Specialty Medications: Shifting the Focus From “How Much” We Spend to “How Well” We Spend

Andrea Hofelich, National Pharmaceutical Council, 202-827-2078, ahofelich@npcnow.org

Kaden Milkovich, Center for Value-Based Insurance Design, 734-615-9635, kmilkovi@med.umich.edu

Washington, DC, June 9, 2014—As health care decision-makers grapple with how to ensure access to specialty medications, the University of Michigan Center for Value-Based Insurance Design (V-BID Center) and the National Pharmaceutical Council (NPC) have released a new report, “Supporting Consumer Access to Specialty Medications Through Value-Based Insurance Design,” that explores how value-based insurance design (V-BID) could be utilized to address specialty medication access concerns.  

Specialty medications are those that typically require special handling when delivered and administered to patients. They are frequently used in the treatment of cancer, rheumatoid arthritis (RA), multiple sclerosis (MS), as well as a number of serious and often life-threatening conditions. The increased prescribing of this class of innovative medications is coupled with a recent trend by public and private payers to shift a larger portion of the medication costs to consumers. The report explains that the result of this policy is that “higher cost-sharing is associated with reductions in both essential and non-essential service use.”

V-BID is built on the principle of lowering or removing financial barriers to essential, evidence-based, high-value clinical services to align patients’ out-of-pocket costs, such as copayments, with the value of services. Driven by the concept of clinical nuance, V-BID recognizes that medical services differ in the benefit they provide, and the clinical benefit derived from a specific service depends on the characteristics of the patient receiving it. According to report author and V-BID Center Director, A. Mark Fendrick, MD, V-BID seeks to shift the focus from “how much” to “how well” we spend our health care dollars.

Acquisition cost, not clinical value, is typically the driving force behind consumer cost-sharing provisions for specialty medications in nearly all public and private health plans. Dr. Fendrick states, “It is imperative for decision-makers that cost-containment efforts do not produce preventable reductions in quality of care.”

Payers and purchasers can use a variety of techniques to apply V-BID to specialty medications including:

  • Imposing no more than modest cost-sharing on high-value medications;
  • Reducing cost-sharing based on patient- or disease-specific qualifications;
  • Selectively reducing cost-sharing for patients who fail to respond as desired to another medication based on current access restrictions used by insurance companies; or
  • Using cost-sharing to encourage patient selection of high-performing providers.

The authors point out that it will be critical to anticipate and address some of the foreseeable challenges associated with clinically nuanced benefit designs to make V-BID work effectively for specialty medications. Specifically, plans and plan sponsors must:

  • Prepare for administrative complexity;
  • Establish incentives that engage patients early;
  • Communicate effectively about V-BID;
  • Integrate V-BID with provider-facing initiatives; and
  • Recognize that the perfect must not be the enemy of the good.

As Americans are responsible for an increasing portion of the cost of medical care, cost-related non-adherence of potentially life-saving interventions is a real and growing problem. Stakeholders must understand that while a comprehensive V-BID program for specialty pharmaceuticals may not be immediately feasible, significant headway can be made by beginning with certain high-priority medications or clinical conditions. Replacing the archaic cost-driven approach to consumer cost-sharing with clinically nuanced alternatives can improve quality, foster consumer engagement and mitigate legitimate concerns that one-size-fits-all strategies may lead individuals to forgo important care.

About the National Pharmaceutical Council (NPC)
The National Pharmaceutical Council is a health policy research organization dedicated to the advancement of good evidence and science, and to fostering an environment in the United States that supports medical innovation. Founded in 1953 and supported by the nation’s major research-based pharmaceutical companies, NPC focuses on research development, information dissemination, and education on the critical issues of evidence, innovation and the value of medicines for patients. For more information visit www.npcnow.org and follow NPC on Twitter @npcnow.

About the Center for Value-Based Insurance Design
Since its inception in 2005, The University of Michigan Center for Value-Based Insurance Design has led efforts to promote the development, implementation, and evaluation of innovative health benefit designs balancing cost and quality.  A multidisciplinary team at the U-M School of Public Health first published and named the V-BID concept, and has guided the approach from early principles to widespread adoption in the private and public sectors. The Center played a key role in the inclusion of V-BID in national health care reform legislation, as well as in numerous state initiatives. For more information, visit www.vbidcenter.org and follow V-BID on Twitter @UM_VBID.

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