Specialty pharmacy channel distribution panel
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Specialty Pharmacy Channel Distribution Panel. Moderated by Mark Zitter April 3, 2013. Most Payers Limit the Number of Specialty Pharmacies They Use…. For specialty agents not subject to manufacturer-imposed limited distribution, my organization…. Payers n = 103. Percentage of Payers.

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Specialty pharmacy channel distribution panel

Specialty Pharmacy Channel Distribution Panel

Moderated by Mark ZitterApril 3, 2013


Most payers limit the number of specialty pharmacies they use

Most Payers Limit the Number of Specialty Pharmacies They Use…

For specialty agents not subject to

manufacturer-imposed limited distribution, my organization…

Payers n = 103

Percentage of Payers


But only a minority require use of specialty pharmacy vendors

…But Only a Minority Require Use of Specialty Pharmacy Vendors

Third party vendor use (specialty pharmacy, wholesaler/distributor)

is ______ for your network physicians.

30%

Fall 2012 Payers n = 103

No significant differences from Spring 2012 report


Payers see plenty of excess cost in the system

Payers See Plenty of Excess Cost In the System…

How much excess cost you could eliminate from cancer treatment

without negatively impacting health outcomes?

Percentage of Payers


And think most excess cost relates to drugs and care sites

…And Think Most Excess Cost Relates to Drugs and Care Sites

How significantly does each of the following drive excess cost in oncology care?

Significant driver of excess cost (5)

Above average driver of excess cost (4)

Mid-range driver of excess cost (3)

Minimal driver of excess cost (2)

Does not drive excess cost at all (1)


Payers want more oral therapy to go through specialty pharmacy

Payers Want More Oral Therapy to Go Through Specialty Pharmacy…

What percentage of your organization’s oral oncology therapy volume

goes through each of the following distribution channels?

What is your organization’s preferred method of oral oncology therapy distribution? 

Share of Total Oral Therapy Distribution

No significant changes from Summer 2011 edition


And so do oncology office practice managers

…and So Do Oncology Office Practice Managers

What percentage of your organization’s oral oncology therapy volume

goes through each of the following distribution channels?

What is your organization’s preferred method of oral oncology therapy distribution? 

Share of Total Oral Therapy Distribution

No significant changes from Summer 2011 edition


For infusible therapies payers want to reduce buy and bill

For Infusible Therapies, Payers Want to Reduce Buy-and-Bill…

What percentage of your office-administered/infusible oncology therapy volume

goes through each of the following distribution channels?

What is your preferredmethod of office-administered/infusible oncology therapy distribution? 

Share of Total Office-Administered / Infusible Therapy Distribution

No significant changes from Summer 2011 edition


While practice managers like the status quo for distribution channels

…While Practice Managers Like the Status Quo for Distribution Channels

What percentage of your office-administered/infusible oncology therapy volume

goes through each of the following distribution channels?

What is your preferredmethod of office-administered/infusible oncology therapy distribution? 

Share of Total Office-Administered / Infusible Therapy Distribution

No significant changes from Summer 2011 edition


Site of care preferences vary by disease but payers dislike the hospital

Site-of-Care Preferences Vary by Disease, But Payers Dislike the Hospital

What is your organization’s preferred site-of-care

for professionally administered therapies in the following categories? 

Payers n = 101

Percentage of Payers


Asp payment has sent patients to hospitals but reduced total costs

ASP Payment Has Sent Patients to Hospitals, But Reduced Total Costs

Since adopting ASP-based reimbursements in your commercial population,

which of the following has your organization experienced?

Payers n = 76

Percentage of Payers


The distribution channel challenge

The Distribution Channel Challenge

  • Payers know there is waste in the system and want to use distribution channels that will minimize excess expenditures

  • With costs continuing to grow and care delivery becoming increasingly integrated with financial risk, which specialty distribution channel(s) will win?

  • Do we need all these channels? Does each add real and differentiated value?

  • How can and should the various channels integrate?

  • How can each channel prove its value to payers?


Specialty pharmacy channel distribution panel1

Specialty Pharmacy Channel Distribution Panel

Moderated by Mark ZitterApril 3, 2013

http://go.zitter.com/nasp


Specialty pharmacy channel discussion hospital integrated delivery network channel

Specialty Pharmacy Channel DiscussionHospital/Integrated Delivery Network Channel

Thomas Blissenbach

Director, Business Development

Fairview Pharmacy Services, Minneapolis


Fairview pharmacy services llc

Fairview Pharmacy Services, LLC

  • Specialty Pharmacy 17+ years

  • URAC Standards

  • Payer – Pharma agreements

  • Integrated Care Model


Hospital idn channel

Hospital/IDN Channel

  • Relatively small today

  • Hasn’t been focus

  • Size matters

  • Specialists = Specialty Drugs

  • Need to do it right

  • Variety of options


Hospital idn channel strengths

Hospital/IDN Channel Strengths

  • Ambulatory care

  • Point of care

  • Improve adherence

  • Integrated Care Model

  • Access to medical record

  • Therapy Management

  • Compliments new payment models: ACO, At Risk Payer Agreements

  • Capture


Hospital idn weaknesses

Hospital/IDN Weaknesses

  • Hasn’t been focus

  • Expertise

  • Capital/space

  • Payer – Pharma agreements

  • Data capability


Hospital idn opportunities

Hospital/IDN Opportunities

  • Revenue/margin

  • Retain patients

  • Improve outcomes


Hospital idn threats

Hospital/IDN Threats

  • Loss of control

  • Missed opportunity


Independent pharmacy channel

Independent Pharmacy Channel

Mike Ellis

Corporate Vice President, Specialty Pharmacy & Infusion,

Walgreens


Independent pharmacy channel1

Independent Pharmacy Channel

Kurt A. Proctor, Ph.D., RPh

Senior Vice President, Strategic Initiatives

National Community Pharmacists Association


National community pharmacists association

National Community Pharmacists Association

  • Founded in 1898 as the National Association of Retail Druggists (NARD)

  • Represents pharmacist owners, managers, and employees

  • 23,000 non-publicly owned pharmacies

  • Single store, multiple locations, regional chains


Independent pharmacies

Independent Pharmacies

1,800 rural independent pharmacies serve as the only pharmacy provider in their community


Independent pharmacists

Independent Pharmacists

  • Patients trust us, choose us

  • Compete on service now

  • RPh available 24/7/365

  • Able to document

  • Able to bill

  • Want to care for their patients completely, including most “specialty” drugs


Buford road pharmacy richmond va

Buford Road Pharmacy, Richmond, VA

Health Living Center – Clinical Services

  • Hemoglobin A1c Test

  • Blood Sugar Test

  • Blood Pressure

  • Bone Density Screening

  • Cholesterol Screening

  • Coumadin Clinic

  • Medication Therapy Management

  • Medicare Part D Consultation

  • Diabetes Management

  • Routine & Travel ImmunizationsInfluenza, Pneumonia, Shingles, Meningitis, Hepatitis A & B, Polio, Yellow Fever, Rabies, Tetanus/Diphtheria/Pertussis, Typhoid, Japanese Encephalitis, Human Papillomavirus


Independent advantages

Independent Advantages

  • Niche service experience

  • Understand the need to deliver support services and do so at competitive prices

  • Are the pharmacy home for this high-touch group of patients

  • Independent pharmacies provide face-to-face service that others can’t


Core message from ncpa

Core Message from NCPA

Independent pharmacies in your network will yield documented patient adherence and monitoring

Independent pharmacists know…

  • Their patients

  • Their patients’ family

  • Their patients’ caregivers

  • Their patients’ doctors

  • Their patients’ environment


Specialty pharmacy and dramatic change in the oncology channel discussion

Specialty Pharmacy and Dramatic Change In the Oncology Channel Discussion

Burt Zweigenhaft

CEO Onco360


Ralph stayer flight of the buffalo 1994

Ralph StayerFlight of the Buffalo (1994)

"Change is hard because people overestimate the value of what they have—and underestimate the value of what they may gain by giving that up.”


Oncology drug market hitting critical inflection point

Oncology Drug Market Hitting Critical Inflection Point

  • Oncology Rx spend projected to grow to $130B by 2020

  • 50% of drugs in development are oncology medications

    • 36 new cancer drugs next 3 years

    • 907 cancer drug clinical trials or FDA review, 2x number in pipeline 6 years ago

  • 90% of oncology drugs approved in the last five years cost $20,000/3-month cycle

Sources: The Specialty Pharmacy Times, the National Institutes of Health, and Industry Reports.


Specialty pharmacy channel distribution panel

Purchaser's Demand Call to Action Trend is Unsustainable!

  • Commercial Payer Cancer Cost 2010: * NE Commercial Payer

    • $457.6MM per/1MM lives

      • (Includes: In-Patient, Out-Patient, E&M, Rx Administration, Drugs, Surgery, Radiation, Imaging and Labs)

    • $187.2MM per/1MM lives

      • (Includes: E&M, Rx Administration and Drugs)

  • Cost trend growth faster than CPI & Medical Cost Inflation at 12% - 23%

    • Medicare cancer incidence 48 per 1,000 members

    • Commercial cancer incidence 9 per 1,000 members

    • 35% undergoing treatment

Average Payer Costs Per Cancer Patient

Sources: Specialty Pharmacy Times, NIH, HealthSource, ASCO, and Industry Reports.


75 increase in cancer incidence projected by 2030

75% Increase In Cancer Incidence Projected By 2030

1.7 MM New Cancer Cases Projected for 2012….was 1.4 MM in 2010

10,000 New Beneficiaries in Medicare or 3.6 MM a year


The average oncologist s drug spend

The Average Oncologist’s Drug Spend

  • Annually Prescribes $3MM

Payer Patient Mix

By Drug Admin Route


Drugs used to drive dominate practice margins

Drugs Used to Drive-Dominate Practice Margins

Decline In Rx Margin for Oncologists


Care shifts to hospitals at higher costs

Care Shifts to Hospitals at Higher Costs

  • Un-sustainable shift in cost with no improvement in care

  • Leveraging 340b drug costs and Part A versus Part B Medical Billing

  • Medicare and Payers will burn down reimbursement over time

54% Of Practices Closed, Sent Patients Elsewhere, Or Were Acquired By Hospitals

Source: Community Oncology Alliance, 2011 Study


Moving away from traditional drug buy and bill

Moving Away From Traditional Drug “Buy and Bill”


Specialty pharmacy channel distribution panel

Oncologist Shortage Crisis = Need Physician Extenders

Board Certified

Oncology Pharmacists

Fill GAP


Concordance with evidence and outcomes is the issue

Concordance with Evidence and Outcomes is the Issue


Oncology drug dispensing is complex

Oncology Drug Dispensing is Complex

Typical Daily Chemotherapy Regimen: Across Multiple Benefits

Typical Chemo Administration Kit:


Cancer protocols drugs are inter dependent

Cancer Protocols = Drugs are Inter-dependent


Pharma hub workflow

Pharma HUB Workflow

Patient Support Services

Key

Product

Data

BCOP

Patient

Payment

Claims

Provider

(MD/Hospital)

Manufacturer

Oncology Pharmacy

Payer

3PL


Universal problem in cancer oncology

Universal Problem In Cancer - Oncology

“Payers own ALL Medical Patients but not always the Specialty or Oral Drug Risks due to PBM carve out nature of Industry”

Benefit Fragmentation

Results In

Dispensing Fragmentation

Clinical Fragmentation

Poor Outcomes

Analytical and Registry Gaps

Less Patient/Provider Satisfaction

Less Utilization Control

Less Cost Contracting Control

More Adverse Events

Hospitalization

Adverse Site of Care Transfers

Drug Waste

  • PBM

    • Orals and sometimes Injectable

  • Specialty

    • Orals, Injectable and sometimes Infused newer agents

  • Medical

    • Infused or Physician-Outpatient Drug Administration


Oncology requires integrated benefit solution

Oncology Requires Integrated Benefit Solution

  • Drugs will be as ASP+ Whatever

  • Value of Clinical Services most important to patient, oncologist, Pharma and payers

  • Leverage combined experience to optimize benefit integration and control

  • ACO’s strive to achieve responsible initiatives and activities to deliver on quality and value

Care Mgmt.


Value based continuum of care services

Value Based Continuum of Care Services


Specialty pharmacy channel distribution panel

Oncology Clinical Service Values… Case Studies


Oncology pharmacy channel requires unique competencies

Oncology Pharmacy Channel Requires Unique Competencies

  • Board Certified Oncology Pharmacy Experts

  • Comprehensive Benefit Access Oral-Injected-Infused

  • Compressed Operational Timelines

  • Treatment Day & Dose Dispensing

  • Pathway Concordance with Evidence and Clinical Flexibility

  • Medication Treatment Management (MTM)

  • Patient Financial Assistance and Insurance Exchanges

  • Access to Limited Distribution and Pedigree drugs

  • Highest Standard Accreditation and Facilities

  • USP 795 & 797 Compliant Clean Rooms aka NECC

  • NIOSH Compliant Product Storage & Handling aka NECC


More change ahead cms driving bus

More Change Ahead CMS Driving Bus

  • Near term is tiered ASP….. meaning that the larger the ASAP the smaller the percentage of add-on payment

  • Seems less likely given that sequestration occurred and docs are now effective getting roughly ASP plus 4.3% or loss of 33% margin

  • Longer term payment options: 

    • Bringing back CAP

    • Moving some or all buy and bill drugs intro Part D (Yesterday) 

  • Coverage options are the ones we always talk about—greater payment for outcomes, following clinical protocols, risk sharing arrangements (think ACOs) and value based purchasing!

  • General issue—when does the exception (340B) swallow the rule (ASP)?  Tremendous growth of 340B could become the majority of cancer drugs purchased


Part b to part d late breaking news

Part B to Part D Late Breaking News

  • CMS quote, MA = Medicare Advantage plans, which are Medicare plans offered by a health plan such as Aetna, United, etc.  Patients are able to CHOOSE to brown bag a Med B drug, and have it covered under Part D so long as the following stipulations are met:

  • Patient is enrolled in a Medicare Advantage plan that offers Part D coverage

  • The drug being prescribed is a Part B drug that CAN ALSO be covered under Part D

  • The patient ELECTS/STATES PREFERENCE to receive the drug from a pharmacy instead of getting it from their physician


Machiavelli circa 1469 1527

Machiavelli Circa 1469-1527

"Whosoever desires constant success must change his conduct with the times.”


Specialty pharmacy channel distribution panel2

Specialty Pharmacy Channel Distribution Panel

Moderated by Mark ZitterApril 3, 2013


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