Report Shows Evolution in Utilization Management for Specialty Drugs

July 21, 2022

By Angela Maas

Republished with Permission from AIS Health

While plan sponsors continue to use traditional utilization management (UM) tools for specialty drugs, some of these tactics have evolved over the years, as well as been joined by newer ones, such as new-to-market formulary blocks, according to a new report from Pharmaceutical Strategies Group (PSG), an EPIC company. And plans’ tracking of specialty spend under the medical benefit has improved, with 70% of respondents having this capability, up from 50% in 2019, according to the 2021 Trends in Specialty Drug Benefit Design Report.

The report, which is co-sponsored by Roche Group member Genentech USA, Inc., is the ninth annual version. It previously was published under the Pharmacy Benefit Management Institute (PBMI) brand.

The study was based on a survey conducted from May 24, 2021, through June 28, 2021, of 171 benefits leaders (employers, unions/Taft-Hartley plans and health plans) offering specialty drug coverage through pharmacy and medical benefits representing plan sponsors of approximately 41.4 million covered lives.

Reducing inappropriate utilization was respondents’ top goal for specialty management, followed by reducing patient out-of-pocket costs and improving adherence and persistency. Fifty-one percent said they use a percentage share coinsurance instead of flat-dollar copayments for specialty drugs in the pharmacy benefit. And 43% have more than one specialty tier on their formulary, with generic specialty drugs always falling on the lowest tier, as well as 81% of biosimilars, 80% of preferred brand specialty drugs and 61% of nonpreferred brand specialty medications.

More than 90% of all respondents used prior authorization, step therapy and quantity limits, and 86% had clinical care management programs, while 45% had copay accumulator programs and 41% had copay maximizers. More than half of all respondents were familiar with new-to-market formulary blocks, which restrict coverage of new agents for a period of time; 21% of respondents restrict all specialty products at launch, 30% restricted them most of the time, and 69% had clinical criteria in place for medical exceptions.

With more biosimilars launching onto the U.S. market, plan sponsors are implementing strategies to encourage their use. The top two tactics were requiring prior authorization for brand biologics when a biosimilar was available and requiring step therapy for new patients to use a biosimilar before the reference drug, both used by 57% of respondents.

Thirty-one percent were exploring the use of alternative funding models for specialty drugs, while 8% were currently using these.

AIS Health spoke with Renee Rayburg, R.Ph., vice president of specialty clinical consulting at PSG, about some of these and other report findings.



AIS Health: What were some of the most interesting and/or surprising findings of the report, and why?

Rayburg: Specialty management’s top goal was to reduce inappropriate utilization (37% overall). Specialty drugs are costly, so any inappropriate use can lead to wasted dollars. When we say appropriate use, we mean the right drug for the right diagnosis at the right dose for the right duration and frequency. Any variation to that can have significant financial consequences when dealing with these often very high-cost specialty drugs. In working with a client last week, we found in our data that when a specialty drug used in the treatment of Crohn’s disease was used twice as often as how it is FDA approved, it resulted in excess of $100,000 extra spend for one member. There can be significant cost consequences to inappropriate use of specialty drugs.

Why? I think payers are better informed and more interested in the financial investment in their members and knowing their members are benefiting from the drugs they are covering. Plan sponsors are paying more attention to the drugs they are paying for and want the assurance that when the drugs are being covered and used, they are done so appropriately, and their members will achieve optimal drug therapy benefits.

Only 17% of plans felt extremely or very prepared to make coverage decisions on the new disease-modifying Alzheimer’s drugs. This was somewhat surprising and disappointing to me and indicates the strong need for more and better information for plan sponsors regarding impactful newly FDA-approved drugs.

Why? While the report indicated PBM account teams, benefits consultant or brokers are the primary sources of information on these Alzheimer’s drugs, it appears plan sponsors may have been in need of more information. Amid the controversy surrounding the approval of the Alzheimer’s drug [i.e., Biogen and Eisai Co., Ltd.’s Aduhelm (aducanumab-avwa)], in my experience it is clear that plan sponsors are looking for new drugs to be safe, effective and affordable. Plan sponsors are better equipped to make those coverage decisions when information provided can validate all three. That did not happen with the Alzheimer’s drug.



AIS Health: Are new-to-market formulary blocks specific to the pharmacy benefit only, or do these apply to the medical benefit as well?

Rayburg: For the purposes of this survey, they were in reference to new-to-market formulary blocks for the pharmacy benefit.



AIS Health: How long are new-to-market formulary blocks generally in place?

Rayburg: Typically they are removed within 90 to 180 days. The intent of the new-to-market blocks is to allow time for the newly approved drugs to undergo P&T [i.e., pharmacy and therapeutics] and/or other PBM committee review to establish any utilization management and/or coverage criteria. Most P&T committees meet at least quarterly, some even meet more often, so it is reasonable to accomplish this review in that time frame.



AIS Health: What could be some of the clinical reasons to have new-to-market blocks in place?

Rayburg: To establish the appropriate clinical criteria needed to ensure appropriate use of a new drug. For example, Cibinqo is a newly approved specialty drug indicated only for adults (18 and older) for moderate-to-severe atopic dermatitis (the only diagnosis the drug was approved for) whose disease is not adequately controlled with other systemic drug products, including biologics (not indicated to be used as a first-line treatment for atopic dermatitis; other drugs should be used first). See the exact wording from the product prescribing info: “CIBINQO is a Janus kinase (JAK) inhibitor indicated for the treatment of adults with refractory, moderate-to-severe atopic dermatitis whose disease is not adequately controlled with other systemic drug products, including biologics, or when use of those therapies is inadvisable.” In addition, the drug has a boxed warning, “WARNING: SERIOUS INFECTIONS, MORTALITY, MALIGNANCY, MAJOR ADVERSE CARDIOVASCULAR EVENTS (MACE), and THROMBOSIS,” so it may not be appropriate for use in all patients. Having time for P&T to evaluate and put the proper UM criteria in place helps to support the appropriate use of the drug. As you can see, the prescribing info can be used to establish the PA criteria, as it includes all of the information the FDA used in the approval, which establishes how the drug was found to be both safe and effective. Without a new-to-market drug block, a new drug can make its way onto the formulary without any type of clinical review. Most payers that I work with have a path to exception for newly approved drugs that have a new-to-market block in place. This allows coverage when the new drug may be medically necessary. This information is collected and clinically reviewed to allow an exception if needed.



AIS Health: Could you comment on why clinical reasons may have been the top reason given by health plans for recommending these programs?

Rayburg: Health plans typically have their own P&T committees and often own the P&T process, so I would think they have more awareness of the need to allow time for the process to occur in order to make the right coverage decisions. Employers and others are relying on their PBMs to evaluate the drugs, take to P&T to make the decisions.



AIS Health: Are any of the percentages of the clinical and cost utilization management strategies currently used particularly noteworthy? If so, what and why?

Rayburg: Prior authorization was cited as the most currently used UM strategy (95%) but PA as a UM tool is not new; it’s been around and used for years. However, we have seen PA evolve over time in the effort to ensure appropriate use or reduce inappropriate use, which by the way was the top goal for specialty drug management among respondents. One example of how PA has evolved includes moving away from indefinite approval duration. Previously, the thought was specialty drugs are used in the treatment of serious conditions, and patients need access to drugs and often for a lifetime, so approvals were granted indefinitely as a result. However, that mindset is changing, and plan sponsors – while still committed to providing access to much-needed specialty drugs – also want to know the drugs are working for members. Limiting a PA to one year to allow a renewal period to assess if the patient’s condition is benefiting from the drug helps to ensure appropriate use.



AIS Health: The report points out that member dissatisfaction and treatment delays are the top two UM program challenges. How can these challenges best be addressed?

Rayburg: By determining the purpose and value of the UM being implemented and then being familiar with and monitoring the UM process. Understand the number of PA requests, how many approvals, how many denials and how many denials result in appeals where the denials are overturned. Monitoring this information can help to assess how well the current UM is working while giving plan sponsors the information needed should tweaks to the criteria or process be considered.



AIS Health: Could you please comment on the biosimilar strategies? Are you surprised that these percentages aren’t higher?

Rayburg: No, I think it is encouraging there is uptake of biosimilars; however, it gets complicated, as the biosimilars compete against themselves and the brand reference product, which continues to be marketed. The optimal strategy is to cover the lowest net cost product, but sometimes that may turn out to be the brand reference product as a result of increased rebates or better contract rates. The savings may not always be tied to coverage of the biosimilar but rather a result of the competition the presence of the biosimilars in the market creates.



AIS Health: Could you please comment on the awareness levels of biomarker testing?

Rayburg: It was a little surprising to see that only 25% of respondents know a fair amount about them, while 75% either haven’t heard of them or have heard of them but don’t know much about them. This indicates that more education and communication are needed on the value of this testing with specialty drugs. There is more awareness with oncology drugs, as the newer drugs are more targeted to specific genetic mutations, [and] a test is needed to identify the presence of the genetic mutation for the drug to work. The other biomarker testing that identifies how well a patient will respond to a specific drug becomes a bit of a balancing act between costs of the tests and the value of the outcomes. More information and education are needed in order for plan sponsors to become more comfortable with the idea and the value the testing can deliver in terms of drug cost savings.



AIS Health: What can be done and by what stakeholders to raise awareness of this?

Rayburg: Ask more questions, obtain more information from the PBMs, learn if there are biomarker testing initiatives being offered by the PBM, and review the intended value or ROI [i.e., return on investment] the testing is offering.