This year’s Medical Pharmacy Trend Report by Magellan Rx Management brings to light just how much changed in the medical benefit over the last ten years. In 2010, there were only 9 medical benefit drugs approved; fast forward to 2019, and these approvals more than tripled to 31 medical benefit drugs, or 57% of the total drugs approved last year. A decade ago, only 32% of payers were concerned with medical benefit drug spend, compared with more than 61% in 2019. Medicare medical drug trends increased by 35% in the last 10 years, while commercial lines of business experienced an astounding 90% increase in trends. Oncology continues to be a key driver of costs in this space, with more than 50% growth in trend; it is the top category of spend and trend across all lines of business.1

Payers continue to search for new and innovative strategies to manage the significant growth in drug approvals, utilization, and spend in this benefit. Although prior authorization and step therapy are mainstays of utilization management, over the years,2 a significant interest and expansion occurred in more targeted strategies such as site-of-service (or site-of-care) programs, vial rounding, weight-based dosing, dose optimization, and drug wastage programs.1

Manufacturers are encouraged to continue to review payer insights from industry reports such as the Magellan trend report. Manufacturers with current and pipeline products in this space benefit from engaging with payer customers to understand their concerns, needs, and priorities, thus finding opportunities to collaborate with customers.

In this current dynamic climate, payers’ priorities shifted to addressing the dire needs of this pandemic. This should not, however, preclude manufacturers from continuous engagement with customers. In a recent PRECISIONvalue internal market research survey, we identified virtual methods of communication that may resonate with payers, including, but not limited to, webinars presenting information on topics of interest for broad communication, virtual meetings via video-enabled webinar software, and email communications.3 Payers are inundated, so patience will be key, but payers appreciate continued updates about product labeling and data that may not be top-of-mind due to competing priorities. Payers are most interested in manufacturer communications about new drug launches, new and updated HEOR/RWE data, contracting opportunities (including value-based agreements), and pipeline updates.

These trends will only continue to grow when you consider the current pipeline includes more than 700 products for gene therapy and oncology alone.1 Given the current environment, it is important to stay abreast of payers’ priorities and top needs in this space and identify opportunities to connect virtually with customers across all payer segments.

References:

    1. Magellan Rx Management. Medical Pharmacy Trend Report: 2019 10th edition. Available from https://www1.magellanrx.com/documents/2020/03/mrx-medical-pharmacy-trend-report-2019.pdf/. Accessed April 2, 2020.
    2. Icore Healthcare. Medical Injectables and Oncology Trend Report. 2010 1st edition. Available from https://www1.magellanrx.com/documents/2019/03/medical-pharmacy-trend-report_2010.pdf/. Accessed April 3, 2020.
    3. Virtual Engagement Survey – Engaging Payers Through Social Distancing. March 2020. Contact your Precision team member for results of this survey.

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Reta Mourad, PharmD
Senior Director, Access Experience Team
PRECISIONvalue