Managing Specialty Spend, the Prime Way

Specialty drugs are likely to represent more than 50% of all drug costs by 2018, according to projections from pharmacy benefit manager Prime Therapeutics’ 2013 Specialty Drug Trend Insights report, released last month. Specialty Pharmacy Times recently spoke to Peter Wickersham, senior vice president, cost of care, Prime Therapeutics, to help us highlight the key points of the report and its implications for the future of specialty spending.

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SPT: What were the report results that surprised you the most?

PW: I have been looking at these results for so long that nothing from the report surprises me all that much! It’s been part of what we do for so long—we have been thinking about these topics since I have been here at Prime, and even prior to that, when I was at Cigna as the VP of pharmacy operations. If there is anything that “surprises me,” it would be 2 things: First, I am always amazed by updated views in terms of the data of how adherence drops as you raise out-of-pocket costs for individual patients [see section 6 of the report, pages 28 and 29]. It’s fascinating that once you push out-of-pocket costs above $100, and then above $150, there is a noticeable drop in therapeutic classes. We specifically looked at multiple sclerosis and autoimmune conditions in the report. It’s interesting to see the drop-off. Then it begs the question, “How do you define benefit designs that apply the right cost share and the right incentive to members without going too far such that they drop off therapy and become nonadherent?” With specialty therapies, adherence is especially crucial.

SPT: Spend in the inflammatory class is the highest. What conditions within this category contribute most to spend?

PW: RA [rheumatoid arthritis] contributes the most to spend in this class. The autoimmune category is intended to encompass the conditions that require tumor necrosis factor inhibitors (such as Humira, Enbrel, and Remicade). This includes conditions such as psoriasis or IBS [inflammatory bowel syndrome].

SPT: What is the most innovative method a company can use to manage specialty spend?

PW: I’m going to disappoint you because I think you are probably looking for something completely different! When you have therapeutic categories that are as expensive as these to manage, and you are an employer, you are making sizable investments in the health of your employees. As an employer, you want to make sure you are monitoring those investments very carefully. Utilization management (UM), quantity limits, step therapy, and prior authorization are going to become staples—to a degree that they haven’t been before.

We manage drug spend (both medical and pharmacy) for 13 Blue Cross Blue Shield plans around the country (we are a Blue Cross Blue Shield—owned company), so they are involved in every part of the drug management process, including the P&T committee. I am amazed with how, when a new specialty drug is released, there is a tendency to want to put UM on it instantly. If you are a payer or PBM [pharmacy benefits manager], that’s the way to do it. It’s not always our approach, but the tendency is there if you are a pharmacy director. This is a change from the way drugs were handled 3 or 4 years ago.

SPT: Are PBMs best positioned to capture the specialty spend on the medical benefit?

PW: I will say that it is a difficult challenge for the industry as a whole. There have been some small boutique-type of firms that over time have been focused on medical drug management, and then there are the health plans out there—such as Aetna and Cigna—and their claim to fame is looking at drug spend holistically. But, the systems internal to those companies aren’t completely as connected as you would think they would be, even within the same firm. I know this well; I was there.

Prime has invested heavily with respect to access to medical data. We have complete access to all of those plans, and we use those medical data as part of our P&T committee. A traditional P&T committee would just cover drugs on the pharmacy benefit. Now we are looking to literally review both sides, and that means having both pharmacy directors and medical directors present from the plan. That is driven by having the right data to provide them with the information they need to make critical decisions about drug coverage. From this, they can institute clinical policy that is more complete on the medical side than they ever have been before.

Data exchange is table stakes to the poker game. From there, then you have to institute the processes and the tools together in an integrated fashion on both the pharmacy and the medical benefit—that’s what bridging the benefit divide really is about. It’s the first step in the 7 steps to specialty success.

SPT: The report pointed out that utilization management lags for specialty. What does this mean?

PW: That’s a comment on the market more so than it is on our book of business. It is a citation from the 18th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care report, and they are looking at the market more broadly. We were out early with respect to having UM controls. The first class in which we used UM was for growth hormone in 2008. Prime Therapeutics went exclusive Omnitrope—which at the time had only a 1% or 2% share—but it was by far the lowest-cost agent. And now, we’ve got upwards of a 65% share of Omnitrope across our book of business. We are the largest driver of Omnitrope sales in the country for Sandoz, which is owned by Novartis. The point is, we took that step in ’08; we then followed in ’10 and ’11 in terms of having a preferred [status] Humira strategy. I think the rest of the market will catch up. We try to use public sources in addition to our own data to develop our reports.