Vendor Integration: Focus on Customer and Cost Leads Manufacturers to Novel Approach
Specialty pharmaceuticals, and the supporting patient and physician ancillary services, have emerged as a focal point for the majority of manufacturers. The increasing number of specialty drugs available in the United States, coupled with the heightened research and development focus of major pharmaceutical manufacturers on biotech therapies, has resulted in an unprecedented shift in dynamics across the prescription drug industry.
Specialty drug manufacturers are under pressure to reduce costs associated with patient access solutions and FDA-mandated REMS programs.
Specialty pharmaceuticals, and the supporting patient and physician ancillary services, have emerged as a focal point for the majority of manufacturers. The increasing number of specialty drugs available in the United States, coupled with the heightened research and development focus of major pharmaceutical manufacturers on biotech therapies, has resulted in an unprecedented shift in dynamics across the prescription drug industry. In fact, by 2014, specialty drug spend is estimated to comprise 40% of US drug spend (source: Express Scripts’ 2010 Drug Trend Report: A Market and Behavioral Analysis, April 2011).
This market shift from oral solid to specialty medications comes with 2 notable dynamics impacting manufacturers. First, it is increasingly important to provide patient and physician support services, such as reimbursement and patient assistance programs. Second, the FDA has imposed more stringent mandates on manufacturers to ensure the safety of approved products, primarily consisting of risk evaluation and mitigation strategies (REMS) and other post-launch surveillance requirements. Frequently, these safety and support programs require significant investments in dollars and total resources. Manufacturers now find themselves in the position of having to devise innovative ways to control costs.
In the past, no expense was spared to ensure the successful launch of a product into the market. However, there has recently been a subtle but significant shift toward austerity in the manufacturer approach to launching and supporting new products.
Perhaps the most significant driver of the austerity movement in specialty drug commercialization is the pressure to reduce costs associated with patient access solutions and FDA-mandated safety programs, such as REMS. A frequent catalyst for this cost sensitivity is the dynamic mergers and acquisitions environment. When companies merge or acquire a competitor, they strive to maximize all potential synergies, typically resulting in increased scrutiny of all buying decisions. This translates into more informed and effective purchasing decisions overall.
Traditionally, specialty pharmacy support services have been awarded to numerous vendors, often resulting in inefficient and isolated efforts. For example, REMS program vendors would be selected by epidemiology groups or risk management departments. Procurement or reimbursement services were the responsibility of trade relations groups or brand teams. Adherence programs and nursing services often operated outside of REMS or reimbursement services. This practice of multiple vendors managing the support services for a single drug became the norm, but it did not take manufacturers long to realize the significant flaws in this fragmented approach.
REMS programs perhaps play the most significant role in exposing the problems associated with fragmented support services management. These FDA-mandated programs must potentially be applied to all physicians, patients, and pharmacies involved in prescribing, administering, and fulfilling a drug with REMS requirements. Because REMS are applied across all prescriptions and potentially all stakeholders, they often must be coordinated with other programs.
For example, a specialty drug may have a REMS requirement that a physician complete mandatory training prior to writing a valid prescription. Before a specialty pharmacy can dispense the drug it must verify that the REMS requirement for physician training has been satisfied. This typically would happen through a telephone call or electronic communication to the REMS program administrator. If the physician is not properly trained, the prescription is held until the physician complies with the training requirement and is entered into the REMS database as a validated prescriber. In addition to validating REMS requirements, prior to dispensing the drug the specialty pharmacy must also verify through the reimbursement hub administrator—and often through its own benefits investigation—that the prescription will be paid for by the patient’s insurance or other means. This reimbursement process requires the cooperation of the patient and the physician’s office.
Both REMS and reimbursement programs require intense coordination with patients and physicians and the compliance monitoring services of the specialty pharmacy. Frequently, the requirements of REMS programs overlap with other services and thus, a savvy manufacturer will consider how to best coordinate programs likely to be managed by separate vendors. Both support and safety programs are built on a foundation of communicating with patients, physicians, and pharmacies via telephone, fax, e-mail, US mail, or Internet. For individual drugs that have multiple safety and support programs run by multiple vendors, these communications often are confusing and may ultimately result in delayed patient therapy and increased rates of patients discontinuing therapy (Table).
Additionally, multiple vendors frequently contact physicians’ offices with requests for action—all for the same patient and the same drug. Often the physician and the office staff believe these calls are about the same issue and that once they have satisfied a request for action, any subsequent requests are simply redundant and can be ignored. The assumption that resolving 1 issue will ensure a patient’s access to therapy is a common misconception within offices. The single-vendor solution may minimize this confusion and facilitate faster initiation of therapy.
Physicians’ offices are not the only stakeholders impacted by the myriad of telephone calls and other communications surrounding a specific therapy. Patients, many of them profoundly ill, are often unable to navigate some of the complex requirements for medication access. Patients might master the process of verifying that their drugs are covered by their health plans and then navigate a separate process to obtain copayment assistance, only to be stalled in their attempts to enroll in a patient database for a REMS program. In the interim, their disease progresses and the medicine they so badly need—the medicine their physician has chosen as the best treatment—is delayed. All too often the patient complains to the physician and the physician responds by writing a different prescription that may not have as many requirements, but that is also not likely to be the best treatment available to that patient.
While coordinating REMS requirements across numerous programs exposed the flaws in the multiple vendor model, there exists today a template for the effective application of multiple program requirements. A small handful of ultra-orphan specialty drugs are managed through an exclusive pharmacy system. In this system there is only 1 pharmacy with access to the drug and that pharmacy manages all the safety and support programs within 1 integrated program. While an exclusive pharmacy model is not viable for most drug programs, a single point of contact for integrated communications is preferred.
An integrated solution allows a suite of services to function as a unified offering to meet manufacturer needs and requirements through the life cycle of a drug. This provides patients, pharmacists, and physicians’ offices with a seamless path that facilitates access to the appropriate therapy. Manufacturers are able to create customized programs around individual therapies that support the specific needs of patients and physicians as well as satisfy potential regulatory requirements. These programs are typically developed from a pool of services including third party logistics, specialty pharmacy, specialty distribution reimbursement services, REMS, patient assistance programs, customized adherence programs, and nursing services. The program elements vary, but true resource synergies are realized when all points of contact come in a coordinated manner from 1 vendor focused on the patient and physician experience.
The appetite for integrated programs for specialty medications has increased dramatically over the past 12 months. Manufacturers are quickly adapting to the need to control costs while providing best-in-class service and adhering to regulatory requirements. Integrated programs deliver key results including cost synergies, clean data, insightful reporting, enhanced patient and physician experience, and the increase in the initiation and ongoing usage of a prescribed therapy. These results have been embraced by manufacturers and are rapidly driving a new standard in delivery of specialty medications. SPT
Kevin Cast utilizes more than 20 years of demonstrated experience and amassed expertise in the pharmaceutical and biotech industries to develop business solutions to support successful product commercialization. As Express Scripts’ vice president of strategy & contracting, pharma & biotech, he currently directs the business development team responsible for contracting with manufacturers.