Evolution of Specialty Drugs and Innovative Cost Containment Strategies
With the rise of healthcare cost there has been a focus on pharmacy spend especially when it comes to specialty drugs. Our Vice President of Clinical Strategy and services, Eric Emerson, Pharm.D. is here to breakdown the world of specialty drugs and how Crumdale is here to help.
Specialty Spend is the Fastest Growing and Most critical driver of Employer Pharmacy Spend
Specialty drugs now account for 53% of pharmacy spend, up from 27% in 2010 (IQVIA. The Use of Medicines in the U.S. 2021), with this trend only expected to rise in the upcoming years. Why have these costs doubled in the past decade? There are some key factors driving this trend:
The shift in drug manufacturers attention to treating rarer and harder to treat conditions. The reasoning being that the more common conditions have treatments that work well.
The FDA rewards the manufacturer for creating innovative Specialty biologic medications and medications used to treat rare diseases with longer patent lives. The longer patent means there is an extended period of exclusivity allowing the manufacturer to maximize revenue.
The smaller group of patients for a specialty drug vs. the larger group for traditional medications means the manufacturer must charge a high cost to recoup the cost of bringing the drug to market. The average annual price for specialty medications was $78,781 in 2018 ( Trends in Retail Prices of Specialty Prescription Drugs Widely Used by Older Americans: 2017 Year-End Update. 2017)
Managing Specialty Drug Spend is Complex and Difficult but CAN Be Done
The rising costs can be not only overwhelming but, frustrating to navigate with some saying, “nothing can be done”. This is not true. There are a number of strategies Crumdale can help deploy to reduce your specialty spend:
Optimize Discounts and Rebates from Pharmacy Benefit Managers (PBMs)
Unfortunately, doing this is much harder than it sounds, you first must have a thorough understanding of PBM contracts and a significant number of lives under management to create leverage. Crumdale provides that leverage through our decades of experience and a large book of business.
Utilization management ensures that the patient gets the right medication, at the right strength and quantity, and at the right time. Crumdale’s experience in developing and overseeing utilization management programs is driven by decades of experience managing high-cost claims and mitigating health and pharmacy spend as a stop loss MGU.
Co-Pay Card Accumulator Programs
These programs leverage medication Co-pay cards to reduce plan and member spend on specialty medications. This type of program requires certain plan designs and have been limited through legislation in some states. Crumdale has evaluated and helped implement market leading best practices to maximize member and plan savings through these programs.
Exclusive Specialty Network
Limiting your specialty network to on one specialty pharmacy can significantly improve plan performance for specialty medications. Again, certain states have placed limits on exclusive or limited networks. Crumdale’s leverage, expertise, and agnostic approach to the PBM and Specialty Pharmacy marketplace allows us to recommend and oversee the right fit and network configuration to maximize outcomes while reducing costs.
In the first half of 2021 Crumdale has assisted 17 small group employer groups and 1,556 impacted members with their specialty spend. The average employer specialty spend leveraging our solutions drops to 34% vs. the average 53% before our intervention. The average member specialty cost per employer dropped from $1447 to $584 and avoided 18 employers stop loss spec hits. We believe this performance speaks for itself.
Some additional support items involved in our solution includes:
Plan Design and Document Support
In House ERISA/Compliance Attorneys
Real Time Analytics, Monitoring, and Reporting
Dedicated Patient Advocates Providing High Touch Service
For more information on this solution and to learn how you can join in the savings reach out to Jake Willcox firstname.lastname@example.org today.
The Proof is in the Numbers
Net Plan Cost PMPM 2022 vs. 2021 $49.95 vs. $55.12 (-9.1%)
Crumdale’s Clinical Prior Auth (PA) approval rate is only 55.2% vs. Big 3 average of over 90%
Specialty plan spend was reduced by 51% by Crumdale’s Specialty Cost Containment solutions while only impacting 0.9% of Rxs & 0.5% of members
Crumdale’s Specialty Cost Containment solutions reduce Plan Cost PMPM by $25.12 (32%) across 2021 & 2022
Crumdale’s Specialty Cost Containment Solutions eliminate 85% of pharmacy specific deductible hits
PMPM Rx spend was 52% lower than the industry average: $49.95 PMPM vs. $103 PMPM