Skyrocketing specialty drug costs — like those for new-generation hepatitis C drugs that cost upward of $84,000 per treatment— are the No. 1 driver of health care expenses among large employers, according to an annual National Business Group on Health survey released Tuesday.
While specialty drugs are used by less than 4 percent of the population, 31 percent of employers surveyed by the Washington-based group indicated they are the top concern for driving their health care costs.
Skyrocketing specialty drug costs — such as for new-generation hepatitis C drugs that cost upward of $84,000 per treatment — are the No. 1 driver of health care costs among large employers, according to an annual National Business Group on Health survey released Tuesday.
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Skyrocketing specialty drug costs — such as for new-generation hepatitis C drugs that… more
“This is surprising because specialty drugs weren’t even considered among the top five drivers of health costs in the same survey just three years ago,” said Brian Marcotte, president and CEO of the Washington-based group. There is a projected 17 percent jump in specialty drug costs as the result of a pipeline of new medications expected in oncology, multiple sclerosis, gastrointestinal disease, psoriasis, asthma and diabetes, Marcotte said.
While these drugs have the potential to be very beneficial, “they have the potential to be very expensive," Marcotte said.
Overall, companies project their costs will rise 6 percent this year — or 5 percent when savings from plan design changes are taken into account. That is stable from previous years. “But the annual trend of 5 percent to 6 percent is really unsustainable,” Marcotte said. “It’s still the No. 1 priority employers are focused on. And it really threatens the overall long-term affordability of health care.”
In their efforts to curb rising costs in health care, here’s a look at what employers indicated they plan to do in the coming year:
Specialty drug cost containment: Companies indicated they planned to more aggressively control specialty drug costs through requiring what are called "utilization management protocols," which include a set of techniques to manage costs by influencing patient care decision-making through case-by-case assessment. They are also instituting requirements that specialty medications be obtained through specialty pharmacies and creating specialty tiers within their pharmacy benefits.
Alternate delivery models: Employers are moving away from plan design changes and are instead looking at the supply side of health care. In particular, they are looking to more offerings of value-based care through affordable care organizations and select high-performance networks of providers. They are also expanding their use of centers of excellence for employees seeking certain procedures like bariatric surgery, orthopedics, cancer and infertility and encouraging lower-cost options like telemedicine.
While specialty drugs are used by less than 4 percent of the population, 31 percent of employers surveyed by the Washington-based group indicated they are the top concern for driving their health care costs.
Skyrocketing specialty drug costs — such as for new-generation hepatitis C drugs that cost upward of $84,000 per treatment — are the No. 1 driver of health care costs among large employers, according to an annual National Business Group on Health survey released Tuesday.
Enlarge
Skyrocketing specialty drug costs — such as for new-generation hepatitis C drugs that… more
“This is surprising because specialty drugs weren’t even considered among the top five drivers of health costs in the same survey just three years ago,” said Brian Marcotte, president and CEO of the Washington-based group. There is a projected 17 percent jump in specialty drug costs as the result of a pipeline of new medications expected in oncology, multiple sclerosis, gastrointestinal disease, psoriasis, asthma and diabetes, Marcotte said.
While these drugs have the potential to be very beneficial, “they have the potential to be very expensive," Marcotte said.
Overall, companies project their costs will rise 6 percent this year — or 5 percent when savings from plan design changes are taken into account. That is stable from previous years. “But the annual trend of 5 percent to 6 percent is really unsustainable,” Marcotte said. “It’s still the No. 1 priority employers are focused on. And it really threatens the overall long-term affordability of health care.”
In their efforts to curb rising costs in health care, here’s a look at what employers indicated they plan to do in the coming year:
Specialty drug cost containment: Companies indicated they planned to more aggressively control specialty drug costs through requiring what are called "utilization management protocols," which include a set of techniques to manage costs by influencing patient care decision-making through case-by-case assessment. They are also instituting requirements that specialty medications be obtained through specialty pharmacies and creating specialty tiers within their pharmacy benefits.
Alternate delivery models: Employers are moving away from plan design changes and are instead looking at the supply side of health care. In particular, they are looking to more offerings of value-based care through affordable care organizations and select high-performance networks of providers. They are also expanding their use of centers of excellence for employees seeking certain procedures like bariatric surgery, orthopedics, cancer and infertility and encouraging lower-cost options like telemedicine.
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