Industry Representatives Discuss Challenges Posed by Specialty Pharmacy

San Francisco—In a Managed Care Essentials session titled Specialty Pharmacy Challenges at the AMCP meeting, industry representatives led a discussion of current issues faced by the specialty pharmacy market.

Steven C. Marciniak, RPh, director, pharmacy Programs, Priority Health, began the conversation with a review of specialty drug management strategies that take into account encompassing benefit design, formulary management, distribution channels, and patient care. He explained that drugs fulfilled through specialty pharmacies have a considerable impact on overall drug spending, noting that 6 of the top 20 drugs by spend fulfilled by Priority Health in 2011 were considered specialty pharmacy drugs (Enbrel® (etanercept), Copaxone® (glatiramer acetate injection), Humira® (adalimumab), Rebif® (interferon beta-1a), Avonex® (interferon beta-1a), and Gleevec® (imatinib mesylate). Mr. Marciniak also described substantial increases in overall unit price for many specialty drug products since 2007.

Mr. Marciniak compared current drug benefit designs to previous models at Priority Health. For instance, there have been substantial increases in pricing for nonpreferred brands ($40 historically to $80 today). In addition, reimbursement for specialty products has changed from $40 to 20% coinsurance ($100 maximum per prescription for preferred brands, $200 maximum per prescription for nonpreferred brands).

He described a 3-tier benefit program with specialty management (5-tier total) as lowering premiums for fully funded or drug spend for self-funded groups; causing minimal member disruption; and allowing for greater leverage during negotiations with manufacturers. He added that in January 2011, a 3-tier benefit design, with specialty management only, was offered for small businesses of 2 to 50 employees. Overall, he estimated that >30% of Priority Health’s commercial membership is currently utilizing a 3- or 5-tier benefit design.

In describing Priority Health’s strategy for formulary management, Mr. Marciniak cited preferred/nonpreferred drug classes, including tumor necrosis factor inhibitors, injectable drugs for multiple sclerosis (MS), pegylated interferon products, and hyaluronic acids. Mr. Marciniak provided examples of step therapy policies, and described rebate opportunities to leverage benefit design and formulary management with manufacturers.

Mr. Marciniak also discussed specific distribution and reimbursement strategies, including the use of preferred specialty pharmacy outlets, variable fee schedule strategies, and restrictions on buy-and-bill practices.

Patient care strategies described by Mr. Marciniak focused on case management tools. These included ongoing health assessments with validated tools that assess patient health or quality of life in conditions such as rheumatoid arthritis, psoriasis, MS, hepatitis C, and Crohn’s disease. Mr. Marciniak also summarized a copayment assistance program, and cited the impact of specialty drug management on medication adherence among Priority Health beneficiaries.

Atheer A. Kaddis, PharmD, vice president, managed markets, Diplomat Specialty Pharmacy, continued the discussion with a review of management care cost strategies. He described drug cost management as having a low financial impact (1%-2% of total spend), formulary or utilization management (step therapy) as having an intermediate financial impact (2%-5% of total spend), and distribution channel management and drug therapy management (described as high touch patient care management) as having the greatest financial impact (5%-10% of total spend).

Dr. Kaddis described distribution channel management as a strategy based on quarterly comparisons of contracted rates on specialty drugs to Centers for Medicare & Medicaid Services (CMS) rates, providing an opportunity to adjust fee schedules to better reflect acquisition costs. He did note important challenges with this strategy, including the fact that spending may not accurately reflect actual acquisition costs, and that analyses must be conducted on a timely basis.

Dr. Kaddis complemented his discussion with descriptions of specific patient care programs offered by Diplomat Specialty Pharmacy for patients with cancer, hepatitis C, and MS.