Employers Struggle to Manage Benefits Covering Specialty Drugs

March 10, 2017

Twenty-seven percent of employers are offering their employees a high deductible plan with co-insurance as part of their specialty drug benefit, and although this strategy helps to lower insurance premiums, it can also result in members not being able to afford to follow their prescribed drug therapy regimen.

That’s according to the 2017 Trends in Specialty Drug Benefit Report published by the Pharmacy Benefit Management Institute (PBMI) and sponsored by Walgreens. It includes responses from 298 employers representing 10 million covered lives.

“As our research shows, the growing use and cost of specialty drugs continues to be of great concern to employers,” says Jane Lutz, executive director of PBMI. “As a result, employers are faced with tough decisions to continue to offer an affordable benefit to their members.”

The top two specialty-drug related problems employers face are the cost of new specialty treatments and the changes in manufacturer pricing on existing specialty medications. More than 60 percent of employers are in favor of government controls on manufacturer pricing of specialty medications.

Other findings:

  • Managing specialty drug cost trend remains the number one goal for employers (51%), followed by reducing inappropriate utilization (13%).
  • Ninety percent of employers are concerned with the impact direct-to-consumer advertising has on patients pressuring physicians to prescribe specific medications.
  • For the first time since the inception of this report, the percentage of employers with coinsurance cost-sharing designs has surpassed those using co-payment structures (51% vs. 43%).

In addition to the use of high deductible plans and coinsurance strategies, 54 percent of employers have implemented formulary exclusions to manage costs for specialty drugs. Fertility, hepatitis C, and inflammatory conditions were the most common specialty drug classes with formulary exclusions. However, 53 percent of employers rate member dissatisfaction as the greatest challenge with formulary exclusion, while 38 percent are considering implementing or increasing the use of exclusions on their formulary.

Topics Excess Surplus Commercial Lines Business Insurance Drugs

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