Page 32 - The Edge - Fall 2020

HEALTH

BY HANNAH OLSON AND TARA ZIKA
Hannah Olson Tara Zika
Specialty Drugs and Their Not So Special Costs

At a time when many school districts are searching Provide Incentives for High Deductible Health
for funds to meet new obligations, employee health Plans
insurance could be crippling your budget. So, if
you self-insure employee benefits, it’s important to High deductible health plans often require that the
implement cost-containment strategies. Otherwise, employee meet an annual deductible before the
things could get worse — much worse. prescription co-pay structure kicks in, which can
save money. They also come with tax-free health
Specialty Medications – a Big Cost Driver savings accounts. Many employers choose to make
cash contributions to those accounts as an incentive
Did you know that about 50% of total pharmacy for employees to make the switch.
spending comes from specialty medications? This
is forecasted to reach 60% by 2021! That’s a big Consider Prior Authorization
bite out of your plan budget.
Evaluating the need for certain products and services
Consider just one example: Zolgensma. This is a before you pay for them can also save on costs.
gene therapy for children with a rare autoimmune One common example is prior authorization, which
disease. It costs more than $2 million per patient. helps ensure that individuals meet certain clinical
If you’re self-insured, spending like this almost criteria before treatment or medication is approved.
certainly isn’t built into your budget. Roughly 95% of plans use prior authorization today.

Granted, Zolgensma constitutes an extreme example. Specialty medications are a godsend for many, but
But spending tens or hundreds of thousands of they come at a steep cost. This reflects a basic reality
dollars on specialty drugs is not at all uncommon. of medical economics: Good health care is expensive.
Although there’s no way to totally eliminate these But you’re not without options. With a little work,
sky-high costs, there are a few ways you can help you can help control the flood of spending. To get
rein them in. started, talk to your plan administrator or pharmacy
benefit manager. They should be your partners in
Adjust Your Medication Formulary keeping costs in check.

A formulary is your plan’s list of covered
medications. It’s important to frequently review Hannah Olson is Operations Manager and Tara Zika
this list to make sure it’s designed with both health is Director of Business Development for Kairos Health
outcomes and cost-consciousness in mind. For Arizona, Inc.
example, you can:
• Add a separate specialty medication tier and
apply a higher coinsurance amount.
• Implement medication exclusions in your
formulary.
• Limit specialty medications to a 30-day supply
to help reduce waste.

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32 THE EDGE FALL 2020