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Volume 10, Number 2 February 2013 News and Strategies for Managing High-Cost Specialty Products Contents Specialty Spend 3 Study: Will Exceed Nonspecialty Spend by 2018 Proposed in Some 4 Bills States Could Limit Biosimilars’ Uptake for 5 Expectations Biosimilars’ Price Impact May Be Wavering Pricing 6 Charts: Implications of Biosimilar Entry Will Shore Up 8 Centene Pharmacy Focus With AcariaHealth Deal FDA Specialty 8 New Approvals D. Smith Reorganizes 10 H. Its Units With Specialty New SBS Drug Is Costly, but It May Reduce Other Care Costs, Improve Quality of Life A recently approved drug to treat a deadly condition is offering a major advancement over a pair of therapies that have been on the market for about a decade. And while its annual price tag of nearly $300,000 may warrant a double take, NPS Pharmaceuticals, Inc.’s Gattex (teduglutide [rDNA origin]), which is indicated for the treatment of short bowel syndrome, could eliminate potentially hundreds of thousands of dollars spent on care for someone suffering from SBS. SBS occurs when portions of the small intestine — usually half of it or more — are removed through surgery or are missing due to a congenital defect. When a lot of the small intestine is missing, people can have problems with absorbing fluids and nutrients from food that are “needed to sustain life,” notes the FDA. These people are dependent upon parenteral nutrition, and Gattex is indicted for use in this patient population. It’s injected once daily to help improve the absorption of fluids and nutrients and in turn reduce the need for parenteral support. Data show that some people may be able to stop receiving parenteral nutrition entirely. SBS prevalence estimates for the U.S. patient population vary from as many as 15,000 people to as few as 3,000. “Based on our patient population and 30 years of experience in the industry, we think likely that SBS occurrence is two to three patients per million lives,” says Karen Hamilton, strategic manager for nutrition at Coram LLC. continued on p. 10 Drug Focus 12 News Briefs Looking for a back issue of SPN? PDF issues, plus a searchable article database, are archived on your subscriber-only Web page — all the way back to 2008! Log in at www. AISHealth.com and click on the newsletter title in the gray “My Subscriptions” box on the right. Managing Editor Angela Maas [email protected] Executive Editor Jill Brown Director, Databases and Directories Susan Namovicz-Peat Improvement of Cold-Chain Management Helps Ensure Integrity of Specialty Drugs Although there is not a standard definition of “specialty pharmacy,” one characteristic of these drugs that most within the industry can agree on is a medication that requires special handling. Most times that means a product needs to remain refrigerated or frozen, which is especially critical while the drug is being transported to patients and physicians. But even though companies utilize an array of tactics in cold-chain management, a recent study suggests that some of these containers may be lacking in their ability to actually maintain an appropriate temperature. Bill Bailey, chief operating officer (COO) of PBM Citizens Rx, LLC who also is a licensed pharmacist in eight states, says that as a pharmacist, “my concern is around the proper storage and handling of biologics. A lot of times not much attention is paid” to this. “There isn’t a good process” to make sure the drug remains the temperature it needs to be during transit, he contends. Bailey estimates that “about 60% of specialty drugs fall within temperature-sensitive opportunities.” And “that number is growing rather significantly year over year,” adds Gary M. Hutchinson, president of Modality Solutions LLC, which helps companies across highvalue and high-risk industries improve their controlled-environment logistics. continued Published by Atlantic Information Services, Inc., Washington, DC • 800-521-4323 • www.AISHealth.com An independent publication not affiliated with insurers, vendors, manufacturers or associations 10 Specialty Pharmacy News H. D. Smith Reorganizes Its Units With Specialty Drug Focus Last month wholesaler H. D. Smith reorganized some of its units under an umbrella organization focused on specialty drugs. H. D. Smith Specialty Solutions will include such subsidiaries as specialty distribution unit Smith Medical Partners and the recently acquired Triplefin, which offers reimbursement, patient assistance and pharmaceutical brand support. H. D. Smith Specialty Solutions was launched with a focus on “develop[ing] a business unit that’s able to coordinate all those service offerings we can supply for manufacturers, payers and patients across a product’s life cycle,” says Tom Doyle, executive vice president of commercial solutions for H. D. Smith. Triplefin Fills Gap The company acquired Triplefin in January. That deal came about because “we continue to respond to market needs and the needs of the manufacturers we service,” says Doyle. Offering reimbursement and patientassistance services “fills a gap in our portfolio,” he says. “The other piece of Triplefin that’s important is its part ownership of SPNN,” or Specialty Pharmacy Nursing Network, which the company acquired in November, he says. SPNN provides clinical and nonclinical services to specialty pharmacies and manufacturers. Triplefin is “dealing mostly with patients and prescribers now,” says Patty Benjamin, vice president of managed care for H. D. Smith Specialty Solutions. For now “the model will continue as is” but later likely “will expand and grow.” CompleteCare Pharmacy, an H. D. Smith company, also has three locations in Illinois. Those retail pharmacies are able to “negotiate with health plans for their covered lives, allowing the stores to dispense” medications, notes H.D. Smith spokesperson Carolyn Webb. And “Triplefin does have a pharmacy with the potential to have a presence” in specialty pharmacy that is licensed in all 50 states. The company has “not executed on that capability, but it’s being explored,” she tells SPN. H. D. Smith has “four or five limited-distribution agreements” for specialty products, says Doyle. He declines to give specifics but says that “in some cases they are in our core space of blood plasma” products. H. D. Smith Specialty Solutions will be “another competitor to the integrated segment including McKesson, AmerisourceBergen and Cardinal,” maintains F. Randy Vogenberg, Ph.D., principal at the Institute for Integrated Healthcare. Doyle says that this is “a space with a lot of fabulous companies providing services,” but he maintains that February 2013 there is “a niche in the market” that H. D. Smith Specialty Solutions can fill. The launch of the new unit reflects the “recognition that biologics and specialty is the future for a wholesaler if they want to stay competitive or survive through this decade,” says Vogenberg. Contact Vogenberg at [email protected] and Benjamin and Doyle through Webb at carolyn.webb@ hdsmith.com. G FDA Approves SBS Drug Gattex continued from p. 1 NPS has a limited-distribution agreement for Gattex with five specialty pharmacies: Accredo Health Group, Inc.; BioScrip, Inc.; Coram; ThriveRx; and Walgreens Infusion Services. “Short bowel syndrome is a highly complex disorder that requires a high degree of coordination of care at the local level,” explains Eric Pauwels, senior vice president and chief commercial officer of NPS. “When we designed our distribution strategy, it made the most sense to be very selective in the design of our network and utilize leading specialty infusion pharmacies that are already providing home infusion services to SBS patients. We believe this approach will offer optimal care for patients and may ultimately improve patient outcomes.” And it’s not only SBS that can cause problems for people. Additional complications, particularly when people are dependent upon parenteral nutrition, often affect this patient population. SBS may have been caused by conditions such as Crohn’s disease, scleroderma or radiation enteritis that come with their own challenges, says Deborah Pfister, director of nutrition at ThriveRx. SBS, explains Pauwels, is “really a ‘condition of a condition.’” Those conditions, in turn, can make some SBS symptoms more severe, says Steve Kennedy, Pharm.D., national director of infusion pharmacy services for Walgreens Infusion Services. SBS can vary in severity depending on how much small intestine the person still has. But when people with SBS “suffer from malnutrition, severe diarrhea, dehydration, fatigue, osteopenia and weight loss due to the intestine’s reduced ability to absorb nutrients, water and electrolytes,” they must receive parenteral nutrition, he points out. Long-term parenteral nutrition, notes Hamilton, “may predispose a patient to potential therapy-related complications. Chronic dehydration from unchecked diarrhea can result in kidney dysfunction. Long-term complications can include: metabolic bone disease, cho- Copyright © 2013 by Atlantic Information Services, Inc. All rights reserved. Please see the box on page 2 for permitted and prohibited uses of Specialty Pharmacy News content. February 2013 lestasis, liver dysfunction and of course, due to the need for a central venous catheter, catheter infection.” Pauwels tells SPN that “parenteral support…does not improve intestinal absorption, and its use is associated with numerous potentially life-threatening complications.…Parenteral support also results in hospitalizations. On average, patients on parenteral support experience two hospital stays per year directly related to complications of parenteral support.” “In addition, the use of parenteral support is also time-consuming for many patients,” says Pauwels. “Those dependent on parenteral support typically infuse it up to seven nights per week, and in extreme cases some patients could receive parenteral support for 24 hours a day.” With that in mind, Hamilton contends that quality of life “is paramount in this population.” “There is a significant quality of life aspect to SBS, and this should be underscored,” agrees Accredo spokesperson Ann Smith. “A number of factors associated with parenteral nutrition can affect patient quality of life; these include inconvenience, expense, and loss of independence. Physical problems resulting from parenteral nutrition include fatigue and diarrhea. Depression may develop.” According to Pauwels, “there is research showing that the disorder can be restrictive socially for many. Patients must combat the stigma of dealing with the constant threat of an accident, and they are often consumed with knowing where the bathroom is located. Further, many SBS patients are unable to work.” The FDA notes that it approved EMD Serono, Inc.’s Zorbtive (somatropin) in 2003 and Emmaus Medical, Inc.’s NutreStore (glutamine) in 2004 to treat SBS in adults receiving parenteral nutrition. “The goal of these therapies is to enhance the absorption of the remaining intestine, while Gattex is the first long-term treatment that increases absorptive capacity,” says Pfister. Zorbtive is approved for treatment of up to four weeks, and NutreStore is approved for up to 16 weeks of treatment. Gattex, says Kennedy, reduces patients’ “dependence on parenteral nutrition — so much so that some patients may be able to wean off the therapy completely.” SBS Care, Complications May Be Costly When NPS disclosed that the annual per-person price for Gattex was $295,000, that made news. “Given the expense of this orphan drug and the fact that only a few thousand patients will be on treatment nationwide, it is extremely important to have experienced specialty clinicians and a specialty pharmacy sup- Specialty Pharmacy News 11 port team working with these patients to help ensure proper use of the medication, adherence, managing side effects and potential comorbidities,” asserts Smith. Pauwels tells SPN that the company took many factors into account when it established the drug’s price: u “SBS is a serious life-threatening disorder associated with reduced mortality. The current standard — parenteral support — is supportive care. It does not address the malabsorption of SBS, and it is associated with significant comorbidities and complications.” u “Gattex is the first and only product of its kind that has been clinically proven to improve intestinal absorption and significantly reduce or even eliminate parenteral support,” he says. u NPS has made a “substantial multimillion-dollar investment…in this product during the 17 years of its discovery, formulation and clinical testing.” u Long-term parenteral support “places a substantial economic burden on patients and the health care system,” Pauwels explains. “A substantial portion of the costs of SBS are likely due to the need for parenteral support.” He cites a National Institute of Health publication that “reported that the annual mean costs of lifelong, complex home health care associated with PN/IV [i.e., parenteral nutrition/intravenous fluids] support ranged from $185,000 to $568,000. This does not include the indirect costs associated with disability. We also have to associate a value to giving these patients the freedom to be independent from parenteral support for a day or more a week or possibly forever — Gattex has been clinically proven to deliver this to patients.” If Gattex produces a 20% reduction in parental support, says Pauwels, that’s one fewer day a week someone would need parenteral support. “Over one year, this translates to almost two additional months of freedom from parenteral support. Gattex may reduce IV catheter access in patients with SBS, thereby reducing the risk of catheter-related infections and other complications.” According to Pfister, “The cost burden of an SBS patient is between $383 and $630 per day.” She tells SPN that “approximately 50% of SBS patients get end-stage liver disease if they are on parenteral nutrition for more than five years. Septicemia accounts for approximately 50% of PN/IV hospitalizations. Various surgeries may be attempted to elongate or otherwise increase the absorptive surface of the bowel.” In addition, she says, if intestinal failure occurs, “SBS patients may undergo a transplant. SBS accounts for approximately 64% of transplant diagnoses. Transplants can cost between $150,000 and $500,000. Post-transplant complications (e.g., rejection, infection) can further increase costs.” continued Subscribers who have not yet signed up for Web access — with searchable newsletter archives, Hot Topics, Recent Stories and more — should click the blue “Login” button at www.AISHealth.com, then follow the “Forgot your password?” link to receive further instructions. 12 Specialty Pharmacy News However, it’s not just a reduction in health care costs for these patients that the therapy could provide, but an improvement in aspects like people’s social life. “They can enjoy eating at restaurants, whereas they may have been unable to do so previously,” says Kennedy. And, says Pauwels. “Reduced dependence on parenteral support could allow patients to experience the simple activities that many of us take for granted — joining family functions, traveling from home for a February 2013 weekend or just getting a full night of uninterrupted sleep.” “Because many SBS patients are on PN for up to eight to 10 hours per day, Gattex could be a life-changing treatment advance,” contends Kennedy. Contact Pfister at [email protected], Hamilton at [email protected], Kennedy at Steve. [email protected], Smith at [email protected] and Pauwels through Susan Mesco at [email protected]. G NEWS BRIEFS u California consumer advocacy group Consumer Watchdog on Jan. 14 said it filed a proposed class-action lawsuit alleging that WellPoint, Inc. unit Anthem Blue Cross illegally targeted members with HIV/AIDS and other serious conditions by instituting a policy that requires mandatory use of mail-order pharmacy programs. Anthem deferred the program start date until March 1, 2013, and allows members to opt out of the program, according to the complaint. But Consumer Watchdog takes issue with the opt-out process. The suit, filed in San Diego Superior Court, alleges that members who do not have one of the targeted conditions can continue to fill prescriptions at local pharmacies. The lawsuit also alleges that the targeted patients won’t be able to access drug discounts only available at retail pharmacies or obtain advice and counseling from pharmacists. Anthem Blue Cross responded that the policy, which applies to specialty pharmacies that provide more specialized clinical care, “is being done with the knowledge of our regulator and applies to several hundred different drugs for many medical ailments. Anthem’s policies do not discriminate on the basis of disease states, and they are reasonable and compliant with applicable laws.” View the complaint at http://tinyurl.com/bjepxmo. u Magellan Health Services Inc. and Performant Financial Corp. are expanding a payment integrity recovery initiative to all Magellan Pharmacy Solutions commercial customers. The companies piloted the audit and recovery services program in 2012 with some of Magellan Pharmacy Solution’s customers. Magellan says industry estimates show that claim overpayments for specialty drugs are about 3% to 10% annually. Contact Magellan’s Joseph Kean at [email protected]. u CMS unveiled an initiative aimed at improving the care of Medicare beneficiaries with end-stage renal disease (ESRD). Through the Comprehensive ESRD Care Initiative, CMS will partner with groups of health care providers and suppliers called ESRD Seamless Care Organizations that will collaborate to offer patient-centered, coordinated care. The organizations must include at minimum a dialysis facility, a nephrologist and one other Medicare provider or supplier, and they will take clinical and financial responsibility for a group of beneficiaries depending on where they are receiving service. Applicants must file nonbinding letters of intent by March 15 and applications to participate by May 1. Visit http://innovation.cms.gov/initiatives/ comprehensive-ESRD-care. u PEOPLE ON THE MOVE: H. D. Smith named Tim Booth executive vice president of Smith Medical Partners. He was previously corporate vice president of H. D. Smith’s Home Healthcare operations. The company also promoted several employees: Tom Doyle was promoted to executive vice president, commercial solutions; Karen Callaway to executive vice president, human resources; Bob Appleby to senior vice president, category management; Tom Twitty to senior vice president, supply chain management; Scott Wilson to senior vice president, drug division; and Mark Mehmet to corporate vice president, product development and architecture.…Humana Pharmacy Solutions named Anna Theodorou director of client solutions and Luke Szymanski market director of sales. Theodorou was previously a director with CVS Caremark Corp., and Szymanski was senior vice president of sales and marketing with US Script.…onPoint Oncology LLC named Rhoda Dunn principal. She previously edited and authored a variety of medical reports for Kantar Health.…Prime Therapeutics LLC named Ann Tobin chief compliance officer. She was previously senior privacy counsel with UnitedHealth Group. 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