How are specialty drugs managed?

While in theory the medical benefit covers all provider-administered drugs, it does not always work that way in practice. For example, many specialty drugs are managed across both the medical and pharmacy benefit structures. The practice of cost-splitting—in which the cost of the drug is processed under the pharmacy benefit, while the cost of physician administration is processed under the medical benefit—is especially common with Medicare and Medicaid plans.

Cost-splitting also makes it easier for payers and PBMs to receive drug rebates. If a manufacturer has a rebate agreement with a payer, the payer may be able to easily pull medical benefit claims for the administration of a particular drug and submit them to the manufacturer for rebate. However, many payers find it easier to process claims for pharmacy benefit rebates, and so choose to separate member benefits at the health plan level.

Understanding the governance of your product is crucial for improving market access. Many denied claims are rejected because a physician’s office verified the member’s benefits under the pharmacy benefit, but the drug is in fact managed under the medical benefit. When physicians must resubmit or appeal prior authorizations due to an administrative denial, the resulting delay hampers patients’ treatment plans and manufacturers’ go-to-market goals.

Learn more by reading the full ebook The Essentials of Market Access: How to Build a Strong Commercialization Strategy for Your Pharmacy Benefit Therapy.