The Link Between Specialty Drug Costs and Consumer Experience

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How a “sticky” consumer experience could help control the drain of high-cost chronic disease drugs.

President Trump is expected to soon issue an executive order outlining a plan to control prescription drug prices, and the issue of soaring prices is again in the news. Recently, Oliver Wyman’s Helen Leis was interviewed by the Wall Street Journal about consumers’ access to high-cost drug therapies. Here, she expands on the topic and explores how controlling access is only part of a comprehensive cost-containment strategy. The real breakthrough, she says, will come when healthcare organizations can better engage consumers in their health and treatment plans. And that will only come when healthcare companies deliver a different, dramatically better experience.  

More than 22 cents of every dollar spent on healthcare premiums goes toward prescription drug costs, according to AHIP. That’s more than what is spent on physician services. Payers are working to manage the rising costs of prescription drugs with novel pricing schemes, such as value-based pricing and indication-based pricing; and traditional pre-authorization remains an important part of payers’ cost-management strategy.

In addition, as part of their focus on total cost of care, most payers and at-risk providers are working to both improve medication adherence and help members comply with prescribed lifestyle changes. But the reason they’re not making enough progress and the reason we see continued challenges around high-cost specialty drugs is because they are going about it the wrong way.

What’s needed now is recognition of the role consumer experience plays in chronic disease management and a commitment to build a better consumer experience. Only then can payers and at-risk providers successfully improve compliance and adherence, and only then could we see improved outcomes and decreased need for high-cost specialty drugs.

A time and place for specialty drugs

When lifestyle modifications or first-line treatments are ineffective treatments for chronic disease, it is logical to move to the next-line medication. For example, when people with Type II diabetes are first prescribed diet and exercise changes, followed by oral medications like Metformin, to bring their blood sugar levels under control. If that fails, the next line of defense is insulin, whose price is seemingly ever-increasing. The price of Humalog, for example, has soared from $21 a vial to more than $250 in the past 20 years.

Moving to the next-line medication can prevent worsening symptoms and the accompanying higher costs. But if the patient does not take the medication correctly or doesn’t adhere to the treatment plan, the costs will continue to add up.

The challenge of non-adherence

Studies have consistently shown that 20 to 30 percent of medication prescriptions are never filled and that approximately 50 percent of medications for chronic disease are not taken as prescribed. In the United States, non-adherence is estimated to cause approximately 125,000 deaths, at least 10 percent of hospitalizations, and a substantial increase in morbidity and mortality. It’s also expensive; non-adherence has been estimated to cost the US healthcare system between $100 billion and $289 billion annually.

Avoiding costly second-line treatment

While medications can effectively help people control diabetes, changes to diet and exercise can also help people with prediabetes or Type II diabetes control their blood sugar levels. In fact, the National Diabetes Prevention Program Outcomes Study showed that diet and exercise beat oral medications in arresting the progression of pre-diabetes to diabetes. Participants in the study who lost a modest amount of weight through dietary changes and increased physical activity reduced their chances of developing diabetes by almost 60 percent. In contrast, those who took 850 mg of metformin twice a day reduced their changes of developing diabetes by only 31 percent. With diet and exercise changes, participants not only avoided the need for metformin (admittedly a relatively low-cost drug), but also negated the need to advance to a second-line, more expensive drug like insulin.

To avoid these costly second-line treatments, we need to engage people in their health and treatment plans sooner, sometimes even before a doctor prescribes the first pill. And to do that, we need to redesign the experience of living with a chronic disease.

Designing a “sticky” experience

Most everyone now gets that consumer experience matters. The challenge is designing an experience that is interesting or entertaining or exciting – or heck, even soothing – enough to keep consumers coming back for more. This is particularly true for conditions requiring aggressive lifestyle interventions or behavior change – helping consumers do what it takes to lose 7 percent of their body weight, for example. Designing a magnetic experience that consumers enjoy along the way is the hard part.

Payers and at-risk providers need to start thinking about the things that can make the experience of managing a disease “sticky” so consumers will adhere to the care plan. Consumer-friendly companies like Amazon created a sticky experience by remembering past purchases, predicting what I might need, serving up customer reviews, and making the whole thing easy. In the case of chronic disease, the sticky things might be going to cardiac rehab, following a diet with a bunch of friends, taking medication when/where supposed to.

The idea of a sticky experience is in sharp contrast to what exists today. Currently, when the system diagnoses someone with a chronic disease, we send patients (er, consumers) off with a whole bundle of to-dos that are task oriented. It’s a checklist of things they have to do, and there is no Task Rabbit for these tasks. It’s not something they can hire out or delegate away to someone else; it’s not a game, and it’s not very fun or interesting or exciting.

And because of that?  It doesn’t become sticky for anyone but the most intrinsically motivated folkswho want to manage their disease. 

We need to think about redesigning the experience of living with a chronic disease so that we can make it enjoyable for the consumer. Once we do, we can drive better adherence, better compliance, and better ROI from a total-cost-of-care perspective.