More than half of large employers will manage the use of specialty drugs more closely next year, according to results of a survey released last week by the National Business Group on Health. Up from a third of employers surveyed last year, 55 percent say they will direct their employees to specialty pharmacies for drugs that can cost thousands of dollars per treatment.
“Health care benefit cost increases at large employers are expected to hold steady in 2016, due in large part to changes employers are making to their benefit programs,” the NBGH said in a statement. “At the same time, nearly half of large employers say if they don’t take additional measures to control costs, at least one of their health plans will reach the threshold that triggers the ‘Cadillac’ excise tax under the Affordable Care Act in 2018.”
Benefit managers say they expect costs to rise 6 percent in 2016, about what is expected this year.
Employers will continue to shift more of the burden on their employees. About a third say they will make small increases in the amount employees are expected to pay, and about a quarter say
The National Business Group on Health is a non-profit group represented by 425 large US employers.
Our Take: With high-profile specialty drug prices regularly making the news, and employers watching their drug costs rise at a double-digit pace, it isn’t surprising to see employers wanting to take a more active role.
Bioscience companies made the strategic shift to specialty drug development about a decade ago, and now we are seeing the results of that business decision. In 2014, there were nearly as many specialty drugs approved as all drugs in 2013. This move may prove to be very profitable for manufacturers, if the cost-effectiveness story is compelling and few substitutes are available. But as drug prices continue to rise disproportionately, there are implications for both public health (Medicare and Medicaid) and employers largely responsible for paying for them.
It is important to recognize that employers aren’t necessarily opposed to spending the money on drugs that keep their employees healthy and productive. But as they are with ACOs, Pharma is largely under-engaged with large employers. Expectations are changing among benefits managers: they want to be in the loop and not be caught off guard when new, potentially expensive drugs are in development. They want to be informed.
To the point: at a recent ACO conference we heard one large employer lament about Gilead’s Harvoni, “It’s not that we didn’t have the ability to pay for it. We just didn’t plan on it,” he said. “These guys just started calling on docs and selling the thing without coming to us first.”