CVS Caremark report: Annual specialty Rx spend to quadruple by 2020
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:
- New program to be rolled out in 2014 that will enable specialty pharmacy patients to access our full suite of specialty pharmacy services through their local CVS/pharmacy store. The patient’s local CVS pharmacist can accept their prescription and connect them with the support services available through the CVS Caremark specialty pharmacy
- Care provided by CVS Caremark therapy-specific Specialty CareTeams who work with the patient to monitor outcomes and side effects, encourage medication adherence, and assist with refills, prior authorizations and benefit verification.
- Complete patient management available through a care management program for rare diseases. Care management nurses help patients manage non-pharmacy issues related to their condition in coordination with the patient’s health care provider and the CVS Caremark CareTeam.
To access the full 2013 Specialty Trend Management Insights Report in the publication section click here.
Spending on drugs in the United States expected to grow again next year after falling
NEW YORK — Global spending on drugs will pass the $1 trillion mark next year, according to a new study by the IMS Institute for Healthcare Informatics, a division of healthcare market analysis firm IMS Health.
The report, "The Global Use of Medicines: Outlook through 2017," released Tuesday, forecasts $1.2 billion in sales four years from now. The report covers the United States, Japan, China and the top five markets in the European Union.
The United States, according to the report, will see resumed increases in spending on drugs next year, after seeing reductions in spending over the past couple of years, as access to health care expands and the number of expirations of branded drug patents taper off.
In developed markets, numerous specialty drug classes — for such conditions as cancer, autoimmune diseases, respiratory diseases, immune system disorders, chronic viral infections and organ transplants — will see strong spending in 2017, particularly cancer drugs, which will have sales of $74-84 billion. Among primary-care drugs, diabetes drugs are at the top, with expected sales of $34-39 billion.
Overall, the United States will account for 31% of spending on drugs in 2017, compared with 34% last year.
Pair of Congress leaders advocate on behalf of community pharmacy
ALEXANDRIA, Va. — Reps. Doug Collins, R-Ga., and Martha Roby, R-Ala., on Tuesday advocated for community pharmacy with letters addressed to the leaders of the House Energy and Commerce Committee and Ways and Means Committee.
In serving Medicare seniors, community pharmacies should be subject to the same three-year audit review period as hospitals, and not forced to document 10-year-old claims, the Representatives suggested.
“Patients rely on their independent community pharmacists to ensure proper medication use, to guard against drug interactions and to help take advantage of lower-cost generic drugs, where appropriate,” said NCPA CEO Douglas Hoey. “These pharmacists should not face needless distractions to patient care, such as documenting why they filled a prescription a decade ago. We appreciate Reps. Collins and Roby taking the time to not only meet with some of the pharmacy small business owners that they represent, but for also registering their concern with the appropriate committee leaders.”
“A few weeks ago I was back in my district and had the opportunity to visit with several small pharmacy owners and their employees about issues they face and deal with every day," Collins wrote. "It was very concerning for me to hear the struggles and lack of leverage these constituents face when conducting business with large pharmacy benefit managers.”
"One could question why PBMs need 10 years to begin an audit,” Roby suggested. “Precedent for a shorter look-back already exists within the Medicare RAC process.”
She also urged the committees to examine PBM auditing methods, a shorter look-back period and what percentage of funds recouped from pharmacies by auditors are actually returned to the Medicare trust fund. In addition, Rep. Roby expressed concern that “pharmacies are frequently reimbursed below their cost to dispense drugs,” and that PBM payment benchmarks for generic drugs are not updated frequently enough to avoid “artificially decreasing pharmacy drug reimbursements.”
Twenty-nine states have enacted legislation setting common-sense standards for pharmacy audits, NCPA noted. The Medicare Prescription Drug Program Integrity and Transparency Act (S. 867), introduced by Sens. Mark Pryor, D-Ark., and Jerry Moran, R-Kan., would implement similar reforms at the federal level, ensure that legitimately recouped funds are passed through to the plan sponsor (such as Medicare) and ban 10-year-old audits.