WOONSOCKET, R.I. — Specialty drug spend is expected to more than quadruple by 2020, reaching approximately $402 billion a year, according to a new CVS Caremark report released today.
The Insights report on specialty pharmacy prescribing trends and strategies for managing costs also reports that while only a very small percentage of patients (less than 4%) use specialty medications, they account for 25% of health care costs. Specialty drugs treat complex diseases such as multiple sclerosis, rheumatoid arthritis, hepatitis C and cancer and represent a rapidly growing area of spending in health care.
"Specialty pharmacy trend is driven by price, mix and utilization, just like traditional drug trend, but managing specialty drug trend is more complex," Jon Roberts, president of CVS Caremark's PBM business said. "While many payors already have basic strategies in place to manage costs and ensure safe and effective use of specialty drugs, we have found that every plan has the opportunity to improve upon their management of this category."
The report reviews foundational strategies for managing specialty drug trend and provides additional insights into key areas where CVS Caremark offers expanded services to improve cost savings for clients. These areas include: Understanding the cost impact resulting from the location of drug administration for infused drugs (e.g., at the hospital, doctor's office or at home), gaining visibility to the portion of specialty pharmacy spend billed under the medical benefit, and providing a full range of services designed to provide comprehensive care for the patient that can improve outcomes and reduce overall medical costs.
"Clinical appropriateness is the primary consideration when managing specialty pharmacy patients, but there are a variety of other factors that can also affect the optimal therapy choice for an individual," Alan Lotvin, EVP of specialty pharmacy at CVS Caremark said. "For example, the site of care where an infused drug is administered to the patient is one area that can significantly impact costs for the patient and payor without necessarily influencing the patient's outcomes."
Understanding the Cost Impact of Site of Care
Many specialty drugs for the treatment of conditions such as cancer, rheumatoid arthritis and multiple sclerosis are administered via infusion that can take place in a hospital, physician's office, infusion center or even the patient's home. Costs for both the drug and its administration can vary by thousands of dollars depending on where the patient receives the infusion. CVS Caremark noted that it offers programs that can help payors increase the utilization of more cost-effective sites of care for infused therapies.
Spanning the Pharmacy and Medical Benefit
Nearly half of specialty drug spend actually occurs under the medical benefit rather than the pharmacy benefit, where it can be harder to track and manage using clinical and cost management strategies. CVS Caremark stated that it offers clients management techniques to help capture and control spend billed under the medical benefit.
Providing Comprehensive Whole-Patient Care
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. As a result, specialty patients have much higher overall medical costs, as much as 8.5 times higher than non-specialty patients. CVS Caremark provides a range of services designed to address these needs and help streamline care management for both the patients and their physicians in order to help improve health outcomes and avoid unnecessary costs for patients and payors. Services include:
To access the full 2013 Specialty Trend Management Insights Report in the publication section click here.