Transcript Ed Pezalla, MD Vice President, National Medical

sPCMA Business Forum 2014
Paying for Specialty Drugs: Are
Payers Hitting the Wall?
Debbie Stern, RPh
President
Rxperts, Inc
Ed Pezalla, MD
Vice President, National Medical
Director, Pharmacy Policy and
Strategy
Aetna
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Program Objectives
• Outline key challenges facing payers related to the
coverage of specialty drugs
• Identify tactics currently used by payers to manage the
coverage and reimbursement of specialty drugs
• Describe potential new strategies related to clinical
evaluation, patient engagement and shared risk
programs
Total Aetna Drug Spend 2013
Growing at
2% - 3% a year
Growing at
15% - 20%
a year
99% of Rx’s
1% of Rx’s
= 10% of TOTAL Aetna Health Care Spend
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Specialty Pharmacy Market Trends
(Rx Benefit)
Specialty drugs >1%
of RX’s in 2012 = 25%
of total RX costs.
By 2019 or 2020,
specialty drugs =
50% of total RX
costs.
Source: Express Scripts Drug Trend Reports: 2011-2013,
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Specialty Drugs 10X ++ Cost of Traditional
Drugs
Newly approved therapies
ranging from $4-10K+/mo
and combo therapies
Source: Rxperts Data on File
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US Pharmaceutical Sales, 2013
Rank
Drug
Sales ($000)
1
Abilify
6,293,801
2
Nexium
5,974,550
3
Humira
5,428,479
4
Crestor
5,195,930
5
Cymbalta
5,083,111
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Advair Diskus
4,981,108
7
Enbrel
4,585,701
8
Remicade
3,980,556
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Copaxone
3,603,958
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Neulasta
3,472,969
http://www.drugs.com/stats/top100/2013/sales?printable=1
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Drivers of specialty costs
Payers face significant challenges related to
managing the cost and utilization of specialty drugs
Rising drug
costs
• Unconstrained drug pricing and price
increases
• Regulatory mandates for coverage
• Abundant pipeline with questionable
value
Fragmented
Management
• Management silos for Rx and medical
benefits
• UM requirements vary by site of care
• Preferred drugs not optimally enforced
• Shift in site of care to OP
15-22%
annual
increase in
specialty
drug costs
(2004 – 2014E)
Prescriber
Accountability
• Lack of prescriber accountability for
cost and outcome
• Variable provider reimbursement
arrangements
Member
Accountability
• Limited member financial
responsibility
• Lack of transparency of drug costs and
value to members
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Mechanisms to Manage Specialty Pharmacy
Acquisition
Cost
Utilization
Management
Benefit
Design
Clinical
Management
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Acquisition Cost Management Strategies
• Currently Deployed Strategies
▫ Network Contract Rates
▫ Rebates
Acquisition
Cost
▫ Mandatory SP Network
• Emerging Strategies
▫ Infusion Networks
Benefit
Design
▫ Risk Share (Pharma and SP)
▫ Performance Guarantees
▫ Site of Service Direction
▫ Episode-of-Care or Bundled Payments
▫ Value-based Reimbursement
Utilization
Management
Clinical
Management
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Provider Reimbursement: Commercial
What is the most common reimbursement basis for SINGLE-SOURCE BRAND specialty pharmacy
products through the various distribution channels?
ASP: range from
+5% to +20%,
mean = +8.9%
AWP: range from
+11% to -18%,
dependent upon
provider
% of plans
Provider capitation
Adapted from EMD Serono Specialty Digest 9th edition
AWP+ or AWP-
ASP+
WAC+ or WAC-
Site of Service Management
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Indicate whether you currently implement or plan to implement a site of service management strategy in the next 12 months
n=91
Rxperts Data on File, 2013
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Benefit Design Management
Strategies
• Currently Deployed Strategies
▫ Member incentives for
preferred drugs
▫ Additional cost share tiers
• Emerging Strategies
▫ Incentives for preferred
vendors/site of care
▫ Rx and medical benefit
integration
Acquisition
Cost
Utilization
Management
Benefit
Design
Clinical
Management
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Total Spending on Specialty Drugs, by
Benefit Type, 2012-2018E
60%
40%
Share of Total US Drug Spend
30%
38%
Pembroke Consulting, 2013-14 Economic Report on Retail, Mail and Specialty Pharmacies
45%
50%
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RX and Medical Benefit Cross-Over
Specialty
RX Benefit
Allows health plan to
utilize proven cost
containment tools
Asthma
Medical Benefit
Crohn’s Disease
Hemophilia
Hereditary Angioedema
Multiple Sclerosis
Oncology
Harder for health plan
Psoriasis
to manage – not real
Rheumatoid Arthritis
time adjudication
Osteoporosis
Pulmonary Hypertension
Supportive Oncology
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Cost Share Conundrum
• Pharmacy benefit cost share becoming more complicated
with multiple levels of cost share
▫ $ copay
▫ % coinsurance
▫ Tiered options based on preferred and non-preferred
• Medical benefit cost share varies by payer, line of
business and individual plan
▫ $0 cost share
▫ Flat dollar cost share
▫ % coinsurance
% coinsurance based on reimbursement to provider
and may vary based on individual provider
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Specialty Pharmacy Management Processes may
Differ under RX and Medical Benefit
Process
Adjudication
Cost Share
Rx Benefit
On-line, real time
Post service
Tier coinsurance with per Rx or annual
MOOP, identified at POS
HMO - $0
PPO – coinsurance, deductibles and annual MOOP
NDC (drug detail level)
NDC for SP and home infusion, J-code for MD and
OP facility, bundled claims, encounter data
Exclusive SPP network with contracted rate
by drug
Differs by provider and site of care: AWP, ASP or %
of billed charges
Prospective UM (step edit, PA)
Differs by provider and site of care: PA, post service
or none;
HMO – UM delegated
Defined reporting processes, easy to access
Difficult to identify drug level data and report on
paid cost and no standard reporting methodology
Claim level pricing
Reimbursement
Utilization Management
Reporting
Medical Benefit
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Utilization Management Strategies
• Currently Deployed Strategies
• Preferred Products
• Prior Authorization
• Medication Policies
• Emerging Strategies
• Pathways
• Partial fills
Acquisition
Cost
Utilization
Management
Benefit
Design
Clinical
Management
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Therapy Categories with Preferred
Products
Indicate which therapy categories have preferred products.
% of plans
Adapted from EMD Serono Specialty Digest 9th edition
% of lives
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Prior Authorization by Therapy Category
(2011–2012)
Indicate which of the following drug categories require PA.
% of plans
2011
Adapted from EMD Serono Specialty Digest 9th edition
% change from 2011
2012
Department(s) Responsible for Managing PA
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Which department is primarily responsible for administering the PA?
Pharmacy Dept.
Medical
Management Dept.
PBM
Other
No PA
% of plans
SPP
* Other includes delegated medical provider, oncology management vendor, or other external vendor
Adapted from EMD Serono Specialty Digest 9th edition
Oncology Clinical Pathways
Indicate whether you currently implement or are planning to implement
oncology clinical pathway programs in the next 12 months.
% of plans
Adapted from EMD Serono Specialty Digest 9th edition
% of lives
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Formulary Management within Therapy Categories
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Please describe your formulary management processes within a therapy category where there are multiple routes of administration and
mechanisms of action (MOA)
Rxperts Data on File, 2013
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Clinical Management Strategies
• Currently Deployed Strategies
• Adherence
• Case Management
• Side Effect Management
• Emerging Strategies
• Discharge Management
• Coordination of Care
• Value-based Formulary
• ACO/PCMH
Acquisition
Cost
Utilization
Management
Benefit Design
Clinical
Management
Adherence Management Strategies
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Indicate which strategies you currently utilize to improve adherence and persistency to specialty drug therapies.
% of plans
Adapted from EMD Serono Specialty Digest 9th edition
Most Likely Strategies to Implement
Within the Next 12 Months: Commercial
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Indicate which strategies you plan to implement in the next 12 months.
% of plans
Adapted from EMD Serono Specialty Digest 9th edition
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Balance Outcome with Effort
Outcome
Effort
Outcome
Effort
Thank You!
Ed Pezalla, MD, MPH
National Medical Director
for Pharmacy Policy and
Strategy
Aetna, Inc.
[email protected]
Office 860-273-7719
Mobile 860-882-4515
Debbie Stern, RPh
President
Rxperts, Inc.
[email protected]
Office: (714) 769-9136
Mobile: (949) 433-0847
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