Specialty Drugs Bankrupting Health Plans

 

Group plan has two individuals costing the plan in excess of $500,000 per year. If any more like these crop up the plan will go bankrupt in a hurry……………………….

Yesterday we received the following notice from a PBM for one of our clients. This is a self-funded plan sponsor with approximately 950 employees with an October renewal date.

Redacted Email:

This email serves as a notification of a recent high cost PA approval for a xxxxxxxxxxx member.  This is for information purposes only and does not require a response.

PA/EOC#: 

Plan Name: 

 Drug Name/Strength: CABOMETYX 40MG TABLET

 Estimated Cost: $16,895.00/ MONTH

 Diagnosis provided: MALIGNANT NEOPLASM OF THE LEFT KIDNEY

 Approval Duration: 4/27/18 – 4/27/19

 Anticipated total duration of therapy (x days/months, ongoing, etc.):  ONGOING

Please let me know if there are any questions.

The patient will be on this drug indefinitely at the cost of over $200,000 per year. Since the group’s renewal is just five months away, you can rest assured stop loss cover will laser this claimant on renewal leaving the plan at full risk.

Medical claims will effectively increase pepm by $17.78 just to cover one individual within the group.

Small groups like this one cannot afford to continue to cover specialty drugs. This case in particular. Currently, with the addition of the claimant here, this group has two individuals costing the plan in excess of $500,000 per year. If any more like these crop up the plan will go bankrupt in a hurry.

RiskManagers.us has a Rx strategy that works to address this exposure. It’s all about common sense and pragmatism.

NOTE: This group stopped taking our advice several years ago. The plan is over reserved and contributions exceed claims and expenses. Complacency has set in. That may change now.

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