Managed Care - March 2008 - (Page B27) Chapter 3 Affordability and Access As more biologics enter the market, health plans and employers face the challenge of controlling costs while ensuring that biologics are affordable. This chapter discusses tools and techniques commonly employed to control access to biologics, and examines alternative benefit designs that may improve the affordability and accessibility of biologics for patients who need them. The country is ambivalent concerning the role for cost in insurance coverage policy, and Medicare is explicitly prohibited from using cost-effectiveness analysis. Public opinion would be even less tolerant of a private insurer that attempted to deny coverage of a biologic that created any health benefit, no matter how small, just because of the financial cost, no matter how large. — JAMES C. ROBINSON, PhD, Health Affairs, 2006 The Centers for Medicare & Medicaid Services estimates that in 2006, prescription drugs accounted for 10 percent of U.S. health care spending — substantially less than the percentage devoted to hospital care (31 percent) or physician services (21 percent) (Catlin 2008). Still, in the $2 trillion health care sector, that amounted to $217 billion spent on pharmaceuticals. Specialty pharmaceuticals (biologics and high-priced small-molecule drugs) are thought to account for 10 to 20 percent of purchases under the pharmacy benefit (Medco 2007, Express Scripts 2007). Only a small minority of a health plan’s members — 1 to 5 percent — uses specialty drugs (Goldman 2006), but a single occurrence can be costly. Consider the per-patient per-year costs incurred in 2005 for several biologic therapies by Kaiser Permanente, a large California-based integrated health plan (Table 1). For a multimillion-member payer, where risk is spread across a large population, expenditures for high-cost, low-incidence-of-use therapeutics are more easily absorbed than in smaller health plans. Express Scripts, a 50 million-member pharmacy benefit manager (PBM), reports that among its commercial clients in 2006, per-member per-year spending for the top three therapeutic categories requiring treatment with a biologic drug (inflammatory conditions, multiple sclerosis [MS], cancer), combined, was $43.08 (Express Scripts 2007). Combined PMPY spending for the top three therapeutic categories treated with nonspecialty drugs (hyperlipidemia, gastrointestinal disorders, mood disorders) was more TABLE 1 Biologic therapies account for 1 to 2 percent of total health care expenditures. Specialty drug costs reported by a large, commercial-sector health plan Costs for indications listed are for calendar year 2005 Trastuzumab (Herceptin): $36,000 for the treatment of breast cancer (6 months of treatment) Rituximab (Rituxan): Up to $32,500 for non-Hodgkin’s lymphoma (8 weeks) Bevacizumab (Avastin) or cetuximab (Erbitux): Up to $28,500 for metastatic colorectal cancer (8 weeks) Etanercept (Enbrel), infliximab (Remicade), anakinra (Kineret), or adalimumab (Humira): $18,000 or more for rheumatoid arthritis Etanercept, efalizumab (Raptiva), or alefacept (Amevive): Up to $22,000 for psoriasis Infliximab: $16,500 or more for Crohn’s disease SOURCE: MONROE 2006 BIOLOGIC THERAPY MANAGEMENT 27
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