Pharmacy Benefits Uncut

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In the recruitment industry, a purple squirrel is a candidate so scarce and perfectly matched to your needs that finding one feels next to impossible. Someone who checks all the boxes, even ones you didn’t know needed checking.

Today I’m going to share with you the purple squirrel of pharmacy benefits optimization: driving down infusion costs.

Why getting infusion costs under control is non-negotiable

Specialty drugs continue to command an outsized share of total pharmacy spend, representing about 2% of prescriptions yet consuming more than 50% of pharmacy dollars. Many of the most expensive specialty therapies today are infusions used to treat cancer, autoimmune diseases, and other complex conditions.

Infusions can be very expensive owing not just to the cost of the drug itself but to other factors such as where it’s administered, how it’s billed, who administers it, and additional facility or professional fees. In fact, many stop-loss claims are for infusion therapies. Because of these cost complexities, many employers, understandably, simply accept their high price tags, no questions asked. But there is actually a way to reduce infusion costs that ensures your members get access to the therapies they need at what could be much lower costs than you’re currently paying. Here are the four things you need to achieve these savings.

Clinical Oversight

Be sure you can evaluate the appropriateness of all infusions from the get-go. As soon as the member is prescribed the therapy, be sure you have a robust prior authorization process in place that provides timely access to the therapy for members who need it and restricts use in members who would benefit from a different therapy. Work with the prescribing clinician to establish the best course of treatment and the most appropriate site of infusion. Also determine what type of follow-up care is required and whether a plan is in place to evaluate if the member is benefiting from the therapy or if they would be better served by switching to an alternate treatment. Providing comprehensive clinical oversight focused on access to the lowest cost, most effective therapy is the key to ensuring value for pharmacy spend on expensive infusions.

Member Engagement

Make sure you’re communicating with your members in an empathetic and understandable way. Many of them who require infusion therapies have recently been diagnosed with a serious condition and may be overwhelmed by their interactions with the healthcare system. Having a process in place to help them navigate their treatments and understand that the most expensive treatment isn’t necessarily the best one will keep the focus on value. Be sure your engagement strategy continues as the member moves through their treatment process so that you’re able to address any problems or concerns that may arise over the course of their therapy.

Health Equity

The astronomical costs of infusion therapy could potentially pose financial problems for many plan members, particularly those with high-deductible health plans. This scenario can very easily lead to members electing not to proceed with required infusion therapies and experiencing worsening health as result, which ultimately leads to higher future costs for the plan. Be sure the long-term financial interests of your plan are aligned with the financial interests of your members. Eliminating or minimizing copays may lead to an increase in your short-term costs but will likely lead to long-terms savings if it results in helping your members adhere to therapies that are critical to managing their condition.

Site of care

Where the infusion takes place may be single biggest contributor to its cost. Typically, infusions are administered in hospital outpatient settings, which provide the necessary clinical infrastructure for patients who require hospital-level care. But they carry substantially higher costs than alternative settings, many of which are just as suitable for low-risk patients. The cost components associated with administering these medications in the hospital setting may also be opaque. It’s often next to impossible to decipher how much of the total cost is related to the medication itself versus costs related to facility fees, professional fees, supplies and equipment, clinical monitoring, ancillary medications, laboratory services and other services associated with the treatment encounter, making it very difficult to eliminate or reduce unnecessary spending. That’s why considering whether another site of care such as a physician’s office, an ambulatory infusion center, or sometimes even the member’s home may be more appropriate and less costly might be the single biggest thing you can do to appropriately reduce costs related to infusion therapies. Of course, the objective is not simply to steer every member away from a hospital but to ensure the site of care matches the member’s needs, and that you’re not routinely paying hospital-level prices when hospital-level care isn't necessary. If you’re interested in a more detailed discussion around site of care considerations for infusion therapies, check out Episode 530 of the Relentless Health Value podcast that explores this issue in-depth.

The bottom line

Like many employers, you may have simply accepted the high cost of infusion therapies as an immutable fact of life, but instituting a program focused on clinical insight, member engagement, health equity and site of care considerations, could be the most important thing you do to significantly reduce your drug spend while improving the health of your plan members – the pharmacy purple squirrel.

That’s all for this week.

See you in two weeks,

Nina

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Pharmacy Benefits Uncut is produced by Healthcare Decision Making, a consultancy that helps small and medium sized employers optimize their pharmacy benefits plan. We offer a comprehensive range of services focused on three areas: PBM procurement, ongoing management of your pharmacy benefits plan, and self-policing and oversight of your pharmacy spend. To learn more about how Healthcare Decision Making can help you, email Nina Lathia at nina.lathia@healthcaredecisionmaking.com