Specialty Pharma: The Good, the Bad, and the Challenging
Specialty Pharma: The Good, the Bad, and the Challenging
The rising cost of specialty pharmaceuticals is a critical issue among managed care professionals.
“If we look at FDA approvals in the last 10 years, we will see that in 2005, 28 medications were approved by the FDA, 6 of which we would deem as specialty. Fast forward to 2013 and there were 27 agents approved by the FDA, 19 of which we would deem as a specialty [drug],” said Jamila J. Jorden, PharmD, MBA, clinical pharmacist, Formulary/ Drug Utilization Review Department, PerformRx. She discussed the reasons for rising costs among specialty
pharmaceuticals and strategies for cost containment at AMCP Nexus.
“In 2012, the United States spent $87 billion on specialty medication. By the year 2020, this number is expected to more than quadruple to $400 billion,” said Dr Jorden.
There are many reasons for the rising cost of specialty medications, including:
• Limited competition. “Some specialty items are the only drug indicated, or one of the few drugs indicated, to treat a specific condition. Usually in that therapeutic class, there are no generic equivalents or generic alternatives.”
• Higher specialty pharmacy inflation rates compared to branded, non-specialty drugs. A handful of specialty drugs are experiencing double-digit inflation rates; some are experiencing triple-digit inflation rates.
• The onset of biosimilars in the US marketplace has been slow. “The manufacturing requirements for these products are complex and expensive and when you tie that in with the FDA regulations, we just have not seen biosimilars take over the marketplace as we thought they would in years past,” said Dr Jorden.
• A rise in personalized medicine and targeted therapies. “And these drug types are more expensive, even when you compare them to specialty items,” she mentioned.
THE PATIENT’S FINANCIAL BURDEN
While specialty pharmaceuticals are successfully treating many patients, increasing survival rate, and improving quality of life, some patients are greatly affected by the financial burden of these drugs. Dr Jorden reviewed a study that included >2000 adults with cancer. From 1995 to 2009, cancer patients were twice as likely to declare bankruptcy compared to those without cancer. A separate study assessed the out-of-pocket costs of insured cancer patients and found
that many of the participants used different techniques to assist in covering or decreasing medication costs. Dr Jorden said, “42% of respondents stated they had either a significant or catastrophic financial burden tied to their treatment. Of that 42%, 46% stated they needed to use some of their savings to help cover the cost of treatment, 46% said they needed to cut their spending on food and clothing, and 68% said they cut back on some of their leisure time and activities. Additionally, 20% of respondents said they used less of a medication than what was prescribed, and 24% of respondents said they avoided filling prescriptions all together due to cost.”
As out-of-pocket costs increase, the likelihood of medication abandonment increases as well. One study found that once out-of-pocket costs for multiple sclerosis and biologic anti-inflammatory drugs reached $250, treatment abandonment rates significantly increased.
Medication abandonment is an issue for managed care professionals because healthy patients are less expensive than unhealthy ones. When a patient goes untreated, hospitalization rates and emergency services utilization can increase. Some states— including Delaware, Maryland, Maine, Louisiana, and New York—have passed laws to protect the patients from the rising cost of treatment. Where does this leave payers? “We’re caught between providing the appropriate drug and appropriate point of therapy as drug costs are rising, budgets are becoming more constrained, and the government is setting regulations on what we can and cannot do,” said Dr Jorden.
COST CONTAINMENT STRATEGIES
She reviewed the primary cost containment strategies and their pros and cons. One such strategy is placing specialty and high-cost medications on a specialty tier. This requires members to pay a higher price for the drugs, and this allows payers to transfer a high percentage of the cost to the members. In this scenario, the cons out weigh the benefits. As referenced above, research shows that high out-of-pocket costs trigger nonadherence and noncompliance among patients. As expected, many patient advocacy groups are against this strategy and some states are beginning to put legislation in place to prevent such practices.
Another cost containment strategy is to utilize prior authorization to limit the approval of high-cost drugs. The pros to this strategy include the ability to ensure the drugs are being prescribed for the proper indications and administered in the proper doses. The negative is that the media tends to disperse stories from a restrictive care angle, stating that insurers are not granting patients access to certain drugs or health insurers are impeding primary care physicians.
In addition to these options, there are a few additional things payers can do in an attempt to create a solution to the rising cost of specialty pharmaceuticals. Dr Jorden said a potential solution is implementing value-based formulary additions in order to deeply evaluate specialty pharmaceuticals from multiple points-of-view, just as Christina Care Health System did. In this model, a Medication Value Subcommittee would evaluate a drug on 4 aspects: (1) efficacy; (2) risk; (3) cost; and (4) social benefit.
Efficacy encompasses outcomes reported studies, patient tolerability, level of evidence, and duration of evidence. When assessing risk, the subcommittee would use a 14-question checklist with each question ranging in value from -2 points to 26 points. Cost was evaluated by projecting the number of patients likely to be eligible over a 1-year period. This, in addition to the acquisition cost, was used to determine the financial impact of the specialty medication.
The final aspect the subcommittee looked at was social benefit. To assess the social benefit of a drug, they brought in a panel of community members, including a high school teacher, 2 college professors, and a pastor to conclude whether they felt the specialty medication improved the patient’s quality of life.
“This strategy allows payers to assess the medication on multiple facets,” said Dr Jorden. It also allows community members to be a part of the formulary process and shows them why some insurance companies and payers do not include certain drugs on their formularies. “I think if we bring community members into the process, they can see what goes into the formulary process and it’s not as easy as ‘a drug is available, we should pay for it’,” Dr Jorden stated. Opposition of this strategy says that the majority of payers cannot completely exclude a drug from approval or prevent their members from using it. If a payer leaves a drug off a formulary, they may still have to pay for it if their member gains access to it.
“Another idea that is getting a lot of interest is partial fill programs,” stated Dr Jorden. Partial fill programs, also known as short fill or split fill programs, are constructed so members receive only part of a 30- day supply of a medication to ensure adherence and monitor tolerance. This program primarily focuses on self-administered oral oncolytics.
Walgreens Specialty Pharmacy conducted a trial partial fill program in conjunction with their oral chemotherapy management program (CMP). The CMP group was compared to a control group; signing up for the partial fill program was optional. The results were significant. The CMP group had a lower rate of drug wastage, which is associated with early discontinuation. About 34% of patients in the CMP group could have avoided drug wastage if they had been a part of the partial fill program.
Dr Jorden said, “The top 5 reasons for early discontinuation included patient death, adverse events, medication switch, ineffective therapy, and physician decision.” The CMP group demonstrated a 2.9% reduction in hospital admissions. Approximately $1374 per patient was saved due to the combination of reduced medication wastage and decreased hospital admissions with the partial fill program.
Another partial fill program, initiated by Diplomat Specialty Pharmacy, assessed patients on 3 chemotherapy medications: Nexavar® (sorafenib), Sutent® (sunitinib malate), and Tarceva® (erlotinib). The drugs were given to patients in 14 day or 16 day batches. Health care providers with oncology training reached out via telephone twice a month 5 to 7 days prior to the next scheduled medication refill. “The results show that 59% of patients stayed on their therapy after the initial partial fill. However, 41% discontinued therapy after 1 month or 2 partial fills, 20% of the patients discontinued therapy after 1 partial fill, and 2% switched [medications] after 1 partial fill,” said Dr Jorden. Although the plan spend was $1 billion annually, they were able to save 19% of the total spend ($186,950) because of the partial fill program.
Another strategy to contain cost of specialty pharmaceuticals is clinical pathways, which are increasing in popularity among insurers (see Side Bar). A clinical pathway is a tool used to achieve standardization of the care process with the aim of managing quality in health care. It has been shown that implementing a clinical pathway can reduce variability in clinical practice and optimize outcomes.
“What is the best idea for cost containment of specialty medications? The answer is an ‘all of the above’ approach,” said Dr Jorden. Not all solutions fit for every provider; it varies depending upon the benefits set up, the members, and the providers. An integration of all cost containment strategies is the best solution to combat the rising price of specialty pharmaceuticals.
SIDE BAR
The Importance of Clinical Pathways
Clinical pathway programs are defined as “systemically developed statements to assist practitioner and patient decisions about appropriate health care for specific clinical circumstances,” according to The American Institute of Medicine. “They are a way to help standardize care of evidence-based chemotherapy regimens and they also create a preference for less costly, but equally effective treatment regimens,” said Dr Jorden. The benefits of clinical pathway programs are that all protocols are evidence-based, care is standardized, it creates ease in identifying gaps in care, and it decreases liability. The drawbacks to this cost-saving strategy is that some health care providers feel constricted when using the pathway program, there is potential for medical contraindicated treatments to be used in some patients, and the use of out-ofdate pathways could result in a lawsuit.
Blue Cross and Blue Shield partnered with the P4 Pathways to implement a clinical pathway program that was multistate and focused on oncology. By comparing data from the year prior to the program implementation to data from a year after, researchers saw an increase in per patient drug cost from $16,494 to $16,906 (P=.587), however, the cost of hospitalizations decreased from $2502 to $1064 (P=.004). When compared to projected cost increases, the pathways resulted in savings of $10.3 million by participant sites: $7 million from drugs and $3.3 million from hospitalizations. This equaled $30.9 million when extrapolated to the entire health plan.
