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CVS: Specialty drug spending to quadruple
November 20th, 2013
WOONSOCKET, R.I. – A new CVS Caremark Corp. report forecasts specialty drug spend to more than quadruple to $402 billion annually by 2020.
CVS said Wednesday that its 2013 Specialty Trend Management Insights Report, which examines specialty pharmacy prescribing trends and strategies for managing costs, also noted that although les than 4% of patients use specialty medications, they account for 25% of health care costs.
Specialty drugs treat complex diseases such as multiple sclerosis, rheumatoid arthritis, hepatitis C and cancer and represent a rapidly growing area of spending in health care, CVS noted.
"Specialty pharmacy trend is driven by price, mix and utilization, just like traditional drug trend, but managing specialty drug trend is more complex," Jon Roberts, president of CVS Caremark's pharmacy benefit management business, said in a statement. "While many payors already have basic strategies in place to manage costs and ensure safe and effective use of specialty drugs, we have found that every plan has the opportunity to improve upon their management of this category."
The report reviews foundational strategies for managing specialty drug trend and provides additional insights into key areas where CVS Caremark offers expanded services to improve cost savings for clients. Those areas include understanding the cost impact resulting from the location of drug administration for infused drugs (such as at the hospital, doctor's office or at home); gaining visibility to the portion of specialty pharmacy spend billed under the medical benefit; and providing a full range of services to provide comprehensive care for the patient that can improve outcomes and rein in overall medical costs.
"Clinical appropriateness is the primary consideration when managing specialty pharmacy patients, but there are a variety of other factors that can also affect the optimal therapy choice for an individual," stated Alan Lotvin, executive vice president of specialty pharmacy at CVS Caremark. "For example, the site of care where an infused drug is administered to the patient is one area that can significantly impact costs for the patient and payor without necessarily influencing the patient's outcomes."
The report pointed out that nearly half of specialty drug spend occurs under the medical benefit instead of the pharmacy benefit, where it can be harder to track and manage using clinical and cost management strategies.
And compared with the average patient, specialty patients are more likely to have multiple diagnoses, see more specialists, fill more prescriptions and have more lab tests, emergency room visits and hospitalizations. Consequently, specialty patients have much higher overall medical costs, as much as 8.5 times higher than nonspecialty patients, according to the report.
CVS Caremark added that in 2014 it plans to launch a new program that will enable specialty drug patients to access its full suite of specialty pharmacy services at their local CVS/pharmacy store. The patient's local CVS pharmacist will be able to accept their prescription and connect them with the support services available through the CVS Caremark specialty pharmacy, the company said.