Is it just me, or did it seem like innovation was predicted to dry up in healthcare as a result of ACA? With all the statistics of doctors getting paid less, anecdotes of them retiring early, and even stories of pre-med students becoming art majors, I was certain that a dearth of innovation would also be upon us. I was shocked to discover that the opposite is true: over 5,400 new drugs are currently in late stage testing (the most ever recorded). Also, in 2012 the FDA approved the second-greatest number of drugs since 1998, and is on track to approve the greatest number ever in 2013.
This silver cloud comes with a shadowy lining, however: the majority of these drugs are specialty drugs. Specialty drug approvals have now overcome traditional drug approvals, which is also a first. The paradox of all this innovation is that we are going to be flooded with some pharmaceuticals so amazing that everyone will need to have them—and they might just threaten to bankrupt us all.
Specialty drugs are the Ferraris of pharmaceuticals. They have more horsepower and niche ability than the sedan, but you pay for it. They are harder to deliver, trickier to prescribe, and require advanced, specialized pharmacies to provide them (think $2,000 oil change).
Luckily, they have composed a very small portion of our drug spend since forever, but this is no longer the case. These new innovations are virtually guaranteeing that they will begin to take over as the standard. Doctors, too, have traditionally been hesitant to prescribe specialty drugs. This is no longer the case: as physicians are sold to more and more by specialty drug reps, and see the great results these drugs generate, doctors are prescribing them with greater frequency.
So, what can you do to protect yourself? There are a few things on the radar, all of which will be fleshed out on this blog in more detail if you are interested. The short answers are as follows:
- Design your plan to encourage treatments that graduate from lower to higher cost. Basically, put in place a preauthorization on any high cost drug. Next, when someone calls in requesting it for the preauthorization, check to ensure all the lower cost treatment options have been exhausted, and start with the ones that haven’t been used yet. Then go to the lowest cost of the expensive drugs. Only at the final step do you “green light” the most expensive treatment. This seems intuitive because it is, but most plans don’t have this step-by-step solution in place.
- Use specialist pharmacists for specialty drugs. This also seems pretty intuitive, but ensure that the pharmacy that is dispensing the drugs has a specialty pharmacist on hand to double check everything. They can catch overdosages, mis-diagnoses, or mis recommendations done by doctors who might not be as familiar with either the drug or the condition. Talk to your PBM about options here.
- Dispense 15 day segments when just starting out. The rockiest part of any new patient-to-drug relationship is right at the beginning. Many people try a new prescription and hate the side effects so much they only take it once or twice and then toss the bottle, and then your plan is out a bunch of money and your member converts to a healthcare emergency in waiting. Instead, only prescribe 15 day supplies for the first 2-3 dispenses, and check in with the member every two weeks. Your PBM should be able to help you with this, or your TPA, but you can make this happen and then you’ll avoid the waste and ensure the program is going to work long term before you commit a ton of resources in meds.
- Use Bioidenticals. A “Bio-Identical” of a specialty drug is similar to a generic of a brand name: it basically does the same thing at a lower cost. There are differences in “bio-identicals” and “generics” because “generics” are essentially “identical-identicals” and “bio-identicals” are not absolute copies of the original, but are pretty close. These bio-identicals may not be prescribed as readily by doctors because they will not have all the advertising budget behind them, so you will need to ensure your plan and preauthorization strategy has them written in there and that you ensure you use them before prescribing the full agenda with specialty drugs, that could cost many times more than the bio-identicals.
There you have it. A quick summary of the most important ways your plan could save millions and millions of dollars over the next couple of years on specialty drugs.