The 2017 Asembia Specialty Pharmacy Summit, held April 30 to May 3 in Las Vegas, delivered the goods in two of the hottest topics: value-based contracts and the race for health systems to enter the specialty pharmacy space.
Here are my top takeaways:
1. Integrated health system and specialty pharmacy integration—proceed with caution
Integrated health systems and large hospitals are racing to enter what they perceive to be a highly lucrative proposition: the specialty pharmacy space. The top question that they must address is will they build or partner to do so. This explains at least in part why we saw far more health systems represented at Asembia 2017 than in any other year in memory.
The interest is driven by an interest in moving towards an HMO (Kaiser) model and perceived profit generation. Health systems, however, should use extreme caution when considering their next steps in specialty pharmacy.
The resources required and mandatory risks associated with entering the specialty pharmacy space are high. As Adam Fein, president of Pembroke Consulting, Inc., discussed during his presentation, “Specialty Pharmaceuticals and Pharmacy: Today, Tomorrow and Beyond,” there is a battle being waged over the patient journey, especially as it relates to data access, which may be driving systems to enter the specialty pharmacy space as well. But distribution network issues, DIR fees, and loss of focus from the core business for a poorly compensated piece of the puzzle are the top reasons health systems should proceed in their specialty pharmacy integration plans with extreme caution.
Partnering with a stable specialty pharmacy committed to improving patient outcomes through programs proven to improve adherence and reduce the overall healthcare might be the most prudent path forward.
2. To make the most of value-based contracting, keep it simple
To date, value-based contracts among pharmaceutical manufacturers and payers have not achieved the adoption and success levels necessary to drive significant systemic change. This is because many of these agreements cover only one drug, and/or rely on volumetric math as the arbiter of contractual conditions and payment. That appears to be changing.
Contracts that base reimbursement on the broader notion of improved patient outcomes, in addition to drug efficacy, are compelling and gaining traction. Manufacturers stand to benefit from pharmacy and MTM partners with proven capabilities in improving adherence and patient engagement. These programs can result in positive health outcomes, such as sustained virologic response, thereby realizing the full financial potential of their specialty therapies.
Some manufacturers have indicated willingness to advance and improve value-based contracts. In a November 2016 column for Forbes, Novartis CEO Joseph Jimenez wrote, “We believe in the efficacy of our products, and by collaborating with payers on solutions for reimbursement, we hope to help start a shift toward value pricing in the healthcare system.”
According to Deloitte in a value-based contracts presentation at Asembia 2017, the key pressures driving the transition from volume to value include reimbursement shifting to outcomes, the consolidation of buyers, increased competition thanks in part to generics and biosimilars, and more highly engaged patients due to increasing out-of-pocket costs and access to information.
According to the presentation, “patient adherence to therapy” is an “uncontrollable factor” among the challenges in executing new value-based agreements. We disagree. We have found that medication management and patient support programs like ours are proven to improve adherence among chronically ill patients.
Value-based contracts are relatively young tools and will undergo continuous change for the foreseeable future. Start simple and select your outcomes measurement data carefully. For example, A1c count may only be measured in 30% of the diabetic population.
The value-based contract gold standard will likely be significantly different from the clinical gold standard due to data limitations. In the end, value-based contracting is about data and using it to generate better clinical outcomes. Organizations that effectively ameliorate the shared pain points between manufacturers and payers will be winners.
Marc O’Connor is chief operating office for Curant Health, a provider of enhanced medication therapy management and specialty pharmacy services.