The Value of Prior Authorization (PA) Programs

A recent Benefits Canada article draws attention to an opportunity many plans have overlooked regarding drug cost management: prior authorization. In the wake of soaring drug costs related to expensive specialty or biological drugs, the lack of robust prior authorization programs is becoming evident.

More than 10 years ago, specialty drugs and their potentially significant effect on drug plan costs were the talk of the benefits community. Ultimately, the expected increases didn’t occur as quickly as expected; as a result, many plan sponsors didn’t take steps to limit their effect on future benefit plan costs.

Today, specialty drugs are the fastest growing segment of drug benefit plans, accounting for (on average) 15% of overall plan spending. They’re a significant driving force in drug plan cost increases.

In the article, Mike Sullivan suggests that had prior authorization programs been implemented in those early days, plan sponsors today may not be dealing with runaway drug plan costs.

Click here to read the full article.