Specialty pharmacies: The payer’s dilemma
Although specialty drug costs continue to climb, that is not the only challenge bending the industry. Healthcare stakeholders face an explosive burst of new drugs, some within the same category; a trend toward value-based care; and an emphasis on patient education to ensure compliance and eliminate waste.
In addition, payers in particular, are weighing the benefits of using their own resources to develop a specialty pharmacy or contracting outside for services.
Retail prices for more than 100 widely used specialty prescription drugs surged skyward by nearly 11% in 2013, surpassing the median income of an American family, according to a new AARP Public Policy Institute (PPI) report.
The report also found that specialty drug prices are considerably higher than other drug prices. In 2013, the average annual cost for specialty prescription drugs was 18 times higher than the cost of branded prescription drugs and 189 times higher than the cost of generics.
According to UnitedHealth Group, growth in specialty pharmacy spending could quadruple by 2020, reaching $400 billion or 9.1% of national healthcare spending in the United States.
Forecasting specialty pharmacy trends
Bill Wolfe, vice president and head of Aetna’s pharmacy business, sees some existing drug trends continue, while new ones will gain importance. Trends in higher costs for specialty pharmacy have been well recorded, he says, along with an increase in specialty pharmacy as a percent of overall spend, more than 30% between 2014 and 2015.
One new trend focuses on launches of specialty pharmacy products in the same category, such as Gilead’s Sovaldi and Harvoni and AbbVie’s Viekira Pak and Technivie for hepatitis C and Sanofi/Regeneron’s Praluent and Amgen’s Repatha in the PCSK9 space for treating high LDL cholesterol.
Wolfe foresees that oncology will most likely be the next category ripe for competition with multiple launches.
Specialty pharmacy, Wolfe says, was previously a single launch of an exclusive drug in a category.
Aetna chose Harvoni and Sovaldi, both from Gilead, as preferred hepatitis C therapies for commercial customers but requires preauthorization. The insurer drives their use through rebates.
Like Aetna, CVS/Caremark made both Gilead products exclusive options for patients with hepatitis C, while Express Scripts chose to go with AbbVie’s Viekira Pak for patients with genotype 1 hepatitis C who use the PBM’s national preferred formulary.
“This new strategy could provide an opportunity to leverage cost containment due to competition, driving additional discounts and rebates,” Wolfe says.