Specialty drugs have been treated as two separate products and billed separately for some time depending on the manner in which they have been given to patients. Oral medications and specialty drugs from a compounding pharmacy have fallen under the pharmacy benefits category, while any medications which have had to be injected or infused have typically been considered a medical benefit. Any medications which patients need to inject themselves are in a type of benefits limbo, and could be placed under either one.
On the face of it, this arrangement makes sense. Oncologists, rheumatologists, pain management specialists and other physicians who prescribe and administer specialty drugs can buy the medications they need and bill for them as an added income stream for their practice. As the number (and the cost) of the specialty drugs increases, the potential for generating extra income also goes up.
Advantages Of Moving Specialty Drugs To The Pharmacy Benefit
Does it make sense to move specialty drugs from medical to the pharmacy benefit? There are some advantages:
- It’s easier to compare different medications when they are under the same category, even if their patient delivery method is different.
- Moving specialty drugs to the pharmacy benefit would make the system more streamlined and removes an extra step from the process (having doctors and hospitals buy the drug and billing for it) which will help to keep costs down.
- A single benefit system would make coding for billing purposes a much easier process.
- Placing the specialty drugs on the pharmacy benefit side makes controlling costs easier. If a particular medication is not authorized or is subject to tiered pricing, the system can recognized these options. The pharmacist will not provide the medication to the patient unless it is being paid for out of pocket.
Good Reasons To Proceed Slowly
There are also good reasons not to simply make a blanket decision to switch all medications to the pharmacy benefit. Proceeding slowly, or making decisions on a case-by-case basis also has merits. In some instances, hospitals can buy medications at a lower price than specialty pharmacies because they can negotiate class-of-trade pricing. If a high enough portion of the savings can be passed on to health plans, it doesn’t make sense to transfer those medications to the pharmacy plan.
However, even if a doctor can buy a medication more cheaply than a pharmacy and administer it in his or her office, it doesn’t benefit the patient if his or her out of pocket expenses increase significantly as a result. There has to be a balance that offers savings to the insurer but still has value for the patient, too. Health plans are probably not the best entities to start negotiating drug prices with manufacturers to try to get the best deal. Proceeding with caution is the best approach here.
If you have questions about specialty drugs from a compounding pharmacy, please contact us.
Chief Operating Officer, The Compounding Pharmacy of America
Matthew Poteet, Pharm.D. graduated with Honors from Lee University with a Bachelors of Science in Biological Science. After his undergraduate training, he completed the Doctor of Pharmacy program at Mercer University Southern School of Pharmacy, graduating in 2004. Dr. Poteet has spent much of his pharmacy career on staff at two of the most prestigious academic teaching hospitals in the Southeast; Emory University in Atlanta and Vanderbilt University Medical Center in Nashville. At these institutions he received extensive experience and training in sterile products compounding.
He returned home to East Tennessee in 2010, where he has held the position of Pharmacy Director at two sterile products pharmacies in Knoxville. Matthew lives in Knoxville with his wife, Chris. Dr. Poteet is Tennessee’s first Board Certified Anti-Aging Pharmacist by the American Academy of Anti-Aging Medicine.