Study commissioned by CVS Caremark examines reducing specialty drug spend

WOONSOCKET, R.I. — As the cost for specialty medications continues to rise, implementing an effective "channel transition" approach — the process of moving prescriptions from the medical benefit to the pharmacy benefit — can produce significant savings for healthcare payers by improving management of these complex and costly drugs, according to a new report commissioned by CVS Caremark.

"With the continued rise in utilization and spend related to specialty medications, health care payers have a tremendous opportunity to reduce costs and improve care through a variety of approaches," stated Alan Lotvin, EVP specialty pharmacy for CVS Caremark. "Transitioning specialty medications from the medical benefit to the pharmacy benefit, as well as offering patients more convenient options by addressing where infusion care is administered, can produce significant savings. We are focused on finding ways to better manage the rising costs related to these complex and expensive drugs, while ensuring patients continue to receive high-quality care."

The new Milliman report finds the transition from the medical to the pharmacy benefit can save payers an average of 19% across 14 classes of self- or provider-administered injectable specialty drugs for the treatment of conditions such as multiple sclerosis and autoimmune disorders. By moving coverage to the pharmacy benefit, payers are able to implement more effective management tools such as formulary design, utilization management, and preferred or exclusive networks. According to the report, more than half (53%) of specialty medication spending currently occurs under the medical benefit.

Compared with the average patient, specialty patients are more likely to have multiple diagnoses, see more specialists, fill more prescriptions and have more lab tests, ER visits and hospitalizations, resulting in overall health care costs as much as 8.5 times higher than non-specialty patients.

It is estimated that specialty pharmacy spend is expected to rise from $92 billion in 2012 to $235 billion by 2018.

"CVS Caremark provides an end-to-end pharmacy management and delivery solution for specialty pharmacy patients that helps them better manage their medications and their disease throughout their journey," stated Jon Roberts, president, CVS Caremark PBM business. "Our suite of programs focuses on managing cost, quality and access for specialty conditions through a range of unique specialty pharmacy services."

According to CVS Caremark, its suite of specialty pharmacy services includes:

  • Industry-leading experience and proven outcomes related to managing across the medical and pharmacy benefit;
  • Team of specialized pharmacists, nurses and dieticians who manage the whole patient and support them throughout the progression of their disease to help control overall health care costs; and
  • Unmatched, convenient access to specialty drugs, patient counseling and the appropriate site of care, combined with consistent clinical quality, improves the patient experience and adherence to their plan of care.

The study was based on 2012 claims data for a commercially insured population as reported in Milliman's Consolidated Health Cost Guidelines database. The study included plans with a variety of commercial plan designs (e.g., PPO, HMO and POS).

Click here to access the full Milliman report.


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