Coverage Trends
The total drug spend for health plans is split between the pharmacy and medical benefits, and health plans report that at least half of the specialty drug spend is attributed to the medical benefit. The fastest growing segment of this marketplace is in specialty injectable and infusion drugs. These drugs, often used to treat chronic illnesses such as rheumatoid arthritis, multiple sclerosis and hepatitis-c, are often administered in a physician’s office or at the patient’s home and therefore are covered under the medical benefit rather than the pharmacy benefit.
The pharmacy spend within the medical benefit market is estimated to be $77 billion per year, with approximately half ($36 billion) of these benefits administered within the home or in a clinic setting1. While the traditional drug spend has flattened recently, projections show the specialty drug market continuing to grow at a rate of 10% to 20% annually.
This trend is expected to continue as new drug therapies come to market. Ninety five percent of biopharmaceuticals currently in late-stage development will require administration via injection or infusion. Of these, 70% will require assistance from a healthcare professional2.
Many insurers assume incorrectly that their current PBM manages these drugs. However, most PBMs do not have the sophisticated automated systems needed to accurately code and process payments for services and per diem charges or for drugs paid under the medical benefit3. In addition, many insurers continue to use traditional paper-based claim processing systems.
NovoLogix software ensures that claims are processed according to client-specified contracted rates, not just standardized payment submissions and processing. As a result, our clients have saved millions of dollars on their overall drug costs.
1.Biotechnology, 2005.
2. Nagle., The Biopharmaceutical Pipeline and a Look at the Future Management of Specialty Drugs, PCMA Specialty Pharmacy Symposium 2005
3. adapted from Serono Injectables Digest, 2nd Edition, 2006