Addressing the Challenges of Rising Specialty Drug Expenditures in Health Systems: Strategies for Optimization

Specialty drugs take up a bigger part of pharmacy spending in the US. In recent years, they made up about 40% of pharmacy benefit costs. This amount might grow to nearly 48%. Prices for these drugs went up about 9.6% each year between 2014 and 2015. The prices keep rising, especially for cancer treatments.

The increase is partly because many new specialty drugs are being developed. In 2017, 60% of new drugs approved were specialty medicines. Cancer and gene therapies are the main areas of growth. Using complex treatments like cell and gene therapies creates big cost issues for health systems. Around 73% of health plans expect these drugs will cause big cost problems in two to three years.

Along with higher costs, there are other problems. Pharmacies deal with sicker patients and harder treatments. They also face staff shortages and problems with drug supplies. These issues make it harder to provide good care on time.

Specific Challenges Medical Practice Administrators Face

• Cost Management
  Specialty drugs are the biggest pharmacy cost. High prices and unexpected supply problems make it hard to keep costs steady. About 40% of systems have less than 90% compliance with drug lists. Improving this to over 95% could save 5 to 10% on total drug expenses.
• Staffing Pressure
  There are not enough pharmacy technicians. These workers prepare medicines, manage stock, and help patients. Hiring and keeping qualified staff is tough, which sometimes makes pharmacists do more work.
• Complex Administrative Workflows
  Specialty drugs often need prior approval, step-by-step treatments, and constant monitoring. This causes delays and more paperwork. Programs that lower doses without losing effect face problems because payers, pharmacies, and patients don’t always agree. This can delay starting treatments.
• Supply Chain Risks
  Over half of pharmacy leaders see drug shortages as a long-term problem. They cause drug shortages and price increases. Few health systems feel ready to handle these problems well.
• Data Management and Integration
  Managing specialty drugs needs careful tracking of buying, use, and payment in hospitals, clinics, and stores. Lack of linked pharmacy and medical data hides the full cost of care. This makes it harder to control spending.

Strategies for Optimizing Specialty Drug Expenditures

1. Strengthening Purchasing and Formulary Compliance

Group Purchasing Organizations (GPOs) help control specialty drug costs by negotiating lower prices. Companies like AmerisourceBergen work with health systems to create purchasing deals that fit each system’s needs. These deals help save money.

Improving following of drug lists is also important. Systems that stick to their formularies over 95% of the time save 5 to 10% on drug costs. This is especially true in critical care areas. Sticking to these guidelines helps systems get discounts without hurting patient care.

2. Developing Specialty Pharmacy and Infusion Programs

Health systems are building or growing specialty pharmacy and infusion services. These help keep patient care connected and improve satisfaction and health results. McKesson Corporation offers customizable care models. Patients get specialty drugs and infusions within the health system. This stops care from being split up and helps patients stick to their medications.

However, setting up these programs is complex. They need coordination of patient therapies, help with payments, and clinical teaching. This requires good management and trained staff.

3. Applying Dose Optimization Programs

Dose optimization can reduce drug quantities without lowering how well they work. This lowers costs and makes it easier for patients to take their medicines. At Diplomat Specialty Pharmacy, a pilot study found 58 dose optimization chances that saved about $135,000.

Still, dose optimization faces problems like delays from extra approvals, insurance issues, and different goals of payers, pharmacies, and patients. Fixing these problems needs everyone to work better together and communicate clearly.

4. Enhancing Inventory Management

Loss and poor control of inventory raise costs in specialty pharmacies. Tools like Nucleus Inventory Management and Cubixx Solutions help track medicines in real time. Technologies such as RFID tagging improve stock forecasts and stop having too much or too little. These systems help keep important drugs ready while controlling costs.

5. Addressing Staffing and Workflow Challenges

Hospitals and clinics use many ways to fix staffing shortages in pharmacy technician roles. These include flexible schedules, higher pay, remote work for some tasks, and online training. Pharmacists and leaders also ask pharmacy schools to offer more career options beyond regular jobs. New paths include pharmacy benefits management, infusion centers, and health IT.

AI-Powered Workflow Automation in Specialty Drug Management

One of the best ways to improve drug cost management is by using artificial intelligence (AI) and automation. These tools can help many parts of specialty pharmacy and health system work:

AI for Prior Authorization and Claims Processing

AI can handle prior authorizations by quickly checking patient eligibility, drug lists, and medical history. This lowers delays caused by manual work. Automated claims also speed up payments and cut admin work.

Predictive Analytics for Drug Utilization and Cost Management

AI looks at past drug use, patient info, and treatment results to predict future needs. This helps plan inventory and stops too much expensive drug stock. AI also finds early signs of patients not following therapy, so staff can fix problems quickly.

Integration of Data Across Systems

AI platforms gather data from pharmacy, clinical, and financial systems. This gives a full view of specialty drug cost and results. It helps teams like supply chain managers, pharmacists, and finance staff make better choices for buying and using drugs.

Enhancing Patient Engagement and Support

AI chatbots and virtual assistants help patients with drug questions, refill reminders, and education about side effects. This helps patients take their meds as they should. Better adherence means less waste and lower costs.

Automating Inventory Management

Using AI with RFID and smart monitors, health systems track drug amounts and locations all the time. Alerts warn staff if stock is low or drugs are near expiration. Automated ordering based on predictions keeps important medicines available without extra stock.

IT managers in medical practices can use AI and automation to reduce manual work, improve data accuracy, and better control costly drug inventories. This helps with both money and patient care.

Expanding Partnerships and Collaborative Models

Health systems work more with drug makers, distributors, payers, and consultants to handle specialty drug costs. These partnerships include sharing data, investing together, and creating new care and cost strategies.

Still, many health systems stick mainly to traditional partnerships. They do not always look at things like investing with payers, private equity, or startups focused on specialty drugs. Expanding partnerships can help share financial risks, make supply chains stronger, and speed up new care methods.

Growing Areas for Specialty Pharmacy Services

Research shows that ambulatory specialty pharmacies, home infusion therapies, retail pharmacy services, and mail-order models are not fully developed in many health systems. Growing these areas can make things easier for patients, improve medicine use, bring more income, and let systems better control drug use.

About 85% of pharmacy leaders in health systems plan to grow ambulatory and specialty networks. Around 70% focus on home infusion services. Growing retail and mail-order pharmacies also helps manage specialty drugs well. This focus helps patients get care where and when they want it, creating less care split-up and better results.

Addressing Current Barriers and Future Considerations

• Data Transparency
  There are still gaps in shared data between health and pharmacy systems. Better data sharing is needed for full cost control.
• Financial Protection for New Therapies
  Many health plans do not have ways to protect against high costs from new cell and gene therapies. This puts health systems at financial risk.
• Aligned Stakeholder Incentives
  Pharmacy managers, payers, doctors, and patients often have different financial goals. Clearer agreements can reduce treatment delays and improve care.
• Workforce Development
  Training and keeping pharmacy staff is important to fill key roles and handle growing specialty drug services.

Summary

Specialty drug costs are rising in US health systems. This is because of new costly therapies and complex treatments. Medical practice leaders, owners, and IT staff need to use many methods. These include smart drug buying, program building, dose optimization, managing inventory, fixing staffing, and using new technology like AI.

Improving adherence to drug lists, starting specialty pharmacy and infusion services, using data well, and making partnerships with drug makers and payers can keep costs manageable. At the same time, patients keep access to important specialty meds.

Automation and AI help reduce paperwork, make decisions better, and improve control over drug costs. Using these tools can help health systems handle rising specialty drug expenses while keeping care quality and patient health strong.