Klick Health’s own Head of Market Access and B2B, Khawar Khokhar, shares highlights of this year’s sPCMA Business Forum, including the power of collaboration to maximize value across the treatment continuum, and a strong focus on rare diseases and specialty therapeutics to ensure optimal health system benefit and patient outcomes.
Last Wednesday and Thursday, March 8 and 9, I was pleased to attend the sPCMA Business Forum, the annual conference dedicated to the specialty pharmacy business. The event featured keynote presentations and breakout sessions led by senior industry thought leaders and decision makers, with important topics for all stakeholders involved in specialty drug benefit management—including health plans, specialty pharmacies, pharmacy benefit managers (PBMs), drug manufacturers, and others.
The Pharmaceutical Care Management Association (PCMA) is the national association representing PBMs, responsible for administering prescription drug plans for more than 266 million Americans. The PCMA promotes PBMs and their efforts in lowering costs and increasing access, working with a variety of health insurance sponsors such as the Federal Employees Health Benefits Program (FEHBP) and a broad gamut of plans, including commercial, self-insured employer, Medicare, Medicaid, and others.
The two-day conference in Orlando had a full agenda covering a wide range of compelling topics, and a recurring theme throughout the keynote presentations and breakout sessions focused on innovative payer and manufacturer partnerships. Collaboration between key health system partners was seen as an ideal way to maximize value while focusing on optimizing patient outcomes across disease continuums; data driven decision-making was also frequently discussed as a powerful and proven way to empower provider and patient engagements to minimize system wastage and spend.
Several sessions throughout the conference were also focused on the “specialty” in the pharmacy business: orphan and rare disease therapies that require high touch and therefore relatively high cost on an individual patient basis. Important considerations included determining the appropriate value determinants of these specialty drugs, and the appropriate management of access to ensure the right patient receives the right therapy, and receives a full spectrum of resources necessary to ensure adherence, treatment success, and ultimately optimal outcomes.
Here are some conference highlights, and my thoughts on their relevance for payers, manufacturers, PBMs—but also providers, as they become increasingly aware of the importance of ensuring optimal market access for their treatments…
The New Political Landscape
Mark Merritt, President and Chief Executive Officer of PCMA opened the conference by discussing what’s been top of mind for everyone: pricing. He saw three things driving the need for price control: Increase in administration pricing (340B, Medicaid, etc.) that biases perceptions because it shifts inflationary pricing to the commercial side of the business; the rise in high cost specialty products, made particularly challenging by the industry focus on controversial price rather than proven value; and the growth in high deductible plans, necessitating transparency to the general public about the true cost of drugs, especially since the flat copay continues to become exceedingly extinct.
For providers and especially pharma, the pricing controversy is a continued sore spot, largely due to public perceptions. On the one hand drug manufacturers are blamed for high and rising drug costs, especially for the most expensive specialty treatments; on the other, the increasing shift in payment burden to the patient with high deductibles and other access controls that creates a complex and confusing reality. Ensuring transparency from all stakeholders and explaining the mechanism of supply chain pricing for PBMs, health plans, and other factors is necessary to make the entire health system provide the most value to all participants, especially patients who are incurring a larger share of the overall expense.
Evolution of PBMs from Transactional to Population Health Enablers
William Fleming, Segment Vice President, Humana Inc. & President, Humana Pharmacy Solutions outlined the origin of PCMA, and discussed how member companies transactionally create affordable therapeutic access through building evidence-based formularies and high performing networks. He then demonstrated how PBMs are uniquely positioned to also drive the shift to more strategic care delivery focused on population health across physician communities, the drug supply chain, and pharmaceutical manufacturer innovation.
Specifically, Mr. Fleming praised the PCMA and its founders, who did a great job foreshadowing what we have to deal with now and in the future as healthcare evolves. He then asked the audience to look at care management from the view point of all stakeholders. Pharmacy/PBMs have a tremendous role and insight into data and can do much more to improve care, care delivery, and physician engagement with the system. Although innovation is extremely important, we don’t see costs dropping in healthcare, as we do in other industries, when innovation progresses; in healthcare inpatient services, drugs, and insurance premiums all continue to increase in cost despite innovation being infused into the system. We therefore have to hold ourselves accountable for expecting better outcomes as innovation is embraced and additional costs are incurred.
He continued to describe how the traditional model is dis-integrated, which drives volume-based motivations—do more, bill more. To date, a third of healthcare is consumed by 1% of the population, and it’s headed to more than half of all healthcare consumed by 1%! Integration of the disparate pieces in contrast would steer the ship toward integrated care, and the pharmacy can sit in the middle to connect the pieces to enable “pay for performance” vs fee for service. Seismic shifts in policy and regulation could help resolve these disparities and bring about game changing improvements, such as the new FDA draft guidance from January of this year, which would allow payers, manufacturers, and PBMs to have a very different dialogue between each other. Such an approach brings additional clarity around pipeline development and future planning, heightening value across the entire health system.
Mr. Fleming wanted to encourage all stakeholders to think about actually changing the system. All of us currently operate within the dis-integrated model and we need to work together to achieve the significantly more strategic and effective integrated care model. We all have to take ownership and hold ourselves accountable!
Pharma Trends and Technology
Doug Long, Vice President, Industry Relations, QuintilesIMS then discussed current and future trends impacting pharma, including traditional and specialty market forces, drug innovation, biosimilars, channel evolution, and pricing. Adding new meaning to the acronym “AWP,” he joked that “Average Wholesale Price” is actually “Ain’t What’s Paid”—referring to the disparity between what PBMs charge and what pharmaceutical companies actually make on scripts. His session highlighted the many challenges facing pharma, especially regarding the discrepancy between pricing perceptions and reality. Increased transparency and strategic integration across the health system could provide much-needed solutions to help bring overall costs down while providing the most value.
On tbe tech side, Tony Schueth, Chief Executive Officer & Managing Partner, Point-of-Care Partners held a breakout session dedicated to formulary and prior authorization in an EHR world. Revealing how today more than 80% of HCPs use EHRs to drive clinical workflow and prescribing electronically, the potential to integrate utilization management tools within ePrescribing workflow is beckoning for both specialty and non-specialty therapies. Mr. Schueth discussed how health systems stakeholders from payers to PBMs to specialty pharmacies can use the technology to optimize management to eliminate barriers to access, reduce costs, and even improve adherence.
Regarding immediate fixes and improvements, Mr. Schueth cited how only 30-50% of the time when a PA is required does the EHR system flag it at point of prescribing, a severe obstacle to access. He also mentioned the importance of providing patient level formulary information at point of prescribing, and the need to start addressing the challenges like plan vs group level variations. “Challenge with portals is that they are not within the physicians workflow,” insisted Tony. “We need to include it into the EHR to simplify and contain within the workflow that physicians are used to and expected to use.”
Orphan Diseases, Specialty Pharmacy, and Appropriate Access
Lauren Barnes, Vice President, Managed Markets from Vertex described the managed care market for specialty therapies, shared many of the shared challenges within this complex and transformative space, and explored successful approaches to improving access in specialty markets for orphan disease treatments. She cited how payers are using more integrated management strategies that are already favorably impacting patient access while helping to contain costs—especially challenging for precision-medicines.
Ms. Barnes went on to share data substantiating product use in the real world to show/prove value is key for discussions with payer audiences. She showed how non-coverage isn’t really an issue for orphan drugs; instead, the focus is more on how the payers choose to cover the therapy and that’s where manufacturers need to engage payer customer to ensure they have all of the right information to provide the most appropriate access/coverage of the therapy. That said, drug pricing discussions are unavoidable, but we should take ownership to ensure it’s not a general “price is too high” conversation, and instead separate those that have a high list price (reflecting the drugs value) vs those that take ongoing price increases.
The FDA guidance earlier this year could also help, by generating and disseminating additional real world data/information. For orphan conditions, provide payer customers with daisies-level data to help them understand the condition before just talking about the product is crucial. In her experience, payers have been interested in getting more information as opposed to being left out of the loop. Her team created adherence reports to show payer customers how they compare to national levels. In turn, payers have asked her organization to provide this information, and as a result have more dialogue to ensure their PA and access reflects what’s needed by patients and their treatment teams.
Panel Discussion: Pricing and Access Strategies to Support Sustainable Healthcare
Sam Nussbaum, Strategic Consultant, EBG Advisors & Former Executive Vice President, Clinical Health Policy and Chief Medical Officer at Anthem moderated a lively and informative discussion between Steve Miller, Senior Vice President & Chief Medical Officer, Express Scripts, and Len Schleifer, Founder, President & Chief Executive Officer of Regeneron. Top of mind: The perceived high cost of drugs, exacerbated by a few bad players engaging in irresponsible pricing practices, plus the new President demanding lower prices. Along the way toward solutions the gentlemen touched on many challenges, opportunities, and proven solutions, emphasizing the need for collaboration and innovation.
Highlights included Mr. Miller lamenting about high deductible plans for people unable to afford them, and Mr. Schleifer stressing the importance of incentives to generate innovation and advancement. “When we innovate we try to responsibly start with the right price based on the agreed-upon value of the therapy. We need to find a way to work together: payers and manufacturers. And if we can’t then the government might step in, and then innovation will really suffer.” Mr. Miller went on to discuss how pricing isn’t actually the industry’s biggest challenge—and how transparency isn’t the solution, either. Instead, he insisted that great leadership such as that exemplified by Mr. Schleifer is what will help maximize value. He also insisted that pharma had to better embrace biosimilars, similar to the way generics have been embraced in the US and the global market.
Next Generation PBMs: Collaborating for Improved Outcomes and Reduced Costs
Mark Thierer, Chief Executive Officer of OptumRx shared his vision of going “beyond the prescription” through collaboration between all stakeholders, with PBMs helping to drive the transformation thanks to their unique position within the value chain. Mr. Thierer discussed how the old PBM model is no longer relevant, and how clients are “pounding the table” demanding for a change. The industry is asking for a new model that’s built on value, one starting with relationships, partnering, and coming together to connect the silos and achieving better outcomes. He’s created a hub that connects all of the data points to get patients/members to better outcomes. Him and his team looked at medical claims, pharmacy claims, labs, behavioral health, and some patient reported data; through analytics they used these inputs to come up with the next best clinical step in achieving the “whole patient care.”
He went on to discuss how we think doctors today are relatively in the dark about drug formularies and coverage—proven by how we can’t inform a patient what’s covered, how it’s covered, where it’s covered. Through the innovative engagement tools his team has created, however, the physician will be able to tell the patient how much the prescribed drug will cost and which network pharmacy to get it from—a completely different, entirely new patient experience that creates transparency, a sense of ownership and empowerment, and a spirit of collaboration between the health system and its ultimate end users. In summary, he insisted we have a once in a lifetime chance to improve how the PBM fits into the evolving healthcare system by building on the relationships and partnerships that we’ve already established and built over the years.
Evolving Networks: Preferred Pharmacy and Manufacturer Limited Distribution
David Galardi, Vice President of Apogenics, Inc. illustrated how preferred and limited networks are increasingly used by PBMs and manufacturers to control cost and access. The channel strategy adopted by each creates opportunities but also tensions which ultimately impact the price and availability of specialty medicines, impacting the plan sponsor. Mr. Galardi challenged everyone in the room to look at themselves, and take responsibility if their actions make it harder for a sick patient to get the right therapy, especially for orphan diseases demanding specialty therapies.
Mr. Galardi described how narrowing pharmacy networks by definition increases competition, and how limited pharmacy networks can’t work without manufacturer support. In other words without rebates, discounts, or fees from the manufacturer, the limited networks can’t work. He added that pharmacy networks without manufacturer support (no discounts) result in reduced level of services, ultimately creating harm to patients. With only one pharmacy in the narrow network, the levels of services will be extremely low as the pharmacy would have to accept a very low reimbursement. He stressed that generally, manufacturers have unwittingly introduced confusion into the specialty markets in order to maintain control. He implored manufacturers to avoid cookie cutter approaches to launches, and always think about the current situation and the best approach for the ultimate end-user—the patient.
Evolving Specialty Pharmacy Business Models
The second day of the conference began with a panel discussion moderated by Dave Moules, Vice President, U.S. Payer and Channel Access of Pfizer and attended by Chris Bradbury, Senior Vice President, Integrated Clinical Solutions and Specialty Pharmacy, Cigna Pharmacy Management of Cigna; Randy Falkenrath, Vice President, Specialty Strategy, Humana Pharmacy Solutions; and Daniel Kus, Vice President, Ambulatory Pharmacy Services of Henry Ford Health System.
Their panel discussion centered around how distribution channels can be optimized to achieve the goals of greater clinical and health outcomes, drug and medical savings, and integration with care providers for new revenue growth. As large health systems increasingly invest in specialty pharmacy capabilities, the need is ever-expanding to address patients’ specialty drug requests for expanded medical and pharmacy benefits. To get us there, Mr. Bradbury described how Cigna is committed to driving new models to get from volume to value, and shift the mindset from one size fits all to more flexible paradigms to deliver the best outcomes. “We’re having more discussions to ensure individuals who need care have access to care at whatever sites works best for them,” said Chris. “This means there will be new discussions and partnerships to unlock new value through evolved specialty networks.”
Mr. Kus reminded the audience of the importance of a fully integrated delivery network in order to sustain profitability by keeping the patient out of the hospital. That in turn creates the need to treat them effectively in an outpatient setting. Dovetailing off that, Chris discussed the importance of better patient education and increased ownership of their health choices. Mr. Falkenrath then mentioned the big focus on the plan side for trend management, and the importance of driving it down. “When you have to make a decision between two choices, you can’t go with the choice that puts the patient under water,” he said. Randy also insisted that a big part of the business relies on Medicare, and the industry feels the inconsistencies between Medicare Part D and Part B, the former offering plenty of flexibility in utilization management and reimbursement.
Most significantly, Chris stressed we should never forget the humanity in what we’re trying to do—it will help us all to be grounded in patient value and benefit before challenges come up. We have choices, but the patient should always be at the center of everything that we do in healthcare.
What to Expect from President #45
Tom Barker, Partner, Co-Chair, Healthcare Practice from Foley Hoag LLP then speculated what the new Trump administration would mean for healthcare and regulatory policies. He covered the market stabilization rule released on February 15, and riffed on the imminent repeal of the Affordable Care Act and its consequences, including what replacement might suggest for Medicaid, Medicare, the Individual Market, and other factors.
Mr. Barker emphasized that developing healthcare policy is very complicated and requires involvement of many departments and divisions within the government. Many roles and positions (requiring Senate confirmation and those not requiring confirmation) need to be filled, and the Trump administration is behind prior administrations in filling these and other roles. He also mentioned several policies likely to be revisited by the new administration, including those on the biotech side we should watch closely to see how things unfold: Drug pricing transparency/price regulation/reimportation, future of MACRA change/delays, policy changes to Med D and Med B, policy changes to the Medicaid prescription drug rebate program and others.
Formulary Management for High-Cost Specialty Drugs
Of particular interest to providers, Jim Rebello, Senior Director, Formulary Strategy of Magellan Rx addressed the continued rise in cost of specialty drugs and their implication for formularies. In terms of background, he identified how formulary managers review specialty drugs and categorize them into their appropriate tiers; he also showcased the use of management tools for encouraging the effective use, pricing, and support of these precision medicines.
Mr. Rebello stressed the importance of putting a big focus on implementing a formulary management approach to therapies covered under the medical benefit: We have the experience from the pharmacy side so why not implement a similar platform on the medical side? Medical formulary management techniques include lower reimbursement on drugs and higher payment for physician services, contracting for lowest net cost for preferred drug selection in categories with multiple drugs in category on the medical side, step edit, and PA requirements. With biosims starting to enter and more on the horizon, many health plan clients are asking to apply medical formulary management techniques to a growing range of therapeutic categories. Similar to aggressive uptake of generics on the pharmacy side, there have been successful efforts to shift market share to biosims upwards of 75-80%. That will continue to make a significant impact on pricing, and influence formulary managers as they continue to optimize access and adherence.
Klick Market Access: Continuing the Conversation
As a full service healthcare commercialization partner, Klick Health not only understands the power of collaboration in care management, but routinely partners with stakeholders across the complete spectrum of the healthcare system. From providers to payers, patients to professionals, marketing to formulary managers, we connect the dots between creativity, data, and technology, bringing innovative thinking and cutting edge activation to help establish value, improve access, reduce costs, and achieve/prove optimal outcomes. I’m eager to learn more about your own needs, and can’t wait to collaborate and add value to your care team. Let’s talk!