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
Commercial medical pharmacy spend increased by an average of 12
percent each year from 2011-2015, while
Medicare Advantageremained relatively stable with only a 5 percent increase over the same five-year period.
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
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
On average, the 10 most expensive commercial medical benefit drugs
$421,220annually per patient and affected two per 100,000 members. The 10 costliest Medicaremedical benefit drugs averaged $268,780and 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
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,"
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 Drug Codes;
- 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.
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