Greg Isaak

With their focus on data, reporting, and outcomes measurement, specialty pharmacies are uniquely positioned to play an important role in the changing health care landscape. 

It is a well-known fact that chronic disease accounts for a significant share of health care costs today. And with an aging population blessed with unprecedented and increasing longevity, chronic disease likely will take an even greater share in the years to come.

As health care reform comes into full implementation within the coming year, providers are seeking ways to provide higher quality care more cost-effectively than ever before. Nearly every purchase will be scrutinized by the value it brings. Hospitals and physicians will be measured by outcomes they achieve and economic penalties will be incurred for avoidable readmissions.

Specialty pharmacies (SPs) are at the core of managing the exploding caseloads of patients with chronic diseases, and are well positioned to help providers thrive under health care reform. And the most logical venue for that just may be found in a new preferred model—the accountable care organization (ACO), an entity formed by groups of doctors and other health care providers that have agreed to work together to coordinate care for recipients. 

Today, approximately 150 ACOs are participating in shared savings initiatives serving more than 2.4 million patients, according to the US Department of Health & Human Services. Many of them are working toward integrating specialty pharmacies, including:

, which has focused on the application of evidence-based information to define the “place in therapy for drugs.” The clinic has also incorporated clinical pharmacists in its ambulatory drug use and evaluation committees.

, whose ACO is working to track and treat patients across the health care system with ready access to data and their medication therapy documentation. “Specialty pharmacy programs enable health care providers to support these patients’ continuity of care and health information access, which enhances the patient experience and the quality and safety of their care,” explained Bob Carta, vice president, pharmacy services.

		Specialty pharmaceuticals are rapidly garnering a major share of the total market. In 2011, retail, mail, and SPs dispensed $46.9 billion worth of specialty drugs. 

According to a Kaiser Family Foundation report, as many as 8 of the top 10 drugs (by plan spending) could be considered specialty by 2016, 3 and could account for nearly half of all pharmaceutical manufacturer sales. 

		Overall, specialty pharmacy therapy costs hit $100 billion in 2010, growing at a 15% to 20% rate over the past 3 years.

		Spending on SPs is growing 5 times faster than for all other kinds of drugs, from 19.6% in 2010 to a projected 25% annually through 2014, when they could comprise as much as 40% of the industry’s total drug spending. 

		SPs lead new drug approvals by a wide margin. According to the Utilization Review Accreditation Commission, more than 700 new specialty drugs are currently in development, “and the expected stream of specialty approvals is making stakeholders reconsider and redesign their channels of delivery and access.” 

It’s no wonder, therefore, that as specialty pharmaceuticals become more prevalent and broaden available treatment options, insurers and providers are being challenged. SPs have high acquisition costs, are difficult to manage, and present reimbursement conundrums. Because of this, SPs are taking on a significant and vital role in streamlining the delivery process and smoothing out the challenges in health care distribution and financing. 

By virtue of the role they play in managing patient therapy and the drug pipeline, SPs already exhibit many of the characteristics that are deemed desirable under health care reform in general, and the accountable care model in particular, observers say. They are playing an expanded role in advising prescribers regarding the relative effectiveness and value of their drug treatment options in an ACO, and are accepting greater responsibility for the ongoing management of medication therapy and outcomes measurement.

In a value-based purchasing environment that incentivizes providers for using medications properly, SPs are able to justify high product costs by demonstrating that high levels of patient compliance result in lower rates of readmissions and unnecessary physician office visits. Their expertise in clinician and patient education also mitigates medication errors, which are responsible for over one-third of all adverse events in health care.

According to an American Society of Health-System Pharmacists analysis, “Health systems and physician groups are grappling over how to create ACOs that will improve patient outcomes while reducing health care costs. 

 To achieve that goal, ACOs will need to improve medication and chronic disease management, as well as reduce hospital readmissions.” Specialty pharmacies have the clinical expertise to help meet this challenge. Under a proposed rule relating the Medicaid Shared Savings Program, in fact, ACOs will be evaluated specifically on medication management. 

In a landmark analysis this past summer, representatives from key industry groups, providers, and Premier, a leading health care alliance, argued effectively for the importance of integrating specialty pharmaceuticals into value-based care models such as ACOs in order to provide better care for individuals, improve population health, and slow cost growth. 

Moreover, a myriad of recent approaches to integrate health care delivery—one of the mandates of health care reform&mdash;clearly demonstrate the vital role that medication therapy plays, according to a 2011 report by the Academy of Managed Care Pharmacy. 

SPS are Eperts at Patient Care Management 

Medicare beneficiaries with multiple chronic illnesses see on average 13 different physicians, fill 50 prescriptions each year, account for 76% of all hospitalizations, and are 100 times more likely to have a preventable hospitalization than those with no chronic illnesses. 

Because of the vital role they play in medication therapy management, SPs will be integral to the success of any accountable care organization.

Specialty pharmacies have proven acumen in patient care management, which generally translates into better patient compliance and adherence to medication and therapy, and this is one of the key ways they can advance the development of the ACO.

Whenever I visit a hospital and physician group practice and there’s a chief financial officer in the room, the first question I invariably get is “How are you going to reduce my readmission rates?” I take that as a personal responsibility. I want to make sure that we provide the highest levels of patient care we can.

It is that singular issue—patient medication compliance&mdash;that highlights the value SPs bring to the table. There are big gaps in patient care right now when it comes to patients with chronic, longterm diseases. Physicians have no way of knowing why their patients end up back in the emergency department or are admitted to the hospital. For every script written, 80% actually result in a connection with some sort of pharmacy, hether it is a retail, mail-order, or specialty pharmacy. Of that 80%, only 60% actually get filled. Of that 60%, only 40% stay compliant.

The importance of quality, reliable information detailing patient care across a vast continuum cannot be overstated—and SPs are rich with data. This is because of the close collaboration they have with physicians and providers. Working with providers, SPs have the ability to communicate and share data such as information on previous patient therapies, drug allergies, and pre-existing conditions, all of which facilitates better coordinated care.

Going forward, SPs will need to work even more closely with providers to link inpatient and outpatient data in order to provide a full picture of patient care and allow better outcomes measurements.

This kind of data also will allow payers to better establish a link between pharmacy compliance and patient health. Right now, few in the industry are convinced that any single medication produces a better outcome on a particular compliant patient than a non-compliant patient. But once we’re able to marry a patient’s total episodic care data with medication data, there will be.

In spite of the inherent value SPs can provide to providers in this new era of health care reform, they face a number of challenges. One is the uncertainty of reimbursement. Unlike their non-specialty counterparts, specialty pharmaceuticals can be covered under the medical and/or pharmacy benefit portions of Medicaid. But mounting drug costs have prompted federal and state Medicaid programs to consider alternative funding mechanisms.

“States are looking at a variety of approaches, including contracts with specialty drug vendors, setting Maximum Allowable Cost (MAC) rates or deeper discounts on select specialty drugs,” according to a 2011 Kaiser Family Foundation report. “States are also considering other options to better manage their pharmacy benefits, including monitoring programs for mental health drugs and other new management tools.” 

Another challenge is the shift from a volume-based to value-based environment. The MSSP program for ACOs, for example, includes both a shared savings component and receipt of payments for achieving quality benchmarks. In the collaborative industry and Premier analysis published in 2011, experts noted that if done correctly, value-based health care can enable patients to gain access to, and support in using, needed medications, and can do so while simultaneously lowering cost growth and achieving the quality benchmarks that the marketplace will soon demand. 

Under health care reform, we will be expected to provide that same level of care at a reduced reimbursement rate. “So the challenge will be in providing high levels of patient care under reduced reimbursement rates and therefore, reduced margins,” suggests the analysis.

SPs also will be called upon more and more to educate providers about their pharmaceutical spend. According to a recent Zitter Group study, payers already are looking for substantial discounts because of a perceived overutilization of specialty therapies. 

A recent American Society of Health-System Pharmacists report states that SPs should educate hospital administrators and other decision makers about the need to incorporate pharmacists’ medication and chronic disease management skills into ACOs. 

Finally, SPs will need to prove their value to providers. Doing so depends on an organization’s ACO priorities, according to the American Pharmacists Association. 

 For example, if the priority is clinical quality, a SP can demonstrate medication safety and outcomes. If the priority is financially based, the SP can document its ability to reduce the rate of readmissions.

If there is an overarching theme to health care reform and the emerging accountable care model, it is the insatiable need for providers, suppliers, and payers to share best practices and successes. Many observers argue that health care reform efforts hinge upon successful collaboration.

The industry is full of examples. One of them is being led by Charlotte, North Carolina—based Premier, an alliance of more than 2700 hospitals and health systems and 90,000 other care sites. Premier has been leading a number of largescale performance improvement collaboratives for several years now, including the Partnership for Care Transformation (PACT) collaborative aimed at developing integrated care delivery models such as ACOs.

To help member health systems address the growing challenges presented by the $100 billion SP market, Premier recently launched a Specialty Pharmacy and Care Management program that provides access to life-saving therapies, administrative support, patient therapeutic management, care coordination, and robust data management and reporting.

“Our specialty pharmacy program is helping alliance members better manage the high costs of caring for specialty pharmacy patients and expand treatment to additional chronically ill patients,” said Premier Chief Operating Officer Mike Alkire. “These capabilities combine to support timely patient access to needed therapies through improved care coordination and medication compliance. For providers, this means optimized clinical outcomes and reduced costs associated with avoidable complications and unnecessary admissions.”

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2. Specialty Pharmacy News, July 2012. http://aishealth.com/marketplace/specialty-pharmacy-news.

3. Managing Medicaid pharmacy benefits: current issues and options. Kaiser Commission on Medicaid and the Uninsured; Kaiser Family Foundation; September 2011. http://www.kff.org/medicaid/upload/8234.pdf.

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13. Managing Medicaid pharmacy benefits: current issues and options. Kaiser Commission on Medicaid and the Uninsured; Kaiser Family Foundation; September 2011. www.kff.org/medicaid/upload/8234.pdf.

14. Role of pharmaceuticals in value-based healthcare: a framework for success. American Journal of Managed Care, July 2012. www.ajmc.com/articles/Role-of-Pharmaceuticals-in-Value-Based-Healthcare-A-Framework-for-Success.

15. Appropriate specialty drug utilization to reduce waste still a top priority. Zitter Group; Summer 2011. www.zitter.com/download/Appropriate%20Specialty%20Drug%20Utilization%20to%20Reduce%20Waste%20Still%20a%20Top%20Priority.pdf.

16. Pharmacists’ role in accountable care organizations. American Society of Health-System Pharmacists. www.ashp.org/doclibrary/advocacy/policyalert/aco-policy-analysis.aspx.

17. Using medications properly in an ACO environment. American Pharmacist’s Association; September 2012. www.pharmacist.com/using-medications-properly-aco-environment.

Greg Isaak

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