EmblemHealth's Clinical Management Programs Mitigate Specialty Drug Costs for Clients and Address the Impact of Sovaldi

Impact of SovaldiEmblemHealth has always been committed to helping clients manage their prescription drug benefit costs while maintaining high levels of access to necessary medications for our members.

While pharmaceutical therapy can often be the most cost-effective way to treat disease and avoid more expensive health care interventions, the rapid growth rates of innovation and utilization of costly specialty medications are presenting health plans with new challenges for containing costs.

EmblemHealth's specialty pharmacy program employs industry best practices and advanced analytic tools to promote improved clinical outcomes and help reduce our clients' overall drug spend.

Sovaldi and the Impact of Specialty Drugs

Specialty drugs make up only one percent of prescriptions, but can account for upwards of 25 percent of pharmacy plan costs. Among the most publicized examples of a specialty drug with a premium price tag is Sovaldi, the breakthrough hepatitis C drug that, while achieving a 90% cure-rate among its users, costs $1,000 per pill for a total cost of $84,000 for the 12-week treatment.

Expensive specialty drugs like Sovaldi can cause group members to quickly exhaust their pharmacy deductibles before they start paying standard copays, which may result in larger-than-anticipated contributions from employers. Further, the increased claims costs of these medications can impact the premiums of experience-rated health plans.

EmblemHealth's Approach

In response to Sovaldi's expected impact on pharmacy costs, EmblemHealth has been proactive in renegotiating contracts and rebates with the manufacturer and participating in State and industry forums to encourage price relief.

Nevertheless, Sovaldi is just the latest specialty drug to stimulate discussions about cost-containment. EmblemHealth's established specialty pharmacy program is well-equipped to help our clients mitigate pharmacy plan costs in the growing specialty marketplace.

The program hinges on the clinical management of utilization, cases and formulary strategy.

Utilization management techniques, including prior authorization requirements, quantity limits and step therapy protocols, all have a place in controlling specialty drug costs. For example, before a drug regimen for the treatment of hepatitis C may be covered by a member's plan, EmblemHealth requires the prescribing doctor to submit a prior authorization request to prove medical necessity. This process helps to ensure the safe and cost-effective use of the administered drugs. Sovaldi and all other hepatitis C drugs would be equally considered under this process to determine the most effective pharmaceutical treatment of the disease.

EmblemHealth's Account Management team is continually strengthening our reporting capabilities to assist with case management efforts. Utilization reports can monitor adherence to treatment plans or identify high-risk patients as candidates for one of EmblemHealth’s disease management programs. Communicating with clients and members about the importance of medication compliance can also help prevent larger medical expenses later.

It is important to note that the management of specialty benefits cannot be done in a vacuum, rather, it must be part of a larger comprehensive pharmacy strategy, including copay structure, deductibles and exclusive specialty and/or mail order providers where allowed by law. Formulary management, for instance, may include the addition of a specialty tier or call for a closed formulary; however it must be balanced with the need for members to have access to medication that is medically necessary. EmblemHealth ensures that our pharmacy cost-management initiatives adhere to established clinical guidelines.

Specialty in Perspective

Industry utilization reports show that prescriptions for a new drug tend to be high during its first few months on the market, but new user numbers level out as market attention decreases. For Sovaldi, this trend has held true among EmblemHealth’s member populations.

The chart pictured shows the number of EmblemHealth members who have become new Sovaldi users from the drug’s release in December 2013 through June 2014.

EmblemHealth saw a marked increase month to month of new Sovaldi users through April 2014. Since May, the number of new users has been declining. We expect this trend to continue, particularly when new competitor drugs with similar efficacy and safety profiles hit the market as early as October 2014. EmblemHealth will continue to monitor market changes and keep our business partners informed of any relevant updates.

EmblemHealth is committed to providing our members with access to quality health care, including prescription drug coverage, at the lowest possible cost. Managing an effective specialty drug program is one important way EmblemHealth helps our clients maximize value and encourages members to stay healthy, get well and live better.

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