CVS Health Research Institute Examines Tools to Slow Dramatic Cost Growth of Specialty Drugs

Specialty drug spending predicted to grow by more than 16% annually from 2015 to 2018.

CVS Health researchers examine the reasons for dramatic increases in spending on specialty medications and discuss tools to help manage these escalating costs in an article published in the October issue of Health Affairs.

CVS Health data shows that between 2012 and 2013, spending on specialty drugs increased by 15.6 percent, while spending on traditional medications grew by only 0.8 percent. This trend is only expected to increase, with specialty drug spending predicted to grow by more than 16 percent annually from 2015 to 2018, ultimately accounting for approximately $235 billion, or more than 50 percent, of total drug spending by 2018.

"As specialty drugs begin to address the needs of an increasingly broad range of patients across several therapeutic areas, there is a growing need for solutions that drive the best patient outcomes at the lowest costs," said Alan M. Lotvin, MD, executive vice president CVS/specialty at CVS Health. "Significant opportunities exist to bend the cost curve of specialty medications by eliminating waste, inducing price competition and reducing or preventing costly complications."

The article outlines drivers of rising costs, including the increasing complexity and effectiveness of new medications, the changing dynamics of target populations that broaden the pool of patients eligible for treatment and how and where specialty medications are delivered. It examines how approaches that have been successful in managing cost growth for traditional medications over the past ten years could be applied to specialty medications, while ensuring adherence to clinical guidelines.

"Spending growth in specialty drugs is not a given," said Troyen A. Brennan, MD, chief medical officer at CVS Health. "To slow cost growth, payers must be willing to embrace a variety of strategies used to manage traditional medications as well as some novel approaches that will require a multi-faceted and holistic approach including the collaboration of those who prescribe, dispense, deliver, pay for, and receive specialty medications."

The authors share insights into cost management strategies that can help achieve the goal of balancing positive health outcomes with reducing sky-rocketing costs. These include applying traditional drug management plan design elements such as prior authorization and step therapy based on evidenced-based medicine, implementation of tiered formularies to stimulate price competition, and utilization of the lowest-cost site of care for delivery and administration of specialty medications.

The article is part of a theme issue of Health Affairs, sponsored by CVS Health, which examines the growth of specialty drugs fueling overall spending on pharmaceuticals and putting increased pressure on overall health care costs.

The CVS Health Research Institute is focused on contributing to the body of scientific knowledge related to pharmacy and health care through research collaborations with external academic institutions, participation in federally-funded research, analysis and sharing of CVS Health data sources and coordination of pilot programs and initiatives. CVS Health Research Institute findings support a continuous quality improvement environment, which encourages product innovation and development to benefit CVS Health patients, clients and their members.

The article can be accessed at the following link: http://content.healthaffairs.org/content/33/10/1736.abstract

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About CVS Health

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SOURCE: CVS Health