Costly specialty drugs make up 40% of 2018 employer drug spending despite few prescriptions

Pills in dollar sign (Photo: Eric Palmer)
A major employer purchasing group devoted 40% of its total drug spending in 2018 to drugs prescribed to less than 1% of its members. Image: Eric Palmer

Specialty drugs for treatments such as arthritis accounted for less than 1% of prescriptions for a major employer purchasing group but made up 40% of the group’s total drug spending last year, according to a new analysis.

The analysis from Willis Towers Watson’s Rx Collaborative, a large employer pharmacy benefit group purchasing organization, underscores a major problem the rest of the healthcare industry is facing in trying to find ways to pay for a select few pricey medications.

The top three drugs that cost the most for Willis Towers were injectable immunotherapy drugs indicated for psoriatic arthritis, rheumatoid arthritis and Crohn’s disease. The collaborative, which has roughly 5 million customers and includes more than 400 employers, detailed several ways it tried to rein in drug spending on specialty products.

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“In 2018, we successfully collaborated with payers to develop weekly reporting that flagged high-cost specialty claims for secondary review, which further controls spend,” said Nadina Rosier, head of the pharmacy practice for Willis Towers, in a statement.

RELATED: Reducing cost of specialty drugs needs to remain a priority for healthcare plan administrators

Costs for certain non-specialty drugs also rose. Insulin’s cost per prescription increased by about 4% in 2018. Specialty drug costs have become a major cost headache for other payers too, including Medicare Part D.

Net spending on specialty drugs rose from $8.7 billion in 2010 to $32.8 billion in 2015 on Part D, according to a report from the Congressional Budget Office.

Plans and payers have looked for strategies to curb the costs of such specialty drugs, including employing formulary management tools such as step therapy that require a patient to try a cheaper drug before moving on to a more expensive one.

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