The debate over rebate appropriateness has heated up over the past year. The focus on drug spend is now burning bright, especially given the current push in Washington to allow federal drug negotiation. But one thing is clear, rebates have a profound effect on the total drug price model.

The Federal Trade Commission recently issued a report on PBM rebate walls that is sure to add even more fuel to that fire. (Read on to get a definition of the “rebate wall”.)

As noted in the article….. “Federal agencies and plan sponsors—the clients of PBMs—are beginning to explore perverse PBM incentives and are waking up to abusive PBM practices. PBMs are incentivized to select higher list price drugs instead of lower list price drugs for their formularies in order to collect a higher rebate… Because rebating practices from drug companies to PBMs can make it more difficult for new, lower-priced drugs to succeed in the marketplace, PBMs may actually be causing drug prices to increase, rather than decrease.” This so called “rebate wall” is, among other things, driving up drug spending and hindering patients’ access to their medications.”

“Additionally, more than 77% of prescription claims in the country are processed by the top three , which have strategically created a complex web of vertically integrated plan sponsors, rebate aggregators, specialty pharmacies, and provider services.”

Specialty pharmacies are peripherally impacted by rebates. Higher drug costs translate into larger reimbursements when using the traditional percentage formulae used for calculating pharmacy reimbursements. However, higher cost translates into lower persistence rates, i.e., patients can’t afford to stay on their meds. The cost of that lost patient revenue can easily offset any increase in reimbursement that can be realized in up front margin.

Wherever you stand on the topic, the article below and the FTC report (link follows) will keep you abreast of what is happening on the front line of the debate.

CLICK HERE to access the FTC report (only 6 pages)

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How PBM “rebate walls” impact drug spending, patient care and competition

Federal agencies and plan sponsors—the clients of PBMs—are beginning to explore perverse PBM incentives and are waking up to abusive PBM practices.

This article examines pharmacy benefit manager (PBM) “rebate walls” and the impact on the United States drug supply chain. The Federal Trade Commission head, Commissioner Rohit Chopra, recently issued a report on PBM rebate walls, and this can be seen as a pivotal industry moment. Federal agencies and plan sponsors—the clients of PBMs—are beginning to explore perverse PBM incentives and are waking up to abusive PBM practices. One of the Commissioner’s important is that “PBMs are incentivized to select higher list price drugs instead of lower list price drugs for their formularies in order to collect a higher rebate… Because rebating practices from drug companies to PBMs can make it more difficult for new, lower-priced drugs to succeed in the marketplace, PBMs may actually be causing drug prices to increase, rather than decrease.” This so called “rebate wall” is, among other things, driving up drug spending and hindering patients’ access to their medications.

Indeed, gross-to-net bubble (i.e., difference in dollars between gross sales of brand name drugs’ list prices and their net sales prices after deducting rebates and other discounts) climbed to $175 billion in 2019 and is estimated to exceed $187 billion.[2] The growing trend in the gross-to-net bubble is directly associated with the current structure of the pharmacy industry. More than 77% of prescription claims in the country are processed by the top three , which have strategically created a complex web of vertically integrated plan sponsors, rebate aggregators, specialty pharmacies, and provider services.
The PBM/insurance companies’ vertical integration scenario provides an opportunity and incentivization for PBMs to create rebate arrangements that bring the most financial benefit to themselves, rather than benefiting plan sponsors, such as private plans and even Medicare and Medicaid Managed Care Organizations (MCOs). For example, Broward County (Florida) discovered that OptumRx was not accurately reporting manufacturer drug rebates and, in fact, contracted out its rebate duties to a rebate aggregator, which is a subsidiary of OptumRx’s parent company, UnitedHealth Group. The rebate aggregator further sub-contracted with Express Scripts. OptumRx ultimately paid back $833,772 to Broward County, the plan sponsor.[3] Also, it is often the case that PBMs exclude prescription claims processed by their own or affiliated pharmacies (e.g., specialty pharmacies and mail-order pharmacies) from rebates. By doing so, rebates that could have been passed on to plan sponsors are staying within PBMs’ vertically integrated network.

The “rebate wall” also correlates with the sharp increase in patients’ out-of-pocket expense, negatively impacting patient care. It was reported that patients’ out-of-pocket expense reached $53.7 billion in 2019. High out-of-pocket expenses discourage patients from adhering to their medication regimen. In fact, a study by Kaiser Family Foundation showed that “nearly 1 in 4 Americans who take prescription medications say it is difficult to afford them.” Unfortunately, non-adherence leads to unfavorable patient health outcomes and increases health care costs. As noted above, PBMs are incentivized to place high-priced medications in the formulary, which in turn, yield higher rebates, even if there exist cheaper and therapeutically interchangeable alternatives. For instance, TRICARE’s formulary managed by Express Scripts listed Yonsa, a brand-drug used to treat certain cancer, as a preferred-drug and listed a significantly cheaper generic alternative, Zytiga, as a no-preferred, and further required “step-therapy” before allowing patients to try Zytiga. In the end, plan sponsors need to carefully examine the contractual relationship with PBMs and also be aware of both the law and remedies to check abusive PBM practices.

Of course, ‘Who is on the losing side when PBM companies consolidate into market-dominating giants and then collaborate with drug manufacturers to protect big-pharma profits, to the detriment of lower-cost competitive solutions?’ was not easily answered by the FTC until now, as the agency has historically failed to scrutinize PBM and pharma deals. Yet, a new dawn has come: With the new administration arrives a novel approach to tackling the immense consolidation that has occurred in the multi-sided PBM marketplace and its interface with the pharma industry. Keep in mind, the underlying principle behind the PBM concept was originally meant to serve plan sponsors (and ultimately their covered patient lives) by more efficiently managing drug formulary and keeping down the ever-escalating prescription drug costs. In reality, however, the dominant PBMs often coopt big pharma’s strategic rebates, designed to make competitive entry more difficult, if not impossible, for generic alternatives, and reap the resulting benefits for themselves, as opposed to passing them on to their customers, the plan sponsors.

In a refreshing change of tune, in the FTC’s report, the federal antitrust watchdog summarizes the dangers as follows: “Rebates can become a ‘trap’ for payers and providers, causing them to make decisions about coverage and utilization for their beneficiaries due to the financial incentives created by the rebate structure. … In this way, some rebates can operate to increase overall drug spending. … In addition, rebate walls such as those described above may reduce incentives for biotechnology companies to develop new medicines and/or invest in biosimilars, harming competition and the quality of care available to patients.”

Even more promising, Commissioner Chopra issued a separate personal statement, calling out his agency’s prior inaction and the unfettered consolidation and market power of the “three main giants” of the PBM industry. Without hedging his bets, the Commissioner notes that, while PBMs are “supposed to exert their bargaining power on behalf of patients to get better prices on drugs,” the industry “suffers from serious conflicts of interest and lack of transparency.”
In short, the FTC has finally awakened to the anti-competitive nature of many PBM practices that have plagued the multi-faceted industry for many years. This means that the time to act is now for plan sponsors, independent pharmacies not affiliated with large PBMs, and competitive drug makers wishing to compete with Big Pharma in these difficult markets. The FTC and (at least some of) its commissioners have now shown a willingness to listen to antitrust complaints about PBM misbehavior, and their Washington, D.C. office doors are open to all industry players who have valuable information to bring to the enforcers’ attention

By Jonathan Levitt, Esq., Dae Lee, Pharm.D, Jesse C. Dresser, Esq., Andreas Stargard, Esq.
Benefits Pro October 01, 2021

Earlier this month the FDA approved a new Infused therapy, Tivdak (tisotumab vedotin-tftv) from Seagen Inc., for adult patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy. Tivdak is expected to meet the unmet needs of patients with recurrent or metastatic cervical cancer.

Tivdak is a first-in-class antibody-drug conjugate (ADC) that targets tissue factor to induce cancer cell death. The labeling for Tivdak included a boxed warning related to ocular toxicity.

The wholesale acquisition cost (WAC) for Tivdak is $5,885 per 40mg single dose vial. Patient cost is dependent on body weight and duration of therapy. The company estimates an average WAC per patient per month of $34,000, before discounts or rebates. Distribution details were not announced as of this date.

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FDA grants accelerated approval to tisotumab vedotin-tftv for recurrent or metastatic cervical cancer

On September 20, 2021, the Food and Drug Administration granted accelerated approval to tisotumab vedotin-tftv (Tivdak, Seagen Inc.), a tissue factor-directed antibody and microtubule inhibitor conjugate, for adult patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy.

Approval was based on innovaTV 204, an open-label, multicenter, single-arm clinical trial (NCT03438396). Efficacy was evaluated in 101 patients with recurrent or metastatic cervical cancer who had received no more than two prior systemic regimens in the recurrent or metastatic setting, including at least one prior platinum-based chemotherapy regimen. Sixty-nine percent of patients had received bevacizumab as part of prior systemic therapy. Patients received tisotumab vedotin-tftv 2 mg/kg every 3 weeks until disease progression or unacceptable toxicity.

The main efficacy outcome measures were confirmed objective response rate (ORR) as assessed by an independent review committee (IRC) using RECIST v1.1 and duration of response (DOR). The ORR was 24% (95% CI: 15.9%, 33.3%) with a median response duration of 8.3 months (95% CI: 4.2, not reached).

The most common adverse reactions (≥25%), including laboratory abnormalities, were hemoglobin decreased, fatigue, lymphocytes decreased, nausea, peripheral neuropathy, alopecia, epistaxis, conjunctival adverse reactions, hemorrhage, leukocytes decreased, creatinine increased, dry eye, prothrombin international normalized ratio increased, activated partial thromboplastin time prolonged, diarrhea, and rash. Product labeling includes a boxed warning for ocular toxicity.

The recommended dose is 2 mg/kg (up to a maximum of 200 mg for patients ≥100 kg) given as an intravenous infusion over 30 minutes every 3 weeks until disease progression or unacceptable toxicity.

This application was granted priority review. A description of FDA expedited programs is in the Guidance for Industry: Expedited Programs for Serious Conditions-Drugs and Biologics.

Earlier this month the FDA approved a new ORAL specialty therapy, Exkivity (mobocertinib) from Takeda Pharmaceutical, for the treatment of adult patients with advanced or metastatic non-small cell lung cancer (NSCLC) with a specific mutation after platinum-based chemotherapy. A next-generation sequencing companion diagnostic test was approved simultaneously to confirm the genetic mutation.

Exkivity was approved on an accelerated basis following Phase 1/2 trial results, which demonstrated clinically meaningful responses with a median duration of response (DoR) of approximately 1.5 years.

A Black box warning was also issued as part of the approval. Exkivity can cause life-threatening heart rate-corrected QT (QTc) prolongation, a rare but serious condition. Dosing instructions indicate drug reduction or a full withhold based on side effects and/or adverse events.

Takeda has not released the cost of Exkivity at this time. While the company did not announce plans for distribution, one specialty pharmacy, Onco360, subsequently issued a press release confirming that they were selected as a limited distribution partner for the new therapy.

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Takeda’s Exkivity (mobocertinib) Approved by U.S. FDA as the First Oral Therapy Specifically Designed for Patients with EGFR Exon20 Insertion+ NSCLC

September 15, 2021 — OSAKA, Japan & CAMBRIDGE, Mass.–(BUSINESS WIRE)–Takeda Pharmaceutical Company Limited today announced that the U.S. Food and Drug Administration (FDA) has approved Exkivity (mobocertinib) for the treatment of adult patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) with epidermal growth factor receptor (EGFR) exon 20 insertion mutations as detected by an FDA-approved test, whose disease has progressed on or after platinum-based chemotherapy. Exkivity, which was granted priority review and received Breakthrough Therapy Designation, Fast Track Designation and Orphan Drug Designation from the FDA, is the first and only approved oral therapy specifically designed to target EGFR Exon20 insertion mutations. This indication is approved under Accelerated Approval based on overall response rate (ORR) and DoR. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.

“Patients with EGFR Exon20 insertion+ NSCLC have historically faced a unique set of challenges living with a very rare lung cancer that is not only underdiagnosed, but also lacking targeted treatment options that can improve response rates”

“The approval of Exkivity introduces a new and effective treatment option for patients with EGFR Exon20 insertion+ NSCLC, fulfilling an urgent need for this difficult-to-treat cancer,” said Teresa Bitetti, president, Global Oncology Business Unit, Takeda. “Exkivity is the first and only oral therapy specifically designed to target EGFR Exon20 insertions, and we are particularly encouraged by the duration of the responses observed with a median of approximately 1.5 years. This approval milestone reinforces our commitment to meeting the needs of underserved patient populations within the oncology community.”

The FDA simultaneously approved Thermo Fisher Scientific’s Oncomine Dx Target Test as an NGS companion diagnostic for Exkivity to identify NSCLC patients with EGFR Exon20 insertions. NGS testing is critical for these patients, as it can enable more accurate diagnoses compared to polymerase chain reaction (PCR) testing, which detects less than 50% of EGFR Exon20 insertions.

“EGFR Exon20 insertion+ NSCLC is an underserved cancer that we have been unable to target effectively with traditional EGFR TKIs,” said Pasi A. Jänne, MD, PhD, Dana Farber Cancer Institute. “The approval of Exkivity (mobocertinib) marks another important step forward that provides physicians and their patients with a new targeted oral therapy specifically designed for this patient population that has shown clinically meaningful and sustained responses.”

“Patients with EGFR Exon20 insertion+ NSCLC have historically faced a unique set of challenges living with a very rare lung cancer that is not only underdiagnosed, but also lacking targeted treatment options that can improve response rates,” said Marcia Horn, executive director, Exon 20 Group at ICAN, International Cancer Advocacy Network. “As a patient advocate working with EGFR Exon20 insertion+ NSCLC patients and their families every day for nearly five years, I am thrilled to witness continued progress in the fight against this devastating disease and am grateful for the patients, families, healthcare professionals and scientists across the globe who contributed to the approval of this promising targeted therapy.”

The FDA approval is based on results from the platinum-pretreated population in the Phase 1/2 trial of Exkivity, which consisted of 114 patients with EGFR Exon20 insertion+ NSCLC who received prior platinum-based therapy and were treated at the 160 mg dose. Results were presented at the 2021 American Society of Clinical Oncology (ASCO) Annual Meeting from the Phase 1/2 trial and demonstrated a confirmed ORR of 28% per independent review committee (IRC) (35% per investigator) as well as a median DoR of 17.5 months per IRC, a median overall survival (OS) of 24 months and a median progression-free survival (PFS) of 7.3 months per IRC.

The most common adverse reactions (>20%) were diarrhea, rash, nausea, stomatitis, vomiting, decreased appetite, paronychia, fatigue, dry skin, and musculoskeletal pain. The Exkivity Prescribing Information includes a boxed warning for QTc prolongation and Torsades de Pointes, and warnings and precautions for interstitial lung disease/pneumonitis, cardiac toxicity, and diarrhea.

For more information about Exkivity, visit www.Exkivity.com. For the Prescribing Information, including the Boxed Warning, please visit https://takeda.info/Exkivity-Prescribing-Information.

Frequent readers of this report know that one of our favorite topics is health-system-owned specialty pharmacies. So, it was with great interest that we read the press release detailing that Walgreens (WAGS) has increased its stake in Shields Health Solutions to 71% for a total of $970 million.

Readers should recall our January 2021 report detailing Shields’ acquisition of ExceleraRx for an undisclosed amount. ExceleraRx, like Shields, had built a large network of 25 healthcare-system-owned specialty pharmacies. In combination, the expanded Shields network topped 65 hospitals and was forecast to reach $2 billion in specialty network revenue this year….. enough volume to really start impressing payors and manufacturers.

We continue to be puzzled about both the earlier WAGS investment and this week’s doubling down. So, the big question is…. “Where does Shields earn the kind of $$$s to justify nearly a $1 billion investment?”

Shields (as with ExceleraRx) only offers hospitals a service. They build, operationalize and optimize integrated specialty pharmacies. They then can be hired to provide day to day management of the pharmacy. They also promote the SP network to payers to gain pharmacy provider contracts and to manufacturers to gain access to LD drugs.

Shields Health is not listed as a pharmacy license holder by the several state Boards of Pharmacy which we checked today. Rather, the hospitals that they represent in those states hold the community retail pharmacy licenses. So, the money paid for prescriptions dispensed by these hospital pharmacies goes to the hospitals, not Shields.

Little is known about the Shields financial model. Hospitals have a huge advantage as they can acquire drugs under the least expensive hospital-class-of-trade rates. We already know about the price advantages they have under 340b. So, there is a boodle of $$s that a hospital can pay to Shields for managing their specialty pharmacy and running the national network on their behalf. Consider that the valuation of a PBM is calculated in a not too dissimilar fashion.

What does Walgreens see in Shields?
In 2019 WAGS likely saw the writing on the wall….. that hospitals would eventually wise up and open their own specialty pharmacies to recoup lost revenue. WAGS has a history of working with hospitals opening a number of on-campus pharmacies in recent years. The Shields model fit that strategic mindset…. which likely prompted the initial investment. The ExceleraRx acquisition gave the model some serious traction, so this week’s move is less surprising. Last thought…. tactically, WAGS has ensured that they will be at the table with many very influential hospitals, payers, and manufacturers. That’s a good place to be. Just sayin’

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Walgreens makes $970 mm investment in specialty pharmacy company Shields Health

Sept 21 (Reuters) – Walgreens Boots Alliance is spending roughly $970 million to acquire a majority stake in Shields Health Solutions to expand its specialty pharmacy business, the companies said on Tuesday.

The investment brings Walgreens’ total stake in Shield to 71%, and the company has an option to acquire the remaining equity interests in the future. The Illinois-based company had taken a minority stake in Shields in 2019.

Founded in 2012, Shields Health Solutions helps hospitals provide specialty pharmacy services.

Specialty pharmacies are designed to deliver medications with unique handling, storage and distribution requirements, often for patients with complex conditions such as cancer, multiple sclerosis or rheumatoid arthritis.

“We’re continuing to make strategic investments in pharmacy and healthcare solutions that can build on our core pharmacy business… The Shields model has shown to improve patient care, and will be complementary to our existing specialty pharmacy offering,” Chief Executive Officer Roz Brewer said in a statement.

The transaction is expected to close by the end of the fiscal second quarter of 2022 and is projected to be modestly accretive in the first full year after completion.

The FDA approved a new intravitreal injection this week, Byooviz (ranibizumab-nuna) from Samsung Bioepis, as the first ophthalmology biosimilar in the United States. It references brand name Lucentis from Genentech/Roche. Indications include Neovascular (Wet) Age-Related Macular Degeneration (AMD), Macular Edema Following Retinal Vein Occlusion (RVO), and Myopic Choroidal Neovascularization (mCNV).

Byooviz (ranibizumab-nuna) is Samsung Bioepis’ fifth biosimilar approved in the U.S., following the approval of Renflexis (04/2017), Ontruzant (01/2019), Eticovo (04/2019), and Hadlima (07/2019).

How big is the specialty Ophthalmology segment?
— Eylea US sales in 2020: $4.95 billion, ex-US sales: $3 billion.
— Lucentis US sales in 2020: $1.3 billion, ex-US sales: $1.93 billion

Who is developing competitive biosimilars?
— Eylea: Celltrion Healthcare, Alteogen, Sandoz
— Lucentis: Boan Biotech, Formycon, STADA Arzneimittel/Xbrane
— Avastin/bevacizumab: Outlook Therapeutics

The cost of Byooviz was not announced by Samsung Bioepsis. By way of reference, the cost of Lucentis and Eylea is currently between $1,800 and $2,000 a dose and the new biosimilar should drive a 20-30% price reduction. Byooviz will be commercialized by Biogen in the United States. Distribution details were not announced, but it is expected that Byooviz will launch through limited distribution as with Eylea and Lucentis.

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FDA Approves Samsung Bioepis and Biogen’s Byooviz, Lucentis Biosimilar (ranibizumab-nuna)

Byooviz becomes the first ophthalmology biosimilar to gain FDA approval in the United States

INCHEON, Korea and CAMBRIDGE, Mass., Sept. 20, 2021 (GLOBE NEWSWIRE) — Samsung Bioepis Co., Ltd. and Biogen Inc. (Nasdaq: BIIB) today announced that the U.S. Food and Drug Administration (FDA) has approved Byooviz (ranibizumab-nuna), a biosimilar referencing Lucentis (ranibizumab)i for the treatment of neovascular (wet) age-related macular degeneration (AMD), macular edema following retinal vein occlusion (RVO), and myopic choroidal neovascularization (mCNV).

Ranibizumab is an anti-vascular endothelial growth factor (VEGF) therapy that prevents vision loss in patients with retinal vascular disorders which can cause irreversible blindness or visual impairments in adults in the United States.

“In the United States, approximately 11 million people are affected with AMD and the prevalence of advanced AMD is growing due to the aging population. The approval of the first ranibizumab biosimilar in the U.S. is a monumental milestone for people living with retinal vascular disorders in the U.S.,” said Kyung-Ah Kim, Senior Vice President and Development Division Leader, at Samsung Bioepis. “The approval of Byooviz underscores our continued commitment to providing valuable treatment options for people who do not have access to life-enhancing biologic medicines around the world,” she added.

“We are very excited to be able to open a new chapter with the approval of Byooviz in the U.S. This approval represents a great step toward the advancement of a new therapeutic option addressing debilitating disease progression of patients with retinal vascular disorders in the U.S.,” said Ian Henshaw, Senior Vice President and Global Head of Biosimilars at Biogen. “Biosimilars could help broaden patient access to more affordable treatments and generate healthcare savings to offset rising costs of these complex diseases while ensuring sustainability of healthcare systems.”

In addition to the U.S. approval, Byooviz was approved in Europe, including 27 European Union (EU) member countries on August 18, 2021 and the United Kingdom on August 31, 2021.

The FDA approval of Byooviz was based on a totality of evidence including analytical, non-clinical data, and clinical data. In a randomized, double-masked, parallel group, multicenter Phase 3 study of SB11, the efficacy, safety, pharmacokinetics, and immunogenicity of SB11 was compared to reference ranibizumab in patients with wet AMD. 705 patients were randomized (1:1) to receive SB11 or reference ranibizumab in monthly injections (0.5 mg), and 634 patients continued to receive treatment up to week 48. The Least Squares (LS) mean change in best corrected visual acuity (BCVA) from baseline at week 52 was 9.79 letters for SB11, compared with 10.41 letters for reference ranibizumab (difference: -0.62, [90% CI: -2.092, 0.857]). The LS mean change in central subfield thickness (CST) was −139.55 μm for SB11 vs −124.46 μm for reference ranibizumab (difference: -15.09, [95% CI, -25.617, -4.563]). PK, safety including incidence of treatment-emergent adverse events, and the immunogenicity profile of SB11 and reference ranibizumab were comparable at all timepoints up to week 52.

The FDA recently approved Cara Therapeutics’s infused drug, Korsuva (difelikefalin), to treat puritus (moderate-to-severe itching) in patients with chronic kidney disease (CKD) undergoing dialysis. It is the first targeted therapy to effectively treat the condition in the United States. Korsuva will be commercialized jointly by Cara and Vifor Pharma.

Korsuva is administered 3X weekly following dialysis. Korsuva reduces sensory nerve response that relays itching from the skin to the brain. Many chronic kidney disease CKD patients with persistent itching currently take depressants, barbiturates, or allergy medications / antihistamines with limited relief.

Cara said that Korsuva will be priced at ~ $17,000 annually. Analyst estimates suggest that Korsuva will garner about $100 million 2022 and grow to about $250 million within the next five years.

Product launch is scheduled for the first quarter of 2022. Details related to distribution were not released. Given the relatively small patient forecast and the site of administration (dialysis clinics) it is likely that Korsuva will be available through traditional distributor channels.

Virtually everyone in specialty pharmacy realizes that good patient communications are key contributing factors to improved outcomes. However, the industry has grappled with how to best communicate with patients with many well-intentioned initiatives withering on the vine. Numerous high-tech efforts, such as smart phone apps, have also been tried with mixed results. Let’s not forget that these tech driven initiatives can also be expensive. None the less, the article below is a reminder that….. If at first you don’t succeed, try, try again.

WellDyne (the PBM) presented recently at the 2021 Pharmacy Benefit Management Institute Annual National Conference on the topic of high-tech patient engagement. It seems that they’ve taken patient communications to the extreme by grouping patients using “psychographic segmentation”. Patients were slotted into five groups: direction takers, balance seekers, priority jugglers, self-achievers, and willful endurers. Presumably, the messaging they developed is tailored to each segment and then ‘combobulated’ into a tech delivery utility. I am not saying that this is wrong in any way, but one gets the sense of the difficult currents a specialty pharmacy might need to navigate to achieve such targeted patient engagement.

Of the few examples included in the article, one warrants positive mention….. the concept of a tailored, tech-driven intervention at the 14-day mark following therapy initiation to review side effects. We’ve not heard of any specialty pharmacies going the high-tech route. The timing makes sense….. and the outreach would be clinically justified. Patients that reply to an easy ‘click on all that apply’ list of side effects and acute events (AEs) could be easily flagged for a clinical intervention and could also generate actionable, therapy-specific findings.

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High-tech tools engage patients and result in better outcomes

The use of high-cost specialty drugs has put pressure on health plans and PBMs to better manage the pharmacy benefit, and innovative strategies are needed to deal with costs while also meeting patient needs, according to a presentation today by WellDyne executives at the 2021 Pharmacy Benefit Management Institute Annual National Conference

September 14, 2021 — David Skomo, RPh, senior vice president and chief pharmacy operations officer, and Nick Page, Pharm.D., chief pharmacy officer, discussed how approaches that take into account patient preferences can lead to better care and a lower cost trend.

“We’ve built high-tech interventions into our patient care model,” Skomo said. “Providing a variety of options for the patients and how they participate with us empowers patients to take charge of their healthcare. Maybe even more importantly, it encourages patients to partner more closely with the healthcare provider team.”

Technology that supports a two-way flow of information can provide a more holistic view of patient health and behavioral patterns. But the channels need to be personalized and provide patient support to increase adherence and satisfaction, the presenters said.

WellDyne has a care model that provides patients with a wide variety of options and communication channels to participate with the organization, including self-serve options through the telephone as well as a healthcare portal, Skomo said.

Skomo discussed Welldyne’s efforts to tailor it messaging to patients grouped by “psychographic segmentation” and motivate the accordingly. The company has grouped patients into five groups: direction takers, balance seekers, priority jugglers, self-achievers, and willful endurers. Skomo stressed the importance of “marrying” the communication channel with these patient tendencies to motivate people to stay adherent.

“We’ve taken the technology to the next level and introduced digital capabilities through text messaging,” he said. “We can send a request to patients via text asking them to take action — for example, filling a prescription. By deploying that technology, along with additional communication channels, we provide convenience for the patient.”

Page reviewed some of the overall consequences of nonadherence, which he said includes 125,000 death per year and $600 billion in costs. Page said WellDyne’s efforts to more carefully monitor patients and meet their needs results means the company has been successful in lowering specialty drug cost increases to 5%-6%, lower than the industrywide increases of 10%-20%.

WellDyne’s “push technology” has been useful during the COVID-19 pandemic because patients are using drive-through and mail order services more often, Page added. “Many pharmacies are reducing staff, which makes it very difficult for the consumer to be able to access a pharmacist to ask questions,” he said. “Patients may not feel comfortable asking a pharmacist a question with a lot of other people around.”

WellDyne clinicians use digital tools to send out patient assessment questionnaires, Skomo said. “We find that the patients are much more likely to provide responses to those types of assessments,” he said. “It’s not us calling them. Patients can use their smartphones to provide those responses very easily at a time and place most convenient for them.”

Patients, Skomo said, engage with the organization more frequently now because of the digital services. “That allows us to derive much more valuable insights and paints a more robust picture of care for that particular patient.”

Patient adherence has increased since WellDyne began using the digital technology; in fact, according to Skomo, medication adherence rates have increased 36%.

The technology is also driving savings for both the consumer and the plan. “Some of our outreach messages are related to educating members about their health, about their benefit and about lower cost options,” Page said. “We’re able to provide information to the consumer about options they have. But it’s not just about product selection; it’s also about educating patients or reminding them that they have a mail-order benefit.”

Part of the communications includes a follow-up 14 days after a patient starts a new therapy to educate that patient about possible side effects. This, Page said, helps with medication adherence.

WellDyne also provides education related to a patient’s disease or condition through digital channels.

“During Diabetes Awareness Month, for example, we’ll do a lot of campaigns and communications to educate possible undiagnosed diabetics about the risk and provide some short online screening tools to help them know whether they might be at risk,” Page said.

Consumers, Skomo said, are hungry for information. “The push technology tends to get read almost immediately,” he said. “We see much better engagement with that than we typically do with emails or print media mailed to the home.”

But patient communication is not one-size-fits-all. “We make it easy and convenient for patients to engage, but the context of the message, as well as motivating a patient to take action, is very important,” Page said.

Skomo noted that many specialty patients don’t want payers and PBMs communicating with them so often and just want to be left alone. “If we make it easy for patients, they don’t feel like we are a bother.”

We’ve written numerous times about value-based contracting (VBC). When it emerged a few years ago there was much hope that it would offer some remedy to the acceptance of ultra-high cost therapies that have been the predominant source of new specialty FDA approvals for the last few years. However, relatively few VBCs have been implemented due to their complexity.

Value methodologies have begun to morph. In fact, the term ‘value-based contracting’ is now a bit too high level. Are you familiar with the nuanced differences between value-based pricing (VBP), value-based insurance design (VBID), long-term financing (LTF), and outcomes-based contracts (OBCs)? If not, the time may be neigh to get up to speed.

We ran across an abstract (below) that does a very nice job of taking our understanding of VBC to the next level. It summarizes the views of 22 health plans with multiple lines of business collectively covering more than 34 million beneficiaries. These plans are large enough to have dipped their toes into the VBC pond and/or thought long on the inherent challenges.

The initiative identified four business objectives including access to new therapies, their rising costs, spending variability across the patient spectrum, and the incidence of reduced levels of clinical evidence. Additionally, the initiative selected five operational strategies including developing new UM controls, the need for increased patient engagement, including providers in the risk sharing methodologies, expansion of data analytics unique to each contract, and the need to staff more pharmacists, statisticians, and data scientists to be experts in the unique aspects of managing each contract.

The contracting world is less and less satisfied with rebates and is looking for something else to fuel the specialty pharmacy engine. VBC is a no brainer IF design and implementation can be refined. So, if you want to keep abreast of that trend, consider the lessons offered.

CLICK HERE to access the full abstract.

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Value-Based Management of Specialty Drugs: Practical Considerations and Implications for Pharmacy

May 13, 2021 — Policy makers and health plans seek value-based management of specialty drugs. This study examines real-world factors that favor some approaches over others and their potential impact.

ABSTRACT
Objectives: Concerns about high and rising drug prices have prompted a call to manage prescription drugs according to their value. Although not all proposals referred to as “value based” are well suited to advance this mission, health plans must select among them under the influence of competing demands and constraints of their market and nonmarket environments. To understand the implications for health policy, we sought to explore how health plans might select among and implement these approaches for specialty pharmacy (SP) under the incentives and barriers that these conditions create.

We’ve often complained that the names of specialty pharmacies selected as limited distribution partners for new therapies are not released at the time of FDA approval (why that is the case is beyond my understanding). However, we are seeing more manufacturers allowing their SP partners to announce that they are the pharmacy of record for their new LD therapy.

As requested, we are sending an update with information from some recent press releases.
We will periodically send similar updates as information becomes available.

Amber Specialty Pharmacy
Amber Specialty Pharmacy has announced that it has been selected as one of three specialty pharmacy providers for Rezurock (belumosudil) for the treatment of adult and pediatric patients aged 12 years and older with chronic graft-versus-host disease (cGVHD).

Biologics by McKesson
Biologics has announced that it has been selected as a specialty pharmacy provider for Rezurock (belumosudil) for the treatment of adult and pediatric patients aged 12 years and older with chronic graft-versus-host disease (cGVHD).

Onco360
Onco360 has been selected by Merck & Co., Inc. to be in the specialty pharmacy network for Welireg (belzutifan), a hypoxia-inducible factor inhibitor indicated for the treatment of adult patients with von Hippel-Lindau (VHL) disease.

Orsini Specialty Pharmacy
Orsini has announced that it has been awarded access to three recently approved therapies:
Aduhelm indicated for the treatment of Alzheimer’s.
Nexviazyme (avalglucosidase alfa-ngpt) from Genzyme, indicated to treat patients 1 year of age and older with late-onset Pompe disease.
Tiopronin for the Treatment of Severe Homozygous Cystinuria, the first available generic version of Thiola® (tiopronin).

Ambulatory Infusion Centers (AICs) are once again gaining traction….. but not for the first time. AICs have actually been around for a very long time. They were popular back at the end of the last century (1980s-90s) but came under fire by the same entities who are now looking at them to slay the cost dragon related to site of service. Back then payers accused AICs of creating derived utilization…. i.e., self referral. In response AICs encountered a wall of contracting resistance with payers…. but, the unintended consequence was to see that spend shift to the hospital outpatient department…. Ouch!

There was actually a resurgence in AICs in the early 2000s, but payers had yet to decide on a contracting strategy to contain infusion delivery costs. So, that brings us to the 2020s and AICs are now regaining their lost luster as payers have finally gotten serious about moving patients to lower cost sites of care.

The article below offers a good recap for the market dynamics pushing the AIC resurgence. Many specialty pharmacies have integrated home infusion into their service models and an AIC presents both a threat and opportunity for them. They might lose home infusion patients to an AIC (especially if the AIC facility is accessible and comfy) or they can offer their own AIC solutions and ingratiate themselves with payers to provide turnkey access to specialty medications and infusion delivery solutions. Given the number of new, very high cost infused specialty meds should also get SPs thinking. Just sayin’

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It’s Prime Time For Ambulatory Infusion Centers

AUGUST 25, 2021 — The time is ripe for ambulatory infusion centers (AICs) to gain a stronger foothold in U.S. health care, a panel of experts said during the MHA 2021 Business Summit, held virtually.

“There’s a lot of tailwinds in this industry,” said Reece Norris, JD, a co-founder and the CEO of WeInfuse, an infusion software and consulting company. Payors and health plans are looking for sites of care (SOC) for infusion therapies that are more cost-effective than hospitals without compromising care, Mr. Norris said. With many autoimmune biologic specialty drugs having a limited distribution, the logistics of getting this in the home can be so burdensome that “it makes sense” to administer them in AICs, he noted.

“We are seeing payors push patients out of the hospital into more cost-effective sites of care,” Mr. Norris said. “We see this space continuing to expand, especially as the formulary of drugs gets larger.”

The SOC optimization trend has been building for several years, said Logan Davis, PharmD, MBA, the director of franchise development for Vital Care Infusion Services, in Meridian, Miss. The COVID-19 pandemic further demonstrated to the industry that being dependent on hospital-based infusion centers isn’t ideal, he said.

“There just isn’t enough capacity in the country at the moment” for stand-alone infusion centers, added Bryan Johnson, a co-founder and the CEO of WeInfuse, echoing the push by insurers to administer infused medications outside the hospital setting. “Wherever we can get a chair, an IV pole and a nurse, let’s try to make that site accessible to a patient, whether that’s in a home or through a management company. You’ll continue to see that—there’s just a lot of pressure coming down from the top.”

Adding to the market opportunity for expansion is a robust pipeline of specialty infusion drugs, including aducanumab (Aduhelm, Biogen), approved in June for the treatment of Alzheimer’s disease (see page 20 for more coverage), and several others still in trials for Parkinson’s disease, the panelists said. The boundaries are blurring among specialties, medications and diseases, Mr. Johnson noted. For example, infliximab (Remicade, Janssen) is being used for both gastrointestinal and rheumatic conditions. Medical specialists accustomed to having few infusion medications available aren’t likely to have office-based infusion suites, he added, and as specialty infusion medications cross into more common diseases covering more people, the demand for services will continue to rise.

Payors are reaching out to urgent care center chains, home infusion pharmacies and other regional service providers to open capacity to treat specialty medication patients in AICs, Mr. Norris said. In addition, some home infusion pharmacies are building infusion suites to capture the medical benefit market they could not traditionally access through the pharmacy benefit. Some home infusion pharmacies are adding infusion management services to their list of offerings. The infusion space is experiencing significant investment from both private equity and industry, Mr. Johnson added.

Why Launch?
There are numerous reasons to launch an infusion clinic, Dr. Davis said. Some of his franchisees wanted to be able to accept more referrals in their markets, access Medicare Part B benefits for referred patients, access drugs and better pricing limited to the infusion clinic class of trade, and access commercial payor contracts available to infusion clinics. But a sharp marketing and sales strategy is critical to success when starting out, the panelists said.

“This is not a ‘build it and they will come’ space,” Mr. Norris said. “You can have the best nurses, the nicest building and the finest equipment, but you have to earn the trust in the community from referring providers.” This can involve the hard work of cold calling, creating medication-specific order forms to ease work for referring physicians and treating referrals as gold. Communicate back to referring physicians how the infusion went, he advised, even if it’s just a quick treatment note.

When thinking about the physical space and build-out, most operators focus on factors such as infection control and meeting codes. But it’s equally important to consider patient amenities such as great parking, expanded hours, free Wi-Fi and coffee, Mr. Johnson said.

“Think more Starbucks and less stainless steel,” he said. “These patients have chronic conditions they will visit you with every few weeks, maybe for the rest of their lives. They want to be comfortable. You want them to look forward to coming to your facility.”

Mr. Johnson suggested these additional operational strategies:
Consult resources such as the National Infusion Center Association or the Infusion Nurses Society to note best practices and standards.
Hire a licensed professional (e.g., a physician, physician assistant or nurse practitioner) for clinical leadership. Their expertise will be needed in updating and maintaining protocols as well as dealing with any adverse events and communicating with other health care professionals.
Write and review emergency protocols and post them clearly for your clinical team.

Although the infusion itself is the same whether it’s administered in a hospital or another setting, AICs are different in terms of their regulation, reimbursements and class of trade, commented David Franklin, the president of Advanced Care Consulting Services, in Ray, Mich.

“There’s a really interesting new hybrid where independent infusion centers are partnering with physicians,” he said, “where physicians hold stock in the company, but they partner with independent infusion centers to operate the services through management contracts. That’s what’s going on now more than anything.”

Still, some of these independent infusion centers are facing reimbursement challenges because they may not be recognized by Medicare and Medicaid, Mr. Franklin noted.