Specialty Pharmacy: Today’s Prescription for a Better Tomorrow Steve Miller, MD Chief Medical...

Specialty Pharmacy:Today’s Prescription for a

Better Tomorrow

Steve Miller, MDChief Medical Officer

What Are Specialty Medications?

• Injectable or non-injectable;

• Frequent dosing adjustments, or

• Intensive clinical monitoring, or

• Intensive patient training, or

• Limited or exclusive distribution, specialized handling or specialized administration, or

• Cost in excess of $500 for a 30-day supply

Anemia

Cancer

Growth Deficiency

Hemophilia

Hepatitis

Infertility

Multiple Sclerosis

Pulmonary HTN

Rheumatoid Arthritis

Many others

Know Your Specialty Patients

Specialty Growth Continues to Outpace Traditional Drug Market

Source: Express Scripts analysis of IMS data.

Relatively Few People Use Specialty Drugs

WellAcute condition

Low-grade chronic

Chronic conditions and/or

procedures

Rare Diseases, Acute Complex,

Multiple co-morbidities

Medical Care 41:1153, 2003

Each Specialty Patient Has Large Annual Costs

10,000

50,000

$20,000

$40,000

$60,000

WellAcute condition

Low-grade chronic

Chronic conditions and/or

procedures

Rare Diseases, Acute Complex,

Multiple co-morbidities

Medical Care 41:1153, 2003

Specialty Patients Remain With Their Health Plans

• Continuous eligibility from July 2003 through June 2006

• Members utilizing their Rx benefit for MS or RA vs. non-utilizers of Rx benefit

• GIC data

0% 25% 50% 75% 100%

Utilizers

Non-utilizers

Health Plan Retention Rate

Overall Specialty Trend: 21%

2005 2006

$60.02$72.58

New Drugs Have A Growing Impact in Specialty Trend

59%43%

Non-Specialty Specialty

New Drugs

Utilization

Cost/Rx

Contribution to Trend

Top Six Specialty Therapy Classes2005:2006

$0 $5 $10 $15 $20

Hepatitis C

GrowthDeficiencies

Blood CellDeficiencies

Cancer

Multiple Sclerosis

InflammatoryConditions

20052006

+ 22.8%+ 22.8%

- 8.3%- 8.3%

+ 4.0%+ 4.0%

+ 39.5%+ 39.5%

+ 19.0%+ 19.0%

+ 22.7%+ 22.7%

Top Six Specialty Therapy Classes2005:2006

$0 $5 $10 $15 $20

Hepatitis C

GrowthDeficiencies

Blood CellDeficiencies

Cancer

Multiple Sclerosis

InflammatoryConditions

20052006

+ 22.8%

- 8.3%- 8.3%

+ 4.0%+ 4.0%

+ 39.5%

+ 19.0%

+ 22.7%

A Common Disease Pathway

-5% 0% 5% 10% 15% 20%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #1: Inflammatory Conditions

Units / Rx

A Common Disease Pathway

-5% 0% 5% 10% 15% 20%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #1: Inflammatory Conditions

Units / Rx

Fast Facts

Cost PMPY $19.04

Avg Cost/Rx

Rx/User/Yr 8.3

Class Trend 22.7%

Price Increases Drove MS

-5% 0% 5% 10% 15% 20%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #2: Multiple Sclerosis

Units / Rx

Price Increases Drove MS

-5% 0% 5% 10% 15% 20%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #2: Multiple Sclerosis

Units / RxFast Facts

Cost PMPY $13.60

Avg Cost/Rx

Rx/User/Yr 9.65

Class Trend 19.0%

Cancer Pipeline Starts to Mature

-10% 0% 10% 20% 30%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #3: Cancer

Units / Rx

Cancer Pipeline Starts to Mature

-10% 0% 10% 20% 30%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #3: Cancer

Units / Rx Fast Facts

Cost PMPY $10.44

Avg Cost/Rx

Rx/User/Yr 3.92

Class Trend 39.5%

Cautious Use in More Patients

-10% 0% 10% 20%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #4: Blood Cell Deficiencies

Units / Rx

-10% 0% 10% 20%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Units / Rx

Fast Facts

Cost PMPY $5.01

Avg Cost/Rx

Rx/User/Yr 4.54

Class Trend 4.0%

More Use and Higher Doses

-10% 0% 10% 20%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #5: Growth Deficiencies

Units / Rx

More Use and Higher Doses

-10% 0% 10% 20%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #5: Growth Deficiencies

Units / Rx

Fast Facts

Cost PMPY $4.59

Avg Cost/Rx

Rx/User/Yr 8.47

Class Trend22.8

Growth Hormone Use Is Rapidly Moving Into Older

Patients

2004 2005 2006

GH users above age 20

Generic Drugs Impact Specialty

-11.0%

-10.1%

-15% -10% -5% 0% 5% 10%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #6: Hepatitis C

Units / Rx

Generic Drugs Impact Specialty

-11.0%

-10.1%

-15% -10% -5% 0% 5% 10%

New Drugs

Intensity

Prevalence

Therapeutic Mix

Brand / Generic Mix

Therapy Class #6: Hepatitis C

Units / RxFast Facts

Cost PMPY $3.45

Avg Cost/Rx

Rx/User/Yr 10.17

Class Trend -8.3%

What Have We Learned?Where Do We Go?

• Specialty drugs are an increasingly large part of the pharmacy spend

• Few patients are impacted today

• Programs can have a significant financial impact with little patient disruption

• Generic drugs can make a difference… even in specialty

Biopharmaceutical Pipeline Continues To

Source:PhRMA, International Federation of Pharmaceutical Wholesalers & Biotech Industry Organization

10 2992

1990 1995 2000 2005

Biotech Drugs on the Market

Biotech Drugs in Development

Most of the Specialty Pipeline Is for Common Illnesses

0 10 20 30 40 50 60 70 80

Oncology

Rheumatoid Arthritis

Crohn's Disease

Hepatitis C

Multiple Sclerosis

PsoriasisPhase 2

Phase 3

Applications Submitted

Number of Drugs

New Indications Are Expanding Utilization

Alferon Campath Humira Rebif Rituxan Xolair

Number of Current FDA Indications

New Indications Are Expanding Utilization

Alferon Campath Humira Rebif Rituxan Xolair

Number of Current FDA Indications Number of Indications Under Investigation

The Routes of Administration Are

Growing More Complex

RA MS Hep C Crohn's Psoriasis

Unknown

Intravenous

Injectable

Oral(Route

unknown)

ESI Pipeline Tracking database, Phase 2 or later

What Do You Want?

• Improved clinical outcomes

• Improved compliance

• Improved patient satisfaction

• Increased reliability of distribution channel

• Decreased acquisition costs

• Consultation on benefit design

Superb Care Makes a Difference

65% 70% 75% 80% 85% 90%

More Satisfied

Rate staff asextremely skillful

Better Educated

Rheumatoid Arthritis Data

CuraScriptRetail0%

42%42%33%33%

Self-ManagementSelf-Management

CuraScript Patients Are More Adherent With Therapy

79%82%

84%87%

92% 92%

Rheumatoid Arthritis Multiple Sclerosis Hepatitis C

Retail CuraScript

Natural History of HCV Infection High Level of Individual Variation

NormalNormalliverliver

Acute Acute infectioninfection

Chronic Chronic infection infection develops develops in 80%in 80%

Chronic Chronic hepatitishepatitis

Cirrhosis Cirrhosis developdevelops in 20%s in 20%

Risk of Risk of carcinoma, carcinoma,

1-4% per 1-4% per yearyear

~20 years~20 yearsAlcohol use, co-infectionAlcohol use, co-infection

~30 years~30 yearsFemale sex, younger age at infectionFemale sex, younger age at infection

Hepatitis C Impact On the Health System Today

Example: Liver Transplantation

• 1,000 per year in US

• $300,000-$900,000 each

Annual spend for HCV transplants in US is over $500,000,000

Future Burden of HCV$830 Billion between 2010-

190,000 additional deaths

Compliance Is Critical To Clearing Hepatitis Virus

Non-Compliant Compliant

10%10%

75%75%

Hepatitis C Type 1

Value of Specialty Pharmacy

• More convenient

• Higher satisfaction

• Better educated

• More compliant

• Greater savings

• Safer

Optimal Recommendations

Comprehensive Communications

for all programs

Clinical ProgramsClinical Programs•Prior AuthorizationPrior Authorization•Drug Quantity ManagementDrug Quantity Management

Co-PaymentsCo-Payments• $25 more for non-formulary$25 more for non-formulary• $30 more for Retail$30 more for Retail

CuraScript Exclusive•CuraScript for all fills•Courtesy fills for “stats” only

Specialty Growth Continues to Outpace Traditional Drug Market

Source: Express Scripts analysis of IMS data.

Access to Lifesaving Medications Act

•Introduced in 2007

•Bicameral, bipartisan

•Express Scripts supporting with research and analysis

ESI Estimate of Biogeneric Savings

Opportunity•Studied four classes of medications

•Very conservative assumptions

Disease Category Drug Group

Patent Expiration

Multiple Sclerosis

Interferons 2003/2007

Anemia Erythropoietin 2004

Growth Failure Growth Hormone

Diabetes Insulin 2004

$3.5 Billion SavingsIn 1st Year Alone

$2,004

$0 $500 $1,000 $1,500 $2,000 $2,500

Erythropoietins

Insulin

MultipleSclerosis

GrowthHormone

$ Millions

In the first ten years:

$71 Billion Savings

$3.5 $4.0$4.6

$5.3$6.1

$7.0$8.1

$9.3$10.7

Year10

Inflation and prevalence driving trend in this model

Biologic Drugs Losing Patent Protection

$11 $11.2 $11.4 $11.7 $12.1

$33.5$35.4

Residual New

Contact Your Elected Officials

www.therightprescription.org

It’s Easy.

Just visit the ESI Outcomes Website: http://www.express-scripts.com/

ourcompany/news/

outcomesconference

Follow the link to: http://www.therightprescription.org

Conclusions

• Specialty spend is increasing

• It is just not about covering the medication but assuring appropriate use

– Right drug, dose, route and care

• There is much you can do now

– Put in plan designs that support goals

– Support biogeneric legislation

Specialty Pharmacy: Today’s Prescription for a Better Tomorrow Steve Miller, MD Chief Medical...

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