Employer strategies to manage costs for rare diseases
With growing concerns about the rising costs, employers need to have strategies in place to address the burden of rare dieseases.
Specialty medications for costly diseases such as cystic fibrosis, hemophilia, rheumatoid arthritis, and multiple sclerosis account for close to 50% of the total drug spend in America. While medications for these rare diseases can have a significant impact on health outcomes and improved quality of life, they often come at a steep price for employers.
The high price tag these drugs often carry can be a significant burden not only for the employer but also the patient. With growing concerns about the rising costs, employers need to have strategies in place to manage.
Related: Specialty drug trend moderated in 2020, but is likely to regain upward momentum
The key for employers to obtain the lowest total cost of care with optimal patient outcomes is to learn what levers are driving the spend; then use that knowledge to require the exchange of pertinent data from vendor partners. That’s easier said than done as this data and the information needed to quantify total cost of care is not routinely provided by vendors. Data on where the spend is captured – under the pharmacy plan, medical plan, or both – is critical because drug costs do not always appear in pharmacy claims alone. Integrating disability and absence data with medical and pharmacy claims can be a challenge but is essential to view the entire cost and impact.
It’s also important to ensure that case management and care coordination are evidence-based and use an integrated multidisciplinary team approach.
Practical steps employers can take to manage their pharmacy benefit manager (PBM) contracts to avoid waste and control their specialty drug spend include:
- Identify the number of individuals with rare conditions to determine the current cost to the plan and help track potential waste.
- Evaluate current benefit plan design to determine which specialty pharmacy network strategy is in place (e.g., exclusive, open). Specialty pharmacies are often connected to the PBM and when this occurs there is a financial interest to filling prescriptions, potentially creating waste. Designating specialty pharmacies for specific disease states such as hemophilia treatment centers can reduce waste, improve patient outcomes and create savings for the patient and the plan.
- Identify what utilization management strategies are in place (e.g., prior authorization, step therapy, preferred drug list). Delaying access to the most appropriate drug can impact the patient’s physical and financial health both in the short term as well as in the long term.
- Be aware of how patient copay assistance and copay accumulator programs may collide and result in shifting more cost to the member.
- Educate members on the benefits and risks of enrolling in a high deductible health plan and highlight member cost-share responsibility when prescribed a high-cost drug.
- Hold vendor partners accountable. Work with a neutral third party such as the National Hemophilia Foundation to conduct a retrospective claims audit that can be used as the baseline for driving prospective strategies and to ensure vendors are doing what is required through quarterly reporting.
In addition to the mentioned strategies, many employers find value in collaborating with other human resource and benefit executives to share best practices and learn from one another in the programs and network enabled by the non-profit Midwest Business Group on Health. The organization also makes available free resources for all employers, including toolkits.
With so much to consider, purchasers have their hands full when it comes to managing their PBM contracting. Especially when it comes to medications and therapies for rare diseases, the potential cost savings and impact to health and wellbeing can be substantial. Employers must start taking steps today to uncover and address these high costs in their organizations – the savings are real.
Denise Giambalvo is vice president with Midwest Business Group on Health, and Dawn Weddle is director of member engagement.
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