Four innovative models rein in pharma costs
Total spending on medications in the United States reached $310 billion in 2015 on an estimated net price basis, up 8.5% from 2014, according to a recent IMS Health study. Specialty drug spending reached $121 billion on a net price basis, up more than 15% from 2014.
IMS Health also shows that the average patient cost exposure for brand prescriptions filled through a commercial plan has increased more than 25% since 2010, reaching $44 per prescription in 2015.
“Costs are completely out of hand, not just specialty pharmacy but also some generics and branded drugs with astronomical costs. As a payer, we ask ourselves, ‘How do we mitigate costs?’” says Sarah Marche, vice president, pharmacy services for Highmark.
While many payers and PBMs are using the same traditional tools to contain costs, others have added programs or expanded upon existing ones. Here are four organizations using innovative new models.
Express Scripts: Risking more for higher rewards
Express Scripts, a PBM, created SafeGuardRx, an umbrella of services focusing on the “pain” points for customers in terms of affordability and quality of care. Its initial two programs launched in 2015—the Hepatitis Cure Value Program (HCV) and the Cholesterol Care Value Program (CCV)—have since been joined by the Inflation Protection Program and the Oncology Care Value Program.
At the heart of HCV is making Viekira Pak the exclusive formulary option for members with genotype 1 hepatitis C. In return, AbbVie, the drug’s manufacturer, provides significant discounts to patients if they fill their prescriptions via Express Scripts’ Accredo Specialty Pharmacy. Express Scripts caps the cost of Viekira Pak if patients require treatment longer than the typical 90-day regimen. In addition, the PBM refunds the cost of therapy if patients do not reach adherence.
“We bet on ourselves in achieving adherence, cure rates and savings,” says Glen Stettin, MD, senior vice president and chief innovation officer for Express Scripts.
CCV offers a per member per year cost cap on PCSK9 inhibitors that Express Scripts added to its national formulary this year. The drugs must be obtained through Accredo and go through rigorous clinical review. Express Scripts provides a guarantee on cost, based on actuarial analyses for those with heart disease and hyperlipidemia that are the conditions warranting the use of PCSK9s.
The Oncology Care Value Program, focusing initially on prostate and lung cancer and renal cell carcinoma, aligns cost of treatment with outcomes. “The cost of cancer drugs is based on value,” Stettin says. The program provides access to the right oncology drugs for patients and if they don’t work, they receive refunds.
The Inflation Protection Program, which began January 2016, caps brand drug inflation, protecting plans from the full cost of year-over-year increases on brand drugs. Plans pay about one-third less per year.
In 2017, Express Scripts will unveil three new programs to help rein in pharmacy costs: the Diabetes Care Value Program, the Inflammatory Condition Care Value Program and the Market Events Protection Program.
The diabetes program is guaranteeing per patient spending caps to improve adherence and prevent cost increases. Stettin says that plans using the program should expect to pay an average increase in diabetes drug spend in 2017 that is about half of what the industry is currently forecasting for U.S. commercial payers next year.
Stettin says the inflammatory program blossomed when it became apparent that patients switch from one drug to another for these conditions, such as rheumatoid arthritis, psoriasis and Crohn’s disease, due to side effects. Between 21% and 36% of patients discontinue these medications within the first 90 days. In response, the PBM provides a savings guarantee for plan sponsors up to $6,000 if a patient discontinues a preferred anti-inflammatory medication within the first 90 days.
All of the care value programs also take advantage of pharmacists specializing in specific conditions, therapeutic resource centers in 20 different clinical areas, and the Accredo Specialty Pharmacy.
The Market Events Program targets unusual market situations and directs clients to the most clinically appropriate, cost-effective therapy or dispensing channel. Stettin says that when clients face events, such as inflated generic drug prices, significant increases in average wholesale prices for brands, or monopolies in certain drugs, Express Scripts asks plans to grant the PBM the authority to deploy solutions to counter these types of situations.