Executive Insights into the Payer and Specialty Pharmacy Relationship


Q&A: Managing the pace of change in specialty pharmacy

How are the rapidly growing costs of specialty medications impacting the relationship between payer and specialty pharmacy? In this revealing question-and-answer session, Kevin James, Vice President of Payer Strategy for US Bioservices discusses the key market trends that are driving stakeholders to work together to ensure the most appropriate, cost-effective therapies without sacrificing the quality of patient care.

As payers look more closely at managing costs for specialty pharmaceuticals, how has that affected the specialty pharmacy industry?
Payers have become very sensitive to the rapid growth in specialty. Although only about 1 percent of patients take specialty medications, they account for about 30 percent of the total drug spend for payers. Specialty medication costs are increasing by about 15 - 18 percent a year compared to the growth of traditional medication at around 2 - 3 percent a year. In addition, more than 50 percent of new medications coming to market are high cost specialty medications for diseases like cancer, hepatitis C and multiple sclerosis. These rapidly growing costs are making it more imperative than ever that all stakeholders work together to ensure appropriate medication use.

We are seeing a trend where more pharmacy benefit managers (PBM's) and health systems have begun opening their own specialty pharmacies in an attempt to manage these medications internally as opposed to outsourcing. This has also led to some consolidation in the industry with PBMs acquiring specialty pharmacies and/or other PBMs. Retail chains are also interested in making sure they have access to and can dispense specialty medications. CVS and Walgreens own specialty pharmacies, and recently Rite Aid bought a PBM, Envision, which has specialty pharmacy capabilities.

What do new care models and trends in care delivery mean for specialty pharmacy? What will success look like in these new spheres of influence?
There are a variety of new care models in the market that specialty pharmacies must be aware of and consider how to best integrate with. Accountable care organizations (ACOs) are one example of a model where providers are being asked to take risk. While conceptually this makes sense, there are still details that must be worked out to determine whether this will be a viable long-term option. In the meantime, specialty pharmacies must determine how to best work with ACOs to help manage specialty diseases to keep costs down without sacrificing quality of care. This will require partnerships where the specialty pharmacy takes responsibility for managing the sickest patients while working with other health care providers to appropriately coordinate care. This will also require the ability to track outcomes in a way that will make it possible to measure success by defining what negative consequences, like hospital admissions and ER visits, were avoided through proper medication adherence and patient management.

What other trends are you seeing in the payer arena?
Payers are implementing utilization management techniques such as prior authorizations, step therapy, and quantity limits for specialty medications. We are also seeing new benefit designs where patients are becoming responsible for higher out of pocket costs associated with specialty medications. Payers are also implementing narrower pharmacy provider networks where they are looking for pharmacies to offer deeply discounted drug pricing in exchange for participation in exclusive or preferred networks.

As the price of medications rises, payers continue to place more emphasis on adherence programs and tracking patient outcomes. Some payers are utilizing a best-in-class approach to specialty pharmacy services, and carving out therapy management to different pharmacies based on specific therapeutic expertise. As a result, specialty pharmacies are constantly modifying their clinical program offerings based on the newest drug regimens to ensure patients are getting the most appropriate, cost-effective care. Adherence programs are a critical part of patient management and are designed to keep patients on therapy in order to reduce unnecessary medical expenses such as medication waste, ER visits or hospital admissions.

What does US Bioservices offer that creates the most value for payers?
US Bioservices has developed a specialty model that is 100 percent focused on patients, and can be customized to meet individual payer needs. The high service level and multiple touch points with the patients ensures the best possible clinical outcomes, and is a model that can't be easily duplicated by payer-owned pharmacies. Part of our business model is to seek out copay assistance or funding from patient assistance organizations for patients that cannot afford their medication. This ensures that patients don't forgo therapy due to an inability to pay.

Payers recognize that keeping patients adherent to their medication therapy reduces overall healthcare costs. They expect that their specialty pharmacies be able to provide detailed reporting showing adherence by therapy category. Our clients value our reporting capabilities and the information we are able to provide by scrutinizing our pharmacy data.

Payers often express interest in maximizing technology and our various Web portals provide a competitive advantage in this area. US Bioservices recently launched a case manager portal, which provides real-time visibility to a patient's profile. This portal allows case managers to view clinical notes, prescription shipment tracking and adherence monitoring in real time. The new case manager portal is a nice addition to our traditional payer portal, along with our patient and provider portals.

Ultimately, we are accommodating the needs of payers by providing customized solutions to deliver high quality service at competitive prices. We measure our time to fill and patient satisfaction scores and know that we perform well in both areas compared to our competitors.

You've been in the industry for a number of years. What keeps you in this industry?
I have worked on the provider side of the pharmacy industry for 25 years. I'm passionate about the value that pharmacy brings to the healthcare industry and excited to continue to identify ways in which our industry can transform the delivery of healthcare. Just in the last decade we have seen the introduction of Medicare Part D drug coverage, health exchanges providing coverage to millions of people as a result of the Affordable Care Act, $4 Generics, and medications that can now cure hepatitis C. I'm sure the next decade will offer many more transformational changes and I'm looking forward to participating in a meaningful way.


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