Value-based contracts among pharmaceutical manufacturers and payers have not achieved the success levels necessary to drive significant systemic change.
GROWTH IN US SPENDING ON prescription drugs dropped in 2016 as intense competition among manufacturers and payers ramped up efforts to limit price increases, according to the report “Medicines Use and Spending in the US,” released earlier this year by the QuintilesIMS Institute.
New drugs launched over the past 2 years have driven at least half of the total spending, with innovative treatments for cancer, autoimmune diseases, HIV, multiple sclerosis, and diabetes becoming accessible to patients. The potential for innovative new treatments over the next 5 years is even more promising, fueled by a robust late-phase pipeline of over 2300 novel products, which include more than 600 cancer treatments. According to the QuintilesIMS report, US net total spending is expected to increase an average 2% to 5% through 2021, reaching $375 billion to $405 billion.
Downward pressure on drug pricing can only go so far before manufacturers abandon the development of new therapies due to their inability to recover research and development costs and a reasonable return on investment. The effects on accessibility to patients will likely be short term, as well. What does the future of access to specialty therapies look like and how are we going to pay for all of this?
Something’s Got to Give
Following the uproar over the cost of the new wave of hepatitis C antiviral drugs, the arrival of PCSK9 inhibitors in 2016—and their $1000 per month for life price tags—triggered swift, stringent prior authorizations (PAs). This was an attempt to ensure that less costly, yet indicated, medications were first shown to be ineffective, a practice commonly referred to as step therapy, before the more expensive medications were prescribed.
As specialty drugs proliferate, there comes a commensurate increase in PAs. Unfortunately, these fall immediately at the feet of prescribers and clinicians. It is possible that PAs can stifle medication adherence and increase the likelihood of patient resistance to medication therapy.
Achieve Expert Status on PA Forms
There can be as few as 3 or 4 line items among the pages of a single PA form that are critical to fair evaluation and patient access. Yet we have seen some patients have their prescriptions authorized and filled, only to learn that the refills of therapies, such as Harvoni, require monthly PA approval. This process puts the patient at risk of resistance to therapy and the payer at risk of massive amounts of wasted spending on prescription drugs.
The more PA forms with which specialty pharmacists can become intimately familiar, especially for high-cost medications for chronically ill patients, the more attractive pharmacists will be to the time-constrained clinicians and the patients who rely on them for care.
Value-Based Contracts: Who’s in for the Leading Role?
To date, value-based contracts among pharmaceutical manufacturers and payers have not achieved the adoption and success levels necessary to drive significant systemic change. This is because many of these agreements cover only 1 drug and/or rely on simple volumetric math as the arbiter of contractual conditions and payment.
Contracts that base reimbursement on improved patient outcomes are gaining traction. Manufacturers stand to benefit from pharmacy and medication therapy management (MTM) partners with proven capabilities to improve adherence and patient engagement that results in positive health outcomes, such as sustained virologic response. A strong case can be made that clinical pharmacists are the most appropriate, near-neutral arbitrators of value-based contracts given the following qualifications:
Expertise - Clinical pharmacists possess the pharmacologic knowledge critical to side effect mitigation (a contributor to adherence and outcomes) and for conducting appropriate medication reconciliation for polychronic, polypharmacy patients. These individuals account for roughly 20% of the population that is responsible for 80% of health care spending.
Familiarity with all parties - Specialty pharmacists interact with all parties concerned: patients, prescribers, manufacturers, and payers. They have a clear line of sight into the patients’ living rooms, kitchens, and medicine cabinets that the other stakeholders do not have. This enables them to understand the whys of medication nonadherence and gives them the ability to alter what is needed in order to effect and support individualized changes that improve adherence, outcomes, and value derivation for all parties.
Trusting patient relationships - Improving adherence requires a trusting relationship with the patient. We have discovered through more than 16 years of patient service that patients tell us things they have not even told their prescribers. Building trusting patient relationships takes time and dedicated, patient-focused teams.
Data systems - Although electronic health record systems have a long way to go to reach needed levels of efficiency and interoperability, specialty pharmacies and medication management providers are uniquely positioned to collect the minimum levels of data needed to fairly adjudicate value-based contracts. These systems should enable ease of access to data sources from multiple stakeholders and to analysis that all parties can understand.
Communication skills - Placing the highest priority on patient outcomes is a good first step in building a dialogue everyone can embrace and understand. Specialty pharmacies can play a leading role in value-based contracts because they are well versed in each party’s language and top interests.
Strength in leadership - There will be many patient lives and millions of dollars at stake in the next generation of value-based contracts. C-suite from payers and manufacturers will be sitting at the table during the design, implementation, and adjudication of value-based contracts if a specialty pharmacy or medication management provider chooses to accept the challenge of playing a leading role. The opportunity to help develop and implement the next generation of patient-centric, value-based contracts is one that could move the right specialty pharmacies and medication management providers out of the shadows of care.
Can Amazon’s Interest in Pharmacy Raise the Level of Industry Transparency?
As has been widely reported, online retail giant Amazon may be getting serious about entering the pharmacy business. With consumers’ self-education about their health care on the rise due to the proliferation of high-deductible plans and the associated out-of-pocket costs, it makes sense that pharmacy needs to adapt consumers’ associated shifts in buying habits into the online space.
Max Nisen recently wrote on Bloomberg.com, “Amazon has many advantages when it comes to selling just about anything. Hundreds of millions of people buy something from Amazon every year; something no other company, let alone another pharmacy, can really match. It’s arguably better at managing speedy delivery and consumer experience than its potential competitors. That gives it a real chance to increase the market penetration of online and mail order drug options.”
Generics and Prevention
A valuable pathway to reducing overall health care costs—including specialty medications—that has not been given sufficient focus is wellness programs, including those focused on reducing obesity. The New York Times reported on a New England Journal of Medicine study published in June that more than 10% of the world’s population is obese. The study authors found that excess weight was a factor in 4 million deaths in 2015 from such conditions as heart disease, diabetes, and kidney disease.
In a closely related piece, USA Today’s Jayne O’Donnell, Erin Barry, and Kate Covington wrote that, “obesity, inactivity could outpace smoking in cancer death risk.” The American Cancer Society’s Rebecca Siegel told the authors, “Twenty percent of cancers are caused by poor diet, alcohol consumption, a lack of physical activity, and/or excess weight that can’t be combined with the 30% of cancer deaths caused by cigarette smoking.”
So How Are We Going to Pay for All of This?
In 2 words, we’re not. The economic machine that drives the provision of US health care, including pharmaceutical innovation and patient access to therapies, runs on the allocation of scarce resources. As I wrote in an earlier piece for Specialty Pharmacy Times®, “Those allocations are based on the value placed on every element that serves or receives service from the industrial players. Perhaps the most difficult assignment of value involves that of the extension of life, a figure that US health care policy makers have yet to quantify.”
Until US health care policy makers assign a quality-adjusted life-year value determination nationwide, we will continue to wade through a disjointed process by which access to, and prices for, specialty medications, including nascent immunotherapeutics, are determined.
Moving the Longest Lever in Addressable Wasted Health Care Spending: Adherence
According to QuintilesIMS, medication nonadherence remains the longest lever available to affect more than $200 billion in wasted health care spending. We know that improvements in adherence also improve outcomes for chronically ill patients, particularly those with inflammatory bowel disease (IBD), hepatitis C, and HIV, through our clinical study work with Johns Hopkins, Northwestern University, and the University of Alabama-Birmingham, among others.
Results from a study delivered during the 10th International Conference on HIV Treatment and Prevention showed that out of 157 patients with HIV whose viral loads were not suppressed prior to enrollment in enhanced medication management protocols, 103 have now achieved viral suppression. And in October 2016, Curant Health and Johns Hopkins Medicine’s Meyerhoff Inflammatory Bowel Disease Center found that MTM improves adherence more than 30% compared with the standard of care for patients with IBD.
The business of improving outcomes while reducing costs is arduous work. Specialty pharmacy has an opportunity to deliver value by investing in patient support services that improve medication access and adherence, while simultaneously providing the alignment and support that the balance of the care continuum needs to ensure available resources are used most effectively.