3. Beyond affordability, what other challenges are you looking to solve for clients?
Another urgent consideration is sustainability. Plans think “Even if I can afford it today or tomorrow, what about five years from now?” And then an additional subtlety which is especially important for smaller and midsize employers is “Am I prepared for gene therapy and other high-cost, one-time treatments?”
Million-dollar claims related to drugs like gene therapies are a reality that is just beginning to be experienced by clients. If you're a thousand-life group, you probably spend about a million dollars a year on drugs within your pharmacy benefit. And as gene therapy becomes more prominent, the reality is that it only takes one gene therapy procedure for one patient to equal the entire annual pharmacy drug spend that you're used to seeing.
While gene therapy costs will typically be associated with the medical benefit, we recommend that our clients always look at medical and pharmacy drug costs together. The benefit under which the claim pays isn’t the important piece – being able to afford the cost of the drug is.
This fundamentally changes how drug costs get funded financially. How do we insulate plans from that million-dollar claim coming in and disrupting their financial picture and everything they thought they knew about drug benefits?
I suspect we will see more interest in products like the Optum Gene Therapy Risk Protection we offer. This protects plans from unexpected high-cost claims. Moving forward without this type of protection is akin to living in a flood zone without flood insurance – and the flood of cell and gene therapies is coming. These treatments represent amazing scientific achievements. We can’t let financial limitations keep patients who need these drugs from getting them.
Beyond gene therapy affordability, one other concerning trend that I see related to this is the growing industry of small alternate funding companies. They will dangle a product in front of a small or midsize employer to say, “you don't need to cover specialty. We have alternate funding arranged that will allow somebody else to pay for your employees specialty pharmacy product.”
If it sounds suspicious from the start, it should. However, it is completely understandable why an employer might be interested in a proposal that promises to reduce their costs. However, these alternate funding companies are distorting the marketplace by essentially manipulating the pharmacy benefit and then attempting to have these patients qualify for free goods from charitable organizations. Those charitable organizations exist to help uninsured patients afford drugs or underinsured patients afford their copays for drugs. These alternate funding companies profit from the funding the charitable organization provides, which I would imagine is not the intent of a charitable organization’s charter.
In the end, the plan sponsor loses the rebate performance and still must pay for the product from an alternate funding company. This diminishes any savings the client may expect. Most importantly, it’s also very disruptive to the patient, who often misses months of therapy as this gets worked out, and often ends up right back where they started – getting the product funded by their employer when the alternate funding attempt didn’t work out. So, this is a trend that I think we as an industry need to figure out.