- Spending on specialty medications is up, accounting for 36% of all drug costs, according to a new report by the Employee Benefit Research Institute (EBRI). In 2012, the drugs accounted for 24% of total spending, and they are expected to account for almost 50% by 2020. The report focuses on the impact of employees and their dependents' use of specialty medications on worker productivity. Specialty medications are high-cost drugs for treating chronic and often rare medical conditions, including multiple sclerosis (MS), psoriasis, rheumatoid arthritis (RA), Crohn's disease and ulcerative colitis. Specialty medications can be covered by either health plans, pharmacy benefits or both.
- The study concluded that although employers are concerned about the costly specialty medications, focusing only on the cost doesn't touch the overall healthcare bill. Many employers, the research found, use cost-sharing to manage spending on specialty medications. Employers can also use consumer-driven health plans (CDHPs) to manage spending.
- The research found no relationship between the use of any specialty medication and the use of sick days, vacation leave or absenteeism. It found, however, that any use of specialty medication reduced the amount of days on short-term disability for workers with Crohn's disease or psoriasis. The research showed that the number of specialty medications filled by workers did not impact their likelihood of taking days off or short-term disability leave.
A PricewaterhouseCooper (PwC) report also identifies specialty medicines as the costliest of all medicines. In fact, they're often in the eight-digit range. Sun Life Financial's 2018 High-Cost Claims Report found that four in five of the most expensive injectable medications, often used to treat cancer-related conditions, accounted for about $45 million in claims from 2014 to 2017. Rare medical conditions, including hereditary conditions like angioedema and hemophilia, had the highest treatment costs.
Employers surely feel the pressure to reduce healthcare costs, but research shows they shouldn't sacrifice giving employees good benefits for cheap plans; health coverage improves retention more than anything else. In fact, 56% of survey respondents said they stayed at their current job because of their health plans, according to a survey by America's Health Insurance Plans.
Some savings might come from rebates and discounts from pharmacy benefit managers (PBMs). These savings are mostly on brand-name medicines, however, rather than less expensive generic drugs. Some proposed strategies for saving on drug and medical costs also include dispensing all unnecessary or low-value medical procedures, which cost consumers $25 billion every year. Employers can also carry out clinical reviews of drug formularies, swapping out expensive brand-name drugs for less expensive alternatives.
Whichever measures employers are using to drive down healthcare costs, research suggests their tenacity and innovation will pay off. Companies that enlist multiple practices and strategies for containing healthcare costs save more than $2,000 annually, according to a Willis Towers Watson study.