With the rise in specialty drug costs, plan sponsors are increasingly seeking to control prescription drug spending. One approach that has emerged in recent years is specialty pharmacy drug carve-out programs. In these arrangements, the plan sponsor contracts directly with a vendor to manage the specialty pharmacy benefit, which may include prescription drug fulfillment, prior authorization criteria development and reviews, and site-of-care management. These programs typically interact with the core services offered by the plan sponsor’s pharmacy benefit manager (PBM). AbbVie commissioned Milliman to prepare a white paper describing key considerations for plan sponsors as they evaluate specialty pharmacy carve-out options.

Key considerations discussed:

• Specialty utilization contractual impacts: Carving out specialty management to a separate vendor will likely impact financial guarantees within existing PBM arrangements, and may be accompanied by a fee.
• Vendor savings projections: Plan sponsors should carefully evaluate a range of factors that may influence the net financial impact.
• Vendor and PBM Fees: While potential savings of 20% to 50% of specialty drug spend is significant, sponsors should assess a range of other financial considerations.
• PBM contract considerations: Carving out specialty drug management may affect existing PBM network rates, rebates, and other financial guarantees.
• Qualitative considerations: Plan sponsors need to evaluate factors such as member experience and non-medical drug switching, biosimilar adoption, drug coverage, and a disintegrated pharmacy benefit.

This report was commissioned by AbbVie.