Balancing Cost and Care: Optimizing Specialty Drug Management for Union Plans
The growing class of specialty medications – prescription drugs used to treat chronic, rare, or complex conditions – is responsible for a disproportionately high percentage of union plan spend. These high-cost therapies typically account for 2% or less of total prescription volume yet often consume 50% or more of a fund’s pharmacy budget.
When it comes to evaluating specialty drug coverage, fund administrators must strike a careful balance. Therapies like GLP-1s and dermatologics should be made available to patients who need them, but it’s also critical to protect the long-term sustainability of members’ pharmacy benefits plans.
To stay ahead of rising prescription costs, fund administrators can implement proactive measures to manage specialty drug coverage without negatively impacting member outcomes.
Rising Specialty Drug Costs Strain Union Plans
A popular and often discussed specialty medication, GLP-1 receptor agonists like Ozempic, Mounjaro, and Tirzepatide are used to treat diabetes and obesity. Though some direct-to-consumer (DTC) pricing models are beginning to emerge, lowering the baseline cost of medications like Zepbound and Wegovy, GLP-1s remain a significant cost driver for labor funds.
In fact, according to recent research, national spending on GLP-1s increased by more than 500% between 2018 and 2023 – from $13.7 billion to $71.7 billion. Ozempic alone grew from $410 million in annual spend to more than $26 billion.
Outside of obesity and diabetes drugs, anti-inflammatory medications and dermatologics lead the specialty drug market. Medications like Humira, SKYRIZI and Dupixent – which treat chronic conditions such as psoriasis and ulcerative colitis – can significantly drive up plans’ pharmacy costs.
While specialty medications can be life-changing for many members, their high price tag can put financial strain on union plans. Without careful intervention, rising pharmacy costs could result in reduced health benefits, increased member premiums, and compromised care.
Proactive Strategies for Cost Control
Fund administrators have the responsibility to fiercely advocate for their members’ best interests, as well as act as financial stewards for their union plans. To protect their funds from unchecked spending, administrators can take proactive steps to manage specialty drug utilization while ensuring members receive the best possible care.
Securing a Sustainable Future
By staying ahead of specialty drug trends and utilization, fund administrators can prioritize member care and secure a sustainable financial future for their plans. This means taking proactive steps to update formularies, strengthen clinical management, and enroll members in holistic support programs.
One approach to effectively containing specialty drug costs is to partner with a pharmacy benefits optimizer (PBO) like RxBenefits. A PBO collaborates with funds and PBMs to drive savings while ensuring members have access to the right medications at the right prices. RxBenefits is backed by a dedicated team of labor experts who deeply understand the member-centric needs of labor and trusts. The company serves as a steadfast partner and advocate, keeping exceptional service at the forefront of its mission. RxBenefits combines strong PBM contract negotiation with independent clinical oversight to control costs while ensuring members receive seamless, top-tier care.
Set up a meeting with RxBenefits today to discover transparent, evidence-based strategies designed specifically for union plans.