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Midwest Business Group on Health National Employer Survey on Biologics/Specialty Pharmacy August 2011 MBGH Biologics/Specialty Pharmacy Initiative Establishing an Employer View • MBGH sees significant growth in specialty pharmacy products and related cost impacts to employers • MBGH Board cites Biologic/Specialty Pharmacy #1 priority for 2010 and 2011 • MBGH partners with Dr. Randy Vogenberg in developing a research project to help employers: – Understand what Biologics/Specialty Pharmacy is and the challenges they must prepare for – More effectively manage benefit through plan design innovation and partnering with specialty vendors in contracting and patient management – Understand the importance of managing their at-risk population and communicating specialty benefits to employees Copyright 2011 © MBGH & IIH 2 MBGH Biologics/Specialty Pharmacy Initiative Addressing Employer Needs • Phase I - 2011 – Employer Advisory Councils – Chicago & Baltimore – National Employer Baseline Survey – National Vendor Survey – Employer Toolkit and Educational Outreach with employer group testing in two markets • Phase II - 2012 – Review pilot efforts and expand outreach and dissemination of findings – Expand survey research, updates to toolkit and national educational outreach – Re-evaluate work and external reporting on results Copyright 2011 © MBGH & IIH 3 Survey Demographics – July 2011 • MBGH partners with 15 NBCH sister coalitions • 120 national employers participate in survey – Representing more than 1 million employee lives • Average Age: – 47% of employees are 41 to 45 years of age • 36% of survey respondents are manufacturers Copyright 2011 © MBGH & IIH • Average employer size: – 22% - Less than 500 ees – 17% split - Over 25000 and 1000 to 3000 ees • Employer funding of health benefits – 69% - Self-insured – 19% - Fully-insured – 13% - Combo of benefits • Employers who offer combination of benefits – 60% - don’t combine – 12% - FF 10%; SF 90% 4 Size of active employee population in U.S. Copyright 2011 © MBGH & IIH 5 Funding of health benefits/employer size Copyright 2011 © MBGH & IIH 6 Level of understanding of specialty pharmacy Copyright 2011 © MBGH & IIH 7 Level of understanding/employer size Copyright 2011 © MBGH & IIH 8 Total medical and pharmacy spend 2010 Per employee spend 2010 Copyright 2011 © MBGH & IIH 9 Special meds paid through medical plan Specialty meds paid through pharmacy benefits Copyright 2011 © MBGH & IIH 10 Increase of specialty total claims over past 3-5 years Copyright 2011 © MBGH & IIH 11 Highest cost specialty medications Highest cost drugs 1. 2. 3. 4. Vaccine (not childhood) Arthritis Cancer Multiple Sclerosis • Employee out of pocket or co-insurance per Rx – Average Minimum - $10 to $20 – Average Maximum - over $200 Patient Mgmt Services • 72% - Case Management • 69% - Disease Management • 68% - Drug Utilization Management Copyright 2011 © MBGH & IIH • 54% of employers require that employees use the Specialty Pharmacy to receive coverage 12 Of the 54% of employers who require use of the specialty pharmacy……. Copyright 2011 © MBGH & IIH 13 Specialty pharmacy plan design Copyright 2011 © MBGH & IIH 14 Incentives offered for use of specialty pharmacy Copyright 2011 © MBGH & IIH 15 Benefits and service providers utilized for specialty pharmacy Copyright 2011 © MBGH & IIH 16 Entities who support employer in management, contracting and benefit design Management Contracting Benefit Design Do on own or In-house 36% 51% 79% Benefits Consultant 21% 60% 77% Outside Pharmacy Consultant 28% 44% 74% PBM 61% 41% 70% Specialty Pharmacy 56% 29% 54% Health Plan 46% 42% 76% Copyright 2011 © MBGH & IIH 17 Level of importance for key areas when contracting with specialty pharmacy Copyright 2011 © MBGH & IIH 18 Use of other options for specialty pharmacy Copyright 2011 © MBGH & IIH 19 Importance of medication-related cost transparency in vendor contracts Copyright 2011 © MBGH & IIH 20 Entities who support employer in case and disease management Case Management Disease Management Do on own or In-house 20% 23% 5% 70% Health Plan 78% 64% 4% 12% PBM 47% 39% 11% 35% Specialty Pharmacy 48% 34% 10% 37% Outside Vendor 18% 26% 8% 64% Copyright 2011 © MBGH & IIH Don’t Know NA 21 Effectiveness of case and disease mgmt support with covered population Copyright 2011 © MBGH & IIH 22 Effectiveness of initiatives to increase employee awareness Copyright 2011 © MBGH & IIH 23 Communication tactics for covered population Copyright 2011 © MBGH & IIH 24 Effectiveness of strategies and employee communication efforts over the past 3-5 years Very Effective Effective Somewhat Effective Not Effective 4% Don’t Know Generic Options 22% 32% 12% 31% Protocols used for prior approval 20% 24% 22% Cost share incentive 11% 20% 22% 10% 38% Days supply-limited messaging 10% 27% 25% 4% 34% Communication from pharmacist 10% 17% 22% 3% 48% Integrated pharmacy network 10% 21% 18% 3% 49% Inclusion/exclusion criteria 9% 17% 22% 4% 47% Communication from physician 8% 14% 21% 3% 55% HRA 5% 16% 26% 16% 36% Formulary explanation 5% 24% 32% 7% 31% Cost comparison 5% 15% 29% 9% 41% Audience benefit management communications for employees Utilization management mailing and phone messages 3% 22% 22% 4% 49% 3% 18% 28% 9% 42% 34% 25 25 Importance of tactics used in managing specialty medication costs Very Important Important Somewhat Important Not Important Don’t Know Improved contracting terms, coverage for claim reimbursement 29% 25% 11% 1% 33% Incorporation of wellness/catastrophic care coordination strategies 28% 22% 9% 5% 36% Improved coordinated info on therapies 27% 27% 12% 1% 32% Contractual opportunities – i.e. rebates 25% 26% 16% 4% 29% Innovative plan designs for coverage 22% 41% 9% 3% 27% Vendor provides analysis or cost modeling 20% 28% 11% 8% 34% Alternative drug delivery channels for access/distribution 17% 30% 14% 2% 37% Risk sharing contracts for Rx use 12% 15% 17% 4% 52% Direct manufacturer contracting 12% 23% 16% 10% 38% Exclusive networks by setting of care 9% 23% 15% 4% 49% Alternative risk financing-actuarial designed coverage 9% 29% 19% 3% 40% 26 26 Contacts Cheryl Larson, Vice President Midwest Business Group on Health [email protected] Cary Conway MBGH Public Relations [email protected] MBGH is one of the nation's leading not-for-profit business coalitions of private and public employers. Members are represented by human resources/health benefits professions for approximately 110 large self-insured public and private employers, who represent over 3 million lives and spend more than $3 billion on health care benefits annually. F. Randy Vogenberg, PhD, Principal Institute for Integrated Healthcare, Sharon, MA Strategic Pharmacy Advisor, Business Group Pharmacy Collaborative & Senior Fellow, Jefferson School Population Health [email protected] The Institute for Integrated Healthcare, an organization that provides integrated pharmaceutical benefits consulting and education to self-insured employers and business coalitions. Copyright 2011 © MBGH & IIH 27