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Specialty Drug Prices Moderated in 2020, but Should Rise in 2021

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The trend in specialty drug cost increases moderated a bit in 2020, but a new report finds that this was probably due in part to the COVID-19 pandemic, which delayed or deferred some care. The report predicts continued increases in costs for specialty medications in coming years.

Growing utilization of these expensive drugs will drive the trend higher in the future, according to the report. The study was released by Artemetrx, an integrated data technology platform that is part of Pharmaceutical Strategies Group, a pharmacy benefits consulting firm.

“For the first time in five years, specialty trend moderated considerably in 2020, falling to 11.8% from the 14.8% seen in 2019,” the report said. “The slowing trend is likely due to a combination of factors, including delayed and deferred diagnostic care during the SARS-CoV-2 (COVID-19) pandemic,1 drug mix, increased use of biosimilars, and the availability of additional specialty generics.”

Varying Costs

The report noted that high-priced specialty pharmaceuticals have had an upward trend in costs, but that some variation has been found.

For example, the per-member-per-year (PMPY) cost for specialty drugs was on average, $959, an increase of $101 compared with $111 from the prior year. However, specialty costs trends for plan sponsors working with Artemetrx ranged from $587 PMPY, a -1.9% trend, to $1,065 PMPY, a 20.8% increase.

“Trend differences by plan sponsors can be due to both the level of specialty drug management (such as plan design, channel management, and clinical utilization management programs), drug mix, reimbursement, utilization, and member demographics, among other factors,” the report said.

Claims utilizing drove the trend, with 9% of the 11.8% trend in 2020 due to increased claim utilization, and 2.6% due to changes in costs.

“Interestingly, the percentage of members using at least one specialty drug was unchanged in 2020, remaining at 4.0%. Whether this is due to delayed diagnostic care during the COVID-19 pandemic is yet to be seen,” the report added. The number of claims per user rose in 2020, at 5.2 claims per year, compared with 4.8 claims per user in 2019.

“Increases in the number of specialty drug utilizers and the average number of specialty claims per utilizer could result in exponential trend in the coming years,” the report said.

Opportunities for Savings

The report outlined different categories where it said plans could find savings with specialty drugs. These were savings from lower-cost sites of care, identifying outlier claims, and clinical management to ensure appropriate use of specialty drugs.

For example, savings could be found if plans shifted the site of administration of drugs from outpatient hospitals to home infusion or physician offices for the site of care. Switching to biosimilar drugs also could lower costs—the report estimated $9,973 average annual savings for every member that shifts to a biosimilar for inflammatory disorders.

The report noted that plan use of biosimilars should take into account how physicians see the drugs in question. Although roughly 75% of physicians say that biosimilars can be as safe and effective as an original drug, the proper utilization of such drugs often depends on physician acceptance and patient clinical support.

“Physician recommendations and confidence in selecting a biosimilar are the most crucial factors in patient acceptance,” the report said.