The North Carolina AIDS Drug Assistance Program ADAP

1. The North Carolina AIDS Drug Assistance Program (ADAP) Change to a Direct Purchase/ Centralized Pharmacy Program National ADAP Educational and Technical Assistance Conference March 31 - April 2, 2006 Washington, DC

2. March 31 - April 2, 2006 National ADAP Conference 2 Topics to be addressed Rationale to change - or not to change The decision-making process Identifying/selecting a Central Pharmacy Provider Identifying/selecting a Pharmaceutical Wholesaler Administrative rules/regulations Communications about - and training for - �the change� Planning for implementation Implementation of the new Program Challenges that were confronted Things we could/should have been done better Future plans

3. March 31 - April 2, 2006 National ADAP Conference 3 Rationale for Changing the Program All-too-common waiting list - despite the lowest financial eligibility criterion in the country Reasonable, but not extensive, formulary Inadequate financial resources - despite NC�s significant support (i.e., $12.2 M; ~45%) Frequent criticism of the Program�s inability to serve all that needed and qualified for services Enhanced ability to monitor the Program Potential cost savings by purchasing directly and using a single, centralized pharmacy

4. March 31 - April 2, 2006 National ADAP Conference 4 Rationale for Not Changing the Program Patient access to medication counseling by pharmacists might be lost Potential for adherence monitoring may suffer Same-day/emergency access to prescription services might be reduced (or lost) Disruption caused by changing the Program�s operation after 15 years Lack of enthusiasm from the HIV community Taking business away from local pharmacies

5. March 31 - April 2, 2006 National ADAP Conference 5 The Decision-Making Process Program did an initial analysis of selected �direct purchase� states in fall 2002 (after RW meeting) � shared with representatives of our Clinical/Medication Advisory Committee and HIV community Despite positive forecast, little community enthusiasm/support Need did not go away; HRSA �encouraged� NC to reconsider the issue in summer 2003; NC General Assembly requested that ADAP review its costs NC requested TA; Dan Schreiner �assigned� in fall 2003 Participated in a community meeting to discuss the issue Spoke by phone with others not in attendance Did his own independent analysis of selected �direct purchase� states Prepared/presented a final report to the community � February 2004 Concluded that savings were likely if the conversion was done � estimates were wide-ranging; averaged ~ 10% -15% savings (~ $3 - $4.5 million) ? ~ 250 � 450 additional clients could be served

6. March 31 - April 2, 2006 National ADAP Conference 6 The Decision Criteria � and the Decision The issues� Would the Program save sufficient funds to serve more people? Would the Program save enough funds � and serve enough more people � to justify the disruption the change would cause? Would more low-income North Carolinians living with HIV disease be better off; hopefully, without imposing unnecessary barriers and/or making too many others worse off? The decision � winter/spring 2004 - As stewards of ~ $27.5 million in federal and state (public) resources, we have an obligation to implement and operate the best program and serve the greatest number of people that are in need of and qualify for the services. Given the reasonable likelihood of expanding access to essential HIV medications for low income North Carolinians living with HIV disease, there was really only one choice � to move ahead.

7. March 31 - April 2, 2006 National ADAP Conference 7 Identifying/Selecting a Central Dispensing Pharmacy Some Key Issues - Some mentioned in Rationale for Not Changing the Program. Others included� Should the ADAP Program contract out to a private Central Pharmacy or develop/operate its own State pharmacy? How do you avoid violating confidentiality and wasting medication if it is mailed directly to clients? Where would the dispensed medications be delivered to? Decision was made to contract out to a private Central Pharmacy Difficulties - and time - associated with creating positions/ central pharmacy within a state bureaucracy Seek an experienced and specialized pharmacy to help develop and implement the new model Improve the timeliness of implementation and the probability of success

8. March 31 - April 2, 2006 National ADAP Conference 8 RFP Process Key steps Develop the RPF � began spring 2004 � significant assistance from Illinois, Ohio, Hawaii, and an earlier RFP for a PBM company Multiple reviews and revisions within the State system in the process Issued October 2004 � put out on the Internet and personal contacts Mandatory pre-bid conference late October; questions raised by potential vendors answered and posted early November (six potential bidders) Five proposals submitted by deadline of November 23, 2004 Structured review/evaluation tool and process developed Initial review mid-December by team of five state employees - two bids eliminated as incomplete/inadequate Reference checks done on remaining three bidders Final review late January by team of eight (original five + three community representatives) February 25, 2005 � PharmaCare Specialty Pharmacy announced as the chosen central/dispensing pharmacy for the NC ADAP Program - initial year + Program�s option for two more

9. March 31 - April 2, 2006 National ADAP Conference 9 RFP Process (continued) Key Requirements/Scope of Work built into the RFP Establish secure electronic communications � transfer of confidential client data Verification of eligibility and payment source � ADAP and Medicaid Contact with client prior to dispensing medications � counseling and minimizing wastage of medication 24/7 access for clients and providers Timely dispensing/delivery of medications - client (with consultation) selects delivery address Collecting, maintaining and reporting/providing programmatic data Inventory management - purchase vs. dispense Sufficient financial capacity - state can be erratic in making payments Requested bids on several �delivery/cost� possibilities

10. March 31 - April 2, 2006 National ADAP Conference 10 Change in Administrative Rules NC uses Administrative Rules, approved by the Commission for Health Services (CHS), to govern much of how administrative agencies conduct their business - have the effect of Law Existing rules covered medications dispensed by and payments made to local pharmacies of the client�s choice Rule change eliminated the choice of pharmacy for clients and specified that �medications provided to eligible clients through this Program shall be dispensed and provided by a pharmacy (or pharmacies) under contract with the Program� Changing Administrative Rules is a long and arduous process, including - almost nine months for these changes to be finalized public posting months in advance on a State website - February 2005 soliciting public comment - two public hearings public CHS hearing with additional opportunity for public comment action by the CHS - approve, deny, request changes/more info two-step process for this change - Emergency and Final Rules (became effective October 2005)

11. March 31 - April 2, 2006 National ADAP Conference 11 Identifying/Selecting a Pharmaceutical Wholesaler Initial guidance provided to the Program - able to purchase under an existing purchase agreement with wholesaler - proved to be incorrect Program was �scrambling� in mid-May (6 weeks prior to implementation) for a pharmaceutical wholesaler State Purchase & Contracts issued an expedited RFB (request for bids) - slightly different than an RFP in both structure and requirements One wholesaler met the criteria and conditions - Cardinal Health Purchase agreement - initial year + Program�s option for two more Decision to use Cardinal site in Greensboro, NC Overnight deliveries were guaranteed Keep as much business as possible in NC (became an issue for some)

12. March 31 - April 2, 2006 National ADAP Conference 12 Issues re: Projected Start of Centralized Pharmacy Services Phase in new program vs. change at one point in time Operating two programs at the same time 340B issue of being a Direct Purchase or a Rebate state Implementation date during the July 4th weekend Holiday weekend - no mail, people on vacation, etc. Need to arrange for early dispense by PharmaCare via Catalyst at end of June Assuring that all necessary information was in PharmaCare�s hands - most critical and difficult part of the process!

13. March 31 - April 2, 2006 National ADAP Conference 13 Communications about - and training for - �the change� By whom - primarily ADAP Program, assisted by PharmaCare To/for whom - clients, case managers, clinicians, pharmacists, HIV community Clients received letters explaining upcoming changes, effective dates, and their responsibilities in the new Program model Case managers received Regional trainings (five done across the state) letters (including copies of client letters), forms, and checklist - what needs to be done, by when, and how to do them e-mails to a case manager �listserve� two statewide conference calls conducted prior to effective date - July 1st Clinicians received letter - jointly from ADAP and PharmaCare Pharmacies received letter explaining the change and requesting their assistance in transferring clients and data to PharmaCare Response from (mostly) independent pharmacies FOI request from local newspaper re: the change

14. March 31 - April 2, 2006 National ADAP Conference 14 Planning for Implementation Meeting between key staff from PharmaCare and ADAP after contract awarded; site visit to PharmaCare at a later date Weekly conference calls between key staff at PharmaCare and ADAP Data team conference calls between PharmaCare and ADAP Merging data from three sources � state, Cardinal, PharmaCare Security issues involved in transferring patient data electronically Setting up required reports at PharmaCare PharmaCare transition team Led by pharmacists and insurance specialists Specific customer service representatives for NC ADAP ADAP provided data on medication dispensed for past year

15. March 31 - April 2, 2006 National ADAP Conference 15 Key Item: Transfer of Client Information to PharmaCare Clients� delivery and contact information Amended POMCS Authorization form PharmaCare enrollment form Client information form Bulk delivery site specifics Electronic list of clients and their �case managers� Daily contact between ADAP, PharmaCare and �case managers� for missing information

16. March 31 - April 2, 2006 National ADAP Conference 16 Transfer of Client Information (continued�) Clients� prescription information From local pharmacies - preferred option Fax �labels� Fax prescription information Verbal transfers Electronic transfers Rewritten prescriptions from clinicians - last option CatalystRx files Clients� names and prescriptions Last dispense No refill information PharmaCare played a critical role - and did so very well Case managers played a critical role - and did so very well

17. March 31 - April 2, 2006 National ADAP Conference 17 Special Challenges Transition team located in a different state Difficulty in getting Special ADAP �discount� agreements into the database at the wholesaler Has contributed to uncertainty/lack of precision in savings estimates NC was one of the �Special Presidential ADAP Initiative� states - working with Chronimed/BioScrip at the same time Last minute issues, including staff changes, with wholesaler Assuring clients received medications the first month � unable to contact some clients - incredible amount of work for everyone! Emergency fill procedure Overnight shipping Local pharmacy �Enrollment� by phone - Client directly contacting PharmaCare Other last minute �concerns�

18. March 31 - April 2, 2006 National ADAP Conference 18 What Could/Should Have Been Done Better? An announcement to local pharmacies should have been sent earlier - better �PR� for the change in the Program Checking feasibility, and then assuring �Task Force pricing�, with the wholesaler earlier in the process Clients were sent information and forms and expected to go to their case manager to complete/submit information - many wanted to send it in directly - perhaps that should have been anticipated Fewer bulk sites and clients than anticipated - Program might have been �more encouraging� - contract modified after first quarter

19. March 31 - April 2, 2006 National ADAP Conference 19 Future Plans Continue as a Direct Purchase/Central Pharmacy Program Preliminary data only Reimbursement (previous) model - ~ $998/person/month Direct purchase (current) model - ~ 859/person/month ~ 14%/person/month less; serve ~ 370 more clients Establish QA/QM Program Monitor inventory Track pricing for accuracy Track utilization of program Improve access to Medicaid and Medicare information

20. March 31 - April 2, 2006 National ADAP Conference 20 Contact Information Steve Sherman 919-715-3111 or steve.sherman@ncmail.net Sally Kohls 919-733-9602 or sally.kohls@ncmail.net