Pharmacy benefit vs. medical benefit

Inside Edge Consulting, Princeton

May 7, 2015

Specialty pharmacy has become a bigger concern for managed care, particularly plans and employers. With this in mind, it is probably important to take a step back to understand the differences between pharmacy benefits vs. medical benefits. A simple definition is:

Medical benefit – drugs that are injected or infused in the office of a healthcare professional by a healthcare professional; offices can include settings such as out-patient clinics and infusion centers

  • Pharmacy benefit – drugs that are self-administered including those that are oral, self- injectable, or offer a route of administration that a patient can handle at home

Currently, the majority of specialty drugs are being processed through the medical benefit, but since most employers outsource this to PBMs it is difficult to accurately track drug spend. However, as more self-administered specialty medications are approved, costs will shift to the pharmacy benefit side. This has already been the trend in hemophilia, rheumatoid arthritis, and respiratory disease.

Health plans and employers are most interested in understanding how a shift could assist them in reducing costs, and there are many factors to consider. What is evident, though, is that pharmacy directors and medical directors do not want to be responsible for the cost of specialty drugs; each group is working on strategies to shift the cost in the direction of the other group.

Over the next few years, it will be interesting to see how this plays out as it becomes increasingly important to track outcomes, costs, and how to provide precision care to patients. More to come…

Tyler Dunn
Senior Project Manager

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