Health Exchanges, ACA, and Recent Drug Approvals Changing the Landscape - Q & A with Gary Owens, MD, President, Gary Owens Associates

First Report Managed Care conducted an interview with Gary Owens, MD, one of our Editorial Advisory Board members, to discuss the changing climate of benefit management and drug approvals under the Patient Protection and Affordable Care Act (ACA). Here you will find Dr. Owens’ take on current events related to the healthcare system.

Q: Before starting your own company, you worked in a variety of high-level roles with health plans and pharmacy benefit managers. Can you discuss your background and some of the major developments you have seen through your career?

A: I spent the majority of my medical management career with the Blue Cross Blue Shield system where I was responsible for medical and pharmacy management activities at the senior officer level. Because my health plan career has spanned more than 3 decades, I literally saw the evolution of health insurance from the indemnity days of the 1980s to the first foray into managed care that was driven by the [President Bill] Clinton healthcare movement. The early 1990s saw the rise of health maintenance organizations as the predominant model for prepaid healthcare benefits and costs stabilized. However, the public demanded more choices and [fewer] restrictions, and by the end of that decade, preferred provider organizations and other more open models were the predominant model of healthcare benefit delivery.

The new millennium was highlighted by a return to double-digit heathcare cost inflation and a return to increased medical management activities to control the rising costs. The launch of Medicare Part D and the growth of Medicare Advantage was another highlight of the first decade of the new millennium, and I was actively involved in the development and refinement of these programs.

As a consultant for the last 8 years, I have seen the transformation of pharmacy [into] a specialty driven model with most new drug launches targeting smaller, high-cost populations. This brings new challenges to pharmacy management, as a small population of patients is now responsible for almost one-quarter of the pharmacy benefit cost.

Q: For the past few years, you have worked with numerous companies on a purchasing collaborative for their drug benefits. How have their needs changed and what areas are they focusing on now when it comes to drug spending?

A: Managing the pharmacy benefit for employers is still about the basics: benefit design, clinical management, and getting the best negotiated price for the pharmacy benefit. There is certainly more integration of medical and pharmacy data to help manage across these benefits. Finally, the major driver of pharmacy cost increase is from specialty pharmacy, so the employers and the consultants who serve them have become myopically focused on managing this benefit efficiently.

Q: Specialty pharmacy is a major area of emphasis now. What are some of the methods payers are using to deal with the increased spending on specialty pharmacy and the FDA approvals of specialty drugs and orphan products?

A: Payers are currently using the following tools to manage the specialty benefit:

·      Clinical management, including prior authorizations that are often restrictive to the FDA label or to the populations studied in the pivotal trials

·      Limitation of dispensing channels to 1 or 2 selected specialty pharmacies in order to obtain the best pricing

·      Limitation of prescribing to selected specialist or specialist groups

·      Benefit redesign to include increased member cost-sharing and equalization of member cost-sharing across the medical and pharmacy benefits

·      Preferred products in crowded categories, such as rheumatoid arthritis (RA), multiple sclerosis (MS), and pulmonary hypertension

Q: The ACA includes legislation on the development of biosimilars. How popular do you think biosimilars will become as replacements for biologic drugs? What challenges do biosimilar manufacturers face?

A: The acceptance of biosimilars is inevitable if they can show clinical effectiveness that is equivalent to the originator compounds. With the current high prices of specialty pharmaceuticals, payers and the clients they serve are looking for any way to preserve clinical quality and cost saving. Biosimilars, if well developed and tested, have this potential. The challenge for manufacturers is to demonstrate the clinical effectiveness in a way that will give prescribers and their patients confidence in the therapeutic equivalence of the products.

Q: There is a lot of talk in healthcare regarding the adoption of technology to measure patients' health as well as medical costs. As a physician, do you think doctors are more open to electronic health records (EHRs) and other new technologies?

A: Doctors are like [everyone else]; there are some who embrace the new technologies and are early adopters. Similarly, there are some who will not adopt these new technologies unless they have no other choice. While the EHR has many good capabilities, there are still some downsides that need to be addressed, including ease of use, data-sharing across multiple platforms, and the impact of these systems on communication between the doctor and their patients.

Q: With health insurance exchanges opening this year and the expansion of Medicaid in some states, millions more people will have health insurance. What are the trends you think we will see with the expanded coverage in the next few years?

A: Basically, if there are more [people] insured, there will be more demand for services. There will be inadequate primary care resources, and alternative providers will need to be developed to meet these needs. One concern is that once we have more healthcare consumers with coverage, there is the potential for costs to spiral upward. Only time and experience with the system will tell how this will ultimately play out.

Q: RA is a disease that payers have traditionally paid close attention to because it is often a chronic condition. How are payers and others in healthcare managing RA? What are the treatment options available, and have guidelines changed as to the best ways to treat these patients?

A: RA is not singled out for any special management activities. Typically patients have unrestricted access to rheumatologists and to diagnostics. Because of the high cost of therapies and because of multiple agents in the RA category, especially in the tumor necrosis factor category, plans are actively managing this class. All RA drugs have prior authorizations and other clinical management tools such as preferred agents and step therapy through preferred agents.

Q: Since 2010, the FDA has approved the first 3 oral medications for MS. How have those drugs changed the treatment paradigm? Do you anticipate more MS drug approvals? Will oral agents become the standard of care?

A: It is still early, and the oral agents have only a small, but growing portion of the market. I believe that as clinicians gain experience with the use of oral agents, there will be an evolution away from the injectables as platform therapies. However, because these therapies have been in use for many years and because many patients are doing well on them, the transition to more oral agent use will likely begin with newly diagnosed patients and then evolve to patients who have had previous therapy. It will be interesting to see how this market evolves over the next 2 to 3 years.