Academic Literature

Value-Based Management of Specialty Drugs: Practical Considerations and Implications for Pharmacy

Not all approaches are suited to meeting policy makers and health plans’ goals of managing specialty drugs based on their value. Researchers conducted a qualitative study with Blue Cross Blue Shield plans interested in implementing value-based specialty pharmacy management to observe the plans’ objectives, strategies, and factors influencing their ability to execute on these strategies.
Originally published on 05/13/2021 in The American Journal of Managed Care

Specialty pharmacy drugs are the greatest drivers of prescription drug spending in the US. They account for 46.5% of spending on pharmaceuticals despite comprising only 1.9% of prescriptions dispensed.

Because of this, specialty drugs are attractive targets for more active management.

The study used three focus groups with four total business objectives identified. The business objectives centered around spending levels, spending variability, access to new treatments, and evidence generation for new treatments. Factors that influenced their ability to act on the strategies included regional and national scale, the strength of provider network relationships, disease managements capabilities, business and data silos, and potential legislative actions to limit utilization management.

In conclusion, the researchers suggested that plans’ preferences for different forms of specialty pharmacy management may not be aligned with policy objectives, in particular those that advance innovation. Policymakers should consider both limiters and incentives in the market and non-market environments in which plans operate. This includes the need to mitigate spending variability and generate evidence to guide coverage decisions.

Access the full article here.

Key Takeaways

Policy makers and health plans must work to make new treatments available while balancing cost concerns. While there are many approaches to achieving this goal, not all are equally effective.

Due to spending variability, budget constraints, insufficient clinical evidence, competitive pressures, and data and human resource constraints, health plans experience pressure to pursue long-term financing and outcomes-based contracting approaches.

Value-based management of specialty prescription drugs is superior to long-term financing and outcomes-based contracts, but will require policy initiatives that incentivize value-based pricing and insurance design.

Share

Research & Insights

We conduct non-partisan, independent research, and make our work accessible and informative to policymakers and the general audience alike. Browse our featured research or explore our work by article type.

Value-Based Management of Specialty Drugs: Practical Considerations and Implications for…
Not all approaches are suited to meeting policy makers and health plans’ goals of managing specialty drugs based on their value. Researchers conducted a qualitative study with Blue Cross Blue Shield plans interested in implementing value-based specialty pharmacy management to observe the plans’ objectives, strategies, and factors influencing their ability to execute on these strategies.
AJMC 05/13/2021
Pharmaceutical Products and Their Value: Lessons Learned and the Path…
Value-based pricing has emerged as an alternative to prices determined by what the market will bear. But which agreements are truly "value-based"?
Value in Health 03/29/2021
Pharmaceutical Products and Their Value
Steep increases in prices and spending on prescription drugs in the United States have triggered public outrage and questions about their value.
Value in Health 03/29/2020
Value-Based Pricing for Drugs: Theme and Variations
A taxonomy of the features that make a payment model truly value-based.
JAMA Viewpoint 05/02/2018
Outcomes-Based Drug Contracts Do Not Move Us Closer to Value
What steps are needed to make outcomes-based contracting a value-based approach?
Morning Consult 06/21/2017
Xeljanz, the FDA, and nine years of patient harm
Quantifying population-level adverse events in the near decade between when safety concerns were identified and FDA action
Drug Pricing Lab 05/31/2022
Atypical antipsychotics: Decades of use, unfathomable harms
Using attributable risk calculations to quantify how many premature deaths resulted from atypical antipsychotic use in the elderly
Drug Pricing Lab 05/31/2022
Medicare Part B Premium Dynamics Explained
The Drug Pricing Lab commissioned Milliman to prepare a report exploring the impact of changes in Medicare Part B program costs on beneficiaries’ premiums and Social Security payments. This report focuses on the 2022 Part B premium for beneficiaries with various income levels to illustrate the payment dynamics and discusses the implications for related programs.
Milliman 12/23/2021
Comparing Factors that Influence Pharmaceutical Pricing and Access in the…
Drug prices in the United States are some of the highest in the world, which has triggered several policy proposals aimed at adopting pricing strategies used by other countries.
Drug Pricing Lab 12/20/2021
Biosimilars in Medicare Part D: pricing dynamics and considerations
The Drug Pricing Lab engaged Milliman to prepare a report summarizing the pricing dynamics affecting utilization of biosimilars in the current Medicare Part D marketplace and under the proposed Part D benefit design in the Build Back Better Act.

This report was commissioned by the Drug Pricing Lab.
Milliman 12/14/2021
Evaluating Industry’s Drug Pricing Claims
A closer look at three of PhRMA’s most cited talking points.
Drug Pricing Lab 11/18/2021
Mapping conflict of interests: scoping review
A scoping review of the literature to identify all known ties between the medical product industry and the parties and activities in the healthcare ecosystem.
Drug Pricing Lab 11/03/2021
Newsletter

Stay up to date on our work and news