Specialty Drugs

Specialty drugs are high-cost prescription medications used to treat complex, chronic conditions like cancer, rheumatoid arthritis and multiple sclerosis, in addition to very rare “Orphan” Diseases (i.e. “Bubble Boy” disease).  Specialty drugs often require special handling (like refrigeration during shipping) and administration (such as injection or infusion). Patients using a specialty drug often must be monitored closely to determine if the therapy is working and to watch for side effects.

Specialty drugs can be covered through either the members medical or prescription drug benefits.. How a specialty drug is covered usually depends on where the patient receives the drug. If the patient takes a pill or self-injects the drug at home, it is more likely to be covered through his or her prescription drug benefit (managed by the PBM). If the patient receives the drug at a doctor’s office or an outpatient clinic, it’s more likely to be covered through the medical benefit (managed by the Medical Management Vendor).

Specialty Drugs: What everyone agrees upon

Specialty drugs are very expensive – $1,000 or more per month – and spending on them is growing 15 to 20 percent a year. Some are very expensive, with the Hep C treatments hitting the market at $94,000 per treatment.  With the orphan drugs, its gets worse, one example being a $500,000/year treatment for the enzyme replacement therapy, PEG-ADA, a condition similar to bubble boy disease.  Worse still – a new drug will be hitting the market soon that will cost $1MM per treatment!

Specialty Drugs: What no one agrees upon

While we all agree it’s morally important to “cure” people if we have to medications to make it happen but the question is “How?  With definitive, scarce resources how does a program manager build a model that offers members what they need for benefits but is sustainable year after year?  The opinions vary greatly and some of the ideas being floated around behind scenes are too embarrassing to discuss.

The Sawgrass Way

Like we do with Medical Claims, we have very involved conversations with our Medical Management, Pharmacy Benefit and Specialty Drug vendors (which is much easier to do when you build your own products).  Looking beyond Step Therapies, Split Fills and Pre-authorizations, we ask questions that many other program managers don’t appear to be asking.  Some very basic questions about a new specialty drug coming to market would include, but not be limited to:

• Who is the target market for this medication? Are we requiring a genetic test to ensure the candidate matches the target market?
• What is the trigger for the use of this new medication over conventional therapies? Who decides this?
• Where does this drug need to be administered? Where “can” it safely be administered?
• When does this new specialty drug need to be added to the formulary list? How effective is the existing therapies?
• How can we provide a wide range of treatments in all therapeutic classes while keeping our specialty drug trend down to the single digits? How do we bring members life style choices into the equation, or do we?

The specialty drug market is very complex and we have no illusions we have all the answers.  The reality is the cost is here and we all have to find a way to pay for it.  But we know what questions to ask and we know that cost is relative. As long as we can offer rich benefits and our specialty drug costs trend better than 80% of our competition, we will be able to offer a compelling value proposition to our clients.  This is the Sawgrass Benefits way.