1. Focusing on Patient Outcomes in an Era of Rising Drug Costs Tom Woller, RPh, MS, FASHP and Dalia Saleh, PharmD Focusing on Patient Outcomes in an Era of Rising Drug Costs    Tom Woller, RPh, MS, FASHP and Dalia Saleh, PharmD    June 9 th from 12:00pm - 1:00 pm Courtesy Reminders: During the webinar, you may select *7 on your phone to speak, and use *6 to mute. Please refrain from placing the phone on HOLD during the presentation.

2. Today’s Presenters Tom Woller, RPh, MS, FASHP Senior Vice President Pharmacy Services Aurora Health Care Dalia Saleh, PharmD PGY2 Health-System Pharmacy Administration Resident Aurora Health Care

3. 3 Today’s Webinar Agenda I.Background on Today’s Drug Market II.Understanding the Nuances of Cost and Outcomes III.What Should Pharmacy Directors Budget? IV.What Should Hospital Leaders Expect from Their Pharmacy Directors? V.Q&A

4. Health Care Costs Are Rising

5. Today’s Drug Market

6. Why does drug spend increase in the hospital?  Utilization changes  Business growth  Unit price increases

7. Unit Price Increases?  Ingredient cost  Market exclusivity – Line availability – Pharma acquisitions – Old drugs now requiring FDA approval

8. Market Exclusivity  Line availability  Market forces  Pay for delay Nelson R. Medscape Medical News. April 2015.

9. Market Exclusivity Rockoff JD, Silverman E. Wall Street Journal. April 2015.

10. How does this impact hospitals?  Example: Aurora Health Care ISUPRELNITROPRESS UnitsSpendUnitsSpend 2013 Baseline usage Baseline spend $66,000 Baseline usage Baseline spend $185,000 2015 97% of baseline 2706% of baseline $1,796,000 67% of baseline 797% of baseline $944,000

11. Market Exclusivity “Cleveland Clinic says the price hikes for the two Valeant drugs is unexpectedly adding $8.6 million, or 7%, to this year’s budget of roughly $122 million for medicines administered at its hospitals.” Rockoff JD, Silverman E. Wall Street Journal. April 2015.

12. Market Exclusivity  Pharma consolidation example  Actavis acquired Allergan, Inc  Actavis renamed itself Allergan, Plc  Allergan, Plc acquired Kythera Biopharmaceuticals  Allergan, Plc sold “legacy Actavis” generics to Teva  Pfizer acquired Hospira  Pfizer + Allergan announced

13. Market Exclusivity  FDA examining old drugs that don’t have FDA- approval  Vasopressin example – Discontinuations by multiple manufacturers – Vasostrict® introduced (only FDA-approved option) ASHP Drug Shortages. 13 May 2015.

14. How does this impact hospitals?  Example: Aurora Health Care  Vasopressin in every code cart Q1 of 2014Box of Vasopressin$90 Q1 of 2015 Box of Vasopressin$900 Box of Vasostrict®$1200 Q1 of 2016Box of Vasostrict®$2600

15. Why? Because They Can.

16. Value – Balancing Outcomes & Cost  Value depends on your viewpoint  Evaluation of alternatives  Consider: – Quantity & quality of life – Return to work – Patient wishes – Length of strength – Readmission risk

17. Outcomes vs Cost  Example: Ipilimumab (Yervoy®) for Melanoma – Increase in life expectancy: 1.88 years (mean) – Estimated incremental cost: $146,700  Quality of Life? – Increase in “quality adjusted life years”: 1.14 QALYs – Estimated incremental cost-effectiveness ratio of $128,660 per QALY gained Barzy V, et al. J Med Econ. Oct 2012.

18. Outcomes vs Cost  Institute for Clinical and Economic Review (ICER) – “A price tag on hope?” – Comparative-effectiveness analyses Goozner M. Modern Healthcare. May 2016.

19. Specialty Drugs  Projected increase of 17% each year  2018: Specialty will be 50% of all drug spend  2020: Specialty will be 9.1% of all health spend Express Scripts. Drug Trend Report. 2015.Pew Charitable Trusts Fact Sheet. Nov 2015.

20. PWC Health Research Institute. 2015. Drug costs are the fastest growing health care expenditure $87 billion $192 billion $402 billion $402 billion National Specialty Drug Spending 2012 2016 2020

21. Example – Hepatitis C  Sovaldi – $1000 per tablet  Harvoni – $1125 per tablet Express Scripts Drug Trend Report. 2015.

22. Harvoni therapyDAA-based triple therapy >95% cure rate<75% cure rate More tolerableLess tolerable Once daily pillMultiple doses per day $94,000 (12 wks)TVR - $55,000 (12 wks) IFN/RBV - $20,000 (48 wks) Liver transplant - $580,000 Example – Hepatitis C Bichoupan K, et al. Hepatology. August 2014.

23. What is Our Priority? Patient Care

24. Example – Vaccines Usage increase  Spend increase This is not a bad thing

25. To Pharmacy Directors  Budget preparation – Projecting expenditure – Networking, socializing – Increasing your understanding  Integrate quality measures  Monitor trends  Understand net revenue  Have plans for improving cost and quality (value)

26. What Hospital Leaders Should Expect From Their Pharmacy Directors  Expect the Pharmacy Director to prepare projections and budget (not finance!)  Expect comprehensive variance reporting  Expect communication across disciplines  Don’t expect them to make up the differences – Drives bad behavior  Expect them to talk about both costs and quality (value)

27. 27 Questions?

28. Please complete the brief post-webinar survey. Thank you for attending today’s webinar. Tom Woller, tom.woller@aurora.org Dalia Saleh, dalia.saleh@aurora.orgtom.woller@aurora.orgdalia.saleh@aurora.org