It’s no secret that specialty pharmacy costs have soared in recent years. By some estimates, specialty medications now account for half of all drug spending. A 2020 survey found that 42% of employers view specialty drug costs as their top healthcare expense concern.
To help employers manage these rising drug costs, their pharmacy benefit managers (PBMs) sometimes recommend a cost-control strategy known as a “lockout list.” This list is created and managed by the PBM and identifies certain specialty drugs to be obtained through the PBM’s specialty pharmacy only. Specialty drugs are used to treat complex and chronic conditions (such as Crohn’s disease or cancer) and are infused or injected by a provider.
How does a lockout list help control costs? PBMs tend to have greater buying power, which can mean lower drug costs, opportunities for rebates, and network discounts for employers and their members. On the other hand, when providers buy and bill for drugs, employers miss out on these cost-saving opportunities.
Quantum Health’s Care Coordinators engage with hundreds of members and providers daily, often around questions and authorizations related to prescription drugs. We’re in a position to see how a lockout list strategy sometimes creates unintended confusion and challenges for members and their treating physicians.
When a lockout strategy is implemented, a provider might discover that a treatment they have been buying and billing directly must be sourced from the PBM’s specialty pharmacy. The unexpected change in sourcing the medication could result in a treatment delay, which might cause worry for the member and even allow their condition to worsen.
Things can go downhill from there. A flare-up of a member’s condition can lead to greater resistance to the prescribed medication. If the case is severe enough, it may even land the member in the hospital for a costly inpatient stay. Should their health deteriorate further, the medication may be deemed a treatment failure, requiring a new, potentially more costly drug to be used.
In some cases, the list might also mean a new provider must be introduced into the member’s treatment journey, because the lockout list places certain limitations or requirements on the type of facility where a provider is permitted to administer the drug.
When implementing a lockout list strategy, employers and consultants should consider these three factors to help minimize disruption to members’ experiences and providers’ treatment plans:
As specialty medication costs continue to rise, medical lockout lists and other cost-control strategies are likely to become more common. With some advance planning, and the right partners working to ensure successful implementation, employers have the best chance to control costs and safeguard member satisfaction.