In this interview, Alison Lum, PharmD, vice president of Pharmacy Services at Blue Shield, discussed the panel she moderated at Asembia 2024 and delved into drug payment options' challenges, including the limitations of copay cards and the need for transparent pricing models.

Please introduce yourself by stating your name, title, organization, and relevant professional experience.

Dr Alison Lum: I'm Allison Lum. I'm the vice president of Pharmacy Services at Blue Shield of California. I am a pharmacist by training, and I've been in pharmacy managed care for about 20 years now.

Many Asembia sessions emphasized the importance of expanding the pharmacist's role. What are your thoughts on this development?

Dr Lum: I went to school to become a pharmacist and help people. Pharmacists are uniquely placed in the community to help not only the patients who need them the most but also the community that identifies with them. We at Blue Shield of California have an initiative that we call Elevate Pharmacy Care, which is multi-fold. It's about elevating the member or patient experience at the pharmacy.

It's also about elevating pharmacists and pharmacy technicians to work at the top of their license.

Can you share any highlights or key takeaways from your Asembia session regarding any discussed drug payment options?

Dr Lum: The title of my session was “Opaque to Transparent: Transforming the Way We Pay for Drugs.” And I had 3 amazing panelists join me: Amvrosios Ioannidis, who is the senior vice president of Payer Relations at Integra Partners, Umar Afridi, who is the founder and CEO of Foundation Health, and Jessica Abraham, who is the director of Population Health at the University of Southern California. Both Umar and Jessica are pharmacists, and so they have a unique take on how things are changing and how we pay for drugs and pharmacy care.

Amvrosios is a pharmacy benefit and health care industry veteran who has been in the space for over a few decades. One of the things that we talked about was how changing the way we pay for drugs impacts patients, pharmacists, pharmacies, and pharmacy benefit managers. I think the biggest highlight that I want folks to take away from our session is that it's not just about changing the way we pay for drugs so that we avoid paying high margins and unfair price pricing.

It's really about getting to the right, fair price so that our patients have access to the medications that they need and that pharmacists are paid for the care that they deliver.

Were there any particularly surprising findings or developments that the panel discussed at the session?

Dr Lum: Well, I think it depends on who in the audience you ask. I think a lot of people had some really great takeaways.

One of the things that impressed me about the panel was their call to action. The call to action was really around taking a stand, making a difference, being bold, and learning something new. I think for a lot of people, that was somewhat surprising because they attend the sessions and typically sit and just listen and don't really know what to do with the information.

But I think we gave a lot of good tidbits for folks to do something different. Umar brought up a really good point when I asked him about the fact that biosimilars have come onto the market. We thought they would increase competition, therefore driving down pricing, but we haven't really seen that come out.

And so one of the things that I asked him about this concept was that he talked about it. Yes, we need to have alternatives. And not just for drugs. He talked about having alternatives for different supply chain stakeholders.

And by that, I mean different partners to work with. After that, an article was released that discussed why biosimilars aren't driving much of the competitive pricing we expected to see. A big part of that is because they are locked up in vertically integrated delivery systems and supply chains. I think that is something that was a bit another big highlight.

When patients can’t fill their prescriptions due to drug costs, we often see manufacturers offering copay cards to help assist the burden. This may only mask the issue instead of fixing it entirely. From your perspective, do you think that copay cards can help solve the adherence problem?

Dr Lum: Yeah, I would say copay cards are a small band aid to a problem that actually probably needs stitches.

We have to stop with these workarounds. With really good intentions, we've created a patchwork to try to fix and address the problems. And we are long overdue for an overhaul. Without a doubt, I agree.

What are some of the most innovative strategies or emerging solutions currently available in the realm of drug payment options?

Dr Lum: I would focus on a couple of things besides trying to drive to a fair, or what we can call net cost. This means getting as close as possible to the cost of goods sold and paying the different stakeholders who touch the drug along the way for the services and value they provide.

I would say some of the models that other folks are looking at are value-based arrangements. These are sometimes difficult to administer because of the data and the outcome and then getting to agreement on the outcomes to be delivered. There are also some description-like payment models out there. So, those are interesting and probably need a lot of help from our actuary friends when it comes to those types of pricing.

There has been a lot of news and chatter about transparent or true cost models and products coming out there. Folks should take a really close look at the pricing benchmark being used. A lot of times, those are based on the pharmacy's acquisition cost, which is how much the pharmacy pays to acquire that drug from the wholesaler or manufacturer.

And that is not necessarily the same as the net cost or the cost of the goods sold directly from the manufacturer. So, “beware” is what I would say. We have a lot of work to do in terms of unveiling or creating more transparency around other fees that are rebates tied to the cost of the drug that aren't necessarily on the actual price tag.

What are your thoughts on the strategy pharmaceutical companies use where they launch the same drug under different brand names? Do you think this practice affects drug costs or contributes to the overall problem?

Dr Lum: I understand why that practice has evolved. I believe it is a side effect of some of the challenges and problems that we have in our current delivery system. In pharmacy, we talk about polypharmacy, which some people consider [means] going to different pharmacies [for medications], and other people might say polypharmacy is somebody who takes a lot of different drugs. Often, when you start taking medications and you have side effects, you'll have doctors prescribe more medications to deal with all those different side effects.

I guess I would call the practice that you just described of, [eg] coming out with the same drug, different label name, different national drug code, is really just like adding on more medications to solve problems that are caused by other medications. I would agree.

From your perspective, considering what you mentioned earlier about patient experience and managing side effects from existing medications while being prescribed new ones, how is this directly impacting the payer space?

Dr Lum: We are having to react and respond. I think a lot of folks [and] payers can't rely on our traditional responses that we've used in the past. Utilization management, renegotiating—that's only going get us so far.

It is going to take a lot of courage and bold moves from different payers to chip away at this. And it's not just going to be one payer that's going to lead the way, we all have to take action in order to change this industry. It's about finding that common ground to figure out.

When it comes to reaching a common ground on coverage decisions, do you believe these decisions are being made in isolation, or do you see stakeholders increasingly collaborating?

Dr Lum: When you say common ground, I actually think we're there. I think common ground is very well understood at the individual level. [We know] we need to address this problem that we have, which is rising drug costs and limiting access, rising drug costs, [resulting] in limited access for folks.

That's not the problem. The problem is the incentives. Incentives at an organizational level are not aligned, and that's what we need to get to. What is so interesting is that I've had different conversations with folks and they're really excited and want to know how they can help or what they can do. And the minute I say, “Well, we all have to align the incentives,” you can see the look on their faces, and there is a very dramatic change where the wheels start to turn and they go, “Well, wait a minute. That means for my organization our profits change, which impact my individual goals and impact me.” So, like I said, it's going to take some courage to change our incentives and really own up to each of the different organizations role in making this different.

From your perspective, do you believe stakeholders will eventually align their incentives to help address the high costs in the drug payment space?

Dr Lum: I'm not sure if it's a question of possibility. I think it's more of a question of we must and how are we going to get there? Because we are not going to be able to afford health care for ourselves as we age if we don't change the system now.

Looking ahead, do you believe the challenges stakeholders are facing can be addressed with proactive strategies, and if so, what initial steps can they take to begin this process?

Dr Lum: Well, I'm encouraged with some of the more recent changes that have happened, including employer groups making some decisions. After we announced our new model, which is a modular solution for delivering pharmacy benefits, we've decided to pull apart and expose some of the inner workings of the supply chain. We're working with 5 different partners: Abarca Health for claims processing, Navitas for our contracting [of the] pharmacy network, Amazon pharmacy for home delivery, CVS specialty for specialty drugs, and Prime Therapeutics for pharmaceutical manufacturer contracting. After we made that announcement, we started to see a lot more employer groups switch to or move away from a vertically integrated pharmacy benefit manager or over to more modular solution.

Those are some of the moves that we were hoping for and we're starting to see. It’s really encouraging. It may not hit total transparency, but I also think some of these new products that are coming onto the market, re-emerging onto the market around true cost, or trying to get at a cost-plus model are good moves as well.

[However], we still need to continue to push for value-based payments. The more that we can continue to push for that and bring patient care to front and center, the more we will help. Especially with the fact that just in this specialty drug pipeline alone, there's a vast amount of drugs that are either being fast-tracked right now or they're in their phase three trials.

We have a lot coming, and it's like you have to take a step back and say, “Okay, I have all these drugs coming and now we're adding this into the mix of everything else we're trying to figure out, but, it does sound like the path forward.” It is a bit more promising, and people are asking the questions that need to be asked to help us get there to fix this cost issue.

What is one key takeaway from the panel discussion at Asembia that you're hoping the audience walked away with?

Dr Lum: I opened the session by saying that people often ask me, "Alison, how are you doing it? How is Blue Shield of California doing it?" And my response is that it's not just going to be one company, one organization, or one individual that's going to change the status quo.

As we noted, we are deeply entrenched in our current system, and we have misaligned incentives. It is going to take a lot of very bold, courageous people and organizations to make this move. Change is tough. To do that, we need folks to make the right choices. We need organizations to make the right choices, circling back to the common ground that we have. At Blue Shield, one of the things that we talk about is to transform the health care system into one that is worthy of our family and friends, and [make it] sustainably affordable. I have not heard one person in the time that we've been talking about that say that that's not the right common ground to get to.

If we can continue to align incentives toward that common ground, health care will worthy of our family and friends, and sustainably affordable. That's where we need to get to. And that was the key takeaway that we had.