Specialty drug costs racked up millions for region’s employers, analysis finds

Pittsburgh Post-Gazette

Specialty prescription drugs cost $84 million for a group of southwestern Pennsylvania employers who covered employee medical and pharmacy benefits during the pastyear, an analysis found.

The most expensive prescription drug that the region’s employers paid for was infliximab, the drug prescribed for rheumatoid arthritis and Crohn’s disease. It represented $4.3 million of the total spent on specialty medications through nonpharmacy benefits, according to an analysis by Strip District data analytics adviser Innovu LLC.

Those drug expenditures were for 127,000 employees of participating Pittsburgh Business Group on Health member companies, but the findings likely are representative of all employer drug spending, Innovu CEO Patrick Stewart said. For all businesses in the 13-county region, the total costs are likely significantly higher, he said.

The new information was based on a review of pharmacy and medical claims for PBGH member companies. Innovu provides both aggregate information for the employer community and breakdowns for individual companiesand employer groups.

Such information can help employers better structure health insurance plans that ensure the lowest cost, highest quality care for beneficiaries, Mr. Stewart said.

“When you have data, you can start to create a new dynamic of competition,” he said. “Without data, you’re driving in the dark.”

Pharmacy and hospital pricing has been a black hole for employers. Innovu has teamed with PBGH members to provide insights into how their health care dollars are spent. Mr. Stewart discussed the findings at a Pittsburgh Business Group on Health conference on Tuesday Downtown.

The data also might provide opportunitiesfor savings.

For example, the company found 21 percent of 17,650 people with diabetes who were covered by PBGH member companies were not assessed for the sensory complications of the condition during the past year and 2.4 percent had no medical or drug claims at all for the period. That may indicate mismanagement of the disease, which can result in costly claims.

Preventing one hospital admission related to diabetes treatment can save employers $22,500, according to Innovu.

In the case of infliximab prescriptions, employers have an opportunity for savings depending on where the drug is administered: injecting the drug in a doctor’s office costs half as much as in a hospital outpatient clinic, $106 versus $200, according to Innovu. If half of infliximab injections were administered outside hospital outpatient units, the participating PBGH employers could save up to $860,000.

Innovu was founded in 2014 and operates in 20 states, working with 1,500 employers. Mr. Stewart said the company was undergoing “significant growth” as employers search for ways to tamp down health care costs.