Post on 27-Dec-2015
transcript
©2003 AdvancePCS
The Solution:
Specialty Benefit Management
Alan Wright, M.D., M.P.H.Senior Vice President and Chief Science Officer
©2003 AdvancePCS
Agenda
Specialty drugs defined
Costs in perspective
Reasons for the focus
Specialty benefit management
Health plan experiences
What’s next for specialty?
©2003 AdvancePCS
Specialty drugs are synthetic or recombinant versions of natural biologic substances, like cells, proteins made by cells (enzymes, or antibodies) or genetic material from cells (DNA or RNA) Large complex molecules
Difficult to produce consistently
Costly
Specialty Drugs:Defined
Source: Mass High Tech, “Lower Costs Pub Generic Biologic Drugs on the Rise” Campbell Evans, P. March 2003
©2003 AdvancePCS
Biotech in nature Injectables
– Requires special monitoring, handling, and delivery
Select orals
– Tracleer, Temodar, Thalomid, Gleevec, Iressa – exceeding $30K per year
Expensive therapies Costs range from $10,000-$1 MM
annually per patient
Requires expert clinical services Limited to few physician specialists
Specialty Drugs:Defined
©2003 AdvancePCS
Costs in Perspective:Specialty Drives One-third of Health Care Costs
Average Annual
Total Cost Per Case
$1,200
$6,600
$71,600
Patients
• Acute• Low-grade chronic• Worried well
• Prevalent chronic (e.g. asthma, diabetes)• Procedures (e.g. surgery, childbirth)
• Rare chronic (e.g. rheumatoid arthritis, hemophilia, pulmonary hypertension, Gaucher disease, multiple sclerosis)
• Multiple comorbidities
Key Distribution
Channels
• Retail
• Retail and mailorder
• Specialty pharmacy
Source: Franklin Health, Chase H & Q
Percent of Patients
Total Costs
90%High
FrequencyCommon
Conditions
9%Chronic
Conditions
1%SevereUnique
Conditions
1/3Of TotalCosts
1/3Of Total
Costs
1/3Of Total
Costs
©2003 AdvancePCS
Specialty Therapy Examples
Avg. Annual Chronic Condition Medications Cost (AWP)
Growth Hormone Deficiency Nutropin, Humatrope, Genotropin, Norditropin $18,000
Hepatitis C Rebetron, Pegasys $24,000
Infertility Fertinex, Lupron, Gonal F $18,000-20,000
Multiple Sclerosis Betaseron, Avonex, Rebif, Copaxone $15,000
Oncology, BMT, HIV/AIDS Neupogen, Procrit, Neulasta, $5,000-20,000Aranesp, Fuzeon
Hemophilia Recombinant Blood Factor Products $150,000 +
Rheumatoid Arthritis Enbrel, Remicade, Humira $15,000 +
Gaucher Disease Cerezyme/Ceredase $250,000
Pulmonary Hypertension Flolan, Tracleer, Remodulin $30,000 -100,000
Lysosomal Storage Disorders Fabrazyme, Aldurazyme $175,000 +
Therapies in “red” approved in last 12 months.071003
©2003 AdvancePCS
Reason for the Focuson Specialty Drugs
Specialty therapies will have a direct impact on drug spend High cost
– Drug expense
– Patients using specialty drugs are driving most of your medical spend
Growing market
– 8% of spend today
– Moving to 20% Difficult to manage medical benefit spend Other issues
©2003 AdvancePCS
Reason for the Focus Specialty is 5th Largest, Fastest Growing Class
$2.90
$2.51$2.17
$1.53 $1.49
$3.27$2.99
$2.61
$1.86$2.03
$0
$1
$2
$3
$4
$5
Misc. GI Drugs Antidepressants Antilipemic Antihistaminedrugs
Unclassifiedtherapeutic
2000 2001
Source: AdvancePCS Claims Analysis
13%19%
20%
22%36%
Specialty pharmaceuticals
©2003 AdvancePCS
Indication Phase Budget Impact
Launch Year
Exanta (ximelagatran)
The tx & prevention of venous thromboembolism
Phase III High 2004
Fuzeon (enfuvirtide)
The tx of HIV infection
Pending approval
High 2003
Xolair (omalizumab)
The tx of allergic asthma in adults
Pending approval
High 2003
pregabalin The tx of neuropathic pain, generalized anxiety disorder, and epilepsy
Phase III High
Reasons for the Focus Specialty Drugs Budget Impact Forecast
©2003 AdvancePCS
Specialty Drug Costs
Pharmacy Budget~30%
Medical Budget~70%
Network Rates AWP + ???
Paper Electronic
• Incorrect billing and payment• Missed discounts• Multiple vendors, multiple rates• Confusing J and ICD9 codes
Reasons for the Focus
A Management
Challenge
©2003 AdvancePCS
Specialty Benefit ManagementAddresses the Challenge
Provides an effective integrated solution, bridging both pharmacy and medical benefits Improves patient health Lowers costs Reduces administrative workload
©2003 AdvancePCS
Specialty Benefit ManagementComponents
©2003 AdvancePCS
Specialty Benefit Management Benefit: Improves Member Health
Increases appropriate drug utilization
Improves compliance via utilization and education programs
Lowers the potential for drug interactions with comprehensive screening
Minimizes emergency room, doctor visits, hospital stays and other medical expenses
©2003 AdvancePCS
State Blue Cross Blue Shield plan with 375 members using specialty drugs billed under medical benefit
Recommendations included: Transitioning specialty drug spend from medical benefit
to PBM-based claims processing and reporting Moving from multiple suppliers to a single-source
pharmacy service to lower cost
Reduced annual specialty drug spend from $8.9M to $7.4M
Provided a savings of $1.5M or 17%
Specialty Benefit Management Benefit:Lowers Costs for Health Plans
©2003 AdvancePCS
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
$0.40
Infliximabinjection
Paclitaxelinjection
Leuprolideacetate
suspension
Rituximabcancer trmt
$1,532/claim
PM
PM
$724/claim$495/claim
$2,334/claim
Lymphoma
Rheumatoid Arthritis
Ovary/breast Cancer
Prostrate Cancer
Specialty Benefit ManagementUncovering Specialty Costs: One Client’s Findings
©2003 AdvancePCS
Large national health plan faced problems providing Flolan therapy to 75 pulmonary hypertension (PH) patients Contracted on patient-by-patient basis and paid 25-50% more
than necessary Faced customer service issues Struggled to identify patients for proper clinical support because
of coding and procedure issues
Recommendations included establishing: One national rate for specialty drug pricing Standard claims processing and coding procedures Case management support and patient education
Reduced annual specialty drug spend from $7.5M to $5.25M
Provided savings of $2.25M or 30%
Specialty Benefit ManagementExample of Lowering Costs
©2003 AdvancePCS
What’s Next for Specialty Drugs? Going Generic
Conventional Drugs Biologic Drugs
Regulated by FDA Regulated by Center for Biologics Evaluation and Research (CBER)
Generics overseen by the Centers for Drug Evaluation and Research (CDER)
Hard to prove bioequivalence of complex biologic molecules
Abbreviated new drug application (ANDA) expedites approval for generics
No expedited process for generics
Generics proven equivalent to brands. If equivalent, generics not required to show safety and efficacy
Generic biologics must conduct full safety and clinical trials
©2003 AdvancePCS
Source: ABN Amro, as cited in The Wall Street Journal, August 26, 2002
Generics Seek To Break into Biotech as Patents Expire
Drug Intron A(interferonalfa 2b)
Epogen(epoetin alfa)
Procrit(epoetinalfa)
Neupogen(filgrastim)
Avonex(interferonbeta 1a)
Company ScheringPlough
Amgen Johnson& Johnson
Amgen Biogen
Conditions Leukemia, Hepatitis B and C
Anemia Anemia Neutropenia MultipleSclerosis
2000 Sales $1.4 Billion
$2.03Billion
$1.72Billion
$1.22Billion
$761Million
PatentExpiration
2002 2004 2004 2006 2011