As I started my career with a passion to add value to the healthcare industry, I would never have been able to predict the rapid evolution we are experiencing today. Take, for example, specialty pharmacy. What originated nearly 50 years ago as a treatment solution for just a handful of conditions has grown exponentially into a $250 billion industry now treating hundreds of ultra-rare conditions and orphan diseases. The explosive growth of the specialty pipeline, combined with the high cost and complexity of managing specialty patients (who often have at least one other chronic condition or comorbidity), highlights the need for payers to stay ahead of the trend and deploy targeted, future-focused management strategies for better specialty drug management.
Tracking the Trends
In 2008, there were eight specialty drugs approved by the FDA; compare that to 2020 with 53 total specialty drugs, and half of those approved for medical benefit use. Not only are the number and scope of specialty drugs increasing, but so are costs. So far in 2021, five high-cost therapies have been approved with price tags of $400K to nearly $750K—this is the new normal. As high-cost and potentially life-saving drugs continue to enter the market, it becomes more and more difficult to determine which patients should receive them and how they will be paid for.
In 2012, about one-quarter of total pharmacy spend was attributed to specialty drugs; in 2020, we have reached 50%. When you drill down even more, about half of that spend occurs on the medical benefit. Going deeper, oncology remains the top driver when it comes to overall medical benefit costs as the highest-spend category for the past 11 years—representing nearly 50% of total per-member-per-month spend for the Commercial line of business and over 60% for Medicare.1 How can employers and payers keep track of these evolving market dynamics?
The Power of Magellan Rx Excellence
At Magellan Rx Management, we have nearly two decades of experience creating flexible solutions that allow our customers to improve patient care, stay ahead of trends, and reduce specialty spend across both the traditional pharmacy and medical benefits. As the original experts in medical pharmacy management, we have a deep understanding of the trends and demonstrate our commitment to advance thought leadership in this space with the annual Magellan Rx Management Medical Pharmacy Trend ReportTM. This Report is a one-of-a-kind resource that highlights key areas of spend and trend across commercial, Medicare, and Medicaid lines of business as well as management strategies for new and emerging therapies.
We also leverage our Expert Clinical Network of more than 175 key opinion leaders (KOLs) across multiple disease states that participate in peer-to-peer discussions and guide recommendations for patients with complex and hard-to-treat conditions. This is especially helpful for payers who lack in-house expertise in ultra-rare and orphan conditions as we work to secure specially matched, unbiased KOLs that are affiliated with major healthcare treatment centers nationwide.
And we don’t shy away from the hard stuff. Our legacy is solving complex pharmacy challenges and meeting the momentum of new developments head-on. In fact, that is what makes us stand apart from other PBMs—our integrated approach and account service model is designed to encourage innovation across clinical, formulary design, distribution channels, and medical pharmacy strategies. These unique solutions are prioritized and intrinsic to the value we bring as a partner.
- Medical Pharmacy Solutions with coordinated management across all sites of service, including utilization management support.
- Formulary Strategies for both traditional and medical pharmacy drugs that connect best-in-class formulary management and value-driven rebate solutions with clinical policies and medical pharmacy programs to manage costs.
- Specialty Pharmacy Distribution that takes a patient-centric, clinical approach to drive adherence and improve outcomes, along with cost avoidance and cost management solutions to reduce total cost of care.
- Condition-specific Programs that deliver better health outcomes and improved CMS STAR ratings.
One example of our devotion to excellence is the work we have done in preparation for the market entrance of oncology biosimilars. We started building the foundation in the autoimmune category and continued to refine our methodology, working hands-on with payers and pharma to create a solution that is not passive but evolves with the dynamic market. As such, our customers were able educate their providers and members prior to the availability of oncology biosimilars. Our impact? We’ve delivered over $40 million in annualized savings for early adopter health plans.
Unlock the Possibilities
I am proud to lead a team of industry experts and thought leaders who inspire me every day to challenge the status quo and add value to this complex area of healthcare spend. I would never have guessed that fifteen years post pharmacy school would have led me to where I am now, but I couldn’t be more grateful. Our team is poised to answer the industry’s toughest questions with thoughtful, clinically-focused solutions—and I’m confident we’re already prepared for the next wave of change. It’s in the spirit of our people to push the industry forward, and I take pride that we have the right experts collaborating with our customers to develop proven programs that drive real results.
Are rising specialty costs a concern? Let’s connect on how we can help solve your unique population’s needs. We’re here for you.
- Magellan Rx Management Medical Pharmacy Trend Report™, 11th Edition, © 2021