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Pennsylvania Health Plans Employ Various Strategies to Combat Cost of Specialty Drugs

With No Generic Alternatives For Specialty Drugs, Insurers Try Intensive

Cost-management Measures, According to a New Report from


NASHVILLE, Tenn., April 8, 2008 /PRNewswire/ -- HealthLeaders-InterStudy, a leading provider of managed care market intelligence, reports that the high cost of specialty drugs is forcing Pennsylvania insurers to get creative in finding ways to control those costs. Specialty drugs -- medications developed through a biological process that are generally injected or infused -- are rising at a rate twice to three times the pace of traditional medications. According to the latest Pennsylvania Health Plan Analysis, health plans across the state are employing various pharmacy management strategies in an attempt to control the rising cost for therapies that can range from $5,000 to $10,000 to $15,000 per month.

"So far, the health plans are opting to manage the cost of these drugs rather than shifting the cost on to health plan members," states Chris Lewis, analyst for HealthLeaders-InterStudy and author of the report. "Health plans are turning to formulary management, prior authorization, use of specialty pharmacies and shifting more biologics from the medical to the pharmacy side of the benefit design in an effort to control costs."

UPMC Health Plan in Pittsburgh, which is in its sixth year of its specialty pharmacy management program, utilizes a combination of prior authorization and step therapy, as well as purchasing medications at a discount through its preferred specialty pharmacy, CuraScript. UPMC puts all specialty drugs on the third copay tier usually reserved for non-preferred brands, with biologics users paying the highest copay.

Independence Blue Cross spends $400 million a year on biologics out of a total drug budget of about $1.5 billion. The health plan's pharmacy benefits manager, FutureScripts, capitalizes on its ability to control both the medical and pharmacy benefits under one roof. Just like for traditional pharmaceuticals, a committee of physicians and pharmacists examines the biologic drugs in the context of the targeted disease and determines whether they are better than existing therapies. In 2006 the health plan started making injectables available through the pharmacy rather than a medical office, if it was available.

About Health Plan Analysis

Health Plan Analysis identifies key health plan trends, allowing healthcare businesses to create comprehensive strategic plans and sales strategies at state and local levels.

About HealthLeaders-InterStudy

HealthLeaders-InterStudy, a company of Decision Resources, Inc., is the authoritative source for managed care data and analysis. For more information, please visit

All company, brand, or product names contained in this document may be trademarks or registered trademarks of their respective holders.

For more information, contact:

Elizabeth Marshall

Decision Resources


SOURCE HealthLeaders-InterStudy
Copyright©2008 PR Newswire.
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