A study commissioned by CVS Caremark Corp. spotlights opportunities to slash spending on expensive specialty medications, which are consuming a growing portion of the nation's health care expenditures.


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CVS: Benefit change can yield specialty drug savings

April 9th, 2014

WOONSOCKET, R.I. – A study commissioned by CVS Caremark Corp. spotlights opportunities to slash spending on expensive specialty medications, which are consuming a growing portion of the nation's health care expenditures.

CVS said Wednesday that according to a new report from consulting firm Milliman, transitioning specialty drug prescriptions from the medical benefit to the pharmacy benefit can yield sizable savings for health care payers by improving management of these complex and costly medicines.

The research reveals that such a benefit switch can save payers an average of 19% across 14 classes of self- or provider-administered injectable specialty drugs for the treatment of conditions such as multiple sclerosis and autoimmune disorders. By moving coverage to the pharmacy benefit, payers are able to implement more effective management tools such as formulary design, utilization management, and preferred or exclusive networks.

According to the report, 53% of specialty medication spending currently occurs under the medical benefit.

Such savings will be key as the specialty pharmacy spend is expected to rise from $92 billion in 2012 to $235 billion by 2018, CVS noted.

"With the continued rise in utilization and spend related to specialty medications, health care payers have a tremendous opportunity to reduce costs and improve care through a variety of approaches," Alan Lotvin, executive vice president of specialty pharmacy at CVS Caremark, said in a statement. "Transitioning specialty medications from the medical benefit to the pharmacy benefit, as well as offering patients more convenient options by addressing where infusion care is administered, can produce significant savings. We are focused on finding ways to better manage the rising costs related to these complex and expensive drugs, while ensuring patients continue to receive high-quality care."

The study was based on 2012 claims data for a commercially insured population as reported in Milliman's Consolidated Health Cost Guidelines (HCG) database. The research included plans with a variety of commercial plan designs, such as PPO, HMO and POS.

Compared with the average patient, specialty drug patients are more likely to have multiple diagnoses, see more specialists and fill more prescriptions, as well as have more lab tests, emergency room visits and hospitalizations — resulting in overall health care costs as much as 8.5 times higher than non-specialty patients, according to an earlier Milliman report.

"CVS Caremark provides an end-to-end pharmacy management and delivery solution for specialty pharmacy patients that helps them better manage their medications and their disease throughout their journey," stated Jon Roberts, president of CVS Caremark's pharmacy benefit management (PBM) business. "Our suite of programs focuses on managing cost, quality and access for specialty conditions through a range of unique specialty pharmacy services."

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