At Munich Health North America (part of Munich Re), we've seen a significant increase in specialty pharmaceuticals as a driver of reinsurance recoveries.
Many of your benefits clients may be seeing that, too.
Here's a look at what we're telling clients about the issue.
Maybe you could use our explanation to shape your own client communications about the specialty drug cost problem.
1. What are "specialty pharmaceuticals"?
Although there is no official definition for the term, it generally applies to drugs administered by injection or infusion. The term can also apply to any drug costing over $600 per dose.
These drugs treat conditions, such as hemophilia, cancer, rheumatoid arthritis, HIV, multiple sclerosis, and Hepatitis C. And they represent a large percentage of prescription drug spending.
These drugs include Recombinant Factor VIII, prescribed for Hemophilia; H.P. Acthar, for Multiple Sclerosis; Soliris, for PNH Disorder; and Vimizim for Progressive Metabolic Disorder. New claims from Hepatitis C treatments currently average about $150,000 per claimant.
2. Why are specialty drug prices such a major concern?
At Munich Re, we plan according to a 30–3 rule for specialty pharmacy: only 3 percent of the total pharmacy prescriptions are considered specialty, but they cost 30 percent of a plan's overall pharmacy expense. These costs are expected to increase; according to most industry estimates, specialty drugs will represent over 50 percent of total pharmacy costs by 2017.
