1. Specialty pharmaceuticals
Christina Hansen, pharm.d

2. CHARACTERISTICS Treat complex and rare disease states
RA, Cancer, Crohn’s, MS
More expensive
Distribution restrictions
Special handling requirements
Continuous monitoring

3. characteristics Biologics or medications complex to manufacture
ROA – injectables, infusions, oral
More costly
Rarely any low-cost generic equivalents

4. background <1% written prescriptions
% of US total pharmacy spending
2017 – estimated to be 50% (per Express Scripts)
Specialty pharmaceuticals interest biopharmaceutical companies in the innovative and business perspective

5. PCSK9 inhibitors Praluent (alirocumab) Repatha (Evolocumab)
PSCK9 is a protein that promotes degradation of LDLR receptors. Inhibits PCSK9 from binding to LDLR receptors on surface of liver cells – allows more LDL-C to bind and be cleared from liver
Single injection every 2 weeks
Approved by FDA 07/2015
Price: $1,120 every 28 days
PCSK9 inihibitor
PSCK9 is a protein that promotes degradation of LDLR receptors. Inhibits PCSK9 from binding to LDLR receptors on surface of liver cells – allows more LDL-C to bind and be cleared from liver
Single injection given every 2 weeks or once monthly
Approved by FDA 08/2015
Price: $1300 per 28 days

6. Hepatitis C Treatments
SOVALDI (sofosbuvir)
Harvoni (Ledipasvir/sofosbuvir)
Treatment of Hepatitis C
Attaches to RNA and prevents virus from replicating
Treatment duration weeks (depending on genotype diagnosed)
Combination therapy – 1 pill daily
Approved by FDA 12/2013
Price: $30,000/28 tablets
Treatment of Hepatitis C – genotype 1
Targets Hep C virus to prevent replication
Treatment duration – 12 weeks
Single therapy – 1 pill daily
Approved by FDA 10/2014
Price: $38,000 per 28 tablets

7. Impact of higher prices on patients
Patient Non-compliance – increased patient expense is associated with
Decreased rates of initiating medication therapy
Lower adherence rates
Increased patient discontinuation of therapy
Patient may or may not look for alternative – depending on disease state, may incur more physician visits, ER/hospital bills

8. Specialty pharmacies Typically owned by retail pharmacies or PBMs
May dispense medications
Biggest asset – patient support services on a per month basis
Compliance
Patience assistance
Tolerance of medication
Refill requests

9. Tools for managing costs
Prior authorization/step therapy
Reference guidelines for treatment pathways
Physicians typically do not know how much medication costs!
Copayment/coinsurance
Incentivize patients to try preferred or generic alternatives with lower copays
Directed networks for physician and service care

10. Intervention strategies
Change payment policies
“buy and bill” – physicians are paid a percentage of the cost of medication – incentivizing them to write for more expensive medications
Reimburse drug acquisition cost and flat fee (depends on therapeutic class) instead of a percentage
Reimbursement model could incentivize patients based on ROA and site of care
Self-injectable medicine available that is as effective and less expensive as one administered in physician office
Infusion or injection at physician clinic vs hospital setting
Utilization of specialty pharmacies adherence programs have the potential to improve outcomes and reduce costs

11. Intervention Strategies
Financial incentive to those providers that use equally effective and more cost-effective therapy, if there is one
United Healthcare piloting model reimbursing 100% drug acquisition cost to oncologist groups adhering to pathways for 85% of UHC patients
Exceptions for medical contraindications and clinical trial enrollment
Wellpoint, Inc., paying incentives to in-network oncologists for following the clinical pathway
Promotes use of therapies that are best for patient – quality of care and best outcomes

12. Value-based insurance design
15 years in the making with University of Michigan Center for Value-Based Insurance Design (V-BID) and National Pharmaceutical Councel (NPC)
V-BID makes high-value providers and the services they offer more accessible and discourages use of those that are of lower value, aligns patient out of pocket costs with value of services
Focus on how smart you spend healthcare dollars vs dollar amount
Cost-sharing ideas:
Modest cost-sharing on specialty medications for common chronic disease states – encourage compliace
Specialty meds showing benefit in a group of patients, decrease cost-sharing for those who may benefit
Failure on preferred medication (lower generic alternative)
Differential cost sharing to incentivize patients to see better providers

13. Other avenues of cost-saving
YOUR EMPLOYEES HAVE MAJOR IMPACT ON HEALTHCARE DOLLARS SPENT!!
KEEP A HEALTHY EMPLOYEE HEALTHY!
Wellness Programs:
Offer gym memberships
Weight management plans
Smoking cessation
Healthy lifestyle strategies

14. Why is this important?
Loeppke and colleagues in a 2009 analysis showed the cost to employers for employees off work due to illness is times as much as the cost of medical and pharmacy spending combined
Well documented that cost-related non-compliance with certain disease states is associated with increased morbidity and mortality

15. conclusions
Specialty medications will continue to be scrutinized by payers in the coming years due to their expensive nature, increased need for use and burgeoning pipeline.
11 new biologics have been approved by the FDA in 2015, and all new medications start out very expensive
Payers have to be aware of how high cost-sharing can impact adherence, health, productivity and financial well-being among patients that use specialty medications.
Knowledge of guidelines and pathways can aid in formulary design
It isn’t always about how much you are spending, but the potential outcome and savings you may incur from that spending.

16. References
Hagerman, J, et al. “Specialty pharmacy: A unique and growing industry”. Pharmacy Today. 1 Jul
Spatz, I, et al. “Health Policy Brief: Specialty Pharmaceuticals. Complex new drugs hold great promise for people with chronic and life- threatening conditions. The drugs are also a driver of spending growth”. Health Affairs. 25 Nov
Johnson, K. “Current trends in specialty drug utilization and management Payer interventions in the shadow of a burgeoning pipeline”. 4 Jul utilization-and-managem?page=full
Jacobs, M, et al. “Curbing the Costly Trend: Exploring the need for a Progressive Approach to the Management of Specialty Pharmaceuticals Under the Medical Benefit”. American Health and Drug Benefits. Jul/Aug
Burns, J. “Here’s why specialty pharmaceuticals need value-based insurance design”. Association of Health Care Journalists. Jun

17. References
Barlas, S. “Are Specialty Drug Prices Destroying Insurers and Hurting Consumers?”. P&T. Aug
Duffant, B, et al. “Overview of the Specialty Drug Trend. Succeeding in the Rapidly Changing U.S. Specialty Market”. IMS Health rkets/ %20Specialty_Drug_Trend_Whitepaper_Hi-Res.pdf.
University of Michigan Center for Value-Based Insurance Design. “Supporting Consumer Access to Specialty Medications through Value-Based Insurance Design”. 11 Oct brief/10897/.
University of Michigan Center for Value-Based Insurance Design. “Specialty Pharmaceuticals and Value-Based Insurance Design”. Jul pager.pdf.
Fendrick, A, et al. “Supporting Consumer Access to Specialty Medications Through Value-Based Insurance Design”. Oct
Therapeutics Research Center. “New Drugs Approved by the FDA in Pharmacists Letter

18. References

19. Thank you