News & Commentary

Survey says employers are challenged by expensive and time-consuming specialty drugs

July 24, 2017
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A survey from Anthem, Inc. and C+R Research revealed that the vast majority of large employers are challenged by the cost of new specialty drugs. The same survey showed that specialty drugs account for one-third of the total time that the same large employers spend on managing employee health benefits.

The survey, published in Benefits Quarterly, solicited the opinions of more than 300 employers in 15 states, each of whom had more than 100 full-time employees with employer-provided health benefits.

Understanding specialty drugs

The phrase “specialty pharmacy drugs” describes high-cost, high-touch medication therapies for patients with complex disease states that alter a patient’s life in the long-term sense, like cancer and multiple sclerosis. These drugs are usually dispensed by specialty pharmacies and can include items like oral, injected and infused biological products.

The number of specialty drugs available has proliferated significantly in the past 30 years. In 1990, there were only 10 injectable specialty drugs on the market. In 2015, there were 300 available, according to the American Journal of Managed Care. An employee with a lifelong chronic condition can generate annual drug treatment costs of over $100,000.

Employers and specialty drug benefits

Survey findings reveal the difficulty that employers experience when choosing what benefits they will offer to their employees. Additional findings from the research show:

  • 77 percent of large employers said they were somewhat to very challenged in being able to understand the complete picture of de-identified specialty drug claims associated with a medical diagnosis.
  • 80 percent of employers said they were somewhat to very challenged by the trend of infusion for specialty drugs moving from doctor’s offices to often costlier outpatient hospital sites.
  • 69 percent said formulary management was somewhat to a very important tool in managing specialty drugs.
  • 31 percent used programs with provider incentives to use treatment pathways.

Across the results, it was revealed the employers vary significantly in the type of programs they used to help manage specialty drugs. It was further shown that since these programs vary so much, it was difficult for any employer to have an accurate, consistent measure of their specialty drug expenditures.

How insurers can help

While employers may want to provide a wide, encompassing breadth of benefits, they must also balance that against the cost of premiums. The insights from this research will better inform how insurance companies can help provide access to quality care—including a wide choice of specialty drugs—while still ensuring the affordability of health care.

For example, insurance companies can work to help demystify specialty drugs for employers by playing an active role in educating them about techniques, such as integrated benefit specialty management, managing infusion site of care, specialty drug pathways, and others that can help to lower both the cost of these benefits and diminish the administrative burden.

Read the full study here

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