One of the largest components of a self-funded employer’s health care costs is specialty drugs. The cost of specialty drugs has grown at a pace of up to 20% annually and may reach 40% of the total pharmacy drug spending in the next five years. Specialty drugs are those which require special handling and administration. The drug classes include autoimmune, multiple sclerosis, oral oncology, growth hormone, hepatitis C and anticoagulants.
Self- insured employers are finding ways to manage the increasing cost by addressing cost factors such as reimbursement, benefit design, channel management and formulary management. For example:
- Move delivery of provider-administered drugs from the hospital to the physician’s office to help reduce the cost while insuring continuity and quality of care for the patient.
- Move the payment of self-administered injectables from the medical benefit to the pharmacy benefit, where savings can be seen. Formulary management can be used to encourage the selection of low-cost, high-quality alternatives.
A self-insured employer should be aware of these rising costs and implement a Specialty Drug Management Strategy that will help control costs while maintaining quality of care for their employees.
Source: The Self Insurer Magazine August 2013.