Biotechnology Healthcare - June 2008 - (Page 55) “These biologics may look costly at first, but they’re usually a lot more cost effective than a new liver,” says Kristin Begley, PharmD, of Hewitt Associates. trary to the whole premise of valuebased plan design.” “Two years ago, employers were trending toward the creation of additional tiers for specialty products to shift more cost share to members. We advise clients not to implement a fourth specialty tier, and monthly caps on coinsurance designs are a must,” says Kristin Begley, PharmD, the pharma practice leader at Hewitt Associates in Lincolnshire, Ill. “If you don’t, be prepared to add up the extra costs of catastrophic care. These biologics may look costly at first, but they’re usually a lot more cost effective than a new liver.” “The average specialty patient will get specialty medications filled nine times a year along with fills of traditional medications for a total of 30 to 35 prescriptions a year. Compliance is an issue,” says DeStefino. “Why would you extract more from that person and put them in a position here they become noncompliant?” “As you get into consumerdirected models,” he adds, “these employees will go through front-end deductibles very quickly, and then you have old-fashioned indemnity where the cost share shifts or goes down to zero. One month could push the family to their deductible, and then the employer is on the hook for the rest of the year. If you’re an employer, are you comfortable with a $5,000 family deductible that a family can reach in one or two months if they have one family member taking these medications? Or do you treat it differently — keep it as a carve-in? A lot of that isn’t sorted out yet. “We try to counsel clients that they need to look at the larger picture,” says DeStefino. “The line item is scary in terms of cost per 30 days, but it’s a small part of the overall utilization that the benefit generates. If you use all the arrows of cost containment in your quiver to control costs around the traditional medications, you’re probably going to be in a pretty good position to afford these prescriptions. It’s usually the sickest people who need them.” They’re also often the least able to afford the coinsurance. CARE MANAGEMENT Pitney Bowes has yet to add up exactly how much biologics are costing the company. But they are starting to have an impact on the pharma budget. Etanercept (Enbrel) just broke into the company’s top 25 list of the most expensive medications. And Mahoney knows that all he has to do to find workers taking biologics for MS is walk down the hall from his office. Six years ago, the company signed up with the pharmacy benefit manager Caremark to help manage the drugs. “We do the fulfillment by mail order,” says Mahoney. “It’s not covered at retail. Part of our thought is care management. A care management person at Caremark can inventory whether the individual is compliant, and work on side effects. We felt that if we were spending that much money, we wanted full impact for it. The big thing with biologics is that people will start them and then stop them. At least we have ongoing management.” Over time, genetic tests are likely to become one more regularly required tool in companies’ costcontrol kits. “For Herceptin,” says Begley, “we’re starting to see fully insured companies say, ‘We won’t pay for it unless the patient is human epidermal growth factor receptor-2 (HER2) positive.’ If the patient is not HER2 positive, the cure rate is significantly lower, and insurers don’t want to spend the money.” For now, the discussion around cost and value has centered on a relatively small number of patients. But all the analysts agree on one point: As biologics push through the pipeline in larger and larger numbers for bigger and bigger disease categories, there will be a growing focus on benefit design. “It’s a ticking time bomb right now,” says Hinds. “Right around the corner, we’re going to be faced with this biologics explosion, and most of us are very concerned. We’re not sure how to finance it and still protect employees and their families. I see it as an issue that’s going to be a real financial dilemma for employers.” “Drugs as we see them today will change dramatically over the next 10 years,” says Hewitt’s Begley. “Maybe we can cure diabetes rather than take drugs every day. And how much does that cost?” More importantly: How much is it worth? John Carroll is a freelance writer and is the editor of Fierce Biotech. MAY/JUNE 2008 · BIOTECHNOLOGY HEALTHCARE 55
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