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New strategies for managing drug spend: RA, Cancer, Hep C


The proliferation of specialty drugs has prompted new techniques for keeping costs in tow.

Health plans and pharmacy benefits managers (PBMs) continue to use tried-and-true tools-formulary management, benefit design, prior authorization, step therapy and quantity limits-to manage pharmacy costs. But the proliferation of specialty drugs has prompted new techniques for keeping costs in tow.

With inflammatory diseases such as rheumatoid arthritis; cancer; and hepatitis C as three of the four top specialty drivers of 2015, according to Express Scripts’ “DrugTrend Report,” it’s critical to find innovative management strategies. The three conditions, along with multiple sclerosis, account for 65.4% of total specialty spend, which comprises 17.8% of overall drug costs.

Tried-and-true methods need a makeover


“Standard pharmacy management tools don’t work for specialty in terms of cost and access,” says Mark Lelinski, CEO, Pinscriptive, a healthcare analytics company. “… The bottom line is that even when payers dip into their utilization management arsenal, nothing works well enough to truly change the unsustainable, specialty drug trend line.”

Biosimilars and more competition are only partial solutions because they only impact competing drug prices by 10% to 30% at the most, he adds. They also lack direct substitution as is available within an already 80% to 90% generic, nonspecialty market.

Instead, Lelinski recommends precision medicine-targeting the right person with the right drug, delivering the best value-based decision for patients and payers both in terms of cost and health outcomes-and advanced analytics because “you can’t afford a misstep.”  

Next: Four game-changers



Lelinski outlines four game-changers in managing specialty drugs:

1. Diverse, big data sets. These enable predictive targeting in niche specialty diseases, by integrating more data of different types for the exact same patient.

2. Deep, sublevel analytics. These provide more specific subpopulation levels to determine inappropriate use; high clinician variability; real-world safety issues; and poor adherence.

3. Integrated systems. Integrated provider-payer systems are uniquely positioned to lead the way on new, collaborative business models.

4. Biopharma embracing pay for value. Drug pricing is best disrupted at the edges; biopharma must commit to pay for value with the rest of the healthcare ecosystem.

Taking a look at hepatitis C, Lelinski says it is important to understand subpopulations. “If you know the economic impact of a decision before it is made, you can create an approach for patients so that prior authorization is not needed; most hepatitis drugs are approved anyway,” he says.  

Lelinski sees oncology as an area with few competitors but several options and alternatives-too many for clinicians to process. “Decision support is needed for better outcomes linked to insurance and population health, along with more partnerships between plans and clinicians, including incentivizing clinicians because they are taking a risk.

“As we go to scale, one therapeutic area at a time, we will see 15% to 20% specialty drug trend lines dropping to single-digit growth without stifling new drug innovation,” Lelinski says. “We will pay only for the value we receive.”

Next: Solvaldi use



Selective criteria hold back Sovaldi use


Medimpact, a PBM, has chosen to be selective about hepatitis C drugs to keep costs down. Steve Avey, vice president, specialty clinical services, found that after conferring with experts, it doesn’t make sense to treat everyone with the virus. “It costs a lot to give new expensive drugs to everyone who is infected with hepatitis C, when they might not have liver disease or a high enough viral load,” he says.

Medimpact deploys strict criteria for using Sovaldi resulting in a low rate of approval. Avey attributes more substantial rebates for Sovaldi to stricter guidelines developed by insurers and PBMs. However, some states have mandated which patients are candidates for the drug, forcing the PBM to broaden its criteria.

Avey says it is imperative that true clinical value for drugs such as Sovaldi are worthy of their high price. That’s why MedImpact clinically vets these products both internally and with external experts to provide clients with clinically and financially sound strategies at the time of product launch.

The PBM creates prior authorizations based on the exact inclusion and exclusion criteria of clinical studies. “These tight clinical parameters ensure that the studied population is the one that actually takes the drug. We also limit off-label use,” he says.

Avey expects oncology drug spend to escalate over the next 10 years. “This will far outweigh the hepatitis C challenge due to the number of people involved, the duration of therapy and the multi-drug approaches,” he says.

To address the high costs of oncology, Medimpact ensures that medications prescribed on day one are still effective six months later. Patients also receive calls within eight days of starting an oncology regimen and if problems prevail, doctors are notified.

In addition, all oncology medications must be accompanied by clinical services to avoid discontinuation and mitigate side effects, be filled at a specialty pharmacy and utilize a split-pill program of 15 pills costing half a copayment for the first two months of therapy.

In the RA space, Humira is the most-costly drug for the PBM, prompting it to use a preferred drug strategy to reduce costs and drive higher rebates, and step therapy before moving onto more complex drugs, says Avey. Medimpact also assesses therapy prior to dose escalation if clinical benefit is still not confirmed and recommends contracting to prevent huge price increases for RA drugs in future years.

Across the board for all specialty drugs, the PBM deploys Medimpact Direct to help answer challenges related to fulfillment: reducing member disruption by determining the most appropriate place to fill a prescription; eliminating “free first, 30-day supply” programs to avoid initiating patient on a more expensive therapy; and ensuring that the recorded amount of copayment/coinsurance paid by a plan member matches the actual amounts.

Finally, its quarterly clinical surveillance program reviews all specialty drugs for all clients and looks for gaps in care; ineffective protocols; overutilization; patients who have dropped off medications; and claims potentially causing fraud, waste or abuse.

Sometimes the answer is ‘no’


Sean Sullivan, dean, School of Pharmacy, University of Washington in Seattle, recommends three main strategies for all specialty pharmacy:

1. Just say “no” to coverage of certain drugs. Sullivan calls this “prior authorization on steroids.” While you can’t say no if there is only one choice, you can limit choices, he says.  

2. Lockdown specialty provider networks into closed delivery systems. If a manufacturer determines a drug is a specialty medication, a group of specialty providers should be part of a contract promising to meet needs of drug delivery based on outcomes assessment.

3. Provide experimental but innovative contracts based on outcomes, biomarkers and financial considerations. Also, commit to a budget so that payers know their liability in advance.

For example, if a patient isn’t cured with an expensive hepatitis C medication (the cure rate is 95%), then payers shouldn’t have to pay for the drug assuming the medication was taken appropriately.

“That’s what prior authorization is all about-a budget cap,” he says. “Plans don’t really need the extra cost of doing [prior authorization]; a manufacturer has to take the risk.”

Oncology, Sullivan says, is a tougher condition to manage because of so much individualization that requires clinical flexibility. He points out that many health plans have designed treatment pathways for cancer and if members stick to the protocols, drugs will be reimbursed.

Mari Edlin, a frequent contributor to Managed Healthcare Executive, is based in Sonoma, California.








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