SUSAN MADDUX: Pharmacy is no longer a standalone benefit. It definitely impacts the total cost of care. If I think about when I started, Craig, like pharmacy probably made up about 5% of the spend. Now for some customers it's up to a quarter of the spend. So it's important to understand how drug costs under the pharmacy benefit impact the total cost of care and what could potentially be done differently.
CRAIG KURTZWEIL: Welcome to Health Trend Talks with UnitedHealthcare, a video podcast series where I sit down with leading minds to unpack the trends shaping employer benefit strategies. I'm Craig Kurzweil, Chief Data and Analytics Officer for UnitedHealthcare's commercial business, and I'm joined by our Chief Pharmacy Officer, Susan Maddux. Today, we'll talk about why pharmacy has become one of the most important and most complex areas of employer benefit strategy. Hi, Susan.
SUSAN MADDUX: Good afternoon.
CRAIG KURTZWEIL: Well, thanks for joining us today.
SUSAN MADDUX: It's a pleasure.
CRAIG KURTZWEIL: Well, you and I have worked together for a long time, but for the audience, would you mind just spending a couple minutes talking about your role and the role you play for our clients?
SUSAN MADDUX: So, I've been with the organization for 25 plus years, always in pharmacy. And my role has always been in evaluating drugs as well as creating prescription drug lists and other management programs for drugs under both the pharmacy and medical benefit.
CRAIG KURTZWEIL: And as part of your role, you're in front of a lot of our clients. You're at a lot of conferences talking about pharmacy. It's a hot topic these days. What are some of the common questions that you're getting from employers and consultants?
SUSAN MADDUX: So, today we get a lot of questions about high-cost drugs, so specialty medications, which make up a large part of our spend, as well as GLP-1s. So, how am I going to manage my GLP-1s spend for both diabetes as well as weight loss, if they are covering medications for weight loss? The questions today are much different than when I first started. So, if we think back 25 years ago, we were talking about medications for common conditions such as allergies, depression, reflux, high cholesterol. And that story has changed. Those medications are still extremely important, but they don't hit the cost trend any longer.
CRAIG KURTZWEIL: And the words have gotten a lot harder to pronounce when you're talking about some of the trends and drivers. Speaking of some of those trends, if you look at our health trends report that we published recently, we're now at over 55% of pharmacy spend being driven by specialty medications. I remember when that wasn't even part of the conversation. It was like 10, 20%. It's changed a lot in the past 15 years or so. So what is the big drivers in that space and what should employers think about as far as how that impacts their benefit strategy?
SUSAN MADDUX: So, when you think about specialty drugs, large part of the spend, but only a few percentage of members are actually on these medications, often used for conditions that are not as common, such as oncology, so cancer, inflammatory conditions such as inflammatory bowel disease, psoriasis, rheumatoid arthritis, multiple sclerosis. And now, of course, we have these high-cost single gene therapies that may be curative for very rare conditions.
CRAIG KURTZWEIL: And you think about it from an employer perspective, there's a delicate balance, right? They want access for their members, but they're dealing with scenarios around affordability with GLP-1s, with specialty medications, with high-cost drugs generally. What are some of the levers that employers should really be focused in on to help manage that benefit?
SUSAN MADDUX: So there's several that they can employ. So one is to make sure you have the right coverage. And these drugs are covered under both the pharmacy and medical benefit now. So integration, in our mind, is very important. So, the right prescription drug list, the right drugs that are covered, and you can do that through various tools such as prior authorization, including preferred products as part of the prior authorization review, step therapy type programs also, even strategic exclusion. So, if there's multiple drugs to treat the same condition, they're all very similar, they have similar side effects, there's probably no reason to cover all of them. So, that's why we continue to increase the number of strategic exclusions that we recommend to our customers. And then if you think about medical drugs, so site of care is important because the cost varies by the site of care. So if it's safe to give in a lower cost site of care, we would encourage our customers to put those types of programs in place.
CRAIG KURTZWEIL: You mentioned medical, so let me ask you about that a little bit. So some of our customers have the pharmacy benefit aligned directly with the medical benefit, some of them carve out the pharmacy benefit. What are some of the benefits to having that pharmacy benefit alongside medical?
SUSAN MADDUX: So, pharmacy alongside medical, we think is important because it impacts the total cost of care as well as the whole-person health. So, we make decisions that go across the benefits. We manage drugs for both medical and pharmacy, so we make sure those decisions align. So, if you don't have integrated benefits, you could have individuals that are on therapy duplication. So, they're getting one drug under pharmacy, a very similar drug under medical, and they may not need both of those drugs. Also, there's more and more drugs now that may start with someone getting an infusion in an office and then move to self-administered formulation of the drug. So, if they start on the infusion and then the pharmacy benefit doesn't cover the self-formulation of that drug, they may actually have to start over and pick a different drug and start over with the induction doses, et cetera.
CRAIG KURTZWEIL: You think about those benefits separately, it just adds another layer of confusion to figure out how to drive the lowest total cost of care.
SUSAN MADDUX: It does.
CRAIG KURTZWEIL: I'd be remiss if I didn't ask you a data question, as a data guy. Data has become much more readily available. We have data upon data within our company. How has that changed the way that you work with employers and advise them around their pharmacy benefit strategy?
SUSAN MADDUX: So data is great to have, but you need to figure out how to find the sweet spots within the data, so trying to find areas to focus on. So just understanding the data is extremely important, as well as having individuals that know how to dive deep into the data to find areas where there could be outliers, so egregious dosing, aberrant dosing, or ways to basically potentially manage the drugs differently. So data is great, but you need to understand where to go with the data.
CRAIG KURTZWEIL: Agreed, agreed. One of the areas that I hear about a lot from employers is the confusion around buying drugs through a cash option versus having them administered through the plan. What's your advice around those scenarios?
SUSAN MADDUX: When we think of all the direct-to-consumer programs now that basically are very new to the market, probably the last several years, they could be beneficial for benefit designs that don't cover those drugs. So the one that comes to mind is GLP-1s for weight loss. Not all of our customers cover drugs for weight loss, so that would be an option for the consumer to go to one of the direct-to-consumer options through one of the pharmaceutical companies or another vendor. If we think about drugs that are covered through the benefit, often the benefit design that we offer from a customer standpoint will lead to the lowest net cost for the consumer, as well as for the customer. So you just need to be very careful and analyze the costs across both.
CRAIG KURTZWEIL: That topic has evolved over the years. How do you see that evolution playing its role within the pharmacy space?
SUSAN MADDUX: So, GLP-1s have been available for treating type 2 diabetes for many years. And over time, they've gotten better from a glucose lowering standpoint. They've gotten better based on how you need to take them. Initially, you had to give yourself an injection twice a day, now it's once a week. And from a safety standpoint, they've also improved. And then we've had GLP-1s for weight loss for 10 plus years. But several years ago, there were agents that were released and approved that are much more effective at achieving weight loss. So, in probably around four or five years ago, we started to see a really increased trend in drugs for GLP-1s for weight loss as well as for diabetes. And what we initially saw, Craig, is individuals were using the diabetes drugs for weight loss. They were using them off label even before the drugs were approved for those indications.
CRAIG KURTZWEIL: As you think about some of those employers that cover GLP-1s for weight loss specifically, oftentimes it's broad coverage. But as we start to analyze some of the data and is it truly driving better pharmacy results and better medical results, some of the results are sort of mixed. And employers are kind of debating what should coverage look like within our population. What do you view as some of those options for employers to think about?
SUSAN MADDUX: So if we think about it, some employer groups were covering weight loss drugs for many, many years, didn't even think about it because it was not even on their radar. And then when the GLP-1s started to increase in utilization, that's when they started to think about whether or not they should cover weight loss. I know that you've looked at medical cost data several times now. We have not yet seen total cost of care decrease for GLP-1s that are being used for weight loss. So I think employer groups are starting to question whether or not they should continue to cover them. If we think about our business today, about a third of our self-funded customers actually are covering weight loss drugs today. We have had several groups decide maybe they shouldn't be covering them because they can no longer afford them. So the various options we have in place is to potentially not cover them at all, to cover them with prior authorization, or cover them without prior auth.
CRAIG KURTZWEIL: And a lot of this, hopefully we're helping those employers make some of those decisions with data. So what really happens in their population? Do medical costs go down? Do they go up? Is there a certain sub portion of the population that really makes the most sense? It's a hot topic and dynamically changing, I would say, every day.
SUSAN MADDUX: Absolutely. We actually are able to help them forecast what their spend could be from those various options that they want to implement.
CRAIG KURTZWEIL: As you think about some of the concerns that we get from employers, brokers, and consultants, oftentimes it's around transparency and prior authorizations. So you think about transparency, where do you think there needs to be greater transparency in the pharmacy space?
SUSAN MADDUX: I think from a transparency standpoint, the customers need all the right information in order to make sure the decisions they're making are appropriate. So they need to understand the cost of the medications, the lowest net cost of the meds, understand the types of discounts that are in place. Also understand how decisions are made, like what goes into the decision making from a coverage standpoint. I think that's critical also.
CRAIG KURTZWEIL: And as part of the transparency, prior authorization is a piece of that. Obviously, prior authorization has a role in healthcare, specifically to pharmacy. What do you think that role is, and where should that go?
SUSAN MADDUX: So, from a prior authorization standpoint, we have it in place for many of our extremely high-cost medications, including specialty, as well as drugs that can be used off label when there's not proven uses for the medication. So, that's where we typically implement prior auth. One of the things that we've been doing for the past several years, Craig, is to figure out how we can better improve that experience. So we evaluate every drug every year to make sure it still requires prior auth. Is there something that's changed that maybe we could remove the prior auth? If we can't remove the prior auth, we try to figure out how we can automate it. So how we use internal data from the medical claim system as well as pharmacy claim system to figure out if we can actually bypass the prior auth. So we do that about 40% of the time now. No one has to even call in for a review. You go to the pharmacy, the claim automatically processes because we have all the right internal information to fulfill the prior auth requirements.
CRAIG KURTZWEIL: It's amazing how much of that abrasion is caused by bad data. Data can fix it all.
SUSAN MADDUX: Exactly.
CRAIG KURTZWEIL: If you can align it the right way.
SUSAN MADDUX: Exactly.
CRAIG KURTZWEIL: What's one of the areas of pharmacy that you wish employers had better understanding of?
SUSAN MADDUX: In my opinion, it's understanding the benefit of integrating pharmacy and medical. Pharmacy is no longer a standalone benefit. It definitely impacts the total cost of care. If I think about when I started, Craig, like pharmacy, probably made of about 5% of the spend. Now for some customers it's up to a quarter of the spend. So it's important to understand how drug costs under the pharmacy benefit impact the total cost of care and what could potentially be done differently. And at times, right, the drugs may be the most effective option and the most cost-effective option, so you need to understand the impact to medical costs when you're making drug coverage decisions.
CRAIG KURTZWEIL: What are some questions that you think they should be asking their carrier or their PBM partner, especially with all the changes that have happened in the pharmacy space for the last couple of years?
SUSAN MADDUX: I think they need to ask them how they make decisions. Like what type of information goes into your decisions? Is it only looking at the cost of the drug? They need to ask them about the net cost of the medication, what are their other options they can do from a benefit design standpoint, as well as making sure the programs they put in place actually work. So, how is the vendor, the company, evaluating whether or not the strategy that's implemented actually delivers what it should deliver?
CRAIG KURTZWEIL: What's one trend that you think employers should be focused on today in the pharmacy space that's maybe newer to the conversation and maybe what's a trend that was a big driver but maybe shouldn't maybe require as much attention these days?
SUSAN MADDUX: So if I think about the trend they need to continue to focus on, especially medications, huge pipeline, existing drugs getting expanded indications and uses, new drugs coming to the market. If we think about some of the new drugs that have recently been approved, their price points are much higher than the competitors that have been on the market previously. So, think about new oncology medications, they can be $25,000 to $45,000 per prescription. So, need to ensure there's programs in place to make sure those drugs are being covered based on evidence. The other thing is GLP-1s. I don't think they're going to go away in the next three years, right? So, new weight loss medications are in the pipeline, some with higher efficacy than the ones before, some with better side effect profiles. So, I think we're going to continue to have to understand how we can better manage that area of pharmacy.
CRAIG KURTZWEIL: Does a day go by when you don't get a GLP-1 question, Susan?
SUSAN MADDUX: It does not, and usually three or four, at least, each day.
CRAIG KURTZWEIL: I hear you, I hear you. So, let's end maybe on a fun one. So, what's one trend that you're adopting right now that would be interesting to the audience, and maybe what's another trend that you had been doing and maybe you're starting to kind of set aside.
SUSAN MADDUX: So one that I've adopted is new types of exercise. So I recently started Pilates and I thought, oh my God, this is going to be so boring, but it was actually very relaxing. So my goal is to not cancel the classes I schedule for some other event that I think I better do instead. And then one thing I'm giving up is sitting at night and watching like mindless TV shows. So I'm going to get back into reading for pleasure. I just bought the Odyssey.
CRAIG KURTZWEIL: I'm all for mindless TV, so I'm not with you on that one.
Well, I know your time is incredibly valuable, Susan, so thank you for spending a little bit of time with us today.
SUSAN MADDUX: Thank you. Thanks for having me.
CRAIG KURTZWEIL: And thank you all for joining us. This is Health Trend Talks with Craig Kurzweil of UnitedHealthcare, and we'll see you again next time.
Share
