“These [medical pharmacy] trends continue to be a challenge for all stakeholders involved in the care of patients with complex specialty conditions, making it vital for them to stay current and informed for better decision-making,” said Kristen Reimers, RPh, senior vice president, specialty clinical solutions, Magellan Rx Management.

Medical benefit drug spend, or what we call medical pharmacy, continues to be one of the largest cost drivers when it comes to overall specialty drug trends. At Magellan Rx, we have nearly 20 years of experience in managing this high-cost and complex portion of medical pharmacy spend and have published the industry’s only detailed source for trends related to medical pharmacy for the last 11 years.

Here are the trends you need to know from the eleventh edition of the Medical Pharmacy Trend Report:¹

1. Commercial per-member-per-month (PMPM) spend has increased 89% from 2009 to 2019.
2. Medicare remains the highest spend and utilization line of business (LOB) with 10% of members having a medical drug claim.
3. The average annual cost per member for the top 10 drugs is almost $45,000 for Commercial members.
4. For medical specialty drugs 30% of members are driving 96% of the spend.
5. Gene therapy is the top concern for payers in medical pharmacy.
6. Oncology remains #1 highest-spend category across all LOBs.
7. The oncology pipeline is forecasted to increase 105% in PMPM spend from $52 in 2019 to $106 in 2024.
8. There’s a new top five drug list for commercial: Remicade, Neulasta, Ocrevus, Herceptin, Avastin, with Ocrevus entering the top 5 and having an 85% trend.
9. The highest-cost medical benefit drugs exceed $1M per patient per year.
10. Biosimilars Renflexis and Inflectra (in the BDAIDs category) market share increased 4-6 percentage points for commercial and Medicare and a substantial 24 percentage points for Medicaid.

Want to dig into these trends and more, including the latest in management strategies to combat rising pharmacy trend? Download your copy of the report.

1. Unlock the Latest Trends and Emerging Strategies to Manage Rising Medical Benefit Specialty Drug Spend.” Magellan Rx Management Press Release, 20 May 2021. Accessed May 20, 2021.
2. 2020 Magellan Rx Management Medical Pharmacy Trend Report™, © 2021.

Two patients, both 73-year-old males with newly diagnosed congestive heart failure, are seen by the same provider and prescribed the same therapeutic regimen. Despite the similarities, the 2 patients experienced drastically different therapeutic outcomes. These divergent outcomes were not attributable to the clinical care they received but instead to non-clinical factors surrounding each patient’s circumstances. These non-clinical factors are also referred to as social determinants of health (SDOH). According to the Centers for Disease Control and Prevention (CDC) website, SDOH are conditions in the places where people live, learn, work, and play that affect a wide range of health risks and outcomes. Some key SDOH that may influence clinical outcomes include housing insecurity, food insecurity, lack of transportation, and lack of family or other social support.

It is widely known that social and economic factors have significant impacts on health outcomes of both individuals and communities. At a population level, it has been estimated that clinical care accounts for only 20% of a community’s health outcomes while the remaining 80% is related to a combination of health behaviors (e.g., diet and exercise), the physical environment (e.g., housing security), and socioeconomic factors (e.g., education and social support). Despite this insight, addressing SDOH has traditionally been the purview of government and charitable organizations rather than healthcare providers. However, with the shift toward value-based reimbursement and increased accountability for the costs and health status of patients, there is an incentive for health plans and providers to further consider the social and economic barriers that contribute to poor health outcomes. Models are being developed that link healthcare systems, providers, and community resources in an integrated fashion to address SDOH. These models are evolving from systems that rely on acute episodes of care to a coordinated system focused on prevention and care management.

As the largest payer for healthcare in the United States, Medicare has also recently begun to make accommodations in order to address SDOH in the privately administered Medicare Advantage (MA) program. MA is a capitated system placing health plans that administer MA benefits at risk for the cost of caring for each beneficiary. MA plans are permitted to offer supplemental benefits beyond traditional Medicare offerings as long as those benefits are “primarily health-related.” Historically, the most common supplemental benefits offered by MA plans have been services not traditionally covered by medical insurance such as vision exams, hearing tests, and preventative dental services.

The Centers for Medicare & Medicaid Services (CMS) have recently begun to implement regulatory changes allowing MA plans more flexibility with regard to these supplemental benefits. First, the definition of “primarily health-related” has been expanded. Examples of this expanded interpretation include providing in-home support for activities of daily living (ADLs) or installation of grab bars in the bathroom in order to prevent injuries and reduce avoidable emergency room utilization. In addition, supplemental benefits that may reduce exacerbations of existing illnesses, such as installing air conditioning units or providing carpet shampooing for patients with asthma, may be considered. Beginning in 2020, MA plans may offer chronically ill patients additional benefits that directly impact SDOH, such as expanded meal delivery options to address food insecurity and transportation for non-medical needs like grocery shopping. In announcing the expanded options for MA plans, CMS Administrator Seema Verma said the changes “give plans the ability to be innovative” and the changes permit “benefits and services that address SDOH for people with chronic disease.”

The shifts occurring in healthcare delivery, including the expansion of accountable care organizations (ACOs), the rise of capitated reimbursements, and penalties associated with hospital readmissions, incentivize healthcare systems to become increasingly focused on holistic care for beneficiaries. By addressing individual and population SDOH, healthcare systems, providers, and community support can be integrated to improve health outcomes and reduce unnecessary healthcare utilization.

Parity Progress

Ten years ago today, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) was passed into law. This ground-breaking legislation required health plans to treat mental health and substance use conditions like physical medical conditions without treatment or financial limitations. For more than 40 years, Magellan has wholeheartedly supported and actively advocated for parity. Every day, we work together with our customers — health plans, employers, state Medicaid and military and government clients — to innovate new solutions on behalf of those we serve, which continues to advance the law and helps to reduce the stigma around mental health and substance use issues. At Magellan, mental health is fundamentally as important as physical wellness, but it’s just a start.

Beyond equal to individualized and integrated

While our country has made positive strides in parity, we know achieving a healthy, vibrant life is tied to many factors beyond parity – namely social determinants, such as housing, poverty, education and access to transportation and healthy food. One way we are addressing and accounting for these social determinants is by focusing on providing individualized, integrated care.

Complete Care-Person-centered. Community-focused. Evidence-based.

A great example is Magellan Complete Care, which operates person-centered health plans that provide complete care coordination for recipients in Medicare and Medicaid. In the state of Florida, we developed the first-in-the-nation Medicaid specialty health plan to integrate physical and behavioral healthcare and address the social determinants of health for individuals living with serious mental illness and substance use disorders. In Arizona, Massachusetts, New York and Virginia, our Medicaid health plans integrate the full continuum of healthcare services – including mental health and substance use disorder services and treatments individualized to help each member live their healthiest, most vibrant life.

Integrated Health Neighborhoods

Magellan Complete Care plan participants include many individuals who contend with complex conditions that impact their physical health and mental well-being every single day. These individuals need to stay connected to their families, friends, neighbors and others in their communities to maintain independence and achieve optimal health and well-being. Doing so makes the difference between surviving and thriving. To these ends, we have pioneered a care coordination model called the Integrated Health Neighborhood (SM).

This model challenges the definition of what you might think a traditional health plan does for its members. Instead of just focusing on physical and behavioral health treatment, Integrated Health Neighborhoods work within existing community support agencies and local public health systems to strengthen and extend their reach. Our local teams help each member navigate these systems and supports based on their needs as well as their preferences for connecting in their own communities. This helps minimize member disruption through the use of familiar local provider networks and support from trusted community organizations.

Our Integrated Health Network teams are comprised of Magellan associates who live in the same communities as the members they serve. Our assigned teams personally know people at agencies, organizations and local resources across their neighborhood, whom they can call on, person to person, to find the right resources for each member. They work collaboratively to help each individual member find his/her path to independence and well-being.

Recovery Support Navigators

A unique part of the team are the Recovery Support Navigators. These are certified peer support specialists who have lived experiences with some of the same challenges our members face – they have experienced substance use disorders or psychiatric disabilities and may have personally been homeless, had their utilities turned off or experienced food insecurity. They can relate to the members they support, empathize, and then draw on real-world solutions to help them.

For the past 20 years, Magellan has been a leader in increasing access to peer support through partnerships with the recovery community and providers.  We have assisted state customers in developing robust certified peer specialist capabilities, driven in large part by our depth and breadth of experience.   We create shared learning opportunities for the peer workforce and others to improve and enhance the knowledge, skills, and competencies of the peer workforce across the continuum.  Our Recovery Support Navigators represent our best practice approach to tapping the power and potential of peer support.

We know people are more than just a diagnosis – or multiple diagnoses. Truly living healthy, vibrant lives means seeing more than parity for the pieces. It’s seeing and caring for the whole person and bringing together the right resources across the community to help. Integration and individualization are the next steps, and I am proud to say Magellan is out front and on the ground in neighborhoods around the country, taking these steps with our partners and members – together!

The Centers for Medicare and Medicaid Services (CMS) Star Rating program is designed to measure and improve the overall performance and quality of care health plans provide to

Medicare beneficiaries.  Due to changes in individual measure specifications, benchmarks, and inclusion into the overall calculation, this quality rating system continues to evolve – which can make it challenging to achieve and maintain 5-Star performance.

Listen to our latest webinar to learn about clinical strategies that can help you stay ahead of the curve for various Part C and D clinical measures such as rheumatoid arthritis management, osteoporosis management, statins in diabetes, and medication adherence for diabetes, hypertension (renin-angiotensin system antagonists), and cholesterol (statins).