Biologics and Specialty Pharmacy: Employer Challenges

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Transcript Biologics and Specialty Pharmacy: Employer Challenges

Midwest Business Group on Health

Biologics and Specialty Pharmacy:

Employer Challenges & Opportunities

National Business Coalition on Health 11/13/12

Specialty Pharmacy (SP) Landscape   

Generics

do not exist today • One exception – a generic for Hemophilia

Biosimilars

are a copy of a biologic drug… • • • But they are not identical FDA approval pathway still under development Only a few biosimilars are likely to be available with cost savings at about 20% less

Biobetters

Economic Impacts to Employers  Specialty drugs are the fastest growing segment of overall pharmacy benefits spend   Costs are growing at 2x the rate of traditional drugs with cost drivers including:   Aging population with chronic conditions High cost per unit – $6,000 to $1M per year     Increasing number of FDA approved drugs Fast growing pipeline – over 800 drugs Special storage, handling and administration requirements Role of diagnostics and related tests and services Three drugs account for more than half of all SP spending  Cancer – Arthritis – Multiple Sclerosis Copyright 2012 © MBGH & IIH 3

Economic Impacts to Employers  Specialty drugs that work for one person may not work for another  Resulting in the potential of multiple Rx fills  Need for related diagnostics/devices/testing  Costs account for about 17% of the average employer’s overall pharmacy costs and this number is rising fast  By 2020 it’s anticipated that 40% of the pharmacy drug spend will be attributed to biologics/specialty pharmacy  Approximately 50% of specialty drug spend occurs in the medical benefit making it difficult to track and manage Copyright 2012 © MBGH & IIH 4

Midwest Business Group on Health

National Employer Initiative on Specialty Pharmacy Benefits

2012

Establishing an Employer View MBGH Project Background  MBGH board of directors cites biologic/specialty pharmacy as #1 priority since 2010  Coalition sees significant growth in SP products and related cost impacts to employers  Partner with Randy Vogenberg, PhD, Institute for Integrated Healthcare to develop multi-year employer research project  Conduct national employer surveys; multiple, national educational programs and seek out feedback from employers across the country Copyright 2012 © MBGH & IIH 6

Addressing Employer Needs Work Stream 1 – 2011 to 2012   

2011

Established Employer Advisory Councils – Chicago & Baltimore Conducted National Employer Baseline Survey Conducted Educational Outreach with employer group testing   

2012

National Employer Initiative on Specialty Pharmacy

2012 Employer Survey

2012 Employer Survey    MBGH partners with 15 NBCH sister coalitions from across the country More than 100 employers participate in the survey Population Size:    40% - 1,000-5,000 20% - Over 25,000 15% - 10,000-15,000  Industry Sector:  40% Manufacturing; 15% Education; 15% Government  90% of respondents are self-insured Copyright 2011 © MBGH & IIH 9

Medical & pharmacy claims costs paid in 2011 (or most recent plan year) Total combined medical & pharmacy claims costs paid in 2011 Per employee medical & pharmacy claims costs paid in 2011 Copyright 2012 © MBGH & IIH 12

2012 Employer Survey

Strategies & Tactics for SP Management

Top three for tactics for managing SP 1. Case management 2. Prior authorization 3. Drug utilization Effectiveness of top outcomes for disease/case management support 1.

Most importance factors when contracting with SP service provider • • • • • • • • 83% 77% 64% 55% 52% 52% 48% 46% Cost of services Overall importance Medication adherence Care management support Cost transparency model Trend management Step therapy edits for claims approval Prior authorization for claims approval Copyright 2012 © MBGH & IIH 25

Working with SP service provider Top outcomes used to evaluate SP service providers 1. Cost management 2. Overall performance 3. Patient management Types of performance guarantees included in SP contracts • • • 68% 53% 47% Guaranteed rebates Accurate processing Cost management Copyright 2012 © MBGH & IIH 26

Targeted communications Effectiveness of strategies to improve use of SP for past few years 52% 54% 52% Pharmacy networks Benefits coverage options Utilization management Types of communication vehicles Copyright 2012 © MBGH & IIH 28

Employer lessons learned – design, management, vendor partnering  Work closely with PBM to identify trends early … develop appropriate action plan to manage cost and utilization  Specialty is an ever increasing cost and component of total medical spend … there’s a need for strict guidelines, protocol and prior authorizations is very important  Need high quality vendor to coordinate with regular drug program  Make certain that the provider has robust reporting tools to drill down into the data Copyright 2012 © MBGH & IIH 29

Employer lessons learned – management of at-risk population  Step therapy and prior authorization  Communicate the cost and special needs around specialty drugs  Get and use as much data as possible  Consistency is important  Communication is key; provide incentive in wellness program for active disease management program participation Copyright 2012 © MBGH & IIH 30

Biologics & Specialty Pharmacy National Employer Initiative

2012 Employer Toolkit

Employer Specialty Pharmacy Toolkit • • • • Launch Winter 2012 Developed with input from employer advisors, feedback from educational program participants and staff expertise Toolkit includes resources, best practices and employer case studies Key areas include: – Understanding Specialty Pharmacy Benefits and tools for the C-Suite – – Innovation in Benefit Plan Design and Service Partner Contracting Managing At-Risk Populations; Communications and Resources Copyright 2012 © MBGH & IIH 32

Section 1: Specialty Pharmacy 101

www.specialtyrxtoolkit.com

Insert home page here Copyright 2012 © MBGH & IIH • • • • • Understanding the Basics Specialty pharmacy landscape – – – – No single definition for specialty drugs Market view: Who are the key stakeholders?

Delivery, distribution & dispensing Generics & other biologic drugs The Employer as Key Stakeholder – From the research: the employers’ perspective – The value proposition Future Trends & Impacts on Employers List of Recommendations 33

Section 1: Specialty Pharmacy 101

www.specialtyrxtoolkit.com

Insert inside page here • • • • • • Edit Economics of specialty pharmacy Shifting Rx marketplace Current trends & cost drivers Future growth trends Dose forms & Diagnostics Education for C-Suite Copyright 2012 © MBGH & IIH 34

Sections 2 & 3 Planning & Contracting • Innovation in Benefit Plan Design and Service Partner Contracting • Employer as the plan sponsor • Vendor contract language • Plan design best practices • PBM RFP Checklist Managing At-Risk Populations; Communications and Resources • • • • Employer health care management priorities Employee satisfaction Benefit design and its management Communicating with covered population Copyright 2012 © MBGH & IIH 35

Biologics & Specialty Pharmacy National Employer Initiative

Future Work Streams

Project Work Streams

Address market need to understand employer perspective and claims experience in the use of specialty pharmacy drugs and services.

Work Stream 1 2011 to 2012 Work Stream 2 2012 to 2013

Research and develop innovative value-based benefit design coverage approaches.

Conduct employer pilot programs to test value-based benefit design concepts and measure their effectiveness.

Deliver education on outcomes to all key stakeholders, including reporting, presentations and publications.

Biologics & Specialty Pharmacy National Employer Initiative

Stakeholder Meeting July 2012

What did the employers say?

• • • Health Care Reform: – Government may put controls in place if prices stay where they are or go up – Need to look at what other environmental changes they need to work through – Not dropping coverage but need to look at benefit design for SP Don’t assume that employers know what they’re doing –we need to trust the vendors– but not sure we can So many variables…..Co-insurance; max out-of-pocket-hit after two doses; physician mark-up; can’t track via j-codes Copyright 2012 © MBGH & IIH 40

Top trends in the next 2 to 5 years • • • • • • Specialty meds becoming the main driver of overall cost trend Required use of specialty pharmacies with intensive case management Mandatory specialty pharmacy utilization driven by benefit design More dosage forms (e.g. oral and IV) within therapeutic categories More Biogenerics; Biosimilars Continued mergers and acquisitions of specialty pharmacies and PBM’s Copyright 2012 © MBGH & IIH 41

Top trends in the next 2 to 5 years • Continued increase in power and influence of employer groups/ coalitions • Vendors going at risk to drive outcomes, clinical utility and quality of life measures • Incremental increase in treatment populations as oral dosage forms replace injectables in some therapeutic classes • Increase in state level regulatory mandates for specialty benefit designs that are at parity with non-specialty benefits. • Greater interoperability of systems to improve communications across transitions of care Copyright 2012 © MBGH & IIH 42

MBGH Initiative Summary • Critically important to address knowledge gaps currently among most stakeholders in marketplace • Innovation and performance is desired but lacking in market today—an important area to inspire action • Market change or shifts will continue into 2015 while technology growth escalates over next 2-5 years – Doing nothing is no longer an option • Employer resources to empower all stakeholders is essential • Ongoing stakeholder collaboration is critical to success Copyright 2012 © MBGH & IIH 43

Project Contacts

Cheryl Larson, Vice President

Midwest Business Group on Health [email protected]

www.mbgh.org

MBGH is one of the nation's leading not-for-profit business coalitions of private and public employers. Members are represented by human resources/health benefits professions for approximately 110 large self-insured public and private employers, who represent over 3 million lives and spend more than $3 billion on health care benefits annually.

F. Randy Vogenberg, PhD, Principal

Institute for Integrated Healthcare, Sharon, MA Strategic Pharmaceutical Advisor, Business Group Pharmaceutical Collaborative [email protected]

The Institute for Integrated Healthcare, an organization that provides integrated pharmaceutical benefits consulting and education to self-insured employers and business coalitions.

Biologics and Specialty Pharmacy: Employer Challenges

Transcript Biologics and Specialty Pharmacy: Employer Challenges

Midwest Business Group on Health