Kaiser Permanente Specialty Pharmacy: A prescription for lower prices

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Employee prescription costs now make up nearly 20% of what a company spends on health care.1 And specialty drugs have been a major contributor to overall prescription costs. But through our Specialty Pharmacy, Kaiser Permanente Washington is saving more than $10 million a year in medication costs.

The high cost of specialty drugs

Specialty medications offer valuable treatments for hepatitis C, HIV, multiple sclerosis, autoimmune disorders, some forms of cancer, and other rare diseases. But they come with prices that dramatically affect health care costs. For instance, a 3-month hepatitis C treatment can typically cost nearly $100,000 per therapy. Costs like these have contributed to an increase in overall spending for prescription drugs by employees and employers.

The road to lower prices

We’ve taken steps to help manage and mitigate these rising costs, as well as ensure the highest level of medication effectiveness possible. In early 2014, we established a dedicated Specialty Pharmacy with specially trained pharmacists, technicians, assistants, and clinicians.

“We started a pilot service with approximately 300 patients,” said Paul Yoon, Specialty Pharmacy Manager. “Today we have more than 4,000 enrolled, getting their specialty drugs mostly through our Specialty Pharmacy.” Yoon went on to explain the key components to the program’s success.

  1. Medication adherence. Two factors contribute to a drug’s effectiveness: dosage and duration. All too often patients don’t take the proper amount of the medication or take the drug for the prescribed length of time. Following prescribed directions is called medication adherence.

In the United States, many reports indicate that medication adherence rates are often below 50%. Our efforts in care coordination and regular outreach to physicians and patients have consistently resulted in over 95% adherence with the Specialty Pharmacy.

“We actively reach out to patients to monitor and encourage adherence,” said Yoon. “When patients take medications as directed, treatment outcomes are expected to be much more successful. Drugs don’t have to be prescribed again and patients are less likely to need further care.”

  1. Controlling costs. Our Health Plan, Clinical Pharmacy, and Specialty Pharmacy work together to develop strategies that help control medication costs. Our goal is to ensure that our members have access to the safest, most appropriate, and most affordable drugs.

Before we prescribe an expensive specialty drug to a patient, we examine the effectiveness of less costly alternatives. If a new specialty drug is needed, we often help coordinate managed care strategies such as trial dosages or split fills. This way we can evaluate effectiveness and side effects while avoiding potential drug waste.

Added Yoon, “If the medication doesn’t work as intended or wasn’t tolerated, the patient and health plan haven’t paid for a full course of treatment.”

We also take advantage of Kaiser Permanente national contracts with pharmaceutical companies, allowing us to often capture significant discounts. We then do everything we can to offer and dispense those drugs through our Specialty Pharmacy instead of having patients go to outside sources.

It all adds up to savings and value for Kaiser Permanente and our members. “With our high-touch support, manufacturer contracts, and internal Specialty Pharmacy, we’re saving the organization more than $10 million a year,” said Yoon. “Because we’re keeping our costs lower, we’re able to contribute to keeping employee and employer premiums affordable and competitive, too.”

1 https://www.pwc.com/us/en/health-industries/health-research-institute/behind-the-numbers/reports/hri-behind-the-numbers-2018.pdf