The Biologic Finance and Access Council 2nd Annual Biologics Healthcare Survey: Views From Key Healthcare Stakeholders

Abstract

Although biologics are a growing area of interest, payers, purchasers, and providers understand surprisingly little about their overall costs or benefits coverage.

In the past year, we have seen the U.S. healthcare system go through unprecedented changes concomitant with a growing interest in biologic therapies. Biologics are the fastest-growing segment of the pharmaceutical portion of the healthcare dollar, representing one sixth of drug spending. While drug spend, excluding specialty medications, slowed to an increase of only 1.5 percent for most plans in 2008, specialty drug spend continued its steady climb, rising by more than 15 percent. For some plans in 2009 and 2010, yearly increases in pharmacy benefit spending was more than 20 percent. Estimates from national specialty pharmacy vendors place the specialty drug spend on the pharmacy benefit side at around 5 percent, with the same growth trajectory seen on the medical benefit side.

Drug, device, and diagnostic companies are investing heavily in the development of new drug products aimed at yielding clinical utility in the treatment of diseases such as rheumatoid arthritis (RA), Crohn’s disease, multiple sclerosis, and the solid and liquid cancers. Alzheimer’s disease and chronic pain are other disease states that will attract investment.

In this environment, it is important to delineate the perceptions of healthcare stakeholders and to track them as changes occur in the delivery of healthcare in terms of access, reimbursement, and policy standards.

Method

In the fourth quarter of 2010, the Biologic Finance and Access Council (BFAC), with assistance from Medi-Media Research, conducted its second annual online survey of more than 150 healthcare executives. The individuals in this diverse group are either affiliated with the Jefferson School of Population Health or are members of BFAC, which comprises thought leaders from large employers, national and regional health plans, and pharmacy benefit managers.

This survey was a follow-up to the first BFAC survey conducted in 2009. The intent of the survey was to glean insight on: Knowledge about and management of biologics in healthcare; issues of importance to each stakeholder; emerging directions regarding biologic access and financial coverage; and trends to watch. The Second Annual BFAC Healthcare Survey was approved by the Institutional Review Board at Thomas Jefferson University, in Philadelphia.

Results

More than 100 respondents representing payers and providers, including health plans, federal and state government agencies, and healthcare systems, participated in the survey. Results indicated the following:

• Approximately one half of payers and nearly one third of providers did not know the percentage of their organizations’ healthcare spend on biologics, but nearly all recognized that expenditures on biologics is increasingly important. Almost none knew what their organizations’ approximate healthcare spend for diagnostics that are used in combination with drug therapies would likely be in 2012.

• Payers and providers agreed that patients will incur more out-of-pocket expenses for biologics over the next 6 to 18 months (Figure 1, page 20). These findings are consistent with the first BFAC survey.

• Early-stage oncology diagnosis, RA and related automimmune diseases, and Alzheimer’s disease are the top three priority areas that both providers and payers said need improvement in quality of care and clinical outcomes (Figure 2, page 21).

• Respondents believed that biosimilars will be available at an approximately 40 percent discount from branded biologic drug products.

• For drug manufacturers, establishing a value proposition and promoting the appropriate use of treatments will be key drivers for the acceptance of biologic agents in the future.

• Respondents agreed that BFAC should focus on research and educational initiatives, such as outcomes measurement, comparative effectiveness studies, specialty pharmacy usage, benefit design options, and data sharing (Figure 3, page 21).

FIGURE 1.

Healthcare trends and a growing use of biologics

Source: Second Annual BFAC Healthcare Survey, 2010

FIGURE 2.

Level of priority needed to improve quality of care and outcomes of various disease states

RA = rheumatoid arthritis.

Source: Second Annual BFAC Healthcare Survey, 2010

FIGURE 3.

Agreement regarding proposed role of BFAC

Source: Second Annual BFAC Healthcare Survey, 2010

Conclusion

Biologics are a growing area of interest among all healthcare stakeholders, yet little is understood about their costs or benefits coverage. Although there is recognition of trends and increasing benefit costs, there continues to be a lack of knowledge among payers about their own expenditures for biologics under both the medical and pharmacy benefits.

The BFAC survey also shows that respondents expect discounts for biosimilar products that may be unrealistic. Outcome measures along with value-based assessments are important, especially for establishing a clear value proposition for biologics and promoting their appropriate use.

Monitoring changes in market dynamics with respect to these issues will be a key area of focus for stakeholders and for BFAC.