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P&T Snapshot

Biologics and Specialty Pharmacy Health Care Survey

Implications for P&T Committees
Cheryl Larson BA
Margaret Rehayem MA
F. Randy Vogenberg RPh, PhD
Larry Boress MPA

Health care costs have remained a continuing concern among employers and other purchasers of insurance. This problem extends particularly to biologics (i.e., specialty products) that are being subjected to increasing scrutiny in terms of their ability to demonstrate value over time. Since the discovery of biologics in the early 1980s and the growth of their impact, attention has shifted from medical expenditures alone to pharmaceutical expenditures.

Seeking to help employers better understand how biologics support at-risk populations and to show them how to contract with health care vendors more effectively, the Midwest Business Group on Health (MBGH), a not-for-profit coalition of more than 100 large employers, identified the need to focus on biologics and specialty pharmacy as a top priority. To this end, MBGH began the first phase of a multiyear effort to help employers address this expensive, complex benefit. In the summer of 2011, in collaboration with the Institute for Integrated Healthcare, MBGH conducted a national survey to determine how much employers knew about the management of biologics. MBGH also partnered with more than 15 business coalitions across the U.S. to distribute the survey to employer members.

The survey was completed by 120 employers representing more than one million employees. Among respondents, the active employee population ranged from fewer than 500 to 25,000; the average age was 43 years. One-third of responding companies were in manufacturing, and 50% of companies were based in the Midwest.

The results provided practical information and insights and identified areas for additional research. Among the key findings, it was discovered that 78% of employers had “no” to “moderate” understanding of what biologics were or how to best address the benefits of coverage. Respondents listed their highest specialty pharmacy costs for non-childhood vaccines, arthritis drugs, and cancer medications (Table 1); however, 69% of respondents indicated that they did not know their top cost areas.

Employers rated the effectiveness of various benefit-management strategies and employee-focused communications over the previous 3 to 5 years (Table 2). Ratings for the top three strategies ranged from “very effective” to “not effective” and “don’t know.” More than one-third of employers responded that they didn’t know the effectiveness of their strategies and communications.

Employers were asked to rank the importance of various benefit tactics in managing specialty drug costs. The top three ranked tactics are shown in Table 3. Again, at least one-third of the time, the employer respondents didn’t know the importance of these tactics.

The survey findings demonstrate employers’ general lack of knowledge of benefit-coverage programs for specialty drugs or appropriate technologies for medication support that were available to their employees and families. Improving employers’ understanding of decisions involving drug utilization, as well as the benefit of clinical options available to patients, should aid companies in managing costs more effectively and in bringing about positive outcomes for their insured populations.

Based on these results and further research, MBGH and the Institute for Integrated Healthcare plan to develop pilot educational programs and an informational toolkit for employers.

The toolkit is designed to provide objective data to assist employers in:

  • understanding what specialty pharmacy and biologic products are, along with current benefit coverage.
  • integrating innovative benefit-plan designs.
  • contracting with health plans, pharmacy benefit managers (PBMs), and specialty pharmacies more effectively.
  • supporting at-risk populations through best practices in care management and communications.

Initial testing of employer presentation from survey data was conducted in Chicago and Baltimore in the 3rd quarter of 2011. In the 2nd quarter of 2012, MBGH plans to conduct a follow-up survey of employers in the U.S. to determine what still needs to be done to increase their understanding of, and success in managing, biologic-related pharmacy benefits. These early findings have provided the impetus for MBGH and the Institute to create programs and tools to improve employers’ understanding of the complex area of the biologic/specialty pharmacy.

P&T committees today, more than ever, play a key role in maintaining the balance between safety, efficacy, and cost, as well as in communicating appropriate information about the decisions made in those domains. Health care organizations face increasing scrutiny and competition in their performance that relate, in part, to P&T committees’ decisions about medication use.


Top Areas That Incur the Greatest Pharmacy Costs for Your Biologics/Specialty Pharmacy

From the choices below, rank the top three that incur the greatest pharmacy costs for your specialty pharmacy:
First Choice (%) Second Choice (%) Third Choice (%)
Multiple sclerosis 30 45 25
Cancer (oncology or hematology) 32 32 37
Arthritis 48 32 20
Vaccines (non-childhood) 50 50
Don’t know 69 8 23

Effectiveness of Strategies and Employee Communication Efforts Over the Past Three to Five Years

Very Effective (%) Effective (%) Somewhat Effective (%) Not Effective (%) Don’t Know (%)
Generic options 22 32 12 4 31
Protocols used for prior approval 20 24 22 34
Cost share incentive 11 20 22 10 38

Importance of Tactics Used in Managing Specialty Drug Costs

Very Important (% Important (%) Somewhat Important (%) Not Important (%) Don’t Know (%)
Improved coordinated information on therapies 27 27 12 1 32
Contractual opportunities (i.e., rebates) 25 26 16 4 29
Innovative plan designs for coverage 22 41 9 3 27
Author bio: 
Ms. Larson is Vice President, Ms. Rehayem is Director of Member Initiatives, and Mr. Boress is President and Chief Executive Officer, all at the Midwest Business Group on Health in Chicago, Ill. Dr. Vogenberg, a member of P&T’s editorial board, is Principal of the Institute for Integrated Healthcare in Sharon, Mass.