Split benefits obscure specialty spend

Although specialty medications account for only about 2% of prescriptions, they represent more than half of total drug spending.

Spending continues to increase as new therapies enter the market.¹ Industry analysts expect specialty medications to remain the biggest driver of pharmacy benefit costs over the next one to three years.²

Specialty drugs are high-cost medications used to treat complex, chronic, rare or life-threatening conditions and often require specialized handling, administration, monitoring and patient support. 

New therapies continue to enter the market, but the main drivers of specialty spending have changed little in recent years.

Key drivers include:³

• Immunology
• Oncology
• Rare disease treatments
• Multiple sclerosis therapies

Cell and gene therapies represent a growing financial risk because of their exceptionally high per-patient costs.⁴

GLP-1 medications are also reshaping benefit strategy because of their rapid growth in demand and spending. While GLP-1s are not traditionally considered specialty medications, they are frequently included in discussions about specialty drug costs.⁵

For many organizations, specialty management has evolved from a niche activity into a strategic priority.

Understanding total drug spending can be difficult because costs are often split between pharmacy and medical benefits.

For example, oncology is one of the largest pharmacy benefit categories. However, about 80% of total oncology spending occurs under the medical benefit.⁶

Many organizations use different vendors to administer pharmacy and medical benefits. Each vendor may use different systems, reporting methods and payment arrangements.

As a result, employers may have detailed information for each benefit but still lack a complete view of total medication spending.

Another challenge is that specialty medications can be administered in different settings.

Self-administered medications are typically covered under the pharmacy benefit. However, many specialty therapies are given in a physician's office, infusion center or hospital outpatient department. These medications are often billed through the medical benefit.

The same drug may be covered under either benefit depending on where it is delivered. This can make spending patterns difficult to track and compare.

Dedicated specialty pharmacies play a key role in managing how certain drugs are delivered but may introduce additional reporting complexities of their own. For example, the same therapy may be dispensed through a specialty pharmacy for home administration under the pharmacy benefit or administered in a hospital outpatient setting under the medical benefit. 

This benefit migration can obscure utilization trends, complicate cost comparisons and make it difficult to identify the true drivers of specialty drug spending. 

Pharmacy and medical claims are also reported differently.

Pharmacy claims are typically available in near real time and provide detailed information about medication use.

Medical claims often take longer to process and may contain less drug-specific detail.

These differences can:

• Limit visibility into spending
• Delay identification of cost drivers
• Create duplicate-counting risks
• Make reporting less accurate

Without an integrated view of medical and pharmacy claims, plan sponsors may underestimate specialty drug costs.

They may also miss opportunities to:

• Optimize site of care
• Improve provider reimbursement strategies
• Strengthen clinical management programs
• Reduce unnecessary spending

As specialty costs continue to grow, many organizations are adopting integrated analytics to better understand total drug spend.

Optum Rx brings medical and pharmacy data together into a single view.

This integrated approach can help plan sponsors:

• Better understand total specialty spending
• Identify savings opportunities
• Improve care management
• Support better patient outcomes

By moving eligible claims from the medical benefit to the pharmacy benefit, organizations may gain greater visibility and stronger cost controls.

Here are a few specific programs that are available to clients to help manage specialty costs:

Specialty Fusion combines clinical, financial and utilization management strategies across pharmacy and medical benefits.

The program is designed to:

• Improve visibility into specialty spending
• Support clinical decision-making
• Identify the most appropriate benefit
• Recommend the most cost-effective site of care
• Apply available rebates and savings opportunities

Depending on existing specialty management programs, clients may achieve savings of up to $15 PMPM.

Specialty Medication Optimization focuses on professionally administered specialty medications.

The program can help:

• Create a more consistent pricing approach
• Reduce site-of-care variation
• Increase visibility into spending
• Identify savings opportunities

Potential savings can reach up to $4.64 PMPM.

For example:

• Benlysta® may cost about $3,000 to $4,000 in office or home infusion settings but nearly $6,000 in a hospital outpatient setting.
• Entyvio® may cost about $8,000 in office or home infusion settings and up to $13,000 in hospital outpatient settings.

Estimated savings can reach:

• Up to $3,700 per Benlysta claim
• Up to $6,400 per Entyvio claim

Plan sponsors gain greater control and insight into specialty spend while preserving provider choice and supporting timely access to treatment.

Specialty medications are expected to remain the largest driver of pharmacy benefit costs over the next one to three years.

As spending continues to grow, plan sponsors will need strategies that balance affordability, access and clinical outcomes.

Integrated pharmacy and medical benefit management can provide a more complete view of specialty spending while helping organizations identify opportunities to improve care and manage costs.

Through specialty pharmacy management, biosimilar strategies, integrated benefits, analytics and patient support programs, Optum Rx helps clients navigate an increasingly complex specialty drug landscape.