Health Plan Utilization and Costs of Specialty Drugs Within 4 Chronic Conditions

BACKGROUND: Drugs are most typically defined as specialty because they are expensive; however, other criteria used to define a drug as specialty include biologic drugs, the need to inject or infuse the drug, the requirement for special handling, or drug availability only via a limited distribution network. Specialty drugs play an increasingly important role in the treatment of chronic conditions such as multiple sclerosis (MS), rheumatoid arthritis (RA), psoriasis, and inflammatory bowel disease (IBD), yet little is known regarding the comprehensive medical and pharmacy benefit utilization and cost trends for these conditions. OBJECTIVES: To describe MS, RA, psoriasis, and IBD trends for condition prevalence, treatment with specialty drugs, specialty costs, nonspecialty costs, and total direct costs of care within the medical and pharmacy benefits. METHODS: This was a descriptive analysis of a commercially insured population made up of 1 million members, using integrated medical and pharmacy administrative claims data from 2008 to 2010. Analyses were limited to continuously enrolled commercially insured individuals less than 65 years of age. Condition-specific cohorts for MS, RA, psoriasis, and IBD were defined using standardized criteria. Trends in condition prevalence, specialty drug use for the conditions, and direct total cost of care were analyzed. The direct costs were subcategorized into the following: medical benefit specialty drug costs, medical benefit all other costs, pharmacy benefit specialty drug costs, and pharmacy benefit all other costs. Trends and compound annual growth rates were calculated for the total cost of care and subcategory costs from 2008 through 2010. RESULTS: Condition prevalence ranged from a low of 1,720 per million members for MS to a high of 4,489 per million members for RA. Psoriasis and MS condition prevalence rates were unchanged over the 3 years; however, IBD prevalence increased 7.0%, and RA prevalence increased 9.7%. The rate of specialty drug use was lowest for IBD (13.7%) and highest for MS (71.8%). The lowest total annual cost of care was for psoriasis ($14,815), and the highest total annual cost was for MS ($36,901). The most commonly used specialty drugs for each of the conditions were as follows: glatiramer (MS), etanercept (RA and psoriasis), and infliximab (IBD). The total annual costs were more than double for the specialty drug users for psoriasis compared with all the psoriasis members ($29,565 vs. $14,815). The total costs were only somewhat higher among MS members using specialty drugs ($41,760 vs. $36,901). Among specialty drug users for each of the cohorts, the annual costs of specialty drugs accounted for 50% or more of the total annual costs. The annual spending growth rate for specialty drugs ranged from 4.4% to 18.0%. CONCLUSIONS: Although specialty drug utilization varied widely across the 4 chronic conditions analyzed, when specialty drugs were used they accounted for the majority of the annual total direct cost of care. Because specialty drugs are accounting for a growing portion of chronic disease total cost of care, health insurers will need to become more vigilant regarding specialty drug use and focus on 4 cost saving management opportunities: drug distribution channel, utilization management, contracting activities, and care coordination.