Tools to Help Payers Manage Growing Drug Costs

Boston—As with other specialty drugs, the high cost of medications to treat hepatitis C presents payers with the challenge of helping their members get the medications they need, while attempting to maintain healthcare costs. Current prices for medications in this drug class highlight the need for payers to find tools to manage the cost of treating this disease.

An analysis of 1.6 million Florida Blue commercially insured members found that sofosbuvir, a drug to treat hepatitis C, was the number 1 drug prescribed during the first half of 2014, at a cost of $3.56 per-member, per-month (PMPM), comprising 4.5% of all drug expenditures. In addition, sofosbuvir drove costs from $0.43 PMPM in 2013 to $4.45 PMPM for the first half of 2014. Along with the current high costs of drugs to treat this disease, forecasted trends predict continued high and increasing cost with an average treatment cost of $122,000 per patient that includes both the cost of drugs, duration of use, and a 10% price inflation of these drugs beginning in 2016.

The current and future cost analysis of hepatitis C drug regimens were among the issues discussed during a session at the AMCP meeting. A major focus of the session was to provide information on tools that can help payers manage the growing cost of these treatment regimens. Among the speakers was Shelley Sanchez, CPhT, assistant vice president, product strategy, Prime Therapeutics, St. Paul, Minnesota, who described the various management tools used at Prime Therapeutics, an independent pharmacy benefit manager, to help manage this growing category of drug spend and emphasized the key role pharmacists play in helping to develop and administer these tools.

Ms. Sanchez noted that payers have a number of different tools to help manage the growing cost of hepatitis C drugs, including utilization management programs, including prior authorization, step therapy, and quantity limits; care coordination, including specialty pharmacy care management, plan care management, and plan disease management; contracting activities with manufacturers, including steerage, price protection, and unit discounts; and channel management, including dispensing protocols and pharmacy channel.

In terms of utilization management programs, she highlighted the need to determine if the prescribed specialty drug is appropriate for the member in terms of safety, effectiveness, and waste. “Decisions such as prior authorization criteria are not made lightly and must balance both clinical and financial concerns,” she said.

Care coordination, she emphasized, involves connecting care to improve drug adherence, intervening early, and reducing waste. This tool offers an assessment of initial adherence risk, identifies and removes barriers to adherence, provides educational materials, conducts recurring nursing assessments, and coordinates with a health plan.

The contracting management tool involves leveraging opportunities for preferred products and rebates with manufacturers, along with exploring outcomes-based contracting opportunities.

Finally, the channel management tool questions where to best dispense these drugs, what type of discounts to offer, and use of a specialty pharmacy where feasible.

Ms. Sanchez emphasized the need to continue to refine strategies and find innovative solutions as new drugs come to market. “Payers have also been challenged to react very quickly with management tools and processes as new, costly therapies are approved,” she said. “As an industry, we will need to continue to develop innovative management tools and ask the tough questions about the cost of medications versus the value they provide.” She also emphasized, “Pharmacists play a key role in helping [to] develop and administer these programs.”

Ms. Sanchez also discussed the importance of developing a benefit and formulary design that considers cost-sharing and incentives, the need to consider the impact of cost on share adherence, and separating tiers for preferred and nonpreferred specialty drugs.

She said Prime Therapeutics takes a stepwise approach to formulary evaluation, beginning with an evaluation of safety and efficacy based on clinical trials, FDA reviews and advisory boards, Prescribing Information, and guideline recommendations. The next step is to evaluate final formulary placement that weighs uniqueness of the drug regimen and potential utilization that considers market dynamics as well as cost and overall utilization.—Mary Beth Nierengarten