Specialty Trend Increase Slows; Biosimilars Are Having Impact

In 2020, specialty trend — which consists of utilization and cost trend components — continued to increase, but it did so at a slower pace than that of the past five years. That’s one of the findings of Pharmaceutical Strategies Group (PSG), an EPIC company, in its State of Specialty: Spend and Trend Report, published in August. The report, which is based on PSG’s Artemetrx platform and uses integrated pharmacy and medical claims data, also found that biosimilars finally are beginning to produce real savings.

Artemetrx analyzed 62.1 million medical claims and 50.4 million pharmacy claims from its book of business for the report. From 2018 to 2019, the specialty trend was 14.8%, while from 2019 to 2020, it was 11.8%. Most of the percentage was driven by claims utilization, at 9.0%, with cost per claim responsible for the remainder. The per-member per-year trend in the pharmacy benefit increased 17.3% compared with a PMPY trend in the medical benefit of 3.7%. Within the latter benefit, home infusion PMPY trend rose 8.8%, followed by outpatient hospital at 4.0% and physician office at 1.7%.

Home Infusion Drove Medical Benefit Rise

Not surprisingly, the report found that home infusion claims in 2020 rose 3.1% in the first quarter and then increased 18.3% in the following quarter. The third and fourth quarters also saw increases — 13.0% and 9.5%, respectively — but ones not as extreme as those in the second quarter, when states were implementing lockdowns and hospitals were reducing in-person visits to try to combat the COVID-19 pandemic.

Four percent of members used at least one specialty therapy in 2020, which was consistent with 2019 and up from 3.7% in 2018. However, the number of specialty claims per member increased from 4.8 in 2019 to 5.2 in 2020.

Inflammatory disorders remained the top therapeutic class in terms of the percent of 2020 drug spend, representing 35%, followed by oncology, with 24%, and multiple sclerosis, at 8%. Categories ranked first through eighth and tenth remained the same as their 2019 rankings, but the skin immunosuppressants class rose from No. 14 to No. 9, driven by Sanofi and Regeneron Pharmaceuticals, Inc.’s Dupixent (dupilumab). The FDA first approved the agent on March 28, 2017, for the treatment of moderate-to-severe atopic dermatitis in adults whose disease isn’t adequately controlled by topical prescription therapies, but since then the agency has approved four additional indications.

The report also revealed a decrease in the percentage of total claims for innovator brands that face biosimilar competition. In addition, it found that biosimilars were putting price pressure on their innovator brands. For example, the average sales price (ASP) for Remicade (infliximab) from Janssen Biotech, Inc., a Johnson & Johnson company, dropped from $75 per unit in January 2019 to $45 per unit at the end of 2020 under pressure from three biosimilars.

PSG modeled two different member shifts to biosimilars to determine potential savings: a moderate 20% shift and an aggressive 50% shift. It found that plan sponsors would save an annual average of $9,973 for each member moving to a Remicade biosimilar and $4,389 for each member moving to a biosimilar of Amgen Inc.’s Neulasta (pegfilgrastim) (see chart).

AIS Health, a division of MMIT, spoke with Renee Rayburg, R.Ph., vice president of specialty clinical consulting at PSG, about the report.

AIS Health: What were some especially interesting and/or surprising findings in the report?

Rayburg: Trend has slowed 11.8% vs. 14.8% the previous year; we were all surprised to see those results, and we believe that a combination of factors may have contributed, including effects of COVID-19 deferring or delaying care, drug mix and maybe the start of the effects of both biosimilars and availability of specialty generics in the market. In addition, the biggest driver of trend continues to be claim utilization, and for the second year in the row, 4% of the population is using one specialty drug. While the trend may have slowed, it is not time to take your foot off the brake; it is more important than ever to continue to manage both cost and utilization.

AIS Health: What are the main takeaways for payers?

Rayburg: Specialty drugs continue to drive spend and trend for payers, and although the trend has slowed a little for 2020, we continue to expect low double-digit trends to continue into the future for most payers. While the high cost of most specialty drugs is of top concern, utilization is the biggest driver of trend; thus, optimal specialty drug management includes managing both cost and utilization. As science advances are bringing newer and often better specialty drugs to the market, it is often not apparent to payers the value these drugs are bringing to their patients. One great example is Trikafta used for the treatment of cystic fibrosis, which expanded treatment to about 90% of patients living with CF. While the drug costs around $23,000 per month, it contributes to improvements in health for most CF patients. When we looked across our book of business, 74% of patients on Trikafta experienced a decrease in their medical costs.

AIS Health: What could the growing number of claims per specialty utilizer be due to? Are people more adherent?

Rayburg: In many cases, these drugs represent scientific advances when it comes to the treatment of the conditions for which they are indicated, many offering even better treatment options. In most cases the drugs really work, so many patients will naturally continue to use the drugs. Yes, [adherence] may also be a contributing factor. There are many reasons why patients are non-adherent, but today many manufacturers of specialty drugs offer copay assistance for patients with commercial insurance, and several PBMs offer copay assistance programs, and this definitely helps with any financial challenges patients may face in affording their copays or coinsurance for their specialty drugs.

AIS Health: What could be the reason for the 2.6% decline in cost per claim in the pharmacy benefit?

Rayburg:
We have seen the entrance to the market of many lower-cost drugs in both specialty generics and biosimilars. In addition, plan sponsors are also more focused on strategies to better manage their specialty drug spend. Both are contributing factors to the decreases we are seeing.

AIS Health: Does it seem surprising that average annual total costs for Remicade and Neulasta were less in the physician office vs. the home infusion setting?

Rayburg: Yes, one might not typically expect to see this, but it’s not that simple. Pricing can vary a lot on an individual channel basis within medical, with fee schedules, drug contracts, utilization [and] differences in dosing all contributing variables. Within our book of business, the home infusion channel sees a much lower volume of claims and utilization compared to the other channels, which may have some effect on these numbers. It is very important to have access to the data and evaluate the costs across channels before considering channel management strategies.

AIS Health: What are some considerations for payers thinking about shifting specialty drugs into a different site of care?

Rayburg: First and foremost, you need to have insights into the data to evaluate your costs by drug in each channel. It is important to understand the plan cost of each drug by channel to help guide your site-of-care strategies. In addition, it’s important to understand what the best site of care for your members is. With the pandemic and the continuing concerns, some patients may feel more comfortable not having their drug administered in an outpatient hospital setting. It is a balance for finding the most appropriate site of care at the best cost.

AIS Health: Could you please comment on the biosimilars findings?

Rayburg: As more biosimilars enter the U.S. market, we continue to measure their effects. It appears the presence of the biosimilars in the market alone is driving costs of all drugs down. Additionally, in 2020, we started to see more uptake of the biosimilar products in the market.

AIS Health: What stands out the most to you about those findings?

Rayburg: The presence of the biosimilars is putting price pressures on the innovator brands. The ASP unit costs of both Remicade and Neulasta have seen a significant decrease.

AIS Health: Do you think some people have been hasty in dismissing biosimilars’ potential impact on drug prices?

Rayburg: Maybe, but I think it’s all tied to how you evaluate it. Unlike generics, when biosimilars enter the market, the brand innovator products do not go away. They are still available and marketed, so the biosimilars are creating competition for market share. The best approach is to fully evaluate all factors including cost, rebates [and] contracting available for both the brands and the biosimilars to get to the lowest net cost product. The true net savings may not turn out to be the biosimilar in all cases; the strategy becomes which product will be lowest net cost. In addition, it is important to ensure all stakeholders are aligned in these formulary decisions, including providers who will be prescribing the drugs and the patients who will be taking the drugs.

AIS Health: Is there anything I’ve neglected to ask about that you’d like to add?

Rayburg: Access to data is really important when it comes to evaluating specialty drug spend and trend. Ability to identify your trend drivers, understanding what is driving trend utilization or cost, can help to direct you to the right strategies to consider.

Contact Rayburg via Samantha Rideout at SRideout@psgconsults.com.

Total Savings From Shifting to Biosimilars for Remicade and Neulasta

This story was reprinted from AIS Health’s monthly publication RADAR on Specialty Pharmacy.

Angela Maas

Angela has an extensive background of editing, reporting and writing for trade and consumer publications. She has written Radar on Specialty Pharmacy (formerly called Specialty Pharmacy News) since she joined AIS Health in 2005 and has broad knowledge of the various issues at play within the space. Before joining AIS Health, she was managing editor at Employee Benefit News and Employee Benefit News Canada and managing editor at HemAware (a hemophilia publication), Lupus Living and Momentum (a multiple sclerosis publication). She has a B.A. in English and an M.A. in British literature from Arizona State University.

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