Employer Perspectives

Employer Perspectives

Quotes from Leading-Edge Employers

The National Initiative on Specialty Drugs project has collaborated with leading-edge employers who are driving change by implementing alternatives to the traditional PBM model. Each year, MBGH conducts multiple employer-only meetings which greatly inform project activities. Below is a list of quotes from employers who have participated in these meetings from 2017 to 2019:

We want to pay for innovation from suppliers (middlemen) and manufacturers, not waste. Middlemen need to remove all the waste.

Much of the current model is not working. We need transparency about the real costs.

Manufacturers can tell you what they charge the wholesaler, but they can’t talk about rebates with the PBM because of required confidentiality clauses between the two. This needs to change.

We need to stop spending money on low value drugs. This will preserve resources to pay for high value drugs.

We want drugs on formulary to be based on clinical efficacy and safety, not rebates.

As employers, if we’re designing benefits that are out of reach for our members, then we’re doing it wrong.

We have to continually be in front of where we want to go. We are the real payer and we have to start leveraging the power we have . 

We must walk the talk!  Who is willing to play ball and walk the talk with us?

Employers Share their Views on the Impact of Specialty Drugs

What do employers need to know to better manage specialty drugs? In this video, you will hear about:

  • How MBGH is supporting employer management of specialty drugs.
  • Aspects of the MBGH initiative employers found helpful.
  • How specialty drugs have changed the industry in the last few years.
  • What will happen in the coming years?

Click here to watch the video.

Employer Concerns & Views About Specialty Drugs

MBGH interviewed five national, self-insured private employers, representing various industries and sizes (11,000 to 120,000 employees), about their concerns and views related to specialty drug management. The employers indicated their greatest concern about the future of specialty drugs relates to cost trends. They expressed apprehension that if these cost trends continued at current rates, significant changes would need to be made in other benefit areas to offset their company’s ability to offer high quality and comprehensive health benefits to attract and retain the best employees in a competitive market. 

Key findings include:

  • Value-based designs are used in overall drug benefit strategies, with a few extending the approach to currently released specialty drugs.
  • A limited number of specialty fills are allowed at the retail pharmacy while others restrict them to the location of purchase at first fill.
  • Use of a specialty pharmacy is required for drug coverage and most rely on them to address member treatment adherence.
  •  Preferred cost-share approaches include:
    • Coinsurance with member minimum and maximum out-of-pocket payments.
    • Applying higher maximums for specialty drugs compared to non-specialty.
    • Co-pay approach with $75 maximum out-of-pocket (believes coinsurance would create enough member uncertainty and financial strain to negatively impact treatment compliance).
  • Tiered member cost is based on a formulary approach that drives the use of specific drugs, while others offer an open formulary that relies on clinical guidelines to determine drug use.
  • J-Code blocks are used in the medical plans to steer members to the specialty pharmacy, while others are still developing this strategy and focused on steering use of self-administered specialty drugs through the drug benefit.
  • Care/case and disease management through various vendors is not coordinated; employers recognized this is a gap and an opportunity to ensure better patient care. 
  • PBM contracting is different for each employer, including:
    • Requiring bids on both traditional and transparent models.
    • Using outside vendors to assist in contract negotiations.
    • Requiring contracts include auditing/monitoring performance against contracted metrics.
  • Most do not require pre-purchase reviews for oncology drugs, citing the complexity of treatment regimens, member angst and oncologist resistance as the reasons.

In summary, these five employer members have taken some degree of action by using a progressive versus risk-averse approach towards the management of specialty drug benefits using many different strategies. They believe that specialty drug coverage is an important component to maintain in their overall health benefits designs and are seeking to develop strategies to accomplish this in a high quality, cost-efficient manner.

In the future, employers expect specialty drug coverage will evolve into a much more robust state as they continue to push the market for changes such as:

  • Use of measurable clinical outcomes as the driver for determining provider use of prior authorization, step therapy and utilization review.
  • Require pre- and ongoing clinical testing to determine appropriate initial prescribing and ongoing use of drugs.
  • Restrict off-label use when possible or feasible.   
  • Development of high quality treatment adherence programs to drive desired clinical outcomes with carrot and stick approaches to achieve member engagement.
  • Increase standardization of care with outcomes-based utilization guidelines specific to specialty drugs included in national standards of excellence in care programs.