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Increased savings, hidden costs: How sellers “carving out” special benefits fail to deliver on promised value

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Specialty drugs — high-cost drugs that treat complex, chronic conditions — have become a major driver of overall prescription drug spending. In fact, according to CVS Health’s 2020 Drug Trend Report, they cost 52%, despite being used by only 2.5% of all patients. Spending on these drugs is increasing rapidly as more specialized treatments are being introduced at higher prices and drugs already on the market receive complementary indications to treat additional conditions, thereby expanding the patient population. While this expands treatment options, it also means increased access and therefore greater costs for employers.

Employers looking to manage their pharmacy benefits are often faced with challenging decisions as they try to balance the impact of rising treatment costs with offering dependable drug coverage to their employees.

In recent years, a number of niche vendors have entered the market, promising significant savings for payers if they “carve out” specialized pharmacy services from Integrated Pharmacy Benefit Management (PBM). While the savings they claim to deliver are undeniably catchy sound, they are often greatly exaggerated.

A Flawed Approach That Hides the True “Cost”

First and foremost, it’s often unclear how these sellers are arriving at their supposedly promised savings — and if the roots of those estimates lie in the assumption that payers are currently employing any sort of specialized management. not doing. In addition, a key component of many of these “carrying out” approaches is aggressive use management—in other words, depriving as many people of drugs as possible. This means that people who must be on certain drugs may also be denied access. Since such decisions are not supported by clinical evidence or treatment guidelines, they are likely to be reversed on appeal, meaning the savings are not true, lasting cost reductions. This is complicated by the fact that the appeal process itself adds cost in the form of fees as well as administrative burden.

Often, there are hidden costs for the payer that they are not even aware of. One is the disadvantage of rebates – discounts PBMs negotiate with drug manufacturers on behalf of their customers.

Similarly, creating a component of pharmacy benefits management can also affect overall pricing and guarantees and may incur additional fees. What’s more, having multiple vendors can mean higher administrative costs which further dilutes any perceived savings.

Carving out specialty pharmacy components jeopardizes member outcomes by fragmenting care in service of pursuing perceived cost savings. Keep in mind that the majority of people who are on specialty medications are people with complex, chronic conditions that require these treatments to effectively manage them and prevent costly, long-term health complications. Appropriate use management to ensure effective cost control with stringent criteria and decisions contained in clinical treatment guidelines not only ensures better outcomes but provides sustainable savings for payers.

An integrative approach guided by connectivity and clinical rigor

The best way to manage specific costs as well as improve outcomes is with an integrated approach that leverages clinically sound decision making, sophisticated data analytics and digital infrastructure, and interoperability that enables silos in healthcare. Breaks. When combined with holistic nurse care support and engagement efforts, such an approach eliminates waste and ensures the appropriate use of cost-effective treatments for each individual diagnosed.

For example, many specialty treatments with multiple indications now have weight and indication-based dosage recommendations from the U.S. Food and Drug Administration. By leveraging our connectivity, we can verify a member’s diagnosis information through their electronic health record – not just through prescriber verification, to confirm the therapy being prescribed, as well as the dosage, suitable for their specific diagnosis. Many medications also have significant side effects, which can lead to non-compliance. Digital tools such as messaging and symptom tracking via wearable devices or smart phones can ensure that a drug is working for a person, that they are not experiencing serious side effects, and that they are following treatment. are doing. It eliminates wasted expenditure on high cost drugs that may not provide clinical value.

What is our debt to employees and members

Ultimately, health care is about making sure people have access to appropriate treatment options that help them stay healthy. No employer would like to sacrifice it in the interest of cost savings. The plain fact is that silently carved approaches often betray commitment to patient care and results in the pursuit of savings – which in many cases are misleading.

Employers should work with organizations that take an integrated and thoughtful approach to member care and cost savings. Medically rigorous medical decisions and a focus on eliminating waste by leveraging the latest technology and digital tools can effectively deliver significant cost savings, without involving member care. The best way to ensure cost savings in a member-centred manner that supports affordability and care is to ensure a coordinated approach that uses competition within each therapeutic area from the start to reduce unit costs. and addresses inappropriate use throughout treatment.

Photo: Kagkansayin, Getty Images

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