PBMs are responsible for creating novel solutions to improve the quality and continuity of care patients receive, while managing costs for patients and payers. As the cost and utilization of specialty drugs continue to rise, health plans and PBMs are providing patients with access to important therapies while maintaining affordability.
The availability of biosimilars gives patients greater access to life-saving medications while saving significantly on the cost of their health care. Patient advocates and payers anticipate biosimilars will foster competition and deliver increased savings from negotiated discounts.
Specialty Pharmacy Networks
Payers rely on PBMs to identify the highest-quality and most cost-efficient specialty pharmacies. Due to the proliferation of specialty pharmacies now involved in the acquisition and distribution of specialty products, PBMs create quality standards and metrics to ensure that the specialty pharmacies they contract with offer the highest quality of care in the industry.
Specialty Benefit Design
Health plan sponsors have increasingly turned to PBMs to help them design and manage their drug benefits. PBMs administer prescription drug benefits for more than 266 million Americans. Since the health care system cannot absorb the current rate of growth in drug spending, PBMs are using targeted interventions to improve the affordability, quality, and continuity of care patients receive.
Drug Coverage Mandates
Imposing or expanding mandatory drug coverage laws, such as Medicare’s “protected classes,” on individual and small employer plans will likely raise premiums and grant drug companies nearly unlimited pricing power. These mandates will make drug coverage more expensive for individuals and small businesses.
Some lawmakers favor laws that would limit patient cost-sharing for specialty drugs and not allow copays to be related to the drug’s price. However, when cost-sharing is tied to a drug’s price, drug makers have some incentive for restraint in pricing. Capping specialty cost-sharing would increase premiums, affect cost-sharing across multiple drug tiers, and result in more limited plan choices and formularies.
Mail-service and specialty pharmacies will save consumers, employers, unions, and government plans a combined $311 billion over the next decade, according to research from Visante. Home delivery of traditional and specialty drugs offers one of the easiest ways to reduce health care costs.
Payers tend to save more when pharmacy reimbursements and dispensing fees are negotiated by PBMs or Medicaid Managed Care Organizations (MCOs) rather than set by state governments. States also save more when they resist “one-size-fits-all” formularies and instead allow PBMs and Medicaid MCOs to devise and actively manage formularies for vulnerable populations.
Medical Benefit Integration
Prescription drugs are covered through a health plan’s pharmacy or medical benefit, largely depending on whether they are self-administered at home or given in a clinical setting. While reimbursement through the pharmacy benefit is straightforward and well-managed by PBMs, reimbursement through the medical benefit is much more imprecise. Due to the variability in claims quality and reimbursement practices, payers have difficulty evaluating medication costs and patient utilization under the medical benefit. To ease confusion, payers and PBMs are exploring ways to apply the tools successfully used in the pharmacy benefit to the medical benefit.