Adjust your drug plan strategy to manage specialty medication costs

By Chris Hanson-Ehlinger
Wed, Mar, 05, 2014

Bullock Brian GrayBackgroundBrian Bullock, Founder and CEO at The Burchfield Group, presented his perspectives on prescription drug innovation at the Minnesota Health Action Group’s 7th Annual Leadership Summit, Moving Forward in Uncertain Times, on February 21.

What’s going on in healthcare today and where is the innovation? This year’s Summit brought together leaders from every corner of health care to consider the question.

Pharmaceutically speaking, innovation is taking the form of “specialty” or biotech drugs. Plan sponsors know them as the drugs that cost tens of thousands of dollars. Patients know them as the drugs that treat or cure diseases that were previously untreatable or incurable.

While the number of patients taking specialty medications is still relatively small, in just a few years these drugs will account for as much as half your drug budget. With more than 600 new drugs in the R&D pipeline, we’re expecting specialty costs to grow at 20 percent year over year, which is why it won’t take too many years for these medications to consume 50 percent of your annual drug budget.

So how do you manage this flourishing cost driver? Start with the basics:

Buy competitively. Make sure your PBM contract secures the best price for your company.

Design a balanced benefit. This is a complex exercise that requires planning across both the medical and pharmacy benefit.

Apply sound clinical rules. Expensive specialty drugs are not for everyone even though ads on TV may suggest otherwise.

Be skeptical. Specialty pharmacy vendors and PBMs have a vested interest in selling more drugs to your members or employees. Always get expert advice from a consultant with thorough, deep domain understanding of the pharmaceutical and pharmacy benefit industry.

With these basics as a starting point and good industry insight, you’ll be able to build an effective specialty drug strategy for your company or health plan.

For more information call The Burchfield Group at 800-778-1359 or send us a note (

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