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BCBSA Report Highlights Dramatic Increase in Specialty Drug Spending

Posted July 1, 2016

Spending on medications used to treat chronic health conditions such as cancer and hepatitis C rose 26 percent across most Blue Cross and Blue Shield (BCBS) companies* from 2013 to 2014 – similar to a national spending rate that is expected to quadruple within four years, according to a new Blue Cross and Blue Shield Association (BCBSA) Health of America report.1

Most of the $18.4 billion that BCBS plans spent on these medications in 2014 was driven by rising drug prices and increasing costs of specialty drug treatments. Specialty drugs get their name because they require special monitoring and administration to patients with serious or chronic conditions such as cancer, hepatitis C, hemophilia, multiple sclerosis and more.

BCBSIL has seen a rise in specialty drug spending. Although specialty drugs represent less than one percent of all prescription drug spending, they are 50 times more expensive than traditional prescription medications. Nevertheless, specialty drugs, when taken as prescribed, play an important role in members’ health by providing both improved health outcomes and sustainable long-term cost reductions (i.e., ER visits, transplants, hospital stays, etc.). Yet, as these high-cost treatment advances emerge, there is an increased need to manage rising drug cost trends in this specialty market.

BCBSIL and other private and public payers are incorporating innovative strategies to help address growth in prescription drug spending, including spending on specialty drugs, and help provide better value to patients. Some examples include the following:

  • Managing specialty drugs comprehensively, including those covered under the medical benefit. Specialty drugs that require a health care professional to administer or supervise are often covered under the medical benefit rather than the pharmacy benefit. Managing these drugs includes monitoring whether the specialty drug is being administered in the most appropriate site of care, such as the physician’s office or member’s home, to help better serve the member and reduce unnecessary spending.
  • Contracting with select accredited specialty pharmacies. These pharmacies can integrate coordination of coverage between the member, physician and health plan. They also offer education to the member and provide members with 24-hour access to a health care professional for any medication questions.

For more information about BCBSIL’s strategy for managing specialty drugs, refer to the following HCSC Pulse article: Fontana: Managing Specialty Drugs to Benefit Patients.

*Does not include members who receive coverage through Medicare or Medicaid programs.

1http://www.bcbs.com/healthofamerica

The information mentioned here is for informational purposes only and is not a substitute for the independent medical judgment of a physician. This is only a brief summary of some plan benefits which may not be applicable in all instances.   Members should refer to their certificate of coverage for more details, including benefits, limitations and exclusions. Regardless of benefits, the final decision about any medication is between the member and their health care provider.