EBN Healthcare News: Benefits Think Specialty infusion drug costs are putting strain on healthcare spend

Come renewal season, employers tend to focus their health benefit strategies on the usual suspects: increasing costs of prescription drugs, chronic health conditions like cancer and diabetes, and the growing demand for mental health services.  

What they haven't planned for is the explosion of specialty infusion drugs, which is quietly (until now), but significantly impacting the costs of employee health plans. 

For nearly 20 years, I worked in various roles guiding small and large employers on how to structure and optimize their employee benefit plans. My strategy was crystal clear — focus on balancing the needs of employees with the need to control costs.  

Ten years ago, the topic of specialty infusion drugs was not even on our radar as a concern. Fast forward a decade and 27% of healthcare costs are now projected to be driven by pharmacy benefits. Within that category, specialty infusion drugs have emerged as one of the single largest cost drivers. 

Specialty therapies, which include nurse-assisted injections and infusions for diseases like cancer, autoimmune disorders, chronic kidney disease and osteoporosis, are pricey, complex and often administered in high-cost settings.   

Sadly, it's about 2-3% of the population at most that's driving 10-15% of overall healthcare costs. 

Breaking down the cost problem

Here's a 30,000-foot view of specialty infusion drugs costs to help set the stage:

U.S. infusion therapy market has skyrocketed from $150B in 2015 to over $360B in 2025. 

10-20 new FDA-approved infusion drugs enter the market every year.

85% of infusions still happen in hospitals or traditional infusion centers, driving up the costs and potentially posing significant patient health risks and challenges. 

Provider mark-up can increase the cost of specialty infusion claims by as much as 400% or more!

Demand for specialty infusion drugs continues to rise and have a major impact on health plan spending. Further amplifying the problem is that the cost isn't just about the price of the drug itself.

Providers purchase these drugs at one price and then bill health plans at another, adding significant margins. While markups are standard in healthcare contracting, the stakes change when a single dose can cost $20,000+ — a common price tag for some autoimmune disease therapies. These margins compound quickly, and that's when employers really feel the impact. 

Read more:  Gen Z is ahead of the game with their benefits — but falling behind financially

Cost savings through transparency and at-home treatment

Here's a solution to address the problem: Transparent pricing — selling infusion drugs back to the plan at cost rather than adding markups. This approach has the potential to generate tens or even hundreds of thousands of dollars in savings for a single patient's course of treatment.  Fee- for-service billing models with clear cost structures allow payers and employers to see exactly where the money is going.  

Shifting the location where a patient receives an infusion can also cut costs and improve outcomes. Traditionally, patients must travel to a hospital or infusion center. This can cause a logistical nightmare for many patients as they must take time off from work, coordinate and pay for childcare, or travel long distances (sometimes a couple of hundred miles) to receive care. 

At-home infusion care is now an option that can all but eliminate these challenges, while still providing the same effective treatment. It becomes a win-win for employers and health plans because it translates to reduced costs, improved patient care and better adherence to treatment regimens.

Take-home message

Addressing the skyrocketing costs of specialty infusion drugs means asking employers and health plans to look outside the box of traditional cost-control measures. Site of care alone doesn't address the root cause of the problem. Transparent pricing and expanding access to safe, effective at-home infusion care can make it possible to save significantly while still preserving patient experiences and outcomes.