Payers Continue to Employ Array of Specialty Drug Management Strategies

Reprinted with AIS Health permission from the May 2024 issue of Radar on Specialty Pharmacy.

Rebates continue to be a huge part of the specialty pharmacy space, with 93% of respondents to a recent survey receiving them for drugs in the pharmacy benefit. Meanwhile, 44% of respondents said their firm received rebates for medical benefit drugs, representing an increase from 39% in the prior year’s survey. Those are just some of the findings in the Trends in Specialty Drug Benefits Report from Pharmaceutical Strategies Group (PSG), an EPIC company.

The 11th annual survey, which reflects 2023 information, was fielded from Sept. 18 through Oct. 13, 2023. The primary source of respondents was PSG’s proprietary database of drug benefit decision makers, and they included people from employers, health plans (or third-party administrators or insurance companies) or union/Taft-Hartley plans. There were 185 benefits leaders from plan sponsors with an estimated 86.6 million lives.

Published April 29, the report was co-sponsored by Genentech USA, Inc., a member of the Roche Group.

Prior authorization continued to be the top utilization management strategy for respondents, with 97% saying they currently use it. That was followed by step therapy and quantity limits and/or dose optimization programs, while white bagging and using niche specialty pharmacies to manage certain conditions were among the least used strategies. Having one tier for all specialty drugs was the most common tier structure, cited by 59% of respondents.

As payers try to keep their spending on specialty drugs under control, some have turned to alternate funding models, working with vendors to carve out certain specialty drugs and seek coverage from patient assistance funds. Researchers found that the use of this strategy may be waning: 13% of respondents were using them in the current survey, down from 21% in the prior one, and 8% said they were exploring their use, a drop from 12% last year.

AIS Health, a division of MMIT, spoke with PSG’s Morgan Lee, Ph.D., senior director of research and strategy, and Renee Rayburg, R.Ph., vice president of clinical strategy, co-authors of the report, about these findings and more.

AIS Health: What were some particularly interesting and/or surprising findings in the report?

Rayburg: We found it interesting that managing total cost of care was respondents’ top goal, while their highest-rated challenge was access to reliable data on the total cost of care impact of medications.

Lee: We found payers’ lack of clarity around CGT [cell and gene therapy] financial protection products interesting — 38% didn’t know enough about these products to rate their satisfaction with the offerings, and over half either weren’t using any product in this area or weren’t sure if they were.

Rayburg: Regarding biosimilars, we found it interesting that a key theme in the challenges to maximizing the benefits of biosimilar competition was reliance on PBMs that have been slow to adopt strategies. We were a bit surprised to learn that 24% of employers weren’t sure if they were covering any Humira biosimilars in a preferred position, and 44% were not sure about their strategy with respect to Humira biosimilars that have come to the market at low and high WAC [wholesale acquisition cost] price points.

Lee: We were also surprised to find that only 10% of respondents had observed differential impacts of utilization management programs for certain groups of members. It’s possible that disparities may exist in some cases without being identified and tracked at the plan level. 

AIS Health: Last year’s report showed that 16% of respondents carved out their specialty drug benefit. That percentage dropped to 13% this year. Do you expect that decline to continue? Why or why not?

Lee and Rayburg: This change was so small that it may be due simply to sample differences from one year to the next, so we are not drawing strong conclusions around this finding. While interest in carving out still exists in the market, we have seen that contractual arrangements can make it financially challenging to do this, so it is not surprising that this percentage is not increasing.

AIS Health: Were you at all surprised that the percentage of biosimilars in the lowest specialty tier wasn’t higher?

Rayburg: When interpreting these data, keep in mind that this question was answered only by the 31% of plans that used more than one specialty tier. To answer your question, in our experience, it doesn’t seem clear that all payers have figured this out. Humira biosimilars represent the most widely used drug in the pharmacy benefit to have biosimilars enter the market to date. With the brand reference product still having such a large portion of market share, plans seem to still be navigating the landscape. In addition, manufacturer copay assistance is available for many of the brand reference products and some of the biosimilars. This can interfere with any tiering strategies plans may set up to steer patients to use products in lower tiers. For example, Express Scripts just announced their Humira biosimilar strategy, which is expected to launch in June, and they pointed out patients would have a $0 copay for the biosimilar based on the drug itself, not the tier it is included within.  

AIS Health: Could you please comment on the finding that 6% of respondents had value-based contracts (VBCs)?

Lee: It’s interesting that we continue to see low engagement in value-based pharmaceutical contracts but moderately high interest in participating in these arrangements. GLP-1s [glucagon-like peptide-1s] and CGTs may be particularly well suited for value-based contracts. CGTs are especially notable. The CGT pipeline is robust, and CGTs are increasingly expensive — one recently approved gene therapy was priced at $4.3 million. These therapies are positioned to treat patients with the most severe forms of the disease they treat, the process is complex, and the drugs don’t work in all patients, so many drug companies are offering different types of value-based contracts for these therapies.  

AIS Health: Respondents indicated that the biggest need for VBCs is additional data/evidence showing their benefits. What kind of information may be most persuasive, and what stakeholder(s) should provide it?

Rayburg: Pulling data to support the outcomes of CGTs can be complicated. It is dependent upon what the expected outcome will be — for example, in patients with hemophilia, treatment with a CGT should result in decreased number of bleeds and decreased need for continued treatment with factor products, which could be reflected/measured in medical and drug claims. In some cases, the medical vendor/health plan may take the lead in measuring and pulling the data for these outcomes and/or managing the VBCs. In other cases, payers may outsource to a company that specializes in this type of work.

AIS Health: Could you please comment on the year-over-year drop in the use and exploring the use of alternative funding models?

Lee: Given the low perceived sustainability and increasing awareness and understanding of these programs, as well as efforts by stakeholders in the system to block them, these declines are not surprising. 

AIS Health: What did you make of the findings around biomarker testing, in particular the 40% of respondents that do not cover it and do not plan to?

Rayburg: There are different types of biomarker testing available in the market. Most payers do cover those that are drug-specific and depend on presence of a specific genetic mutation in order for a drug to work. These are commonly found in oncology drug therapies that target very specific patient types. In our experience, these are covered and are usually embedded within prior-authorization policies.  Alternatively, other biomarking testing is used more broadly to overall predict how an individual patient may respond to many drug therapies. These programs, while available, are not growing in use.

AIS Health: What might the increase in employers and health plans that are not using or considering site-of-care programs be attributed to?

Lee and Rayburg: To clarify, the finding here was a slight increase in not using or considering among health plans (22% in 2023, 32% in 2024) but a slight decrease in this among employers (50% in 2023, 42% in 2024). Site of care can be challenging for health plans, especially those owned by or part of hospital systems where the physician practices are within the organization. In those situations, we have seen alternate strategies such as fee schedules or utilizing system-owned home infusion companies to achieve cost savings for the administration of select specialty drugs. Site-of-care programs require substantial patient and provider support through the process, and in our experience, mandatory site-of-care programs achieve the most success.

By Angela Maas

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