FOR EMPLOYER HEALTH CARE ECONOMIC DECISION MAKERS ONLY

OPTIMIZING YOUR HEALTH BENEFITS DESIGN:

Striking a Balance Between Health Care Investment and Value

2 3

As an employer responsible for your members’ health care benefits, you need strategies that balance

your desire to keep costs under control and the vital mission to ensure the health of your members,

especially those with complex, chronic conditions.

SOME OF YOUR MEMBERS ARE LIKELY DIAGNOSED WITH COMPLEX, CHRONIC CONDITIONS

HOW MANY OF YOUR MEMBERS HAVE CONDITIONS LIKE THESE?

• A chronic inflammatory disease that affects the skin and other parts of the body8

• Primarily characterized by plaques, or scaly red patches on the skin, which can be painful and can intermittently flare up and subside over a lifetime8

Psoriasis 7.5M people (2015)7

• Includes 2 chronic autoimmune diseases—ulcerative colitis (UC) and Crohn’s disease (CD)—that result in inflammation of all or part of the digestive tract6

• Associated with frequent bowel movements, cramping abdominal pain, loss of appetite, weight loss, and increased risk for colon cancer6

Inflammatory Bowel Disease (IBD) 1.7M people (2016)4,5

• A chronic systemic autoimmune disease that involves inflammation in multiple joints3

• Associated with pain, swelling, damage to the cartilage and bones, deformity, and disability3

Rheumatoid Arthritis (RA) 1.3M people (2005)2

Examples of Complex, Chronic Conditions

MEMBER-FOCUSED BENEFIT DESIGN STRATEGIES SHOULD INCLUDE:

• Managing specialty medications reimbursed under the medical benefit as well as the pharmacy benefit

• Keeping member out-of-pocket (OOP) costs low

• Leveraging the services of specialty pharmacies

• Preventing non-medical switching*

* Non-medical switching is the switching of a stable patient's prescribed therapy for reasons unrelated to the patient's health; often driven by health plan design or formulary changes.1

54

ALTHOUGH PREVALENCE IS LOW, CHRONIC DISEASES SUCH AS THESE CAN BE COSTLY

Annual US health care costs for these 3 chronic diseases alone exceed several billion dollars9-11

High disability costs have also been associated with these chronic conditions11-13

Direct Costsa of Selected Autoimmune Diseases in the United States

Employees with these conditions had higher disability costs than those without:

RA12,*• 2.1x greater short-term disability costs• 3.9x greater long-term disability costs

IBD13, †

• >2.5 greater short-term disability costs for employees with UC• ~2.5 greater short-term disability costs for employees with CD

Psoriasis11,‡

• >2x greater disability costs

THESE REPRESENT ONLY THE DIRECT HEALTH CARE AND DISABILITY COSTS AND DO NOT INCLUDE THE IMPACT OF

ABSENTEEISM AND LOST PRODUCTIVITY.9-13

* Based on a retrospective analysis of health insurance claims data and employer data (January 2001 through June 2010) from the Human Capital Management Services research reference database, which includes data from more than 900,000 employees for 20 employers dispersed throughout the United States.12

† Based on a retrospective analysis of health insurance claims data (1999 through 2005) from the MarketScan Health Productivity and Management database, a subset of the MarketScan Commercial Claims and Encounters database, which includes data from 92 large employers in the United States.13

‡ Based on administrative claims data from January 1998 through January 2005, including 5.1 million employees and families from 31 large, self-insured US Fortune 500 companies. Mean per-patient per-month (PMPM) disability costs for the psoriasis group (N=3097) was $185 vs $69 PMPM for the control group (N=8335).11

Includes all levels of disease severity.aDirect costs=medical and prescription drug costs.

THE PATIENT’S JOURNEY THROUGH DIAGNOSIS AND TREATMENT CAN BE A STRUGGLE

For members with these complex, chronic conditions, receiving an accurate diagnosis, connecting with a specialist, and achieving a stable health status can be a long and difficult journey14,15

Once diagnosed, some RA patients with more active and severe disease may receive and then discontinue multiple treatments before a specialty medication is prescribed15

Patients with certain autoimmune conditions, such as RA, may experience a delay in diagnosis14

In some cases [specialty drugs] offer the only treatment for illnesses and conditions that historically

had few treatment options.19

Pharmaceutical Care Management Association

Specialty medications, such as biologics, are more complex than other medications, and should not be managed the same way16-18

• Are typically indicated in patients with greater severity of disease• Include injections and infusions16

• Can be administered at physician’s office, infusion center, hospital, or patient’s home17

• May require dosing adjustments and clinical monitoring17

• Often require specialized shipping and temperature-controlled storage and handling16

• May involve nursing assistance or mandated member education17

• Can be covered under medical or pharmacy benefit or both18Biologics are typically large, complex molecules derived from living cells cultured

in laboratory16

RA$8.4 Billion

(2005 dollars)9

IBD$6.3 Billion

(2005 dollars)10

Psoriasis$6.75 Billion

(2006 dollars)11

6

UNDERSTANDING THE COSTS ASSOCIATED WITH SPECIALTY MEDICATIONS IS NOT EASY

Specialty medications may flow through the pharmacy benefit, medical benefit, or both18

It’s often difficult to get full transparency on specialty medication spending and utilization across both pharmacy and medical benefits20-22

• Visibility of potential additional costs for outpatient visits, administration charges, and diagnostic tests, all of which are covered under the medical benefit, may be limited for specialty medications20

• Because specialty drugs can be billed through either the pharmacy benefit or the medical benefit, this inconsistency can make it challenging to get an accurate picture of specialty drug spend21

• The medical benefit can lack the visibility, cost-control strategies, and oversight of the pharmacy benefit22

HAVE YOU TRACKED AND EVALUATED YOUR SPECIALTY MEDICATION COSTS UNDER THE MEDICAL BENEFIT?

DMD=disease-modifying drug; ESA=erythropoiesis-stimulating agent; GCSF=granulocyte colony-stimulating factor; IG=immune globulin; IV=intravenous; MS=multiple sclerosis; PAH=pulmonary arterial hypertension; PCSK9=proprotein convertase subtilisin/kexin type 9; RSV=respiratory syncytial virus; SC=subcutaneous.Source: EMD Serono survey of health plan personnel responsible for specialty drug-related services, from 58 US commercial health plans representing more than 140 covered lives, 2015-2016.

Source: Peterson-Kaiser Health System Tracker interactive online tool using data from the National Health Expenditure Account; updated annually.

Benefit Coverage by Therapy Class

0% 20% 40% 60% 80% 100%

Pharmacy Only Both Medical Only

Anti-in�ammatory (IV)Asthma

Botulinum toxinsESAs

GCSFHemophilia factor

Hereditary angioedemaHyaluronic acid derivatives

IG (IV)IG (SC)

Macular degenerationDMD for MS (IV)

Oncology (IV)Osteoporosis (injectable)

PCSK9PAHRSV

4%

9% 58%56%67%

60%

9%

18%

18% 49%

42%

79%79%

82%

11%

70%11%21%

9%21%

19%18%

14%26%

21%14%

33%18%

70%74%

26%26%

33%

75%77%72%

67%

70%

7%

7%

7%

7%

12%19%

14% 12%16% 14%

23%

32%

4%

81%

7

MANAGING SPECIALTY BENEFIT COSTS AND MEMBER HEALTH CAN BE A DIFFICULT BALANCING ACT

Direct costs for ALL health care have grown considerably over the years23

Employers face the challenge of managing total health care costs, including specialty care costs, and helping members meet their health care needs

Increase in US Health Expenditures From 2004 to 2014 (by All Sources of Funds)

Total health care costs, including specialty

care costs

Member health and employee performance

73.5% 54.5%53.0%Hospitals Physicians

and clinicsPrescription

drugs

Your Benefits Budget Is an Investment in Your Members

98

SOME SPECIALTY BENEFIT DESIGN STRATEGIES FAIL TO MAINTAIN THE RIGHT BALANCE

Strategies that increase member cost sharing are becoming more prevalent24-27

Although proven effective in managing cost trends, increasing employee cost share may have unintended consequences for employers and members

• By 2018, 6 in 10 jumbo employers plan to increase employee cost share24,a

• The percentage of employers offering high-deductible health plansb has more than doubled over the past decade, and this growth is expected to continue25,c

• Nearly 30% of covered workers are enrolled in plans with high deductibles26,d

• The percentage of covered workers in plans with 4 or more drug tiers has increased27,e

a Cost share includes deductibles, premiums, co-pays/coinsurance, and/or OOP maximums. Source: Benfield, a division of Gallagher Benefit Services, Inc., survey of 106 US jumbo employers (5000+ employees) representing 3.7 million covered lives, 2016.

b For calendar year 2017, the IRS defines a high-deductible health plan (HDHP) as a health plan with an annual deductible that is not less than $1300 for self-only coverage and $2600 for family coverage, with OOP expenses capped at $6550 for self-only coverage and $13,100 for family coverage.28 HDHPs are also referred to as consumer-directed health plans (CDHPs), which are HDHPs paired with a savings plan.25

c Source: Benfield, a division of Gallagher Benefit Services, Inc., survey of 106 US jumbo employers (5000+ employees) and 35 US health coalitions representing a total of 6.2 million covered lives, 2016.

dSource: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2016.eSource: Kaiser/HRET Employer Health Benefits 2015 Annual Survey (January-June 2015).

In a 2016 survey of 106 jumbo employers representing 3.7 million covered lives 24:

WHAT CAN YOU DO TO MANAGE RISING HEALTH CARE COSTS AND MEET THE SPECIALTY CARE NEEDS OF YOUR

MEMBERS WITH COMPLEX, CHRONIC CONDITIONS?

88% said increasing cost sharing was an important part of their long-term strategy for managing their cost trend92% reported that cost sharing has been an effective way to manage health care cost trends

75% reported having received pushback from employees about their share of health care costs53% said increasing employee cost sharing has negatively impacted employee attraction and retention

61% reported that shifting health care costs onto employees has had a negative impact on employee health

EMPLOYERS CAN OPTIMIZE THEIR BENEFITS DESIGN TO STRIKE A BETTER BALANCE

Implementing member-focused strategies helps ensure appropriate access to specialty medications while managing the costs of care

1 Manage specialty medications as diligently on the medical side as on the pharmacy side

2 Keep OOP costs low to help improve cost access and help combat medication nonadherence

3 Leverage services and support offered by specialty pharmacies to control costs and reduce medication nonadherence

4 Limit disruption by preventing non-medical switching of therapies with medically stable members

Look for savings opportunities on the medical side; doing so can help fund strategies to optimize benefits

$

1110

ALIGNING PHARMACY AND MEDICAL BENEFITS CAN ENHANCE CONTROL OVER COSTS

Even though medical benefit drug spend is substantial, many employers are not tracking their specialty costs under this benefit29,30

Employing specialty drug management strategies under the medical benefit could yield considerable savings31

In 2015, applying cost-saving controls used in the pharmacy bene�t to specialty medications

administered through the medical bene�t could havesaved more than

$9 billion31of all specialty drugcosts were projected to be adjudicated under the medical bene�t in 201629

Nearly~36%of large employers did NOT track the specialty pharmacy trend under the medical bene�t in 201630,a

60%

In 2015, applying cost-saving controls used in the pharmacy bene�t to specialty medications

administered through the medical bene�t could havesaved up to

$9 billion31of all specialty drugcosts were adjudicated under the medical bene�t in 201623

Nearly~36%of large employers did NOT track the specialty pharmacy trend under the medical bene�t in 201630,a

60%

Most employers focus only on their [specialty] drug spending covered by pharmacy plans and

ignore drug spending covered by medical plans.32

Towers Watson

1

Consider these benefit design strategies to better manage medications administered through the medical benefit: • Ensure similar OOP costs on the medical and pharmacy sides• Require prior authorizations on the medical side• Optimize site-of-care management

FOR EXAMPLE, SITE-OF-CARE COSTS CAN VARY CONSIDERABLY

There can be significant cost differences among sites of care33

Consider these benefit design tactics to reduce costs by managing the site of care:• Establish preferred channels for the administration of infusions• Use prior authorization policies to require administration at a preferred site• Incent member use of preferred sites

Medical Benefit Cost per Claim by Site of Care as Shown for 8 of the Top 25 Drugs (2014)33

IF YOU HAVE SAVINGS FROM MEDICAL MANAGEMENT STRATEGIES, CONSIDER REVISITING YOUR MEMBER OOP COSTS FOR SPECIALTY MEDICATIONS ACROSS THE MEDICAL AND PHARMACY BENEFITS.

Medical benefit costs in the hospital setting were always greater and were often 2x as high as in the physician’s office or via specialty pharmacy/home infusion

a Includes 46% of employers who reported that they did not track the specialty pharmacy trend under the medical benefit and 14% of employers who reported that they are not sure whether they tracked it. Source: Pharmacy Benefit Management Institute survey of 298 US employers representing an estimated 10 million covered lives, 2016.

Cos

t per

clai

m

$2000

$1000

0

$4000

$6000

$8000

$9000

$7000

$5000

$3000

Product 1

Product 2

Product 3

Product 4

Product 5

Product 6

Product 7

Product 8

Home infusion/specialty pharmacyPhysician o�ce

Hospital outpatient

Congestive heart failure (n=16,353) Diabetes (n=42,080) Hypertension (n=112,759)

1312

KEEPING Rx OOP COSTS LOW MAY HELP COMBAT MEDICATION NONADHERENCE

Reduced OOP costs were also associated with more days of therapy possession34

New-Start Commercial Refill Adherence by Co-pay Cohort (2011-2012)

Adherence is defined in retrospective assessments as the number of doses dispensed in relation to the dispensing period. Compliance with the prescription is assumed, but unknown, when the medication is dispensed. Retrospective prescription claims database analyses lack the details of daily dosing with respect to timing, dosage, and frequency of taking medication.Source: SHA PTD dataset (2012); IMS FIA dataset (2012); Amundsen Group Analysis.

Day

s of t

hera

py in

firs

t yea

r

Immunology

220

152

Multiple sclerosis

236204

Patient pays <$30

Patient pays >$75

2 HIGHER MEDICATION POSSESSION RATIO WAS ASSOCIATED WITH LOWER TOTAL HEALTH SPENDING

Although adherent patients had higher prescription costs, medical spending was shown to be lower, which led to lower total health care costs35

Impact of Rx-Fill Adherencea in Chronic Vascular Disease on Health Services Spending (2005-2008)

a The medication possession ratio (MPR) was used to measure adherence. MPR is the number of days during the year when the patient had medication, divided by the number of days in the year. Condition-level adherence for each patient-year observation was calculated as the average of MPRs for all therapeutic classes for each chronic disease, weighted by the days’ supply in each therapeutic class. A condition-level MPR below 0.80 was considered nonadherent, and a ratio of 0.80 or above was considered to be adherent.

b Adherent patients vs nonadherent patients. Source: CVS Caremark integrated pharmacy and medical administrative claims data, January 1, 2005, to June 30, 2008. Presented are marginal effect estimates from linear fixed-effects models of health services cost. All models included a weighted Charlson Comorbidity Index; 2-year indicator variables; dummy variables for age 65 or older, male, and adherent; and interaction terms for age 65 or older, male, and adherent.

WHAT ARE YOU DOING TO KEEP OOP COSTS LOW FOR YOUR MEMBERS ON SPECIALTY MEDICATIONS?

Annual totalhealth care spendingb

Annual medicalspendingb

Annual prescriptionspendingb

$0

$2000

−$2000

−$4000

−$6000

−$8000

−$10,000

Annual totalhealth care spendingb

Annual medicalspendingb

Annual prescriptionspendingb

$0

$2000

−$2000

−$4000

−$6000

−$8000

−$10,000

+( ) =

-$7823

-$3756 -$3908

Annual totalhealth care spendingb

Annual medicalspendingb

Annual prescriptionspendingb

$0

$2000

−$2000

−$4000

−$6000

−$8000

−$10,000

Consider these benefit design tactics to keep OOP costs low for specialty medications: • Cap OOP costs for specialty medications• For HDHPs, include an HRA option• For HDHPs with an HSA, adopt an expanded preventive drug list

HRA=health reimbursement arrangement; HSA=health savings account.

Reduced OOP costs have been associated with lower Rx-fill abandonment34

Commercial Patient Abandonment by Co-pay Cohort (2012)

Abandonment is defined as the proportion of patients who do not fill the index drug within 90 days of their first approval (covered [not rejected] by payer) for that drug.Source: SHA PTD dataset (2012); IMS FIA dataset (2012); Amundsen Group Analysis.

Perc

enta

ge o

f pat

ient

s w

ho a

band

oned

thei

r firs

t pr

escr

iptio

n

Immunology

4%

68%

Multiple sclerosis0

23%

Patient pays <$30

Patient pays >$75

STUDY DESIGN: Commercial patients were selected by their first approved attempt to fill the index drug between January 2012 and December 2012. A 12-month eligibility look back and a 6-month eligibility follow-up were performed to ensure patients were visible in the dataset. Patients were grouped by their final OOP costs (after any secondary payer amounts) on their first attempt to fill. SHA longitudinal claims data were used for specialty drugs (immunology and MS). Longitudinal claims include payer channel, patient co-pay information, and life cycle status.

STUDY DESIGN: Included commercial patients initiating a new specialty medication (index drug) between September 2011 and October 2012. A 12-month eligibility look back and a 15-month eligibility follow-up were performed to ensure patients were visible in the dataset. Patients were grouped by their most common final OOP costs (after any secondary payer amounts) during the year they were tracked. SHA longitudinal claims data were used for specialty drugs (immunology and MS). Longitudinal claims include payer channel, patient co-pay information, and life cycle status.

1514

SPECIALTY PHARMACIES PROVIDE AN ADDITIONAL LEVEL OF PATIENT SUPPORT

In addition to product dispensing, specialty pharmacies provide the complex services often required by your members taking specialty medications

According to the Academy of Managed Care Pharmacy, specialty pharmacies36:

Are designed to efficiently deliver medications with special requirements (eg, handling, storage, and distribution), using standardized processes that allow for economies of scale

Are distinct from traditional pharmacies in that they coordinate many aspects of patient care and disease management

Help patients locate resources to provide financial assistance with OOP costs $

Coordinate information sharing among clinicians treating patients

Employ health care professionals to provide patient education, help ensure appropriate medication use, and promote adherence

3 SPECIALTY PHARMACIES MAY HELP DECREASE MEDICATION NONADHERENCE AND CONTROL COSTS

Patients using a specialty pharmacy were shown to have greater medication possession than those using a retail pharmacy (2016)34

In addition, patients using a specialty pharmacy were shown to have lower medical costs than those using a retail pharmacy (2016)34

Adherence to Therapy Over 12 Months

Medical Costsa

aCosts associated with emergency department (ED), inpatient, physician, and outpatient visits.b P value based on gamma model adjusted by age, sex, Charlson Comorbidity Index, disease indication, index year, baseline medical costs,

and baseline co-payment.

a P value based on linear model adjusted by age, sex, Charlson Comorbidity Index, disease indication, index year, baseline medical costs, and baseline co-payment.

b Medication possession ratio (MPR) was calculated as the total days of treatment supply divided by the total days in the 12-month study period multiplied by 100.

Medical costs were 17% lower for patients using a specialty pharmacy

MPR

(%)b

$15,641$12,986

Specialty pharmacy (n=1182)

Retail pharmacy (n=1182)

Consider these benefit design tactics to leverage the added value provided by specialty pharmacies: • Require the use of specialty pharmacies as appropriate • Ensure uninterrupted care by allowing members to stay with the same

specialty pharmacy

STUDY DESIGN: Commercial patients ≥18 years who had ≥2 claims for an indicated autoimmune disease (rheumatoid arthritis, Crohn’s disease, ulcerative colitis, psoriasis, psoriatic arthritis, or ankylosing spondylitis); ≥1 claim for the specialty drug/biologic of interest from January 2008 to December 2015; medical and pharmacy coverage ≥12 months before and after the index date; no prior biologic treatment in the 12 months before the index date. Specialty pharmacy cohort included patients who had initiated and refilled their prescription at a specialty pharmacy for 12 months or had initiated their prescription at a retail pharmacy and transferred their prescription to a specialty pharmacy within 12 months. Retail pharmacy cohort were those patients who initiated and refilled their prescription at a retail pharmacy for 12 months. Patients in both cohorts were matched 1:1 using propensity scores estimated with the following covariates: age, sex, Charlson Comorbidity Index, disease indication, index year, baseline medical costs, and baseline co-payment. Source: Clinformatics™ Data Mart dataset (2000-2015).

7160

Specialty pharmacy (n=1182)

Retail pharmacy (n=1182)

P<0.0001a

Time to Discontinuation

a P value based on Kaplan-Meier analysis and associated log-rank test. Discontinuation was defined as a gap in treatment greater than the days of

supply on the previous claim without any further prescription.

Mean time to discontinuation (days)

Prob

abili

ty o

f con

tinui

ng tr

eatm

ent

0.20 100 200 300

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

291 daysSpecialty pharmacy

Retail pharmacy255 days

P<0.0001a

P<0.0001b

1716

4 STEER CLEAR OF NON-MEDICAL SWITCHING, WHICH CAN DISRUPT TREATMENT

Medical switching vs non-medical switching

PRESERVE THE PATIENT/PHYSICIAN DECISION: PATIENTS WHO ARE MEDICALLY STABLE SHOULD BE

ALLOWED TO STAY ON THEIR THERAPY UNLESS THERE IS A MEDICAL REASON TO SWITCH.1

A physician and/or patient chooses to switch a medication for medical reasons (eg, the patient cannot tolerate the therapy or is not adequately responding to the treatment).37

A patient who is stable on a prescribed medication is required to switch the medication for financial reasons (eg, formulary changes that eliminate coverage for that medication or increase the level of cost sharing).38,*

What is medical switching? What is non-medical switching?

Patients who switch for non-medical reasons may experience multiple switches to and from other medications.38

NON-MEDICAL SWITCHING MAY LEAD TO INCREASED UTILIZATION OF HEALTH CARE AND HIGHER COSTS

Switching medically stable RA patients was associated with significantly more outpatient, specialist, and ED visits per year34

In addition, health care costs were higher for medically stable patients who switched from one specialty medication to another34

Comparison of Medical Costs for Maintainers and Switchers After 6 Monthsa

Comparison of Total Costs for Maintainers and Switchers After 6 Monthsa

Comparison of Overall ED Visits for Maintainers and Switchersa

Comparison of Overall Outpatient Visits for Maintainers and Switchersa

Mea

n an

nual

vis

its p

er p

atie

nt

Mea

n an

nual

vis

its p

er p

atie

ntM

edic

al co

sts

(inpa

tient

and

out

patie

nt)

Tota

l cos

ts

(inpa

tient

, out

patie

nt a

nd R

x)

+$547 Medical Costs

+$4013 Total Costs

Maintainer (n=3477)

Maintainer (n=3477)

Switcher (n=234)

Switcher (n=234)

$833$11,229

$1380$15,242

Maintainer (n=6270)

Maintainer (n=6270)

Switcher (n=342)

Switcher (n=342)

0.20

0.32

21.94

~5 more outpatient visits

per year 60% more ED visits

17.25

a Maintainers were medically stable patients with rheumatoid arthritis who refilled their prescription for an originally prescribed specialty medication within 90 days. Switchers were medically stable patients with rheumatoid arthritis who switched to a different specialty medication within 90 days after their last prescription for the original specialty medication.

b P values were generated from Poisson regression models adjusting for sex, age, health plan (PPO vs other), employment, CCI, index copayment, had rheumatologist visit during baseline period, baseline use of narcotics and other non-methotrexate DMARDs, other autoimmune conditions, and health care cost and utilization during baseline.Medically stable was defined as patients with no hospitalizations, ED visits, or use of oral/injectable corticosteroids in the 6 months before the index date.Source: Based on an analysis using claims data from the Thomson Reuters MarketScan database (2003-2010).

a Maintainers were medically stable patients with rheumatoid arthritis, psoriasis, psoriatic arthritis, ankylosing spondylitis, or Crohn’s disease who had continuous usage of the index specialty medication in a 6-month follow-up period. Switchers were medically stable patients with rheumatoid arthritis, psoriasis, psoriatic arthritis, ankylosing spondylitis, or Crohn’s disease who switched to a step-1 agent during a 6-month follow-up period. Medically stable was defined as patients with no hospitalizations, ED visits, or substantial increase in a certain specialty medication dose in the 6 months prior to the switch.Source: Based on an analysis using Clinformatics DataMart data (January 2011–December 2012).

* A patient is medically stable when the medication is successfully treating the person so that he or she experiences satisfactory relief from symptoms. Achieving stability may require several months of uninterrupted treatment.38

PBM=pharmacy benefit manager.

Consider these strategies to keep stable patients on their medications:• Require your PBM to grandfather members’ current therapies and cost share amounts• Prevent non-medical switching when a formulary or PBM change occurs

IRR=1.12; P<0.001b

P<0.01 P<0.01

IRR=1.42, P<0.015b

19 18

OPTIMIZE YOUR SPECIALTY BENEFITS DESIGN TO ENSURE MEMBER ACCESS TO CARE

GET STARTED TODAY BY IMPLEMENTING THESE BENEFIT DESIGN STRATEGIES

Understand how chronic conditions, including rheumatoid arthritis, inflammatory bowel disease, and psoriasis, affect your covered lives

– Gather metrics from your plan such as disease prevalence, percentage of members receiving treatment by a physician (primary care and specialist), hospital visits associated with specific conditions, and nonadherence by condition

Assess the total cost of care by examining medical and pharmacy claims for treatment and utilization

– Obtain data from your pharmacy and medical benefit partners to understand how specialty medications are being utilized in the treatment of chronic diseases among your members

– Be sure to request data on your total spend for these medications, including associated drug administration or facility fees that may fall under the medical benefit

STEP 1:

STEP 2:$ Keep members OOP costs low

Ensure members are not burdened with financial barriers that may prevent them from filling or refilling prescriptions

For HDHPs, consider adding an HRA option with a separate, lower drug deductible

For HDHPs paired with an HSA, adopt an expanded preventive drug list

Manage specialty medications under the medical benefit, as well as the pharmacy benefit

Adjust your network to exclude providers with overly high costs

Establish differential member OOP costs based on the site of care

Look to control costs on the medical side; if you find savings, you can leverage those savings to help offset costs associated with implementing strategies to lower member OOP costs

Prevent non-medical switching

To limit therapy disruption, enable members to continue on the specialty therapies their physicians have prescribed

Require grandfathering of your members’ current therapies and cost share so they will not be disrupted if a formulary or PBM change occurs

Maximize the value of specialty pharmacy services

Contract with specialty pharmacies to help manage costs and combat medication nonadherence

Encourage members to choose a specialty pharmacy right from the first fill in order to have the best possible start in their treatment journey

Do not require members to switch specialty pharmacies

Implement optimal benefit design strategies that help remove barriers to early diagnosis and timely treatment

– Work with your pharmacy and medical benefit partners to determine where to make benefit changes that will best balance costs with the health of your members who have complex, chronic conditions

STEP 3:

©2017 AbbVie Inc. North Chicago, IL 60064 400-1916122 June 2017

References:1. Coalition of State Rheumatology Organizations. Keeping stable patients on their medications. http://www.csro.info/Switching. Accessed January 3, 2017. 2. Helmick CG, Felson DT, Lawrence RC, et al; National Arthritis Data Workgroup. Estimates of the prevalence of arthritis and other rheumatic conditions in the United States; part I. Arthritis Rheum. 2008;58(1):15-25. 3. Centers for Disease Control and Prevention. Rheumatoid arthritis. http://www.cdc.gov/arthritis/basics/rheumatoid.htm. Updated July 22, 2016. Accessed October 24, 2016. 4. Crohn’s and Colitis Foundation of America. What is Crohn’s disease? http://www.ccfa.org/what-are-crohns- and-colitis/what-is-crohns-disease/. Accessed October 24, 2016. 5. Crohn’s and Colitis Foundation of America. What is ulcerative colitis? http://www.ccfa.org/what-are-crohns-and-colitis/what-is-ulcerative-colitis/. Accessed October 24, 2016. 6. Centers for Disease Control and Prevention. What is inflammatory bowel disease (IBD)? http://www.cdc.gov/ibd/what-is-ibd.htm. Updated September 18, 2014. Accessed October 24, 2016. 7. National Stem Cell Foundation. Psoriasis. http://www.nationalstemcellfoundation.org/psoriasis/. Accessed January 3, 2017. 8. Menter A, Korman NJ, Elmets CA, et al; American Academy of Dermatology Work Group. Guidelines of care for the management of psoriasis and psoriatic arthritis: section 6. Guidelines of care for the treatment of psoriasis and psoriatic arthritis: case-based presentations and evidence-based conclusions. J Am Acad Dermatol. 2011;65(1):137-174. 9. Birnbaum H, Pike C, Kaufman R, Marynchenko M, Kidolezi Y, Cifaldi M. Societal cost of rheumatoid arthritis patients in the US. Curr Med Res Opin. 2010;26(1):77-90. 10. Centers for Disease Control and Prevention. An expensive disease without a cure. http://www.cdc.gov/ibd/pdf/inflammatory-bowel-disease-an-expensive-disease.pdf. Accessed January 3, 2017. 11. 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BY ENHANCING YOUR HEALTH CARE INVESTMENT, YOU CAN BETTER BALANCE THE COSTS OF SPECIALTY CARE AND THE

HEALTH OF YOUR MEMBERS WHO HAVE SPECIALTY Rx NEEDS.