Managing the Spectrum of Medicaid Specialty Care and Costs

Oct 1, 2015

Active management of specialty drugs and the use of the best pharmacy go hand-in-hand in achieving great patient results with better savings.

  • Medicaid

Managed Medicaid plans are increasingly challenged with controlling the costs associated with specialty medications while providing the specialized care these patients require to ensure medication adherence. 

These challenges occur at two ends of the spectrum. For example, more than 70 million Americans have high blood cholesterol, and more expensive biologic medications to treat high cholesterol have recently entered the market. On the opposite end of the spectrum, while hemophilia is a far rarer condition, one patient with hemophilia could cost a plan as much as $3 million each year.

Factors Driving the Increased Specialty Drug Costs

In 2014, roughly 72% of Medicaid pharmacy costs were spent on traditional drugs – those to treat chronic conditions like diabetes, asthma and others. The remaining 28% were spent on specialty drugs, up from 22% in 2013.

We anticipate cost growth for specialty medications will continue to exceed the pace of 20% per year, although we expect to see this growth rate to decline as more biosimilars come to market.

There are four factors that contribute to specialty trend:

  • Specialty therapy entering traditional therapy: While historically traditional diseases, there are nuances to certain patient populations that make them unique. These specialty drugs will meet needs for these niche populations, treating patients with rare forms of diabetes or metabolic disorders.
  • Therapy administration change: New products that have come to market will reduce dosing frequency. Other drugs have moved from an infused medication to an oral treatment.
  • Increased utilization: New drugs that offer actual cures for conditions, such as hepatitis C, have driven an increase in utilization.
  • Pharma pricing and marketing: Direct-to-consumer advertising creates additional demand for certain products, as well as opportunities to expand the approved uses of medications that are already on the market.

Strategies For Specialty Management

Whether it’s expensive hemophilia products, or new oncology drugs in the pipeline, it is critical for plans to be able to provide the right patients access to the right medication at the best possible price with the highest level of care.

For managed Medicaid plans, it means flexible strategies tailored to address these novel and critical therapies. It also means pushing boundaries with advanced management for specialty medications, with decision support tools for providers and specialized patient care for members, will continue to become even more critical.

Smarter Formulary Management

Today, most therapy classes offer more drug choices than ever. Yet many prescription drugs that cost more may deliver no additional health benefit. Smart formulary management is vital to offering a sustainable pharmacy benefit that preserves patient access and choice while helping payers obtain fair and affordable pricing. As new therapeutic categories of medications come to market, plans should thoughtfully review innovative drugs, and when possible, wait until more than one drug per therapy class is available to make the formulary selection.

Step therapy drives quality and cost effectiveness so utilization is directed to the most cost-effective agents that you cover, reserving the others for unique patient needs. Step therapy can be applied at a point-of-sale or in coverage review criteria as a prior authorization. Either way, preferred drugs should be considered first.

Tighter Specialty Drug Management

Utilizing specialty drug distribution through a specialty pharmacy like Accredo decreases unit cost while improving medication adherence, which will help save money on overall healthcare spend. Specialty pharmacies should have an effective patient assistance and care management program, provided by specially trained pharmacists and nurses. This type of support for patients and caregivers is critical to successful specialty drug therapy.

Monitor Medication Adherence

Medicaid patients present unique challenges in achieving adherence. Active management through the specialty pharmacy – supplemented by health plan case managers and active involvement with the patient’s physician – are needed to keep the patient adherent to his or her therapy and achieve healthier outcomes. This is especially true for categories like cholesterol therapies, which are often asymptomatic conditions.

Manage the Site of Care

Infused or injected treatments may occur at outpatient surgical centers or infusion suites. These are often the most expensive locations for this type of care. Medicaid plans should work with their specialty pharmacies to identify opportunities for home-based administration of these drugs by trained nurses. This approach can provide significant savings to the plan, as well as improved convenience and comfort for the patients.

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