Seeking Value: Managing Specialty Medications and Medication Adherence

Amid the constant change churning the health care marketplace, employers have the opportunity to use value-based tactics to get more for their health benefits, including pharmaceutical spending that is currently the biggest driver of rising health care costs.

That message was echoed by all four speakers at the Alliance Learning Circle on “Doses and Dollars: Strategies for Specialty Drugs and Medication Adherence,” held March 17 at Monona Terrace in Madison. The event was co-sponsored by Merck and WisconsinRx/National CooperativeRx.

Seeking Value

Employers are increasingly using data to develop benefit designs that improve the value of health benefits, according to Randy Vogenberg, Ph.D., a registered pharmacist who is a principal at the Institute for Integrated Healthcare and the co-founder and partner of Access Market Intelligence.

Value-based benefit design (VBBD) has prompted employers to focus on chronic conditions, including benefit designs that reduce patients’ share of the cost of medications used to manage these conditions.

Vogenberg listed eight risky behaviors that drive 15 chronic conditions to account for 80 percent of total costs for all chronic illnesses worldwide. That means that employers who want to shift costs must address the difficult issue of “human behaviors.”

Vogenberg said health benefit leaders who have kids in their immediate or extended families already know about the difficulty involved in changing behavior.

“We’re dealing with lots of ‘kids’ out there in the marketplace that we’re trying to move from unhealthy to healthy behaviors,” Vogenberg noted.

Specialty Medications

The price tag for treating chronic conditions rises rapidly when specialty medications are used in treatment. Specialty medications also fall under the broader term of New Molecular Entities (NMEs).

Specialty medications have a biologic basis, rather than the typical chemical basis found in traditional prescription medications.

Researchers have focused their efforts on developing NMEs, with U.S. companies representing 68 percent of total global NME development. Until 2013, about 19 NMEs were introduced annually. In 2013 40 new NMEs came to market, with 36 to 38 NMEs expected to be launched each year from 2013 to 2018.

“The holy grail is to have a new NME,” Vogenberg said.

High-Cost Medications

Photo: Randy Vogenberg, Ph.D., RPh, Partner, Access Market Intelligence

NMEs are costly, averaging $3,500 per prescription. Some are far more expensive. Vogenberg noted that medications for Hepatitis C have been in the news because of their price tag of roughly $84,000, but other specialty medications can cost $100,000 or more. The average annual bill for NMEs to treat a patient with hemophilia runs $1 million.

Many NMEs are aimed at conditions that were previously untreatable. That means they are both a new solution and a new cost driver for health benefits.

Because of their cost and complexity, NMEs are often covered as medical benefits, rather than as part of the pharmacy benefits management plan. That means medical plan strategies should be used to manage specialty medication costs, Vogenberg said.

Change is inevitable as employers struggle to keep pace with an evolving marketplace and the new challenges posed by specialty medications, Vogenberg said. Pharmacy benefits will be unsustainable in their current form as specialty medications are introduced and new gene therapy treatments add to the cost of prescription medications.

“It’s not about what you will be doing in the next three to six months, but in the next three to six years,” Vogenberg said.