There are two ways to get a good scare in Las Vegas. You can either ride the roller coaster that hovers above the New York New York casino, or you can sit in on the presentations at the Pharmacy Benefit Management Institute conference.
Dire warnings about the rising costs of prescription drug use set the stage for an intensive two days of information and strategy sharing among plan sponsors, pharmacy benefit managers and vendors looking to bend the cost curve through better care management, contract deals, narrow pharmacy networks and other PBM tricks of the trade.
An ominous tone was sounded at the outset by keynote speaker Robert Whitaker, who warned that the nation is headed for a bipolar epidemic among youth because of the over-prescribing of anti-depressants and stimulants. Citing various studies, the author of ?Anatomy of an Epidemic, built a case that indiscriminate prescribing of antidepressants among mild and moderate cases is actually fueling a rise in long-term depression disability in the United States. You could almost see wheels turning in the brains of plan sponsors: ?What kind of controls should I be considering on these drugs??
But most of the conference focused on another boogie man?the skyrocketing costs of specialty drugs, which threaten to cripple the healthcare budgets of employers. In the words of Peter Wickersham, a senior vice president at Prime Therapeutics, the spending trend of specialty is a ?neutron bomb? that ?could wipe us all out.? His PBM has seen specialty drug spending rise 20 percent over two years and expects that by 2017, it will account for half of the pharmacy spend for Prime's book of business.
Self-insured employers, the key constituency of the PBMI, are still trying to wrap their heads around specialty. The latest PBMI survey of employers reveals a continuing lack of insight into their specialty spending, especially on the medical benefit. Employers cite reducing inappropriate utilization of specialty drugs as their No. 1 concern in 2013, jumping ahead of reducing the acquisition cost of drugs. More than half of employers are moving specialty drugs from the medical side of the benefit to the pharmacy side, where they have more formulary control. There's also a big movement toward putting step therapy and prior authorization controls on drugs under the pharmacy benefit.
PBMs and plan sponsors shared their varying tactics for managing specialty, which, for many, is focusing on drugs administered in medical setting. UnitedHealthcare, for instance, is creating a payment system to reward physicians for best practices in the administration of oncology drugs. Prime Therapeutics is piloting a project to convince physicians to order genetic testing for the oral cancer drug Tarceva, having used integrated medical and pharmacy claims to uncover waste and inappropriate utilization. The EnvisionRx PBM has established preferred and non-preferred tiers for specialty drugs, saying that benefit design is critical to ensuring use of the lowest net cost drugs.
PBMI expects the hot trends in specialty for 2013 to be: managing drugs through the medical benefit, steering members to lower-cost sites of care, seeking more transparency in specialty drug rebates and pursuing specialty copay assistance programs.
Specialty aside, overall drug management is leaning more and more toward pharmacy networks as a lever of control over spending. Humana's Mark Morse, practice leader PBM sales and client services, says narrow pharmacy networks have taken off ever since Express Scripts survived the exclusion of Walgreens from its pharmacy network in 2012. He said small employers in particular are increasingly taking advantage of a limited network that involves Walmart stores and Humana's mail-order facility. Although this limited distribution option can be disruptive, it can also save a company 2 percent on premium for the drug benefit, he said.
On the subject of manufacturer discount coupons, the PBMI conference took a different tack. Instead of the usual PBM warnings about how coupons undermine the formulary process, representatives of Source Healthcare Analytics took the audience through an episode of ?Myth Busters,? shooting down several myths using their own studies. Among those busted: that coupon use is exponentially increasing and impacting primary prescription benefit designs.
The conference only scratched the surface of prescription drug management. PBMs are pulling out all their tricks in the bag to get a handle on rising costs. Subscribers of HealthLeaders-InterStudy's Pharmacy Benefit Evaluator can dig deeper into these important companies by reading our series of PBM profiles. The ninth in the series is EnvisionRx, a PBM with a distinctive story about contracting, market partnerships (i.e., Costco) and strategies.