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If you did a side by side comparison of the leading PBM Annual Trend Reports you would be challenged to see much difference when compared to the 2019 reports recently published by CVS, Express Scripts and Prime Therapeutics. In the past these reports would run upwards of a hundred pages chock full of data and charts…. today we are lucky to get a dozen or so pages with watered down, executive level summaries. Our Alert unapologetically offers an even more watered down summary for your reading pleasure (at least it is a relatively fast read)…. and, we also include some provocative questions to ponder. We’ve also provided links to the three PBM reports below.

For most of the past decade, traditional drugs shrank to low single digit or negative trend rates. But specialty is now racking up lower than historic trend increases for a two key reasons.

• Utilization – It spiked in 2019…. but less than most years since 2010. We attribute that to the number of lives newly insured in 2019. Lots of people (especially uninsured / not eligible for Medicaid) took jobs offering health insurance last year. Also, a number of next generation / first-in-class therapies approved last year likely added new patients previously on non-specialty maintenance therapies. Although the numbers of patients may be low for these (mostly orphan) drugs, their average cost was significantly higher. It will be very interesting to see the impact of the Corona virus driven by job layoffs and disruption in healthcare access.
• Unit Cost – Specialty saw hefty unit cost increases for mostly new product launches in 2019. Conversely, 2019 saw one of the lowest price increase trends for established therapies over the past decade….. perhaps driven by manufacturers seeking to deflect congressional intervention, a hot topic last year.

What noteworthy items jumped out of these trend reports?

• First…. both ESI and CVS spotlighted their ‘tightly managed’ specialty programs. While granular details were not provided, the results were eye popping. For example, ESI touted a -5.2% (yes, a YoY reduction) for participating plans in their SaveonSP® specialty patient assistance solution (sounds almost philanthropic) program vs. 12.3% for nonparticipating plans! That’s huge. By comparison, CVS touted a specialty trend of +8.9% in their tightly managed program and 13.2% trend in their non-managed program. CVS took a big red pencil to their specialty formulary for 2019 and deleted a number of specialty products (they did that again for 2020).
• Second….. no information was provided related to rebates and how they are reflected – or not – in the published trend numbers.
• Third….. the reports suggested that plan member out-of-pocket contributions were at record lows. However, we’ve seen that these large plans have implemented copay accumulator and copay maximizer programs that essentially shift a lot of $$$s off the books. The amount of that $$ shift is a big unknown and may be sweetening the trend numbers.

Yes, time to groan, another missive on the 340b program. At least there are some new statistics about the program that should wake up the majority of specialty pharmacies that aren’t skimming the cream off this program unlike a few others. The 340b program has come under the most intense scrutiny that we’ve seen in years. As we mentioned in our last Alert, the full court press by Pharma (against 340b) and the hospital industry, lobbying just as hard to preserve 340b, is fierce. Key findings from the referenced report (Note, it was sponsored by Pharma) show that many retail pharmacies and other third parties have taken advantage of and financially benefited from the 340B program’s contract pharmacy arrangements: — The data showed an average profit margin of 72% on 340B medicines commonly dispensed through contract pharmacies vs. a margin of 22% for non-340B medicines dispensed through independent pharmacies. — 340b covered entities and their contract pharmacies generated an estimated $13 billion in gross profits on 340b purchased medicines in 2018, which represents more than 25% of pharmacies’ and providers’ total profits from dispensing or administering brand medicines. — Following HRSA’s expansion of the contract pharmacy program in March 2010, contract pharmacy participation grew a staggering 4,228% between April 2010 and April 2020. While over 27,000 distinct pharmacies participate in the 340B program today, over half of the 340B profits retained by contract pharmacies are concentrated in just four pharmacy chains – Walgreens, Walmart, CVS Health and Cigna’s Accredo specialty pharmacy. A word on specialty pharmacy participation. Statistics were not available to adequately break out SP revenues by pharmacy type (SP vs. retail/chain). We believe that the lion’s share of specialty prescriptions is being filled by the handful of big box SPs. That’s not surprising as a hospital is likely to select a primary pharmacy partner to consolidate all its 340b transactions into one, more manageable relationship (just like a manufacturer selecting a limited distribution partner for a newly launched drug.) Click here to read the full report , “For-Profit Pharmacy Participation in the 340B Program” __________________________________________________________________________ New Analysis Shows Contract Pharmacies Financially Gain From 340B Program with No Clear Benefit to Patients New Analysis Shows Contract Pharmacies Financially Gain From 340B Program With No Clear Benefit to Patients WASHINGTON, Oct. 8, 2020 /PRNewswire/ — Today, the Berkeley Research Group (BRG) published an analysis of historical trends in 340B contract pharmacy arrangements. The findings conclude that the growth in the number of these arrangements is fueling explosive growth in the program at large and driving the 340B program farther and farther away from its original intended goal of providing discounted medicines to safety-net entities treating uninsured and vulnerable patients. Congress created the 340B program to help safety-net providers, including certain qualifying hospitals and federally funded clinics, access discounts on prescription medicines for low-income or uninsured patients. In 2010, a Health Resources and Services Administration (HRSA) policy opened the door to allow all 340B entities to contract with an unlimited number of for-profit retail pharmacies (e.g., CVS, Walgreens) to dispense 340B medicines. While this policy may have been intended to improve patient access to needed medications, it had the misguided effect of creating an opening that allowed for-profit vendors, pharmacies and pharmacy benefit managers to exploit the program and make a profit on 340B sales – sales intended to benefit low-income and vulnerable patients. “It is clear that contract pharmacies have leveraged market power to drive unprecedented program growth and siphon money out of the program and away from vulnerable patients,” said Stephen J. Ubl, president and chief executive officer of the Pharmaceutical Research and Manufacturers of America (PhRMA). “I urge lawmakers to consider the results of this analysis and pursue policies that ensure the 340B program benefits vulnerable patients rather than just line the pockets of for-profit corporations.” Analysis after analysis shows there is explosive growth in the program, but there is little to no clear evidence that this growth has benefited low-income and vulnerable patients. Even the New England Journal of Medicine found no evidence that expansion of the 340B program has resulted in improved care or lower mortality among low-income patients. These new findings build upon a mounting body of evidence from the Government Accountability Office (GAO) and HHS Office of the Inspector General, which show hospitals are taking advantage of contract pharmacy arrangements to generate additional revenue through 340B without ensuring that low-income patients are benefiting from manufacturer discounts. GAO found that more than half of 340B hospitals surveyed reported that they did not share discounts with patients at their contract pharmacies. OIG found similar evidence, noting some 340B hospitals “do not offer the 340B price to uninsured patients in any of their contract pharmacy arrangements. … [I]f covered entities do not, their uninsured patients pay the full non-340B price for prescriptions filled at contract pharmacies.” To learn more about the 340B program and ways to fix the program, visit PhRMA.org/340B. About PhRMA The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier and more productive lives. Since 2000, PhRMA member companies have invested nearly $1 trillion in the search for new treatments and cures, including an estimated $83 billion in 2019 alone. Source: Pharmaceutical Research and Manufacturers of America (PhRMA)

Many are starting to question whether there will be a future for specialty pharmacy…. at least how we know it today. That being said, an optimist would say that even a buggy whip company could remain viable after the arrival of the automobile with enough innovation.

Specialty pharmacies don’t have mush room left to be innovative. Much of that innovation has already taken place with the emergence of advanced data management capabilities, integrated electronic health records to expedite and monitor patient status through artificial intelligence, tailored therapy-specific care management protocols, numerous operational efficiencies, etc. But one area still remains an opportunity for improvement and innovation, Value Based Initiatives.

The article below is a good overview of how and where specialty pharmacies may develop that innovation and ensure that their businesses will not go the way of the buggy whip company. “Working with patients, caregivers, prescribers, payers, and pharmaceutical drug manufacturers, specialty pharmacies promote value by coordinating care for complex health conditions across a diverse range of stakeholders and uniting patient touch points within a fragmented health care system.”

As the concept of value-based arrangements is evolving, the interest level by health plans is climbing. Value based deals are still tough to measure since results may need to be based on long timelines (years?) and metrics need to be precise (not easy…. but that’s where a specialty pharmacy can best participate, especially under the medical benefit which has historically been a black hole.)

The article spotlights a framework and five elements for specialty pharmacies to pursue.
— Understanding Shared Health Needs of Patients
— Designing Comprehensive Solutions to Improve Health Outcomes
— Integrating Learning Teams Measuring Health
— [Linking] Outcomes and Costs
— Expanding Partnerships

These elements add up to a more powerful model for specialty pharmacy that should be sustainable for the foreseeable future.

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How Specialty Pharmacy Will Thrive in the Value Era

2020-10-08 The era of fee-for-service health care is nearing an end. In its place, value-based initiatives seek to improve patient outcomes, reduce cost, and increase transparency in health care. These changes represent significant opportunity for specialty pharmacies to demonstrate their ability to create sustainable value across the health care continuum.

The Need for Value-Based Initiatives
The United States spends more per capita on health care than any other developed nation. According to the CMS, National Health Expenditures (NHE) in the US are predicted to outpace the growth of GDP through 2027 when health spending is predicted to exceed $6 trillion.

Despite spending the most, the US falls behind other developed countries in several key health indicators. The US has the highest incidence of chronic disease burden, the highest rates of obesity, and among the largest numbers of both preventable hospitalizations and avoidable deaths. Coupled with an aging population, rapidly expanding drug portfolios, and a fragmented health care system that tends to promote volume over outcomes, it’s clear why there is a push for change.

A Framework for Value
Michael Porter is a Harvard Business School professor whose extensive work in economics, strategy, and social causes has earned worldwide recognition. Porter and Elizabeth Teisberg wrote the book Redefining Healthcare, providing a widely accepted framework for a value-based health care system. They define value in health care as “The measured improvement in a patient’s health outcomes for the cost of achieving that improvement.”

In addition to defining value in health care, Porter describes a “paradox” in the US health care system which focuses on shifting cost and increasing bargaining power while restricting patient choice—none of which ultimately create value for the patient. Porter proposed a set of principles focused on high-quality, less costly care, improving value for patients, advancing unrestricted competition based on results, focusing on the full cycle of care, and value that is driven by provider experience, regional and national competition, transparency, and strongly rewarding innovation.

In a recent article in the Journal of the Association of American Medical Colleges, Teisberg et. al provide a strategic framework for implementing value-based health care. The framework includes 5 broad imperatives for value: understanding shared health needs of patients, designing comprehensive solutions to improve health outcomes, integrating learning teams, measuring health outcomes and costs, and expanding partnerships. These 5 imperatives have significant implications for health care delivery and defines a space where specialty pharmacy has opportunity to act as a driver of value within the broader health care system.

Value Based Care and Specialty Pharmacy
Specialty pharmacies are uniquely positioned to thrive in the era of value-based health care. Working with patients, caregivers, prescribers, payers, and pharmaceutical drug manufacturers, specialty pharmacies promote value by coordinating care for complex health conditions across a diverse range of stakeholders and uniting patient touchpoints within a fragmented health care system. Driving positive patient outcomes and managing costs are at the core of specialty pharmacy services.

As the Medicare Access and CHIP Reauthorization Act of 2015 and other federal legislation seeks to fundamentally change health care delivery and payment for health care services, specialty pharmacies are successful because of their proven ability to drive value in spite of the existing health “paradox” as described by Porter. Independently owned specialty pharmacies in particular are in a unique position in the current shift to value-based care because they are already organized around the imperatives as outlined by Teisberg while functioning outside of health systems and third-party payer organizations more closely tied to the fee-for-service system.

Specialty pharmacies align under Teisberg’s 5-point framework as follows:

Imperative 1: Understanding Shared Health Needs of Patients
Specialty pharmacies understand the unique clinical needs of patients with complex, often chronic health conditions and the drugs used to treat them. Specialty pharmacies build clinical programs with clinicians and staff who have extensive training and experience with specific disease states, drug classes, and comorbid conditions. Specialty pharmacists take the time to understand the unique clinical, psychosocial, and financial needs of the patient groups they serve, promoting continuity and establishing relationships based on trust and mutual understanding. Understanding the broad needs associated with a particular condition such as hemophilia or drug class such as IV/SC-Ig allows experienced clinicians to deliver targeted, individualized care to a specific group or groups of patients.

Imperative 2: Designing Comprehensive Solutions to Improve Health Outcomes
Specialty pharmacies use medication therapy management (MTM) to coordinate comprehensive care for patients and improve health outcomes. MTM employs a range of clinical tools to improve outcomes and promote value, including therapeutically focused clinical assessments, validated quality of life measures, detailed medication reconciliation, monitoring adverse effects, connecting patients to educational resources, peer-based support programs, and access to need-based financial resources reducing barriers to care. Specialty pharmacies provide patient level support reducing health system and therapy complexity by explaining benefits and coverage, coordinating the best site of care for injected or infused medication, providing drug administration training, adherence support, and resources empowering patients to independently manage complex, persistent treatment plans.

Imperative 3: Integrating Learning Teams
Specialty pharmacies leverage highly experienced, multi-disciplinary teams to promote value. By integrating clinical teams with intake, billing and care coordination specialists, specialty pharmacies speed access to care, remove barriers to treatment, and reduce therapy abandonment. Integrating clinical and nonclinical teams create synergies that do more than promote access and positive outcomes for patients. Aligning teams around shared goals creates a workplace culture focused on process improvement, cross-functional learning, and organizational efficiency.

Imperative 4: Measuring Health Outcomes and Costs
Specialty pharmacies have long been required to demonstrate their ability to improve outcomes and reduce cost to be included in payer networks, earn referrals from prescribers, and obtain Limited Drug Distribution agreements from pharmaceutical manufacturers. Specialty pharmacies are also required to measure outcomes to maintain accreditation from leading health care accreditation agencies. Specialty pharmacies employ sophisticated software and tools to track response to therapy, monitor dosing, utilization, and adverse effects while tracking costs. These tools allow pharmacists to deliver data-driven interventions, reducing unnecessary hospitalizations or adverse events.

Data collected by specialty pharmacies drive value across stakeholder groups: patients better understand the benefits and outcomes of their treatment plan, prescribers receive a complete picture of response to therapy for a patient or group of patients, pharmaceutical manufacturers discern insights into the efficacy of their product, and payers develop deep insight into cost and cost drivers for high-dollar health conditions.

Imperative 5: Expanding Partnerships
Specialty pharmacies work with an array of stakeholders across the health care continuum to drive value. In a fragmented health care system, specialty pharmacies use these partnerships to promote continuity and facilitate a better understanding of patient-level needs and experiences across stakeholder groups. By expanding partnerships with each of the traditional health care stakeholders and developing relationships in new areas, including patient advocacy groups, government organizations, and a growing digital health industry, specialty pharmacies have significant opportunity to improve patient care, scale operations, and reduce complexity in the health care system.

Toward a Better Future
Porter affirms, “Value in health care is determined in addressing the patient’s particular medical condition over the full cycle of care, from monitoring and prevention to treatment to ongoing disease management.”4

Specialty pharmacies will thrive in the era of value-based health care because their business model is already firmly centered in creating value. As health systems, independent physician practices, payers, pharmaceutical manufacturers, and patients navigate this new environment, specialty pharmacies are uniquely positioned to lead as a valued, experienced member of a multi-disciplinary, multi-stakeholder team facilitating a shift to a paradox free, value-based healthcare system.

JUSTIN LINDHORST, MBA,
BioMatrix Specialty Pharmacy.
Published 10/2020 Pharmacy Times

Earlier this week we sent an Alert talking about Specialty Generics. Today we’re talking about another emerging trend in specialty, combination therapies.

The FDA just approved yet another combo last week. This one pairs Opdivo with Yervoy for the first-line treatment of adults with malignant pleural mesothelioma, a type of cancer caused by inhaling asbestos fibers, that cannot be removed by surgery. This is the first drug regimen approved for mesothelioma in 16 years and only the second approved therapy for mesothelioma. Curiously, the FDA approved pemetrexed in combination with cisplatin for this same indication sixteen years ago (not such a new idea, huh?)

Unlike most recent combo therapy approvals this one will not launch under a new name or a single NDC. The approval is essentially for the new indication and related dosing and safety guidelines. According to our records, Yervoy is available only through limited distribution.

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FDA Approves Drug Combination for Treating Mesothelioma

October 02, 2020 — Today, the U.S. Food and Drug Administration approved Opdivo (nivolumab) in combination with Yervoy (ipilimumab) for the first-line treatment of adults with malignant pleural mesothelioma that cannot be removed by surgery.

“Today’s approval of nivolumab plus ipilimumab provides a new treatment that has demonstrated an improvement in overall survival for patients with malignant pleural mesothelioma,” said Richard Pazdur, M.D., director of the FDA’s Oncology Center of Excellence and acting director of the Office of Oncologic Diseases in the FDA’s Center for Drug Evaluation and Research.

Malignant pleural mesothelioma (MPM) is a life-threatening cancer of the lungs’ lining caused by inhaling asbestos fibers that about 20,000 Americans are diagnosed with each year. MPM accounts for most mesothelioma diagnoses, and most patients have an unresectable (unable to be removed with surgery) tumor at time of diagnosis. With currently available therapy, overall survival is generally poor. Opdivo and Yervoy are both monoclonal antibodies that, when combined, decrease tumor growth by enhancing T-cell function.

This combination therapy was evaluated during a randomized, open-label trial in 605 patients with previously untreated unresectable MPM. Patients received intravenous infusions of Opdivo every two weeks with intravenous infusions of Yervoy every six weeks for up to two years, or platinum-doublet chemotherapy for up to six cycles. Treatment continued until disease progression, unacceptable toxicity or completion of two years. The objective was to determine if Opdivo in combination with Yervoy improved overall survival compared to chemotherapy. At the time of the analysis, patients who received Opdivo in combination with Yervoy survived a median of 18.1 months while patients who underwent chemotherapy survived a median of 14.1 months.

The most common side effects of Opdivo in combination with Yervoy in patients with MPM include: fatigue, musculoskeletal pain, rash, diarrhea, dyspnea (difficulty breathing), nausea, decreased appetite, cough and pruritis (itching). Yervoy can cause serious conditions known as immune-mediated side effects, including inflammation of healthy organs, such as the lungs (pneumonitis), colon (colitis), liver (hepatitis), endocrine glands (endocrinopathies) and kidneys (nephritis). Patients should tell their healthcare providers if they have immune system problems, lung or breathing problems, liver problems, have had an organ transplant, or are pregnant or plan to become pregnant before starting treatment.

The FDA granted approval to Bristol-Myers Squibb Company.