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Employer specialty pharmacy trend slows.

Here’s some good news for employers: The overall cost of employee prescription drug coverage is projected to decelerate in 2007, according to the Segal Company’s annual Health Plan Cost Trend Survey. Prescription drug trend — defined as the predicted change in per-capita claims, as influenced by drug costs, utilization, and cost shifting — ranges from 11.5 percent to 11.9 percent for commercial plans, depending on the benefit. For purchasers, Segal’s findings are tempered by news that the specialty drug trend is 19.5 percent — down from last year but still strong. 
 
The report cites increased availability and greater demand as the primary reasons for specialty drug growth, though a combination of factors is responsible for the trend. “We are seeing some cross-applications of drugs driving the increase,” says Sean Brandle, vice president and Segal’s national pharmacy practice leader. In combination, product cost and benefit design are a factor, too; many employers do not have plan designs that require members to take on a large portion of specialty drug expenses. “The fact that employer plan designs don’t really require the member to fund a large portion of costs means that those drugs are going to represent a higher percentage of what employers pay for year after year,” Brandle says. 
 
Plan sponsors have been successful in efforts to initiate aggressive copayment structures for traditional prescription drugs, but the same does not hold true for specialty drugs. 
 
“It’s tough,” says Brandle. “You don’t want to make the copayment so high that it is cost prohibitive, yet you don’t want it to be too low, either.” A careful balance, he says, is necessary when providing specialty drugs that patients may need. “The question is how to make sure patients get them at a reasonable cost and with effective administration so that they are closely monitored to ensure that they are benefiting from the drug.” 
 
With an onslaught of new biotech drugs set to hit the market over the next several years, cost-management strategies remain somewhat limited. Brandle says some health plans are looking at separate plan designs for biotech drugs as one way to manage costs, but most are concentrating on choosing the right specialty drug vendor to help with utilization strategies. “We are starting to drill down to try to figure out the program mechanics that the vendor offers when dispensing drugs,” says Brandle. 
 
With the lack of generic competition and a slew of new drugs pending on the market, Brandle sees cost management of specialty drugs as a challenge. “At some point, there will be a fixed amount of dollars that employers will be able to afford to pay. Some tough decisions will have to made,” he says.