Using Data Analytics to Manage Your Rx Costs: Part 1

Ah, Spring! At home the birds are chirping, tulips are blooming, and your annoying neighbor is running the lawnmower at 7:00 am on a Saturday!

Another potentially frustrating experience may occur in the office this time of year…. It’s time to begin planning your company’s fiscal healthcare budget! To help you prepare, analyze the impact of areas that increase costs against those that reduce costs when estimating your year-end prescription drug expenditures. This week, the focus is on two areas that can increase your costs.

  1. Project the impact of 2018 drug price increases.

    In my February blog, Prescription Drugs Take a Bigger Chuck of Your Benefits Budget, I shared information on price increases on several popular brand medications. High cost specialty drugs such as Humira and Enbrel experienced a 9.7% increase, causing allowed payments for these drugs to rise to $4,300 on average, per patient per month. (The allowed payments represent the full cost of the prescription from all payment sources, which includes the employer’s and the employees’ responsibilities.)

    If you are using historical utilization to project your year-end costs, include these specific price increases to calculate your total allowed payments. If specific price increases are not known, use the most recently published consumer price index. In March of 2018, the U.S. Department of Labor reported that the all items index rose 2.4%, before seasonal adjustments, over the last 12 months (CPI-U).

  1. Account for new high cost drugs in the pipeline.

    Your benefit advisor and data analytics vendor should be able to highlight new high cost drugs in the pipeline that could be used by your employees and their families to treat their chronic conditions. An industry expert highlights a few of the drug therapy classes in the pipeline used to treat migraine, psoriasis, multiple sclerosis, cancer, and HIV conditions (AJMC).

    The new class of drugs to treat migraines (calcitonin gene-related peptide (CGRP) inhibitors), are in development and could be available in early 2019. The cost for these drugs will likely be $8,500 per year, compared to $2,500 per year for the biggest class of anti-migraine drugs (Imitrex®.) (MarketWatch)

What can you do?

  • Identify the chronic conditions in your population and the prescription drugs used to treat those conditions. Apply the estimated price increases to high cost brand medications or an inflationary factor to project your year-end expenditures.
  • You may have members who are candidates for the high cost specialty drugs in the pipeline, so you should work with your care management team to identify all members who are not controlled with their current therapy. Look for those:
    • Taking polypharmacy
    • With increased office/urgent care visits
    • With recurring admissions.

    Using the new class of migraines drugs as an example, identify members in your data suffering from episodic and chronic migraines, and whom have a prescription drug history of two or more preventive therapies. In one clinical trial, these patients suffered an average of 19 migraine headache days per month prior to the investigational drug.

    This population may be candidates for these new drugs when approved next year.

  • Discuss with your pharmacy program manager how and when it begins to manage new FDA-approved, high-cost drugs. A prior authorization program helps to oversee that the prescribed drug is dispensed in the right quantity for the right patient condition; however, delays in implementing or making changes to these programs can cost you money.
Deborah Partsch

Deborah Partsch

Debbie Partsch serves as Innovu's Chief Pharmacy Officer, applying her extensive experience in pharmacy program management by scouring Innovu's broad human capital database to uncover deep insight about prescription benefit costs and how trends are impacting clients and their employees/dependents now or in the future. With more than 13 years of consultative and clinical pharmacy expertise, she understands how important it is for employers to integrate data across all benefit programs, not just medical and pharmacy, to identify true program cost drivers and design cost-effective programs to address their populations' needs.

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