Targeting specialty drug costs and utilization

Employers cite pharmacy costs as one of their most challenging priorities. Companies are proactively examining and leveraging a range of options to manage the relentless rise of pharmacy spend driven primarily by increased specialty drug costs.

The top strategies planned or under consideration to address rising specialty pharmacy spend include:

• Adopting more comprehensive solutions.
  Companies are looking to adopt a comprehensive approach to address the high and rising costs of specialty drugs, which are paid for both by pharmacy benefit administrators and health plans. Almost half of employers (49%) report they are extending their evaluation and management of specialty drug costs and utilization performance to drugs covered under the medical benefit, a figure that is anticipated to increase to 85% by 2021 (Figure 1). It remains to be seen how future health care mergers that may combine a health insurance payer, pharmacy benefit manager (PBM) and national retail pharmacy network could impact specialty drug cost management in the future.

Figure 1. Employers proactively manage pharmacy benefit costs

Sample: Companies with at least 100 employees
Source: 2019 Willis Towers Watson Best Practices in Health Care Employer Survey

• Promoting lower-cost biosimilars.
  A fast-growing number of companies are exploring the possibility of offering biosimilars as a lower-cost option to patients requiring expensive specialty products. Almost a third of employers (30%) are evaluating plan design incentives/requirements to promote use of lower-cost biosimilars, and another 40% are considering doing so by 2021.
• Influencing site of care.
  The location where care is given can dramatically affect prices. Roughly a fifth of employers are implementing coverage changes to influence site of care for specialty pharmacy products under the medical benefit, possibly rising to 54% in two years.

Other affordability strategies include continuing to require mandatory mail delivery for maintenance medications (31% today growing to 52% by 2021) and adopting a high-performance formulary, similar in concept to HPNs, with very limited brand coverage across therapy classes (19% today growing to 42% by 2021).

Best Practices: pharmacy management

• Require mandatory mail for maintenance medications.
• Evaluate and address specialty drug costs and utilization performance through both the pharmacy and medical benefit.

Figure 2a. Best performer advantage

Adopt a high-performance formulary

Figure 2b. Best performer advantage

Implement coverage changes to influence site of care for specialty pharmacy

Figure 2c. Best performer advantage

Evaluate plan design requirements to promote use of lower-cost biosimilars