Download Soaring Specialty Drug Prices

Soaring Specialty Drug Prices:
Status & Solutions
Mark Hiatt, MD, MBA, MS
Executive Medical Director
Regence BlueCross BlueShield of Utah
Soaring specialty drug prices: status & solutions
Prices of pharmaceutical drugs have been soaring.
What is the status of this hyperinflation, & what are
possible solutions to moderate the rise?
What can you expect, & what can you do about this
problem?
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Soaring specialty drug prices
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What is a specialty drug?
No universally accepted definition
Historically: expensive, injectable drugs to treat orphan
conditions
The specialty drug landscape is changing  more
difficult to define
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Specialty drug characteristics
Common qualities of specialty drugs:
Treat specific, mainly chronic, &
High-touch patient-management
often rare conditions
required
Prescribed by a specialist
Patients require financial
assistance
Injectable drug
Requires special storage/handling
Limited distribution (only available
from certain pharmacies)
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Expensive!
Common specialty disease states
Hepatitis C
Multiple sclerosis
Chronic inflammatory diseases (e.g., rheumatoid arthritis,
ulcerative colitis, psoriasis)
Oncology
HIV
Hemophilia
Primary immunodeficiency
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Social factors affecting health
Image source: www.bestmasterofscienceinnursing.com
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America’s disadvantage
Image source: www.bestmasterofscienceinnursing.com
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Healthcare costs: the opportunity
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Healthcare costs
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Average state health plan employee premiums (2013)
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Specialty drug spend
Fastest growing component of healthcare costs
Source: JPMorgan
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Specialty drug spend
Managing specialty drugs is
critical
50%
of the drug pipeline comprises
specialty products
10x
the average cost of a traditional
branded prescription drug
Express Scripts; IMS 2014
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Specialty drug costs are soaring
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Price inflation: drugs outpacing general inflation
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Mergers and acquisitions
Monthly costs of drugs after an acquisition
Drug 2
Drug 1
$7,000.00
$45,000.00
$40,000.00
$35,000.00
$30,000.00
$25,000.00
$20,000.00
$15,000.00
$10,000.00
$5,000.00
$0.00
$6,000.00
$5,000.00
$4,000.00
$3,000.00
$2,000.00
$0.00
5/1/2012
7/1/2012
9/1/2012
11/1/2012
1/1/2013
3/1/2013
5/1/2013
7/1/2013
9/1/2013
11/1/2013
1/1/2014
3/1/2014
5/1/2014
7/1/2014
9/1/2014
11/1/2014
1/1/2015
3/1/2015
5/1/2015
7/1/2015
7/1/2015
2/1/2015
9/1/2014
4/1/2014
11/1/2013
6/1/2013
1/1/2013
8/1/2012
3/1/2012
5/1/2011
10/1/2011
12/1/2010
7/1/2010
2/1/2010
9/1/2009
4/1/2009
6/1/2008
11/1/2008
$1,000.00
Drug 3
$30,000.00
$25,000.00
$20,000.00
= date of
acquisition
$15,000.00
$10,000.00
$5,000.00
$0.00
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New drug technologies drive increases as well
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Revolutionizing Hepatitis C treatment
Nov/Dec 2013:
Olysio and
Sovaldi
approved
Dec 2014:
Viekira Pak
approved
Total Cost
Oct 2014:
Harvoni
approved
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Medical benefit drugs: more difficult to manage
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Upcoming specialty drug budget busters
Source: Walgreens
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Specialty drug
management
Challenges to managing specialty drugs
Double-digit growth in specialty spend
Lack of outcomes data for specialty drugs
Managing across medical & pharmacy benefits
Manufacturer copay coupons
A variety of methods are required to manage specialty
drug costs
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Specialty drug management strategies
Formulary/UM
Contracting
• Formulary status
• Prior authorization/
reauthorization
• Step therapy
• Quantity limits
• Provider reimbursement
• Manufacturer rebates
Clinical Case
Management
Benefit Design
• Care management via
specialty pharmacy
• Health plan case
management
• Cycle management
program/split fill program
• Tiered copayments/costshares
• Specialty pharmacies
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Formulary management
Be vigilant about managing drugs – make sure the right
patients are receiving the right treatment
All new drugs (traditional & specialty) evaluated by Pharmacy &
Therapeutics (P&T) committee
– Determines which drugs are included/excluded on the preferred
drug list using the best available evidence
– Goal: provide members with medications that present the best
treatment value in terms of efficacy, safety & cost
– Foundation of clinical management strategy
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Utilization management
Steers patients to preferred, cost-effective products;
reduces inappropriate utilization
 Prior Authorization
• Defines the appropriate population for treatment
• Appropriate dose or length of therapy
• Step therapy
• Monitor efficacy and/or safety through re-authorization
 Step Therapy
• Ensures use of generics or other 1st-line alternatives
 Quantity limits, dose optimization
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Drug pipeline update: specialty drugs for a
common condition
PCSK9-inhbitors
1st specialty drugs approved for high cholesterol in high-risk patients
Category
Proprotein
convertase
subtilism/kexin
type 9 (PCSK9)
inhibitors
Products
Approval Dates
#1) PRALUENT
07/24/2015
• Evidence shows that
they lower LDL (bad
cholesterol)
08/27/2015
• No evidence showing
they improve
important outcomes
(death, heart attacks)
(alir ocumab)
#2) REPATHA
(evolocumab)
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Notes
Proactively managing the specialty drug pipeline
Medication Name
Therapeutic Use
Kanuma
Lysosomal Acid
Lipase Deficiency
Keytruda
Lung Cancer
Repatha
Hypercholesterolemia
Nucala
Asthma
Drisapersen
Duchenne Muscular
Dystrophy
Cinquil
Asthma
Eteplirsen
Duchenne Muscular
Dystrophy
Rociletnib
Lung Cancer
Strensiq
Hypophosphatasia
= strategy under consideration
Supply Limit
Step Therapy
PA
Genetic
Testing
Not being
considered
Not being
considered
Not being
considered
Not being
considered
= strategy strongly considered
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Not being
considered
Biosimilars
Source: Express Scripts
Challenges:
Legal issues (patent dance)
Pricing
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Physician acceptance
Substitutability
Biosimilars
Encourage adoption of biosimilars when evidence shows
they are interchangeable with branded drugs
Regence will evaluate the evidence of all FDA-approved
biosimilars
Formulary status & utilization management will take into account
evidence of similarity to the branded product & product cost
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Benefit design
Support an integrated approach to benefit design &
reimbursement across pharmacy & medical benefits
Tiered cost-share, copayments
Limiting to a 30-day supply
Management of medical benefit drugs
• Clinical management
• Site-of-care management
• Reduction of administrative waste
Regence’s integrated PBM services are administered by OmedaRx
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Medical + pharmacy benefits = valuable programs
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Source: Express Scripts accessed at: http://lab.express-scripts.com/insights/specialty-medications/9-billion-wasted-on-nonpharmacy-specialty-medications
Using specialty pharmacies
Advantages
Lower drug costs
Improved patient outcomes through care management
More data on utilization & outcomes
Management across benefits
Walgreens Specialty Select program
Access
Medical vs. pharmacy benefit
Drug cost
Practical considerations
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Care management
Educate members about coverage options & support
services, like those offered by specialty pharmacies
Adherence is an issue for all chronic medications
Larger problem with specialty drugs due to administration
& drug costs
A comprehensive approach to patient care is required to
optimize drug therapy – many types of services offered by
specialty pharmacies
Adherence should be monitored closely to improve
patient outcomes & reduce waste
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Examples of care management programs
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Source: Walgreens Specialty Pharmacy
Care management
Hepatitis C medication adherence
Managed by a specialty
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pharmacy
Not managed by
a specialty pharmacy
Source: Walgreens Specialty Pharmacy
What else can you do?
 Integrate high-quality case management, step therapy &
prior authorization to help manage cost & outcomes
 Use knowledgeable service providers who understand
your market trends, patient population & challenges
 Share clinical resources with employees to improve
personal health accountability & engagement
http://www.specialtyrxtoolkit.com/
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Soaring Specialty Drug Prices:
Status & Solutions
Mark Hiatt, MD, MBA, MS
Executive Medical Director
Regence BlueCross BlueShield of Utah