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Specialty Pharmacy: reigning in costs and improving health outcomes

By Georgi Johnson | Apr 13, 2016

Specialty Pharmacy: reigning in costs and improving health outcomes

Specialty drugs have brought great advances in treating rare and complex diseases. They have improved the outlook for members and their dependents suffering from complicated health problems like cancer and multiple sclerosis. But these drug treatments can be very expensive. In fact, nine out of 10 organizations surveyed said managing the cost of new specialty drugs is challenging.1 And the costs are rising.

What exactly are they?

  • Oral, injected, inhaled or infused drugs
  • Closely monitored by a doctor
  • Frequent dose adjustments
  • Many are biologics that need special storage and handling


Why the high costs?

One of the big factors is that specialty drugs are more expensive to produce than other drugs. But there are other cost drivers:

  1. There are a lot of them in the market. And there are more in development.
  2. There are more patients relying on these treatments. Specialty drugs are not only for rare and niche diseases, but are increasingly being used to treat a broader population.
  3. There a few generic versions, so prices stay high.


What can be done to keep costs down?

Many organizations are looking for ways to keep these costs down. In a recent study, 98% of Large Group companies said they wanted more education about specialty drugs and information on how to help them rein in the costs1. As more people use specialty drugs, costs will likely climb higher. While there is no single solution for bringing down costs, companies are doing a number of things to control the expense.  Here’s what they say is working:1

Site of care management

This can be one of the best ways to keep costs down. Ask your members or require them to use a lower-cost care site when they need to have specialty drugs administered. These include outpatient hospitals, home or infusion suites or doctors’ offices. 

Utilization management

Treatments are reviewed for necessity and efficiency to manage care on a case-by-case basis.

Drug list management

Funds are using drug list-management techniques like requiring members cost-sharing through copays and coinsurance.

Cost management

This includes limiting drug refills to 30 days, requiring higher cost-sharing for out-of-network pharmacies and nonpreferred specialty drugs and offering provider incentives to use lowest-cost sites of care and treatment pathways.

Channel management

Encouraging members to buy specialty drugs at designated specialty, retail and mail-order pharmacies can help contain costs.

Care management

Certain techniques and tools can also help. These include reminding members to refill prescriptions, encouraging them to get regular checkups and giving them access to a nurse or other health care professional who can answer their questions about how to take medicine correctly.


A smart decision: combining medical and pharmacy benefits

Research shows that integrating specialty pharmacy benefits and medical benefits can help make sure the right drugs are provided in the right setting at the right price. Every specialty drug should be looked at individually to decide which benefit should cover it, how it fits into the overall care of the member and which site of care should be used. The results of these decisions can mean better care and lower costs.


Checklist for an effective integrated benefits program

  • Pipeline monitoring — Be aware of which drugs are coming into the market and how they differ from what’s currently being used.
  • Clinical management — Know which drugs have the best outcomes and are cost-effective. Create programs that make sure members are using their medications correctly. Include therapies that are effective across all lines of care.  
  • Direct care — Lead patients to the most appropriate, cost-effective sites.
  • Cost management — Develop low-cost networks, contract competitive rates and negotiate discounts.
  • Provider incentives — Offer rewards for the best care. For example, our Cancer Treatment Pathways program offers rewards to doctors who use medications with evidence of a positive outcome.
  • Patient focus — Make sure patient care is coordinated, especially for those with complicated diseases. And keep the member in mind when medications are moved between benefits and channels.
  • Comprehensive reporting — Know what you’re spending on both medical and pharmacy benefits. Understand the cost of specialty drugs, what’s driving their costs and how the drugs are being administered.


1 Anthem Blue Cross and C+R Research, Specialty Pharmacy Research Study, February 2016.          


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