Why is this document important?  Healthcare marketers are aggressively pursuing new revenue streams to augment lower reimbursements provided under PPACA. Prescription drugs, particularly specialty, are key drivers in the growth strategies of PBMs, TPAs and MCOs pursuant to healthcare reform. The bottom line; payers must have access to "reference pricing" then apply this knowledge to lower plan expenditures for stakeholders. As of 9/12/2013 - Published Weekly on Thursdays How to Determine if a Pricing Problem Exists Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month. Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list. Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions. Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 10% or more price differential (paid versus actual cost) we consider this a problem.   If you discover multiple price differentials then your organization or client is likely overpaying. REPEAT these steps once per month.

The Affordable Care Act might not make care much more affordable for some Californians who need expensive prescription drugs to treat chronic illnesses or just to stay alive. The health plans to be marketed in the California insurance exchange, established under President Barack Obama's health reform law, will follow the lead of Medicare and a growing number of commercial insurers by charging co-insurance payments ranging from 10 to 30 percent on a number of high-cost "specialty" drugs. These include medications for treating rheumatoid arthritis, multiple sclerosis, hepatitis C, breast cancer, leukemia and other conditions. Advocates for the sick are unhappy that Covered California has decided to adopt this model, which imposes much higher costs on many patients than more traditional policies that offer the drugs for a flat co-payment. "It's disappointing that the state is in a way institutionalizing what we believe is a practice that harms those who are in the greatest medical need," says Lisa Nelson, director of state government affairs for the Leukemia and Lymphoma Society. Whether sick patients would be financially worse off in the exchange depends on their current insurance coverage -- and on which of the four basic exchange plans they choose, since each has different premiums, co-insurance levels and annual caps on patient out-of-pocket spending. Covered California's spokesman, Dana Howard, said the exchange officials had to balance several important factors, and in the end they believed the decisions they made were "the most feasible way to provide health plans that are affordable both in terms of premiums and cost sharing." He noted that lower-income people, who would be most affected by the high drug costs, are also the ones who will benefit the most from subsidies intended to reduce their premiums and out-of-pocket costs. Sonja Radovic, a 45-year-old working mother of two who was diagnosed with breast cancer five years ago, would not qualify for any of those subsidies. She said her expense for Feraston, a hormonal drug, could skyrocket by as much as 10 times should she ever need to buy coverage through the exchange -- from the current $860 a year to $8,600 under the plan with the lowest premium. She is confident that her employer, a small business with 11 employees, will keep its current coverage, though that could conceivably change should the economy sour again. "What part of 'Affordable' are they not understanding?" Radovic asks. "And that's just on one drug. What about other even more expensive specialty drugs?" Feraston is far from the most expensive medication. The average cost of treating a variety of cancers with one of five specialty drugs is $3,682 per month, or $44,184 a year, according to Express Scripts, the giant St. Louis-based pharmacy benefit-management company. For multiple sclerosis, the average cost is $3,584 per month, and for hepatitis C the monthly price tag is $3,284. Kalydeco, the only effective therapy for cystic fibrosis, can carry a price tag of up to $180,000 per year, says Suzanne J. Tschida, a vice president at Optum…

A little-known provision of the 2010 health care law has states and their governors scrambling to take advantage of potential savings in how states distribute medication to Medicaid patients. The Affordable Care Act (ACA) allows states to receive drug rebates even if they move their Medicaid prescription benefit to managed-care organizations. The federal government has also asked states to fix the wide disparities in dispensing costs for drugs distributed through Medicaid. That has created a rush by states and businesses to capitalize on the changes as evidence shows they are having an effect. For the first time, New York has reduced Medicaid spending. Alabama, which had one of the highest dispensing rates for Medicaid drugs, has created a commission to determine the best way to distribute medication. "It's clearly been a trend over the last several years," said Andrea Maresca, director of federal policy and strategy at the National Association of Medicaid Directors. "I think there's money to be saved." The increase in spending for Medicaid, the federal-state health care program for low-income Americans, has bedeviled states for decades. Spending for medication was no different, and states have tried preferred-drug lists that point beneficiaries to cost-effective medications, requiring prior authorizations of drugs, requiring discounts from manufacturers, negotiating additional rebates and entering multi-state joint-buying programs. Although some approaches have succeeded in reducing costs, they have also created a patchwork in which states such as Alabama pay $11 per prescription to dispense Medicaid drugs but with low ingredient fees, while other states pay $2 in dispensing fees and higher costs for ingredients. Neither approach is transparent. The battle for change now pits pharmaceutical manufacturers, pharmacy benefit managers and both physical and mail-order pharmacies against one another. They are lobbying state legislators around the country to encourage the use of certain medications, incentives and rebates. At the same time, drug costs have increased, and people are using more medications as they develop chronic diseases such as heart disease or diabetes. One approach is moving to managed care. Managed-care plans mean the state contracts out its pharmaceutical services to a group that agrees to provide services for a lower cost. Rather than a pharmacy charging a set amount every time a person fills a prescription, a managed-care system gets paid more the more money it saves.  This can be good for the patient in that there are fewer opportunities for drug duplication. However, there have been concerns that insurers will not pay for medications a doctor prescribes, such as for behavioral health issues, or that quality will be cut along with costs. Big pharmacy management providers say they can save the states as much as $33 billion over 10 years, according to a 2011 report commissioned by the Pharmaceutical Care Management Association. A new report that assumes Medicaid expansion in all the states because of the Affordable Care Act estimates $90 billion in savings, according to the Lewin Group. The ACA allowed states to expand their Medicaid programs to cover more people. Some of…

If you are of a certain age, you recall that at the turn of this century, working families and seniors took bus trips to Canada in pursuit of lower-cost prescriptions unavailable here at home. Passengers lined up with empty shopping bags and suitcases and returned with several months’ worth of prescriptions. Unless we take action soon, many Americans may again find themselves booking bumpy bus rides up north. Our healthcare system is on the brink of returning to sky-high prescription drug costs for consumers, large employers, and Medicare and Medicaid. This time, the culprit is the rapidly rising cost of specialty biologic drugs, which can easily cost hundreds of thousands of dollars per year, even for those with Medicare or good private insurance. Specialty biologic drugs are sophisticated prescriptions that are transforming lives for millions of Americans with inflammatory conditions, multiple sclerosis, cancer, HIV, or hepatitis C. These breakthrough drugs help people return to work, spend quality time with loved ones, and enjoy many of the things we all too often take for granted. However, when a year’s supply of a medication starts to rival the cost of a home, we have a big problem. Consider these troubling trends: In 2012, the unit-cost increase for specialty biologic drugs was 18.7 percent for commercial payers, 16.7 percent for Medicaid, and 26.8 percent for Medicare. And that’s despite the fact that specialty prescriptions actually declined. Because specialty drugs comprise a small percentage of the overall number of prescriptions — at least for now — these double-digit price increases are generally hidden. By 2016, we project that seven of the 10 top-selling prescriptions will be specialty drugs. Between now and the end of 2015, we estimate that spending on specialty prescriptions will increase 67 percent. It turns out that the best way to bend that cost curve downward has a lot to do with the reason the Canadian prescription-drug express is running less frequently. One of the great healthcare success stories of the past decade has been the dramatic decline in the growth rate of prescription drug spending for traditional pills. In 1999, the annual growth rate was galloping along at 18.2 percent. Confronted with this unsustainable growth that threatened to overwhelm budgets, employers turned to pharmacy benefit managers (PBMs) to help control runaway costs. Working on behalf of consumers and payers, PBMs created competition by compelling discounts from drug manufacturers who wanted placement for their medications on employers’ and health plans’ drug lists. Similarly, PBMs negotiated discounts with tens of thousands of chain drugstores and independent pharmacies to help ensure lower prescription drug costs. PBMs expanded the availability of lower-cost generic drugs and introduced new lower-cost pharmacy options, including a 90-day medication supply delivered to a patient’s doorstep. This strategy works. By 2011, the annual rate of growth in prescription drug costs was down to just 3 percent. But today, these gains are at risk. Our specialty drug system currently lacks the same market-based tools that we used in the past to…

This Trend is Part of Overall Effort by Payers to Control Access to and Costs for Rheumatoid Arthritis, Multiple Sclerosis and Oncology Therapies, According to a New Report from Decision Resources BURLINGTON, Mass., July 31, 2013 -- /PRNewswire/ -- Decision Resources, one of the world's leading research and advisory firms for pharmaceutical and healthcare issues, finds that 68 percent of surveyed managed care organization (MCO) pharmacy directors either currently or plan to transition specialty product coverage from the medical benefit to the pharmacy benefit for office-administered products, particularly affecting therapies in rheumatoid arthritis. This transition, which is slated to be completed in 2015 or later after many of the policies in the Affordable Care Act begin to take effect, comes as MCOs deal with a cost trend for specialty drugs that far exceeds those for small molecule therapies. As a result, MCOs are implementing strategies to control access to specialty therapies in rheumatoid arthritis, multiple sclerosis and oncology. (Logo: http://photos.prnewswire.com/prnh/20130103/MM36784LOGO ) The Physician & Payer Forum 2013 report entitled Market Access for High-Cost Biologics in Multiple Sclerosis, Oncology, and Rheumatoid Arthritis also finds that 85 percent of surveyed plans have some utilization restrictions in place for specialty drugs, particularly prior authorization for therapies covered under the pharmacy or medical benefit. However, other restrictions are slated to increase in use. In the next 12 months, 63 percent of surveyed payers expect to have site of care restrictions in place, while 66 percent will have preferred and non-preferred specialty tiers. Furthermore, some MCOs plan to eliminate grandfathered coverage for specialty therapies while 52 percent anticipate restricting use of copay coupons for non-preferred specialty agents. In addition, surveyed neurologists, rheumatologists and payers report notable restrictions around specialty therapies treating MS and RA, reflecting the launch of newer premium-priced therapies. Of note, however, MCOs' traditional laxer restrictions around oncology may be giving way to greater management by payers, particularly through the use of clinical pathways and companion diagnostics. "Increased complexity in benefit design is impacting all pharmaceuticals, and plan members continue to have increases in financial responsibility. This is especially true for higher cost specialty drugs which are covered more often in a co-insurance tier," said Senior Director Brenda Cole. "In addition, competition in the form of both new brands and generic introductions are allowing MCOs increased leverage with manufacturers, especially in the MS and RA markets, but also in some oncology markets. Payers have been talking about increasing restrictions and using differential co-pays to lower costs with specialty drugs and this report shows how they are taking action and what trends are likely to continue and evolve." All company, brand, or product names contained in this document may be trademarks or registered trademarks of their respective holders. SOURCE:  Decision Resources

Drug adherence is one of the hottest topics in pharmacy today. What is driving this and what does it mean for community pharmacies? Everywhere you turn — in industry publications, academic research, conferences, and even the mainstream press — there is mention of “drug adherence.” (A Google search of this term generates over 10 million hits.) It seems that increasingly drug adherence is a priority for the government, Medicare Advantage plans, private payers, pharmaceutical companies, PBMs, ACOs — and pharmacies. But why is drug adherence getting so much attention lately? And why should community pharmacies care about it? Why Adherence? Because Non-Adherence Remains a Huge Problem Medication adherence is not a new issue, but remains an enormous problem. Half of the 4 billion prescriptions written annually are not filled in their entirety.[i] And, recent studies confirm that the failure to take medications as prescribed has a costly impact on the U.S. healthcare system, with estimates that the current cost could be as much as $290 billion annually — or 13% of total healthcare expenditures.[ii] Even though the problem of non-adherence to prescribed drugs has been known and researched extensively, the rates of non-adherence have not changed much in three decades.[iii] A few salient facts that illustrate the continuing adherence problem[iv]: Nearly two-thirds of Americans who take medications do not take them properly. 64% percent of Americans who take medications don’t always take their medications as prescribed; only 33% say they never miss taking their prescription medications. Those who must manage multiple medications are most likely to not adhere; 70% of individuals who take 3 or more medications do not take them properly. “Drugs don’t work in patients who don’t take them.” — C. Everett Koop, former U.S. Surgeon General Why Adherence? Because It Has Been Proven to Work There is better and better evidence showing the adherence-focused interventions can work. A recent Health Affairs blog posting on adherence[v] highlighted three 2011 studies that showed associations between medication adherence and cost savings; the savings was attributable to lower medical utilization. When people were more adherent to their medications, their overall medical costs declined. These studies included patients with CHF (congestive heart failure), hypertension, diabetes and dyslipidemia. Even though spending on medications increased, there were corresponding decreases in hospitalizations and emergency department visits yielding benefit-cost ratios ranging from 3 to 1 (for dyslipidemia) to even 10 to 1 (for hypertension).  Further, according to a recent Congressional Budget Office (CBO) report, a 1% increase in the number of prescriptions filled by Medicare beneficiaries would cause Medicare spending on medical services to fall by roughly 0.2% ($1.7B).[vi] “CBO reviewed dozens of newer studies and determined a body of research now demonstrates a link between changes in prescription drug use and changes in the use of and spending for medical services.” — CBO Report, November 29, 2012 The evidence base increasingly shows that better drug adherence leads to a reduction in healthcare costs, and has a positive return on investment. Why Adherence? Because Multiple Stakeholders Are Now Focused on It…

Diabetes Drugs Will Lead Specialty Category Diabetes drugs will lead the way in a dramatic rise in spending over the next two years on specialty drugs, according to a study by Express Scripts, a St. Louis-based prescription benefits management company. The study estimates that U.S. spending on such drugs will reach nearly $115 billion in 2014. Specialty drugs are defined as drugs used to treat very serious ailments, such as cancer and autoimmune diseases like diabetes. The drugs require special handling and administration. Their costs are high due to several factors, including the expense of developing them, and the fact that physicians are delaying treatment of some patients until drugs now under development come to market. Heading the list of expensive specialty drug therapies will be diabetes drugs, where spending on them is expected to increase by 24 percent between now and 2015. (Other disease categories where Express Scripts expects to see higher spending on drugs are cancer, multiple sclerosis, and inflammatory conditions such as rheumatoid arthritis.) According to Express Scripts, diabetes became the costliest prescription drug therapy class in 2011. The increasing incidence of the disease in the general population, plus an abundance of new diabetes drugs in the pipeline will add to the overall cost of drugs in that class. by Diabetes Health Staff Jun 14, 2013

There has been a lot of buzz in the healthcare world lately about “specialty pharmacy” as an opportunity for rapid growth, financial opportunity, and expansive change, however there is some debate as to what exactly constitutes a specialty pharmacy.     Here we will examine that questions and look at some of the definitions that have been recently emerging by focusing on three key questions: What is a Specialty Drug? Specialty Pharmacies are most often focused on the dispensation of specialty drugs.  While there is no standardized definition of what constitutes a specialty drug, most often the meet the following criteria: the drug is a specialized, high cost product (typically more than $500 per dose or $6000 or more per year) the drug is utilized as a complex therapy for a complex disease the drug requires special handling or administering, shipping, or storage (such as an injectable) the drug may have a Food and Drug Administration (FDA) Risk Evalaution and Mitigation Strategy (REMS) in place specifying that there is required training, certifications, or other requirements that must be met in order for the drug to be administered. The drug has the potential for significant waste due to high cost Specialty drugs are used to treat a variety of complex and chronic conditions including but not limited to: anemia, cancer, infertility, multiple sclerosis, HIV and hepatitis.  Some categorize specialty drugs as meeting all of the three H’s: High Cost, High Complexity, High Touch. Because of the specialized way in which these drugs need to be administered, specialty pharmacies come into play with a specific focus on this group of drugs and the required comprehensive and coordinated delivery and support required to effectively deliver these drugs to patients.  Leading us to the question “What is a Specialty Pharmacy?” What is a Specialty Pharmacy? Now that we have identified what a specialty drug is, we can begin to touch on what constitutes a specialty pharmacy.  In broad terms, a specialty pharmacy is a specific type of pharmaceutical delivery system which coordinates delivery and offers comprehensive support in the distribution of drugs which are high cost or complex and utilized to treat complex conditions. The Academy of Managed Care Pharmacy (AMCP) in a recent publication entitled Format for Formulary Submission, version 3.1 defined specialty pharmacy as the following: “Specialty pharmacies are distinct from traditional pharmacies in coordinating many aspects of patient care and disease management.  They are designed to efficiently deliver medications with specialized handling, storage, and distribution requirements with standardized processes that permit economies of scale.  Specialty pharmacies are also designed to improve clinical and economic outcomes for patients with complex, often chronic and rare conditions, with close contact and management by clinicians.  health care professionals employed by specialty pharmacies provide patient education, help ensure appropriate medication use, promote adherence, and attempt to avoid unnecessary costs.  Other support systems coordinate sharing of information among clinicians treating patients and help patients locate resources to provide financial assistance with out of pocket expenditures.”  What we are essentially…