June 1, 2016

BCBSA Report Highlights Dramatic Increase in Specialty Drug Spending

Spending on medications used to treat chronic health conditions such as cancer and hepatitis C rose 26 percent across most Blue Cross and Blue Shield (BCBS) companies* from 2013 to 2014 – similar to a national spending rate that is expected to quadruple within four years, according to a new Blue Cross and Blue Shield Association (BCBSA) Health of America report.

Most of the $18.4 billion that BCBS Plans spent on these medications in 2014 was driven by rising drug prices and physician treatment expenses. Specialty drugs get their name because they require special monitoring and administration to patients with serious or chronic conditions such as cancer, hepatitis C, hemophilia, multiple sclerosis and more.

Our Blue Cross and Blue Shield Plans in Illinois, Montana, New Mexico, Oklahoma and Texas have also seen a rise in specialty drug spending. Although specialty drugs represent less than 1 percent of all prescription drug spending, they are 50 times more expensive than traditional prescription medications. Nevertheless, specialty drugs, when taken as prescribed, play an important role in members’ health by providing both improved health outcomes and sustainable long-term cost reductions (i.e., ER visits, transplants, hospital stays, etc.) for our members and customers. Yet, as these high-cost treatment advances emerge, there is an increased need to manage rising drug cost trend in this specialty market.

Examples of our management efforts include specialty drug channel management and value-based contracting through:

• Managing specialty drugs comprehensively, including those covered under the medical benefit. Specialty drugs that require a health care professional to administer, or supervise, are often covered under the medical benefit rather than the pharmacy benefit. Managing these drugs includes monitoring whether the specialty drug is being administered in the most appropriate site of care, such as the physician’s office or member’s home, to help better serve the member and reduce unnecessary spending.
• Contracting with select accredited specialty pharmacies. These pharmacies can integrate coordination of coverage between the member, physician and health plan; offer education to the member and provide members with 24-hour access to a health care professional for any medication questions.

Find more information on our strategy for managing specialty drugs.

*Does not include members who receive coverage through Medicare or Medicaid programs.