After enduring a second year of unprecedented disruption due to COVID-19, we anticipate (we won’t endeavor to ‘predict’) a half dozen trends that could play an outsized role in shaping how pharmacy benefits are managed and delivered in the coming year.
Saying consumerism is growing in healthcare is not novel thinking, but we believe it will play an increasingly significant role in how patients receive care and access benefits in the coming year.
Consumers today already have expectations of 24/7 access to trusted providers and enhanced care coordination, according to a recent survey of physicians and provider group leaders by Sage Growth Partners and DataGen.
Providers are being forced to innovate to meet these expectations. Specifically, the survey found providers are influenced by consumer sentiment on:
Patients’ desire for convenience (76%), requiring greater access
Rising healthcare costs (66%), requiring greater transparency
Heightened competition (57%), requiring greater ability to help patients navigate their care
Access: The desire and need for convenience has been a key driver in the rise of telehealth, which saw a surge in utilization last year as patients and physicians sought safer ways to conduct care during the pandemic. However, harnessing telehealth’s full value will take time and effort, notes the Business Group on Health. Going forward, the focus will be on integrating virtual health with in-person delivery, the group says.
Transparency: Consumers also appear primed to continue pushing for greater transparency around the true costs of medications. Online pharmacies, health plans, and other healthcare players increasingly are providing web tools that allow consumers to see the costs of specific medications. Providers too could benefit from this trend. We see that only one in five providers, for example, knows the cost of a medication when they prescribe it, according to a recent JAMA study.
OUR TAKE: Considering their demand for greater convenience and transparency, we expect consumers to increase adoption of tools that allow them to get the medications they need at the lowest cost, with or without their provider’s support.
See trend #2 for more commentary on navigation.
We believe 2022 will see a continuation of so-called “point solution fatigue,” as organizations grapple with managing an ever-increasing number of digital health and wellness programs.
The past few years have seen a rapid growth in healthtech “point solutions,” a term that describes the array of digital options offered in addition to an organization’s core covered health benefit. Point solutions might address specific health conditions, such as cancer, or promote healthy lifestyle changes, such as weight loss.
Seeking ways to mitigate this fatigue is expected to continue in 2022, and we expect employers will demand greater integration of solutions, rather than cutting things out to the dismay of employees. Digital health experts seem to agree, according to Med City News. (Disclaimer: WithMe Health’s CEO, Joe Murad, is one of the cited digital health experts)
Digital point solutions often are delivered in a siloed fashion, which can not only cause point solution fatigue but also result in a lack of insight into patient needs, inefficient outreach, and ultimately poor care.
Many plans are managing between four and nine different digital point solutions, according to a Wellframe survey of health plan leaders. Plan sponsors will need to refocus and invest in point solutions that support the whole person, result in unified engagement, and can be measured rigorously for continuous improvement.
New point solutions should focus on closing key gaps in existing solutions. Given the ongoing stress from the pandemic, a significant portion of employers are now providing access to mental health and emotional well-being services through online resources and digital therapy, for example.
The same trend is seen in the pharmacy benefits realm. 30% of employers report using point solutions offered by their PBM, while another 17% are planning or considering them, according to a recent Willis Towers Watson survey.
OUR TAKE: To get more value out of the pharmacy benefit, we expect plan sponsors to demand clinical programs from PBMs to integrate more tightly with navigator and concierge services as well as virtual primary care resources.
By all indications, we expect the size and speed of the drug pipeline to continue accelerating in 2022.
A total of 300 new drugs are expected to launch between now and 2026, significantly higher than levels seen on average during the past decade, according to a new study by IQVIA.
Most of these drugs are expected to skew toward specialty, niche, and orphan drugs.
Two leading global therapy areas—oncology and immunology—are forecast to experience a 9-12% and 6-9% compound annual growth rate (CAGR), respectively, through 2026.
Spending on new branded drugs through 2026 are projected to increase to $196 billion, up more than 20% over the past five years, IQVIA notes.
This trend will be further amplified by the fact that utilization of healthcare services is expected to accelerate in 2022 as patients return to the doctor’s office following over a year of delayed treatments due to COVID-19 impacts. This expected surge has created a sense of urgency to have the right mechanisms in place to control spending in the coming year.
OUR TAKE: To state it plainly, we’re concerned that most plan sponsors don’t see pharmacy medication spend tsunami coming and aren’t prepared for it, so current programs won’t be sufficient for dealing with it. For those that do tune it, this will create a real hurry to get new partners in place to manage spend heading into 2023.
We see technology playing an even greater role in how utilization management tools are designed and administered over the coming year. Just look at the success Cohere is having in impacting spend for Humana with its digital prior authorization platform.
New technological advancements are key to this. For example, the continually improving quantity and quality of data in a members’ profile will increasingly allow organizations to better tailor utilization management programs to drive the best outcomes at the best price.
Others echo the trend in technology-driven care management and therapeutic solutions. This can be seen clearly in the demand for evidence-based digital therapeutics to treat chronic conditions and mental health, according to this report from American Health and Drug Benefits (AHDB).
“As seen with smoking cessation, cancer, and diabetes, these digital solutions are becoming a fundamental tool in changing behavior to improve employee health outcomes,” the article states. “Alone or in combination with drugs and/or clinical support, promoting access to digital therapeutic programs, backed by rigorous clinical evidence and approved by the FDA, can lead to reduced direct healthcare and other indirect member costs for the employee and the plan sponsor.”
OUR TAKE: We expect to see plan sponsors adopt solutions that combine analytics and digital engagement, combined with the right human intervention, to do utilization management in a less disruptive manner for members.
We see the effects of The Great Resignation of the past year to reverberate well into 2022 and beyond.
Employers are trying to find workers to fill more than 11 million openings, according to the U.S. Labor Department. Attracting and retaining talent has jumped to among the top concerns of business leaders, according to a global survey of executives and board members, by Protiviti and North Carolina State University.
Fierce competition for talent means that many employers are opting not to increase premiums and copayments within their benefits in 2022, so as to remove a key reason for attrition. Employers are looking to manage health benefit costs without shifting costs to employees, according to a recent Mercer survey.
Most plan sponsors (60%) say they will not make any benefit changes to reduce expected cost increase, the survey noted. This is largely due to employers focusing their attention on enhancing benefits to support employees and stay competitive in a tight labor market, Mercer adds.
OUR TAKE: Plan sponsors can’t afford to lose their best employees, but they also can’t afford significant healthcare cost increases. We believe the only way to deal with this conundrum is to scrutinize how their benefits are being personalized to their members;’ needs, with solutions that prioritize interventions across the employee population and then personalize those interventions for individual members.
Flip on any TV news program or scroll any mainstream news website, and you’ll likely see politicians of all stripes decrying the high costs of pharmaceuticals and offering proposals to lower them.
Some of these proposals are moving forward and may be enacted in 2022. We hope that’s the case anyhow, although realistically entrenched interests may get in the way of bold action and broader application (especially outside of Medicare and Medicaid).
On the federal level, the House in November passed the Build Back Better Act (BBBA), which includes several provisions that would lower prescription drug costs for people covered by Medicare and private insurance. According to a Kaiser Family Foundation report, BBBA includes provisions that would:
Allow the federal government to negotiate prices for some high-cost drugs covered under Medicare Part B and Part D. The negotiation process would apply to no more than 10 (in 2025), 15 (in 2026 and 2027), and 20 (in 2028 and later years) single-source brand-name drugs or biologics that lack generic or biosimilar competitors.
Limit cost sharing for insulin for people with Medicare and private insurance. Medicare beneficiaries could choose to enroll in a Part D plan participating in an Innovation Center model in which enhanced drug plans cover insulin products at a monthly copayment of $35 in the deductible, initial coverage, and coverage gap phases of the Part D benefit.
Repeal the Trump Administration’s drug rebate rule. The BBBA would prohibit implementation of the November 2020 final rule issued by the Trump Administration that would have eliminated rebates negotiated between drug manufacturers and pharmacy benefit managers (PBMs) or health plan sponsors in Medicare Part D by removing the safe harbor protection currently extended to these rebate arrangements under the federal anti-kickback statute.
The BBBA currently is stalled in the Senate. But in politics, anything can happen. If passed in 2022, these provisions are expected to drive down drug costs and change the marketplace dynamics between manufacturers and pharmacy benefit managers.
OUR TAKE: We remain optimistic that the ongoing debates will continue to shine a light on the games played with rebates and spread pricing by traditional PBMs, bolstering demand from plan sponsors for services from transparent, full rebate pass-through PBMs.
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