Multiple cost-management programs can reduce specialty drug spending, report finds

WASHINGTON — Employers that use multiple cost-management programs have a 50% lower specialty drug trend than those that don't use them, according to a new study by pharmacy benefit manager Express Scripts.

The study, presented Thursday at the National Business Group on Health's Business Health Agenda 2013 conference in Washington, was described as one of the first to examine the effect of multiple utilization management programs on the cost of specialty medications, which is expected to account for $1 out of every $4 spent on prescription drugs by 2014.

Researchers at the PBM analyzed the specialty drug spending of 60 employer clients who were members of the NBGH, representing more than 5 million Americans with pharmacy benefits; employers were categorized according to the type of cost-management programs they adopted, including unmanaged, somewhat managed and tightly managed. Unmanaged programs included those in which employers' health plan members could obtain their specialty drugs from any pharmacy; in somewhat managed programs, members used a specialty pharmacy exclusively and one specialty utilization management program; and in tightly managed programs, members used a specialty pharmacy exclusively, combined with multiple specialty utilization management programs.

Employers classified as unmanaged experienced an annual average increase in specialty drug spending per member per year of 27.8%, while those that were tightly managed saw an increase of 13.6%. Overall, according to Express Scripts' "2012 Drug Trend Report," the increase in spending on specialty drugs was 18.4% last year, compared with 17.1% in 2011. Meanwhile, spending on traditional drugs decreased for the first time, by 1.5%, mostly due to generics.

"Specialty drug costs and use have escalated without sufficient oversight to manage waste or misuse of these expensive medications," Express Scripts SVP clinical research and new solutions Glen Stettin said. "Add in the impact of bad health decisions, and you get both poor financial and clinical outcomes. This data clearly demonstrates that multiple progressive management solutions mitigate the rising cost of specialty therapies by identifying and seizing cost-saving opportunities, as well as enabling better decisions that can lead to improved health outcomes."

Price inflation, increasing utilization and new drug introductions are among the many factors that contribute to the rising costs of specialty medications for hard-to-treat diseases like cancer, hepatitis C and multiple sclerosis, and these medications can cost up to $100,000 per person per year, according to the study.

Medications for inflammatory conditions, multiple sclerosis, cancer and HIV accounted for nearly 70% of annual spending on specialty drugs, according to Express Scripts.