SCOTTSDALE, Ariz.--(BUSINESS WIRE)--
Magellan Rx Management, the pharmacy benefit management (PBM) division of
Health, Inc. (NASDAQ: MGLN) today released its seventh annual Medical
Pharmacy Trend Report, which continues to be a leading source for
payers and other industry stakeholders to analyze high-cost injectable
drugs paid under the medical benefit.
This year's report
highlights the member and payer impact of high-cost specialty drugs
billed on the medical benefit. Often unrecognized, but a critical
component of total drug spend, this segment of drug utilization is
especially important considering that by 2018, it's expected that 50
percent of total United States drug spend will be composed of specialty
medications. Additionally, half of specialty drug spend is billed
through the pharmacy benefit and half through the medical benefit, or
"medical pharmacy." Specifically, the report
Commercial medical pharmacy spend increased by an average of 12
percent each year from 2011-2015, while Medicare Advantage remained
relatively stable with only a 5 percent increase over the same
The majority of oncology drugs are still infused or injected and the
largest portion of their costs are covered through the insured's
medical benefit. Oncology and supportive care agents represent nearly
50 percent of commercial medical benefit drug spend and nearly 60
percent for Medicare Advantage.
The leading cause of blindness in senior populations is treated with
injections that are exclusively covered through the medical benefit,
and this was the highest trending category on the medical benefit in
2015 (30 percent for commercial and 39 percent for Medicare Advantage).
On average, the 10 most expensive commercial medical benefit drugs
averaged $421,220 annually per patient and affected two per 100,000
members. The 10 costliest Medicare medical benefit drugs averaged
$268,780 and affected eight per 100,000 members.
In total, taking into account coinsurance, copay and deductible,
members using a medical benefit drug paid 3 percent of total medical
pharmacy costs in commercial (97 percent for the payer) and 5 percent
in Medicare Advantage (95 percent for the payer). While the member
percentage may seem small in comparison to payer percentage, many
members have trouble affording their medications or reach their
maximum out-of-pocket costs, oftentimes at thousands of dollars.
"It's clear that specialty spend on the medical benefit accounts for a
significant expenditure for both members and payers alike and it is
continuing to grow rapidly, particularly for commercial health plans,"
said Casandra Stockman, Pharm.D., vice president of medical pharmacy
strategy at Magellan Rx Management. "Ensuring a sound medical benefit
drug management structure is in place is necessary to rein in costs in
both the short- and long-term, particularly as new drugs come to market."
Key strategies for the effective management of medical benefit drug
spend outlined in the report include:
Clinically and operationally managing drugs billed with unclassified
Healthcare Common Procedure Coding System codes;
Improving claims system capabilities to capture and report National
Employing provider network strategies for commercial members to remove
disparities in cost by outpatient site of service;
Implementing benefit design strategies, and
Bringing transparency of medical benefit drug costs and therapeutic
options to members.
"Building an effective medical benefit drug management strategy requires
an in-depth knowledge of and expertise in this complex area, but it's
essential to help payers rein in costs and improve the quality of care
for members," said Stockman.
Magellan Rx Management is a full-service PBM that expands beyond
traditional core services to help its customers and members solve
complex pharmacy challenges by connecting them to the people, technology
and information they need to make smarter healthcare decisions. Magellan
Rx Management is leading the next evolution of PBMs by using a
value-driven approach that moves past the traditional volume-focused
thinking to deliver true value-driven solutions, including targeted
clinical programs, powerful member and provider engagement strategies,
advanced analytics and expert specialty pharmacy management
capabilities. As pioneers in managing specialty spend under both the
pharmacy and medical benefit, Magellan Rx Management is
effectively-positioned to continue delivering thought-leading solutions
in this complex and rapidly growing area of healthcare to help people
live healthier lives.
About Magellan Health: Magellan
Health, Inc. is a leader in managing the fastest growing, most
complex areas of health, including special populations, complete
pharmacy benefits and other specialty areas of healthcare. Magellan
supports innovative ways of accessing better health through technology,
while remaining focused on the critical personal relationships that are
necessary to achieve a healthy, vibrant life. Magellan's customers
include health plans and other managed care organizations, employers,
labor unions, various military and governmental agencies and third-party
administrators. For more information, visit MagellanHealth.com.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170403005121/en/
Colleen Flanagan Johnson,
Source: Magellan Health, Inc.
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