Employers eye costs of specialty drugs

Employers have drug costs on their minds lately. Balancing the cost of drugs against care has swelled as the key consideration for companies evaluating drug plans in a survey by Express Scripts.

Where 5 years ago only 41% of respondents said "balancing cost with care" was their main concern, now that number is 78%, reports Reuters. Meanwhile, where 57% said "providing the broadest coverage" was the most important measure 5 years ago, now only 14% of respondents think that is the main deal.

How companies and their benefit managers structure prescription drug benefits can have a big impact on the pharmaceutical industry. And they have been taking aggressive steps to keep on top of prices. A coalition of unions and a consumer group recently sued 8 of the largest companies, including Pfizer ($PFE), Merck ($MRK) and GlaxoSmithKline ($GSK), for using coupons to try to lure patients away from generics. 

And companies are thinking hard about things like the cost of specialty drugs, the high-priced medications often used for the most serious conditions like cancer or rheumatoid arthritis. While only 36% of plan managers said specialty drugs are their key concern, the drugs are the primary concern for 58% of companies with more than 25,000 employees.

There is a reason specialty drug costs are on employers' minds, Tim Wentworth, Express Scripts' president of sales and account management, tells Reuters. While they make up less than 30% of what a company is spending on drugs, they are the fastest-growing segment in terms of cost. Last year, spending on medications grew 2.7% while spending on specialty drugs was up 17.1%, he said. It is the fastest-growing segment, "so they want to put things in place now," he says.

One way to do that is with step therapy, requiring plan members to try the low-cost drug before moving to another medication. Most companies expect to institute such a plan within two years, the survey found.

- read the Reuters story