Specialty medications: Implications for pharmacy practice ... Drug Mkt...Rebif/Avonex (interferonbeta-1a) MS 4.0 Tecfidera MS 3.2 Atripla HIV 2.9 Somatropin Growth hormone 2.9 Gleevec

© 2016 by the American Pharmacists Association. All rights reserved.

2

Specialty medications: Implications for pharmacy

practice, patients and research

Patrick Gleason, PharmD, FCCP, BCPS Director, Health Outcomes, Prime Therapeutics

Adjunct Professor, University of Minnesota, College of Pharmacy

3

Disclosures• Patrick Gleason declares he is employed by a pharmacy

benefit manager, Prime Therapeutics.

• He has no other conflicts of interest, real or apparent, and no financial interests in any company, product, or service mentioned in this program, including grants, employment, gifts, stock holdings, and honoraria.

The American Pharmacists Association is accredited by the Accreditation Council for Pharmacy Education as a provider of continuing pharmacy education.

4

• Target Audience: Pharmacists

• ACPE#: 0202-0000-16-074-L01-P

• Activity Type: Knowledge-based

5

Learning Objectives

• State a working definition of the term “specialty drug.”

• Describe at least five factors that influence whether a drug product is considered a “specialty drug.”

• Explain differences in the coverage of specialty drugs in the pharmacy benefit versus the medical benefit of an insured or prepaid health program.

• List new channels of distribution emerging for specialty drugs.

• Identify the relative role of traditional drugs and specialty drugs in total spending by U.S. health insurance plans.

6

Prime Therapeutics• 13 Blue Plan owners

• 19 Blue Plan clients

• 25.6 million members

• $22.5 billion drug spend managed

• 337 million annual claim volume (weighted)

• 67,000+retail pharmacies in network

• 7.2 million Prescriptions shipped via PrimeMail®

• $4.4 billion revenue in 2014

• 3,900 employees


7

Drugs now comprise more than 25 percent of all employer health insurance expenditures.

• True

• False

8

Specialty drugs are currently over 40 percent of all employer drug expenditures.

• True

• False

9

The specialty drug member cost share where there begins to be a statistically significant increase in new start abandonment was:

A.$50

B.$100

C.$150

D.$250

E.$500

10

The most common specialty benefit cost share is:

A. $50

B. $100

C.20 percent coinsurance

D.50 percent coinsurance

E. Co-insurance with minimum and maximum

11

The leading employer specialty management strategy is:

A. Narrow specialty network

B. Medical benefit drug coverage changes to influence site of care

C.Formulary exclusion with limited brand coverage across therapeutic categories

D.Utilization management (e.g., prior authorization, step-therapy, quantity limits)

12

Prescription drugs’ sizable share of health spending

• 19 percent of employer health care expenditures is retail (Rx benefit) drugs

• 23 percent of employer health care expenditures is hospital care

• Combined Rx benefit + medical benefit drug > 25 percent of total health care expenditures

Sourced: Prescription Drugs’ Sizable Share of Health Spending. by Drew Altman December 13, 2105. http://blogs.wsj.com/washwire/2015/12/13/prescription-drugs-sizable-share-of-health-spending/tab/print/


13

Prime Therapeutics: Commercial book of business

Over 15 million members during 2014

Pharmacy benefit• $24.78 per member per month (PMPM) specialty drug expenditures• 31 percent of all drug expenditures was specialty drug expense

Medical benefit• $18.06 PMPM spent on drugs

Medical + pharmacy benefit specialty drugs• 43 percent of all drug expenditures in 2014

Source: Prime Therapeutics LLC, 2014 internal data

14

Distribution of spending across medical and pharmacy benefits varies by drug class

$300 $600 $900 $1,200 $1,500

AUTOIMMUNEINJECTABLE CANCER

MULTIPLE SCLEROSISHEPATITIS C

ORAL CANCERHIV & IMMUNOSUPPRESSANTS

BLOOD MODIFIERSIMMUNE GLOBULINS

HEMOPHILIAENZYME DEFICIENCIES

NAUSEA & VOMITINGGROWTH HORMONES

ANTICOAGULANTSCYSTIC FIBROSIS

LUNG DISORDERSINFERTILITY

PULMONARY HYPERTENSIONVISCO SUPPLEMENTS

MillionsSpecialty drug spend by category and benefit coverage

TOTAL MEDICAL TOTAL PHARMACY


15

The importance of a comprehensive picture: 15 million commercially insured members

Top Pharmacy benefitspecialty drugs*

Class% of Rx

specialty spend

Humira Autoimmune 13.1

Sovaldi Hepatitis C 9.2

Enbrel MS 8.0

Copaxone MS 4.3

Rebif/Avonex(interferon beta-1a)

MS 4.0

Tecfidera MS 3.2

Atripla HIV 2.9

SomatropinGrowth hormone

2.9

Gleevec Cancer 2.1

Olysio Hepatitis C 1.9

Top Medical benefitspecialty drugs*

Class% of Medical

specialty spend

Remicade Autoimmune 11.4

Neulasta Blood modifier 8.9

Avastin Cancer 7.0

Herceptin Cancer 5.9

RituxanAutoimmune/ cancer

5.5

Tysarbri MS 2.9

EpoetinEnd stage renal disease

2.6

Alimata Cancer 2.1

Gammunex-C /Gammagard

Immune globulin 2.1

Doxetaxel Cancer 2.0

Source: Prime Therapeutics LLC, 2014 internal data* All brand names are the property of their respective owner

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Specialty drugs: Inflationary and utilization (2012-2014)

• 15 million commercially insured members

• Average age 35 years

• 50 percent women

Source: Prime Therapeutics LLC, 2012 – 2014 internal data

5 per 1,000

$4,700

17

Tools to manage specialty spend

Patient cost share & formulary (drug list) management

Utilization management

Contracting management

Care /casemanagement

Channel management

• Prior authorization

• Step therapy

• Quantity limit maximums per prescription fill

• Rebates

• Fee schedules

• Patient counseling to ensure safe & effective drug use

• Patient services to ensure use of preferred care network and specialist

• Coordination of care

• Specialty pharmacy network

• Drug purchasing discounts

• Optimize site of care

• Patient financial assistance (coupons) for preferred formulary tier drugs

Source: Health Affairs 2014;33(10):1761-1769

18

Pharmacy Benefit Management Institute: 2015 Specialty Drug Benefit Report Employer Survey

Source: PBMI https://www.pbmi.com/shop/reports/2015-specialty-drug-benefit-report/


19

Multiple sclerosis (MS) specialty drug costs

• ~13 percent increase in MS drug cost year over year

• If 20 percent coinsurance, $960 monthly member contribution

– Yearly member contribution $11,520

Source: Prime commercial book of business, 2011-2014

$4,800

20

Prime health insurance marketplace: Enrollment and deductibles

Source: Prime HIM data, 2015-2016

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

2015 Bronze 2016 2015 Silver 2016 2015 Gold 2016 2015 Platinum 2016

Range $1,000 $850 $500 $1,500 $400 $1,250 0 0

Low $5,000 $6,000 $1,500 $1,500 $1,000 $500 $1,000 $200

Individual deductible by metallic level2015 and 2016

$6,000

$6,850

$2,000

$3,000

$1,400$1,750

$1,000

$200

21

2015 – 20th annual Towers Watson/National Business Group on Health Best Practices in Health Care Employer Survey

Source: 2015 Towers Watson/National Business Group on Health (NBGH) Best Practices in Health Care Survey, Dec. 15, 2015

22

Hepatitis C drugs utilization management impact

• In the first half of 2015, plans using Metavir score-based prior authorization had:

• 36 percent lower utilization

• 200 fewer new starts

• Cost neutrality of treating hepatitis C in people with Metavir score < 2 has not been demonstrated.1,2

Source: charts – Prime Therapeutics LLC, internal data 2013 - 2015

1. Ann Intern Med. 2015;162(6):397-406.

2. JAMA Internal Med. 2015 Nov 23:1-9. doi: 10.1001/jamainternmed.2015.6011. [Epub ahead of print]

23

Specialty pharmacy


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Tools to manage specialty spend

Patient cost share & formulary (drug list) management

Utilization management

Contracting management

Care /casemanagement

Channel management

• Prior authorization

• Step therapy

• Quantity limit maximums per prescription fill

• Rebates

• Fee schedules

• Patient counseling to ensure safe & effective drug use

• Patient services to ensure use of preferred care network and specialist

• Coordination of care

• Specialty pharmacy network

• Drug purchasing discounts

• Optimize site of care

• Patient financial assistance (coupons) for preferred formulary tier drugs



25

Pharmaceutical companies coupons

Program provides up to $8,000 of assistance per patient for each 12-month period to cover out of pocket costs for ENBREL®,

including copayments, coinsurance and prescription deductible. -See more at: https://www.enbrel.com/support/financial-

assistance/#sthash.VuCMhqkL.dpuf


26

Specialty drug coupons patient pay impact at Prime Therapeutics Specialty PharmacyTM

117,330 prescriptions with a coupon

57%

3%

Patient cost share greater than $50

12%

1%

Patient cost share greater than $250

Patient pay beforecopay coupon

After coupon


27

Cost share (patient pay) impact on primary non-adherence

Unadjusted abandonment rates of specialty drugs by 15,937 patients newly initiating or restarting use

Source: Health Affairs 2014;33(10):1761-1769; authors Catherine I. Starner, G. Caleb Alexander, Kevin Bowen, Yang Qiu, Peter J. Wickersham and Patrick P. Gleason6

28

Prime Therapeutics Specialty Pharmacy prescriptions dispensed by condition/drug class

Core Category Claims Patients Patient Paid Plan Paid Total Paid

Biologic Anti-Inflammatory 184,347 27,457 $28,692,572 $554,197,794 $582,890,366

Multiple Sclerosis 99,842 12,174 $19,350,996 $464,245,066 $483,596,062

Hepatitis C 16,059 2,607 $3,873,329 $224,852,337 $228,725,666

Cancer – Oral drugs 24,575 4,368 $3,195,650 $154,771,380 $157,967,030

Growth Hormones 20,389 2,803 $3,257,027 $71,486,463 $74,743,490

Cystic Fibrosis 5,399 877 $577,770 $25,774,986 $26,352,757

Infertility 18,334 3,867 $1,814,340 $31,108,127 $32,922,467

Hemophilia 1,423 216 $188,499 $35,711,939 $35,900,438

Others* 26,498 6,756 $2,913,468 $69,544,976 $72,458,444

Overall 396,866 59,170 $63,863,651 $1,631,693,068 $1,695,556,719

*Others include primarily pulmonary hypertension, lung disorders, immune globulins, enzyme deficiencies, human immunodeficiency virus, cancer-injectable, and anticoagulants.

† Members column does not sum due to some members using drugs in multiple core categories.

• $1.695 billion in specialty drug claims

• 63 percent of all specialty drug costs are in the first two rows

Specialty pharmacy claims by core category during 2014 among 15 million commercially insured members


29

• Saved members more than $41.7 million in 2014

• 35,230 members (60 percent) received a copay offset

• $1,185 average savings per member who received any copay offset

Specialty pharmacy claims by core category during 2014 among 15 million commercially insured members

Copay coupons/Patient assistance programs (PAP)

Core CategoryCoupon/PAP

Claims Coupon/PAP Members Coupon/PAP Amount% of Member Cost Share Offset by Coupons/PAP

Biologic Anti-Inflammatory 120,466 21,856 $23,029,214 80.3

Multiple Sclerosis 53,706 8,714 $12,669,452 65.5

Hepatitis C 6,290 1,547 $2,937,912 75.8

Cancer – Oral drugs 2,185 614 $1,245,836 39.0

Growth Hormones 5,139 1,024 $687,064 21.1

Cystic Fibrosis 1,252 315 $252,862 43.8

Infertility 149 77 $25,187 1.4

Hemophilia 86 18 $21,440 11.4

Others* 5,016 1,138 $880,328 30.2/Ranges 1.4-71.0

Overall 194,289 35,230 $41,749,295 65.4/Ranges 1.4-80.3

*Others include primarily pulmonary hypertension, lung disorders, immune globulins, enzyme deficiencies, human immunodeficiency virus, cancer-injectable, and anticoagulants.† Members column does not sum due to some members using drugs in multiple core categories.


30

Prime Therapeutics research implications

• As patient cost shares go beyond $250 per month, more patients abandon their initial multiple sclerosis or biologic anti-inflammatory prescription

• A patient’s cost share for preferred tier specialty drugs on the formulary (drug list) should be $250 or less per month

• When coupons were applied, they reduced patient cost share to less than $250 and saved patients $6 of every $10 they are asked to pay out of pocket

• Unless used on preferred specialty drugs, coupons undermine insurer’s ability to manage costs, risking increases to premiums

• Laws banning specialty drug tiers and/or capping cost shares will likely increase costs and result in more limit drug access due to expanded formulary exclusion lists


31

Network

Formulary/Rebates Utilization

Mgmt

Benefitdesign

Care Management

Coupons/PAPs

Research needs

Clinical outcomesPractice implications

32

Key Points• Specialty drug expenses will soon be half of all drug expenditures,

with substantial expense through the medical benefit

• Insurers are implementing more limited formularies, utilization management and cost sharing to address rising specialty expenditures

• Pharmaceutical manufacturer coupons are frequently used to eliminate member cost sharing, negating the formulary cost share tiering

• More research is needed to understand the pharmacy benefit management tools impact on practice, clinical outcomes and costs

33

Drugs now comprise more than 25 percent of all employer health insurance expenditures.

• True

• False

34

Specialty drugs are currently over 40 percent of all employer drug expenditures.

• True

• False

35

The specialty drug member cost share where there begins to be a statistically significant increase in new start abandonment was:

A.$50

B.$100

C.$150

D.$250

E.$500

36

The most common specialty benefit cost share is:

A. $50

B. $100

C.20 percent coinsurance

D.50 percent coinsurance

E. Co-insurance with minimum and maximum


37

The leading employer specialty management strategy is:

A. Narrow specialty network

B. Medical benefit drug coverage changes to influence site of care

C.Formulary exclusion with limited brand coverage across therapeutic categories

D.Utilization management (e.g., prior authorization, step-therapy, quantity limits)

38

Specialty Drugs:How Did That Iceberg Get Here?

New Channels & Framework for Drugs

Stephen W. Schondelmeyer, PharmD, PhD, FAPhA

CMC Endowed Chair in Pharmaceutical Management & Economics

Professor & Director, PRIME Institute

College of Pharmacy, University of Minnesota

39

DisclosuresStephen W. Schondelmeyer declares that: • He is employed by the University of Minnesota and conducts drug

benefit management for the University’s health benefit program (UPlan).

• He has grants from the Minnesota Department of Health and the AARP Public Policy Institute.

• He serves on the Editorial Advisory Board of Drug Topics and First Report Managed Care.

• He has no other grants, employment, gifts, stock holdings, and honoraria.


40

Learning Objectives

• State a working definition of the term “specialty drug.”

• Describe at least five factors that influence whether a drug product is considered a “specialty drug.”

• Explain differences in the coverage of specialty drugs in the pharmacy benefit versus the medical benefit of an insured or prepaid health program.

• List new channels of distribution emerging for specialty drugs.

• Identify the relative role of traditional drugs and specialty drugs in total spending by U.S. health insurance plans.

41

DisclosuresStephen W. Schondelmeyer declares that: • He is employed by the University of Minnesota and conducts drug

benefit management for the University’s health benefit program (UPlan).

• He has grants from the Minnesota Department of Health and the AARP Public Policy Institute.

• He serves on the Editorial Advisory Board of Drug Topics and First Report Managed Care.

• He has no other grants, employment, gifts, stock holdings, and honoraria.


42

Which of the following is NOT a common factor used to define specialty drugs?

A. Complex, chronic conditions

B. Administration by injection or inhalation

C. High cost drug

D. Oral route of administration


43

What percent of total healthcare spending by commercial insurers in the U.S. in 2016 is expected to be spent on drug therapy?

A. 7% to 8%

B. 9% to 10%

C. 12% to 15%

D. 29% to 34%

44

Which of the following channels of distribution is showing the least growth due to specialty drugs?

A. Hospital Outpatient

B. Mail Order Pharmacies

C. Limited Distribution Pharmacies

D. Physician’s Offices

45

Which of the following is NOT true regarding drug expenditures for a commercially insured population in 2016?A. Drug spending is a small part of health expenditures at

about 10%.

B. Drug spending exceeds spending on physicians.

C. Drug spending exceeds total hospital inpatient

spending.

D. Specialty drug spending in all settings accounts for

about 40% of total drug spending.

46

Specialty Drugs: Overview• Defining a “Specialty Drug”

• Channels of Distribution for Specialty Drugs

• Coverage of Specialty Drugs

• Monitoring Specialty Drug Spend & Trend

• Impact of Specialty Drug Patterns on Pharmacy Practice

• Impact of Specialty Drug Patterns on Research

47

Factors Considered in Defining a Specialty Drug

• Special or complex handling & distribution requirements, or

• Route of administration such as injection, infusion, inhalation, implantation, or instillation (“the 5 I’s”), or

• Patient management, monitoring or disease support system before, or after, drug administration, or

• Special patient training & education needed for safe & effective use or for self-administration, or

• FDA approval by a BLA versus an NDA, or

• FDA designation as an Orphan Indication for the drug, or

• FDA approved Risk Evaluation & Mitigation (REMS) program, or

• Chronic or high risk disease or certain therapeutic categories, or

• Drugs with Limited Distribution (voluntary or required), and

48

Does High Cost Define Specialty Drugs?

• High cost is the most common element listed.(1)

• High cost is “always noted but not always included in the formal definition.”(2)

• Level for “high cost” varies – Ranges from costs that exceed $500 to $2,500 per month(3).

• High cost alone is not sufficient to define a specialty drugsince this factor alone would place many high cost, traditional brand name drugs on the specialty list.(1)

– For example, Abilify 10 mg tabs #30 costs $910, or Cialis 10 mg tabs #12 costs $577

(2) AMCP, The AMCP Format for Formulary Submission, Version 3.1, Dec. 12, 2012, Specialty Pharmaceuticals Addendum, pp. 34-39.(1) Blaser DA, Lewtas AJ, et al. How to define specialty pharmaceuticals – a systematic review. Am J Pharm Benefits. 2010;2(6):371-380.

(3) EMD Serono Specialty Digest, 8th Edition, Managed Care Strategies for Specialty Pharmaceuticals, 2012, p. 20.


49

Impact of High Cost Limit forSpecialty Drugs

* Prescription claims & dollars from self-insured population for calendar year 2015, compiled by PRIME Institute, University of Minnesota.

$ 600: 3.9% of claims & 49.8% of spend

$1,000: 2.2% of claims & 41.8% of spend



50

A Working Definition for aSpecialty Drug

• A drug that “requires a difficult or unusual process of delivery to the patient (preparation, handling, storage, inventory, distribution, Risk Evaluation & Mitigation (REMS) program, data collection, or administration”(1) or

• “Patient management prior to, or following, administration (monitoring, disease or therapeutic support systems).”(1)

• High cost (always noted, but may vary by plan).

(1) AMCP, The AMCP Format for Formulary Submission, Version 3.1, Dec. 12, 2012, Specialty Pharmaceuticals Addendum, pp. 34-39.

51

Who Determines Specialty Drug Definition?

• Medicare Part D - $600 per claim (unchanged since 2006)

• Medicare Part A & B – Drugs given in physician’s office

• Medicaid - State determines list & cost limit

• Self-Insured Employer (or Union) – determines list & cost limit

• Managed Care Plan – determines list & cost limit

• PBM – determines list & cost limit

• Specialty Pharmacy – determines list & cost limit

52

Coverage of Specialty Drugs

• Manufacturer gets FDA Approval for drug

• Medicare & Medicaid have to cover the drug

• Private & Commercial have pressure to cover the drug– Civil lawsuit for inadequate treatment if not covered

• FDA approval without utilization management tools is like writing a Blank Check to the manufacturer.

• Covered under:– Medical benefit (Commercial Medical or Medicare Parts A & B)

– Pharmacy benefit (Commercial Pharmacy or Medicare Part D)

53

Specialty Drugs: CoveragePharmacy BenefitMedical Benefit

• Prescriptions• Transaction Record• Drugs Identified• Drug Cost• Drug volume• Hidden incentives• Timely Claims• Utilization mgmt• Case Management• Drug Use Data• Drug Cost

Not always writtenBundled in office visit claimsHCPCS (J Codes) usedDrug cost part of total visitDrug mfg & dose uncertainProvider discount unknownClaims processed (days-months)

Retrospective DUR (at best)

Poor info. access, not easyNot available, not included 20%-100% > Pharmacy benefit

Based on prescriptionsClaim for each prescriptionNDC # for each drugDrug cost is knownDrug mfg & dose knownPharmacy price knownClaims processed (real time)

Concurrent DUR, PAGood info., easily doneReadily availableCosts less than medical benefit

Coverage Issue

54

Specialty Drug Distribution Channels

• How and where specialty drugs are distributed is

a choice and is influenced by:– Drug Manufacturer

– FDA

– Wholesalers & Specialty Wholesalers

– Plan Sponsors (private & public)

– PBMs

– Specialty pharmacies & limited distribution pharmacies

• “Specialty pharmaceuticals may also be dispensed by retail, hospital, or infusion pharmacies, which may provide some (or all) of the services that specialty pharmacies provide.”(1)

(1) AMCP, The AMCP Format for Formulary Submission, Version 3.1, Dec. 12, 2012, Specialty Pharmaceuticals Addendum, p. 35.


55

Specialty Drug Channels

• Growth in new drug $’s is in specialty drugs

• Growth in Pharmacy Benefit is in:– Specialty pharmacies (PBM-owned or stand alone)

– Limited distribution pharmacies (manufacturer chosen)

• Growth in Medical Benefit is in:– Physician’s offices & clinics (manufacturer & provider driven)

– Hospital outpatient (manufacturer & hospital driven)

– Home infusion providers (provider & patient driven)

56

Changing Channels of Distribution for Drugs

ChainPharmacy

Mass MerchantPharmacy

Food & DrugPharmacy

IndependentPharmacy

Mail OrderPharmacy

Health PlanPharmacy

Clinic &Drs’ Office

Long TermCare

PharmacyHospital

GovernmentFacilities &

Other

Chain Warehouse

RegionalWholesalers National Wholesalers

Drug Manufacturers & Marketers

Source: Prepared by PRIME Institute, University of Minnesota.

Bulk Sales

Bulk Sales

Manufacturer Direct Sales

Generics & aFew Old Brands

Specialty& Bio Therapies

SpecialtyPharmacy

Limited Distr.Pharmacy

$

+

+ +

Revenue Shifting fromLeft to Right

HospitalOutpatient+

57

Drug Claims by Distribution Channel: 2014 (Traditional Pharmacy & Medical Channels)

Source: U of M UPlan Health Benefit, 2014 (with estimates for Medical Drug Expenditures).

% of Total Drug $

58.6% 41.4%Traditional Pharmacy Specialty Pharmacy & Medical

$ Annual Growth Rate~ -2% to +3%

$ Annual Growth Rate~ +10% to +25%

58

Physicianor Clinic

Specialty Drugs Distribution

Patient

SpecialtyWholesaler

Manufacturer

Physicianor Clinic

Buy & Bill

59

Physicianor Clinic


Patient

Pharmacy

Wholesaler

Manufacturer

PharmacyNetwork

White Bag

Brown Bag

60

Physicianor Clinic


Patient

PBM

Mail OrderPharmacy

Manufacturer

SpecialtyPharmacy

SpecialtyPharmacy


61

Physicianor Clinic


Patient

SpecialtyWholesaler

Manufacturer

PBM

Mail OrderPharmacy

SpecialtyPharmacy

Pharmacy

Wholesaler

Physicianor Clinic

PharmacyNetwork

SpecialtyPharmacy

62

New Specialty Drugs: 2009-2014(New Biotechnology Drugs, Vaccines, & Indications)

Source: IMS Health & Express Scripts

SpecialtyDrugs

96

TraditionalDrugs

49

New Molecular Entities 145

2/3 of New Approvals Were Specialty Drugs

63

What is the Spend & Trend of Pharmaceuticals &Specialty Drugs?

Are drugs a small part of the health care dollar?

64

Hospital Care,31.4%

PhysicianServices,

20.0%

Dental Services, 3.8%

Home Health Care 2.8%

Nursing Homes, 5.3%

Prescription Drugs, 9.6%

Durable Med Equip, 1.4%

Govt. Adm.,1.2%

Health Insur. Admin., 6.6%

Public Health, 2.6%

Capital Costs 5%

Research, 1.4%Other, 10.0%

The Nation’s Health Dollar: 2015Where Did It Go?

*

*

**

**

* *

*Other sectors thatinclude Rx drugs.

> 17.5% in 2016Rx Drugs in All Settings

Are Drugs Used in Other Sectors?

YES!

*

What Role Did Drugs Play?

*

65

Projected Healthcare Expenditures forCommercial Insured Population: 2016

Source: Milliman, Inc., Commercial Specialty Medication Research: 2016 Benchmark Projections, Dec. 1, 2015.Projections for 2016 using Truven’s MarketScan data for commercially insured population from 2012 & 2013.

$ PMPM

Non-Drug Service

Traditional Drugs

$421

$120

$541

20.5%

14.2%

Specialty Drugs

34.7%All Drugs

Specialty Drugs

Traditional Drugs * 29.0% w/o HospitalInpatient Drugs

66

Projected Healthcare Expenditures forCommercial Insured Population: 2016$ PMPM

Non-Drug Service

Drugs Only

$119

$138

$11

$111

$42

$120



67

Projected Healthcare Expenditures forCommercial Insured Population: 2016$ PMPM

Non-Drug Service

Drugs Only

$119

$138

$11

$111

$42

$120

Specialty Drugs $188* Pharmacy Benefit Spending > Hospital Inpatient Spending* Pharmacy Benefit Spending = Hospital Inpatient Spending - Drugs

* Pharmacy Benefit Spending > Physician Office Spending

* All Drugs All Settings w/o Hospital Inpatient = 29.0% of Total Healthcare Spending* All Drugs All Settings w/Hospital Inpatient = 34.7% of Total Healthcare Spending


68

Where is the Spending Growth & Trend for Pharmaceuticals &

Specialty Drugs?

Are drugs growing slower than the U.S. economy?

69

Avg Cost per Drug Claim in Self-Insured Employer Plan (UPlan): 2004-2015 (Feb.)

$0$25$50$75

$100$125$150$175$200$225$250$275$300$325$350$375$400$425$450$475$500$525

Jan

-04

Ap

r-04

Jul-

04

Oct

-04

Jan

-05

Ap

r-05

Jul-

05

Oct

-05

Jan

-06

Ap

r-06

Jul-

06

Oct

-06

Jan

-07

Ap

r-07

Jul-

07

Oct

-07

Jan

-08

Ap

r-08

Jul-

08

Oct

-08

Jan

-09

Ap

r-09

Jul-

09

Oct

-09

Jan

-10

Ap

r-10

Jul-

10

Oct

-10

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

Oct

-12

Jan

-13

Ap

r-13

Jul-

13

Oct

-13

Jan

-14

Ap

r-14

Jul-

14

Oct

-14

Jan

-15

$ / Claim

Average Drug Claim

Patented Brand(SS-Rx)

Generic (Gen-Rx)

$474

$ 41

$135

Brand Prices Increased > 13% in 2014

OTCs as Rx $ 39

Source: Based on data from Univ. of Minnesota self-insured drug benefit (UPlan) 2004 to 2015 & compiled by PRIME Institute, University of Minnesota.

70

Avg Cost per Drug Claim in Self-Insured Employer Plan (UPlan): 2004-2015 (Feb.)

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

Jan-

04A

pr-

04Ju

l-04

Oct

-04

Jan-

05A

pr-

05Ju

l-05

Oct

-05

Jan-

06A

pr-

06Ju

l-06

Oct

-06

Jan-

07A

pr-

07Ju

l-07

Oct

-07

Jan-

08A

pr-

08Ju

l-08

Oct

-08

Jan-

09A

pr-

09Ju

l-09

Oct

-09

Jan-

10A

pr-

10Ju

l-10

Oct

-10

Jan-

11A

pr-

11Ju

l-11

Oct

-11

Jan-

12A

pr-

12Ju

l-12

Oct

-12

Jan-

13A

pr-

13Ju

l-13

Oct

-13

Jan-

14A

pr-

14Ju

l-14

Oct

-14

Jan-

15

Source: Based on data from Univ. of Minnesota self-insured drug benefit (UPlan) 2004 to 2015 & compiled by PRIME Institute, University of Minnesota.

$ / Claim

Generic

Patented Brand

$4,055

$4,791

$ 41

$474

[$4,055/Month or $48,660/Year]Specialty Drug Claims

Brand to Generic 11 : 1

Specialty to Brand 10 : 1

Specialty to Generic 100 : 1

71

What is the cost of specialty drugs?

Specialty Drugs & Costs

• Oncology

• Hepatitis C

• Growth Hormone

• Transplant Drugs

• Arthritis Drugs

• Hemophiliac Drugs

• Antiretrovirals (HIV)

• Multiple Sclerosis

• Coagulation Drugs

• Gaucher’s Disease

• Anemia Drugs

• Other Specialty

Xeloda, Afinitor, Gleevec, Tasigna, Nexavar $40,000 to $130,000

Sovaldi, Olysio, Harvoni, Infergen $84,000 to $150,000

Norditropin,somatropin (generic),Omnitrope $10,000 to $120,000

Cellcept, Rapamune, Prograf, Myfortic $ 1,000 to $25,000

Enbrel, Humira, Remicade, Kineret $25,000 to $85,000

Kogenate FS, Benefix, Recombinate $100,000 to $250,000

Truvada, Atripla, Reyataz, Emtriva $ 6,000 to $30,000

Avonex, Copaxone, Rebif, Tysarbi $30,000 to $75,000

Lovenox, Arixtra, Innohep, Fragmin $15,000 to $60,000Ceredase, Cerezyme $80,000 to $150,000Procrit, Neupogen, Epogen, Neulasta, Aranesp $15,000 to $100,000Soliris $40,000 to $500,000

Annual Cost of Therapy

2013 Median Annual Household Income in U.S. ~ $ 53,657 72

U.S. Annual Income: 2014

U.S. Bureau of the Census, 2015; AARP Report, 2015

$ / YearIncome per Family / Household

Specialty $53,364

Brand $ 2,960

Generic $ 283

Income per Person

Are Specialty Drugs Affordable---Even at the Societal Level?


73

Specialty Drugs: Utilization

Annual Plan Cost

$2.08 million

Cost of Drug Therapy

$52,000Per Person

40 with MSWill Seek

Treatment (67%)

60 personsWith

Multiple Sclerosis(0.18%)

Covered Population

of

40,093

Multiple Sclerosis & Plan Cost: 2013

Annual Plan Cost of

Drug Therapy$51.88 PMPY

5.4% ofTotal PMPY

74

Specialty Drugs: Utilization

Annual Plan Cost

$1.53 million

Cost of Drug Therapy

$102,000Per Person

15 with Hep CWill Seek

Treatment (1.5%)

1,000 personsWith

Hepatitis C(2.5%)

Covered Population

of

40,093

Hepatitis C (Sovaldi & Olysio) & Plan Cost: 2013

Annual Plan Cost of

Drug Therapy $38.16 PMPY

4.0% ofTotal PMPY

75

Humulin U-500: Average $/Monthfor Commercial Insurance: 2005-2013

$187

$247

$431

$864

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Jan

-06

Ap

r-06

Jul-

06

Oct

-06

Jan

-07

Ap

r-07

Jul-

07

Oct

-07

Jan

-08

Ap

r-08

Jul-

08

Oct

-08

Jan

-09

Ap

r-09

Jul-

09

Oct

-09

Jan

-10

Ap

r-10

Jul-

10

Oct

-10

Jan

-11

Ap

r-11

Jul-

11

Oct

-11

Jan

-12

Ap

r-12

Jul-

12

Oct

-12

Jan

-13

Ap

r-13

Jul-

13

Oct

-13

Jan

-14

Based on data from self-insured drug benefit 2004 to 2013 & compiled by PRIME Institute, University of Minnesota.

$ / Month

$ 5,172/Year

* 461% Increase In 8 Years

$ 2,248/Year

$ 10,375/Year

$ 2,954/Year

13% IncreaseIn 4 Years: 2006 to 2010



76

When insulin has a200% increase in price

does the patient’s

NO ! ! !Are We Getting Our Money’s Worth

When Drug Prices Go Up 200%?

diabetes get 200% better?

When a Drug Price Goes Up 200%?What Happens to the Cost-Effectiveness?

77

What Does the Future Hold?

78

What Is the Impact of Specialty Drugs Trends for Pharmacy Practice?

• Drug spend is shifting to non-retail channels!

• The money is in care management not drug distribution.

• Pharmacists must become familiar with how to assess affordability of drug therapy.

• Pharmacists will be needed in unique practice settings.

• Pharmacists will be needed to manage biosimilars.

• Pharmacists have a role in pharmocogenomics.

• Pharmacists need to know the “value” of drugs.


79

What Is the Impact of Specialty Drug Trends for Research?

• Pharmacists need to know the “value” of drugs.

• Price changes must be taken into account in applying economic analyses.

• Cost and price changes need to be taken into account in prescribing & formulary decisions.

• Need to understand and study the issue of affordability of drug therapy.

• Need to re-evaluate the threshold level for QALYs.

• Need to develop means to express price feedback without blocking access to needed drug therapy.

80

Need for More R & DWe need more R & D ?

R

DIncreased R & D Will Result in

Improved Health Value

&

81

Traditional Prescriptions(>85% of Rxs Are Generic)

Specialty Prescription Drugs Are About

1% of Rxs &>50% of Rx $

How Did That Iceberg Get Here?

Specialty Prescriptions in Health Benefit ProgramsAccount for 30% to 50% of

Total Drug Spend

2/3 of New Drug Approvals Are for Specialty

Drugs

Specialty Drug Spending is Growing10% to 25% per Year.

82

Which of the following is NOT a common factor used to define specialty drugs?

A. Complex, chronic conditions

B. Administration by injection or inhalation

C. High cost drug

D. Oral route of administration

83

What percent of total healthcare spending by commercial insurers in the U.S. in 2016 is expected to be spent on drug therapy?

A. 7% to 8%

B. 9% to 10%

C. 12% to 15%

D. 29% to 34%

84

Which of the following channels of distribution is showing the least growth due to specialty drugs?

A. Hospital Outpatient

B. Mail Order Pharmacies

C. Limited Distribution Pharmacies

D. Physician’s Offices


85

Which of the following is NOT true regarding drug expenditures for a commercially insured population in 2016?A. Drug spending is a small part of health expenditures at

about 10%.

B. Drug spending exceeds spending on physicians.

C. Drug spending exceeds total hospital inpatient

spending.

D. Specialty drug spending in all settings accounts for

about 40% of total drug spending.

Documents

Specialty medications: Implications for pharmacy practice ... Drug Mkt...Rebif/Avonex (interferonbeta-1a) MS 4.0 Tecfidera MS 3.2 Atripla HIV 2.9 Somatropin Growth hormone 2.9 Gleevec