By Brian Carpenter and Kimberly DuBrueler
For risk managers looking to reduce workers' comp claims costs, they should perhaps look no further than specialty drugs. Although their use in workers' comp is not widespread, they can quickly drive up claims costs.
A recent analysis of Coventry Workers' Comp Services 2011 pharmacy data found that specialty medications currently account for only 2 percent of total pharmacy spend -- but for claims involving specialty drugs, they consume 37 percent of the pharmacy spend on that claim.
Specialty drugs include biologics, or protein-based medications like Enbrel, Humira and Remicade for rheumatoid arthritis, and nonbiologics, or chemically-derived medications such as Synvisc and Hyalgan for osteoarthritis.
Many are injectable -- requiring broader service capabilities -- or have specific storage requirements. In the last 15 to 20 years, the specialty drug segment has increased from about 30 products to more than 200 -- a number that is expected to double in the next decade. The Express Scripts (ESI/Medco) 2011 Drug Trends study notes that nearly 600 specialty drugs are in Phase II or III clinical trials.
By 2020, ESI/Medco expects specialty drugs to occupy eight out of 10 spots on the Top 10 Drugs list, generate $1.7 trillion in sales and account for 40 percent of total drug spending. With an estimated 7 percent of specialty drugs in development aimed at inflammation -- a common component of pain -- employers and payers need to understand how specialty drugs are poised to impact workers' compensation and what they can do to help manage the spend.
new MEDICATIONS surface
Most specialty drugs treat complicated diseases, such as cancer and hepatitis, which are not commonly seen in workers' compensation. However, specialty drugs are prescribed with increasing frequency for rheumatoid arthritis, osteoarthritis and blood clots, which may sometimes impact workers' compensation claims.
Research shows that specialty drugs are most likely to appear in claims involving soft-tissue injuries. In a Coventry study, claims involving torn cartilage, ligaments and tendons, accounted for 15 percent of the specialty medication spend. Strains accounted for another 7 percent, and herniations and ruptures accounted for an additional 5 percent.
Osteoarthritis is the most common form of arthritis. Although the causes of osteoarthritis are unknown, occupational overloading of joints or repetitive motion may cause or aggravate the joint degeneration associated with the condition. Most osteoarthritis specialty medications are injected directly into the affected joints to provide lubrication or cushioning. For many disease states, specialty medications are an alternative to traditional therapies; in contrast, osteoarthritis specialty agents are most often used in addition to traditional therapies.
With rheumatoid arthritis, the body's immune system begins attacking the joints. As an autoimmune disease, rheumatoid arthritis is rare in workers' compensation; however, repetitive motion, chemical exposure or even mental stress may activate, reactivate or accelerate the disease. Specialty medications for rheumatoid arthritis have high response rates but also significant side effects, so they are usually only prescribed when traditional therapies, such as methotrexate and oral corticosteroids, do not provide relief.
Finally, anticoagulants are used frequently in workers' compensation to prevent or treat deep vein thrombosis, a type of life-threatening blood clot, and related conditions. Clots may occur when a claimant is undergoing surgery for a knee or hip replacement or when an obese claimant sits at a desk all day. Specialty hematological medications, such as Lovenox, Fragmin and Arixtra are often preferred therapies for preventing blood clots following joint replacements. As a result, they may appear in workers' comp claims. They are similar in efficacy and side effect profiles to their traditional counterparts, and they offer some advantages that make them more desirable.
Specialty medications are relatively new, expensive to develop, produced through complex manufacturing processes and typically not available as generics. Biosimilars, which are similar to, but not exact replicas of the brand-name medication, will also be costly to produce and require more effort for Food and Drug Administration approval than traditional chemical generic drugs. This results in a large cost discrepancy between traditional and specialty therapy.
The average wholesale price of specialty rheumatoid arthritis and hematological medications is generally 20 times higher than traditional therapy. Specialty medications for osteoarthritis can be up to nine times more expensive. In addition, many of the biologic specialty medications, especially injectables, require administration by a health care provider and are billed by the provider's office. Such transactions involve a Healthcare Common Procedure Coding System (HCPCS) Level II code, which includes J-codes for pharmaceutical billing, rather than the National Drug Code (NDC) that pharmacies use.
Unlike the NDC, the HCPCS codes are not standardized, nor do they specify quantity or manufacturer. With no parameters or limitations as to the billed amount for each code, they can result in excessive costs.
Pharmacy benefit managers are developing a variety of approaches to manage utilization and contain costs surrounding specialty medications. From an operational perspective, formularies, step therapy and prior authorization help ensure that prescribers follow accepted guidelines. When multiple medications in the same therapeutic class have similar profiles, selecting a preferred drug may give the pharmacy benefit manager access to discounts based on expected utilization increases. Drug utilization review and quantity/duration limits help increase safety and reduce the chance that a claimant is overusing these expensive medications.
With access to consistent, traceable pricing and volume discounts, specialty pharmacies are uniquely positioned to administer these management programs. They are designed to accommodate time- and temperature-sensitive medications. Specialty pharmacists can create formularies and step therapy guidelines, ensure proper medication handling and storage, answer claimants questions and follow up on compliance. They can communicate with prescribers and claimants if an adverse event occurs.
Many pharmacy benefit managers are affiliating with or forming their own specialty pharmacies. One specialty pharmacy regularly saves its clients 18.5 percent off the average wholesale price. With several specialty medications costing thousands of dollars each month, the savings can be significant.
On the clinical side, therapy management -- including use of treatment protocols to direct dosing, frequency and duration as well as instruction on drug preparation and storage -- could help reduce waste. Education can help claimants and prescribers identify and understand the side effects associated with specialty medications. Pharmacy outreach from specialty technicians or pharmacists to prescribers and claimants can help by sharing best practices and encouraging compliance with therapy, both of which have been shown to result in savings.
a role in outcomes
Specialty medications have a role in achieving better outcomes. In many cases, they provide relief that traditional therapies could not -- resulting in better quality of life, as well as fewer hospital admissions, emergency room visits and laboratory tests. A decrease in disability, absenteeism and presenteeism delivers indirect savings.
According to ESI/Medco, a typical rheumatoid arthritis claimant with severe disease would generate $11,750 less over the life of a claim by receiving a specialty drug.
Going forward, specialty medications will become a larger component of the total pharmacy spend, simply because they are a current manufacturer focus. With the aging workforce and delayed retirement, claims for conditions such as rheumatoid arthritis and osteoarthritis are increasingly likely to end up under the workers' compensation umbrella.
Although an increase in utilization of -- and spending for -- specialty medications is likely, biosimilar medications will begin to enter the marketplace as patents expire on brand-name products, beginning with Enbrel in 2013. This should allow for market competition and cost control.
In addition, lawmakers in 20 states are exploring legislation limiting the cost of specialty medications. Whichever path specialty drugs follow, pharmacy benefit managers and specialty pharmacies should be committed to providing protocol-driven care throughout the trend and spend changes. Their work with employers and clients should focus on initiating, maintaining, improving overall cost-containment strategies and return-to-work results.
BRIAN CARPENTER, R.Ph., is vice president of product development at Coventry Workers' Comp Services.
KIMBERLY DuBRUELER, Pharm.D, R.Ph., is a clinical pharmacist at Coventry Workers' Comp Services.
September 15, 2012
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