Specialty Drug Spend Under the Medical Benefit

Continuation in rising costs of specialty drugs and maybe accelerate in next 1-2 years: Randy Vogenberg

Specialty Drug Spend Under the Medical Benefit — Biologic, biotechnology based, rare disease or high cost pharmaceuticals—collectively known as specialty drugs—can be covered under the pharmacy benefit, the medical benefit, or both depending on the plan sponsors’ benefit design required of the payor. On average, up to 50% of specialty drugs are covered under the medical benefit.

Managing specialty drugs under the medical benefit is challenging due to the difficulty identifying these drugs due to:

  • The lack of actionable data (i.e., reporting) that can identify best clinical and financial practices
  • Conflicts of interest due to PBM and physician office drug dispensing revenues
  • Patient OOP co-pay/co-insurance discrepancies
  • Site of service fragmentation each producing different costs,

…and additional costs associated with these medications, which require a clinician to administer or to teach the patient self-administration.

Common tools being used to manage specialty drugs under the medical benefit that have been tried have not been effective, including: PBMs, Specialty Pharmacies, Prior Authorizations, and White-Bagging.

To help control the escalating costs of specialty drugs under the medical benefit, the challenge is to develop the optimal strategies that will be cost-effective while providing access for these drugs to members.

AMI continues to monitor trends and activities of third party payors in their effort to control specialty drug spend under the medical benefit.