Rural Electric Co-ops Try to Tackle Specialty Pharma Spend

From RADAR on Drug Benefits

The National Rural Electric Cooperative Association (NRECA) decided to implement a carveout for specialty drugs after it determined that its pharmacy spend accounted for about $100 million of $500 million in total annual claims paid — and specialty drugs comprised fully 35% of that pharmacy spend.

Starting in January 2016, NRECA began requiring that specialty medications be paid through the pharmacy benefit rather than the medical benefit. Thus, the association was able to take advantage of deeper discounts available through its PBM. Patients were also connected with the PBM’s specialty pharmacy team to help improve their therapy adherence, and sites of care were aligned to ensure that medications were being dispensed in cost-effective settings.

As a result, NRECA estimates that the plan saved about $1.3 million in 2016 by carving specialty medications out of the medical benefit and providing site-of-care alignment services.

NRECA spokesperson Tracy Warren says that organization offers health care coverage to almost 900 rural electric cooperatives, and 60% take advantage of that.

Mercer is also testing strategies to better manage specialty drugs spend. "I think the top two things that employers are focusing on is managing specialty pharmacy and managing high-cost claimants, and the two are related," says Tracy Watts, a senior partner and national leader for health reform at Mercer.

She suggests that all large groups might be taking a closer look at their spend in pharmacy. Specialty pharmacy will be at the top of the list for employers for years to come.

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