The Lynx Group

Knowledge Gaps and Value-Based Oncology Coverage Related Findings from the 2012 National Employer Survey

March 2013, Vol 4, No 3
Cheryl Larson, BA
Vice President, Midwest Business Group on Health; Margaret Rehayem, MA, Senior Director of Strategic Initiatives and Communications, Midwest Business Group on Health
F. Randy Vogenberg, PhD, RPh, FASHP
Partner, National Institute of Collaborative Healthcare, and
Access Market Intelligence
Greenville, SC

Background: Healthcare costs are a continued concern among employers and other purchasers, and extend especially to biologics that are being increasingly scrutinized to demonstrate value over time. A significant cost challenge to employers, these drugs create logistical issues for patients, physicians, pharmacies, and manufacturers owing to their unique approval requirements, dosing, side effects, and distribution methods. The costs of biologics are also hard to track, because they show up in medical as well as pharmacy expenditures.

Objective: To assess the change in level of knowledge and benefit design gaps of employer plan sponsors in the area of specialty pharmacy and biologic products for conditions such as cancer and immune disorders, and to identify opportunities for future benefit coverage innovation.

Methods: An online survey instrument was developed through an advisory council comprising self-funded employers in late spring 2012. The survey was disseminated to 15 business coalitions across the United States during the second half of 2012, and was completed in January 2013. Results were analyzed by the Midwest Business Group on Health and the Institute for Integrated Healthcare.

Results: A total of 68 employers of varying size and representative Standard Industrial Classification types completed the survey. Results in 2012 indicated that larger-size companies have a higher knowledge base versus the 2011 survey findings, which indicated that 25% of small- to mid-size employers had little to no understanding of specialty or biologics, and 53% had a moderate understanding of these covered products. Similar to 2011, the 2012 results showed that many companies did not know whether their company’s claim costs for specialty drugs had increased over the past 3 to 5 years. Again in 2012, most employers were using traditional benefit design (eg, tiered formularies, copayments, and coinsurance) instead of innovative (ie, value-based) benefit designs that may be more appropriate for biologic and specialty pharmacy medications. Vendor performance was again highly valued, yet the majority of benefit designs continue to omit an incentive to ensure proper adherence to medication or compliance with treatment.

Conclusion: There remains a knowledge gap among commercial plan sponsors that is important to those who manage oncology services or risk, among other specialty drug categories. The 2012 survey findings demonstrate employers’ relatively low knowledge of biologic drugs, appropriate support technologies, and vendor contracting options available to their plan. Employers who improve their understanding of the many challenges in managing this area will be able to more effectively manage costs and the related patient outcomes.

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