Procuring drugs designed to treat minor illnesses is one thing, but what about purchasing pharmaceuticals engineered to help people suffering from major ailments?
Specialty pharmaceuticals are drugs used to treat "chronic, serious or life-threatening conditions," as defined by Health Policy Briefs, and they're becoming more popular among health care organizations. The source noted that these substances are generally priced much higher than conventional drugs. For some specialty pharmaceuticals, costs can be more than $100,000 per year. Sovaldi, a pill that can cure hepatitis C, is priced at $1,000 per pill.
Sustaining high expenses
Given the high prices associated with specialty pharmaceuticals, health care organizations obligated to ensure patients can access these drugs if they need it are wondering how to best distribute costs. Right now, the expenses are satisfied by patients, insurance companies and other industry participants.
Any spend management professional working for a pharmaceutical provider would tell you just how confusing specialty pharmaceutical procurement can be. Now that health care is continuously moving to the public sector in the United States, President Barack Obama is hoping to ease the financial pressure Medicare encounters when trying to give carriers with the funding they need to provide patients with specialty drugs.
According to Oregon Live, Obama is asking Congress to allow Medicare to be able to negotiate on behalf of its beneficiaries for specialty pharmaceuticals that incur large co-payments. The proposal is intended to temper expenses and, of course, improve patient accessibility to much-needed care. While the intent appears positive on the surface level, some critics have asserted that Obama's measures will ultimately drive premiums up. Matt Salo, executive director of the National Association of Medicaid Directors, maintained that exactly how these decisions will impact the pharmaceutical economy is somewhat uncertain.
"If in this competitive market, Medicare is able to drop the floor on prices, what is the ripple effect?" asked Salo, as quoted by Oregon Live. "Does Medicaid get charged more?"
A time for strategic sourcing
Regardless of the size of the organization, reducing the costs of procuring specialty pharmaceuticals - or rather adjusting budget allocation to better support specialty drug purchases - strategic sourcing is a practice that should be leveraged. Assessing every department's direct procurement needs and assembling to create a portfolio that accommodates those requirements will give companies a better idea of how they can provide specialty pharmaceuticals to their beneficiaries without disrupting resources.