Researchers urge specialty Rx insurance plans

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Few employers contain specialty Rx costs: study
Researchers urge specialty Rx insurance plans

Researchers at the University of Michigan's School of Public Health argue in a recent study that taking a personalized approach to specialty medications could be a key to saving healthcare dollars over the long-term. The study was supported by the National Pharmaceutical Council, which is backed by companies including Boehringer Ingelheim, Astellas, AbbVie and Genentech.

Despite the apparent self-interest, the report synchs with national conversations about how to contain healthcare costs and pay for quality. Typical cost-containment strategies include incentives (and disincentives) such as low (or no) co-pays for certain services or medications and co-pays or co-insurance for others.

Value-Based Insurance Designs, known as VBIDs, may use these strategies, but are structured so patients pay less for what may be deemed high-value medications, which is different from paying less for lower-cost ones.

Specialty medications, which U of M's researchers say carry an average out-of-pocket co-insurance rate of around 30% and can go as high as 50%, do not fall into the low-cost category. The researchers indicate this is wrongheaded because the high costs are linked to low adherence, which means higher aggregate costs later. Their recommendation: prioritize the long-term value in terms of health and cost savings over immediate cost.  Among the economic impacts cited from such an approach: a 2009 study that found that an employer's cost of lost productivity is about 2.3 times as much “as the cost of direct medical and pharmacy spending combined.”  They also found a  2013 study that linked medication adherence to fewer sick days—with on-regimen patients using anywhere from three to seven fewer sick days than non-adherent co-workers.

Specialty medications are a major balance sheet concern because they are used for well-known, widespread diseases including cancer, multiple sclerosis, rheumatoid arthritis and hepatitis C. The common nature of these diseases is just part of the significance—the IMS Institute for Healthcare Informatics reported this spring that 29% of last year's US drug spend was for specialty medications, and that $7.5 billion of this was spent on new-to-market specialty drugs.

The numbers may feel heavy in aggregate, but researchers say such sums fail to take into account how this spend plays out if the expenditure is associated with optimal health outcomes, writing “stakeholders must shift the focus from how much to how well we spend our health care dollars.”

Two examples of how costs flow through the patient experience include studies that showed Medicare patients tried to pay for RA medications by spending less on food and heat. They also cite a study of MS patients which showed that doubling out-of-pocket costs meant 4% fewer patients actually started treatment within two years of being diagnosed, whereas a compliant patient was associated with “fewer relapses and lower overall medical costs.” This lower cost also defers associated expenses such as disability payments.

This is the sort of argument Mount Sinai Hospital's professor of medicine and liver diseases Douglas Dieterich made during an April webcast about Gilead's hepatitis C medication Sovaldi (sofosbuvir). He argued in his talk with investment firm ISI that paying the $84,000 for the three-month regimen made sense, compared to waiting for a patient to get sick enough to require a $500,000 liver transplant and the added cost of anti-rejection drugs that would follow it.

Researchers also note that VBIDs have a payer-friendly flipside, which is that the plans discourage “use of services and providers that are of lower value.” They also note that this does not mean payers have to give a speed pass to the most costly medications. They are OK with step-therapy, as long as failure to respond to a lower-cost intervention, such as methotrexate for RA, does not mean a drawn-out patient experience to get on a higher-priced medication, if needed.

They also note that getting that high-value impact requires a bit of patient flexibility, such as prioritizing—and therefore reducing the cost of—say a cancer medication that is indicated based on a particular biomarker if the patient is a match, but not allowing it if it is not. Cigna's recent AstraZeneca pact circles this approach, in that patients it flags as higher-risk for heart disease can go straight to branded Crestor, as opposed to navigating lower-cost options first.

Researchers highlighted a precedent for this approach in a 2014 study for Blue Cross Blue Shield of North Carolina which used a VBID for high blood pressure patients. The VBID structure was for all high blood pressure patients, and the study found a high-risk subgroup tapped medical services far less after implementing the VBID. The Blue Cross Blue Shield assessment found around “89% of program costs—$6.4 million—were offset through reductions in utilization.”

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