Presentation is loading. Please wait.

Presentation is loading. Please wait.

Specialty Pharmacy: The Inside Story John Aforismo, B.Sc. Pharm., R.Ph Chairman & Founder RJ Health Systems International, LLC.

Similar presentations

Presentation on theme: "Specialty Pharmacy: The Inside Story John Aforismo, B.Sc. Pharm., R.Ph Chairman & Founder RJ Health Systems International, LLC."— Presentation transcript:

1 Specialty Pharmacy: The Inside Story John Aforismo, B.Sc. Pharm., R.Ph Chairman & Founder RJ Health Systems International, LLC


3 Payor Issues What issues are Payors struggling with? Home Infusion Contracts Pharmacy Network Contracts Manufacturer Incentives Physician Contracts Specialtyvs Buy & Bill Buy & Bill Specialty Formularies Specialty Pharmacy Contracts

4 Reimbursement: TrendsAWP? Average Wholesale Price AMP Average Manufacture Price SWP Suggested Wholesale Price AAC Average Acquisition Cost MAC? Maximum Allowable Cost PAYORS Reimbursement Methodologies? WAC? Wholesale Acquisition Cost ASP? Average Sales Price HCPCS Drug Code vs NDC

5 Reimbursement: Trends Payors (commercial & federal government) are using variations of the following: 1.ASP (average sales price) 2.AWP (average wholesale price) 3.WAC (wholesale acquisition cost) 4.SWP (suggested wholesale price) 5.AMP (average manufacturers price) 6.AAC (average acquisition cost) 7.MAC (maximum allowable cost) Pharmacy benefit Medical benefit

6 New Reimbursement Methodologies MAC (Maximum Allowable Cost) A list of prescription medications established by a health plan (PBM or Third Party) which will be covered at a generic product level price. Pharmacy Benefit: Medical Benefit: HCPCS Drug Code Level NDC Level Acquisition costs used as reference

7 New Reimbursement Methodologies Average Acquisition Cost (AAC) Used for Medicaid Surveys of Pharmacy Purchases Reflects the final drug price paid by the pharmacy after subtracting discounts Each state reimbursement would be different NA DAC- National Average Drug Acquisition Cost Potential New Benchmark from CMS

8 NADAC National Average Drug Acquisition Cost Developed in response to FDB ceasing publication of AWP in September 2011 More precise than AWP/MAC For Medicaid Drug Reimbursement

9 Is A New National Benchmark Needed?

10 Reimbursement: Observations

11 Reimbursement Observations Present Payor Contracts Retail Pharmacy Brand name drugs: Usually AWP discounts range from AWP 14% to AWP 16% (plus dispensing fee) ($1.40 – $1.50) Generic drugs: MAC plus dispensing fee (AWP-76 or MAC) ($1.40 – $1.50) Mail Order Pharmacy Brand name drugs: AWP discounts range from AWP 23 % (plus a small or no dispensing fee) Generic drugs: AWP (plus a small or no dispensing fee)

12 Reimbursement Observations Specialty Pharmacy AWP discount can vary by drug with maximum discounts seen of AWP–35% Payors requiring NDC on claim when HCPCS Drug Codes is supplied.

13 Specialty Pharmacy Managed Care Expectations

14 Specialty Patient Workflow Initial Prescription Received Benefits Verification Proactive Clinical Assessment Care Coordination Personalized Education Dispensing & Shipping Member Outreach Clinical Reassessment Clinical Intervention Billing Compliance & Persistence Prior Authorization & Step Therapy

15 Payor/Management: ICD 9 ICD 10 Reimbursement CPT Drug Code Drug Units HCPCS Drug Code NDC Drug Name Strengths Min Max Dose Admin Code Office Supportive Code CMS 1500/UB04 Claim Form 857 Electronic Transfer 857 Electronic Transfer

16 RJ Health Systems International, LLC RJ Health Systems International, LLC 30 Cold Spring Road Rocky Hill, CT Phone: Fax:

17 Specialty Pharmacy:The Inside Story Stephen Lagano, Founding Principal, Altometrixs, LLC

18 Todays Objectives Overview Specialty Pharmacy And Market Identify Significant Impactful Trends Identify Key Stakeholders And Their Expectations Review The Specialty Pharmacy Business/Financial Model Business/Patient Impact – Reimbursement & Care Perspective Discussion Into The Future

19 Discussion Guide MarketTrends Stakeholders SP Business/Financial Model Into the Future Discussion Specialty Pharmacy Reimbursement Trends

20 What is Specialty? Confusion: Specialty is term used to describe products, markets, companies, programs, etc. Clarity: For consistency the term Specialty will be utilized to describe products,certain therapeutic areas and channels: Injectable and infusion therapies (can be an oral drug) High-cost ($5,000 and up per patient per year) therapies Therapies that require complex care (high touch services) Special handling Specialty Products Specialty Distributors Servicing physicians Clinics, etc. Specialty Pharmacies * - Specialty products can go through the retail channel Specialty Channels*

21 Specialty Pharmacy Specialty Pharmacy: Specialty pharmacy is a closed door pharmacy that is delivering high cost drugs for complex therapies that require patient case management and high touch services Specialty pharmacies provide day-to-day patient management services to optimize the patients clinical outcomes, including : Coordination of care across all providers Patient counseling and support to assist with injection technique medication side effects and disease complications Recognizing and responding to suboptimal responses to therapy Identifying insurance coverage and reimbursement support services to assist the patient with out-of-pocket expenses that may limit the patients access to the drug

22 Specialty Markets Specialty Markets: The specialty markets is an aggregate of specialty of specialty products under therapeutic categories Common specialty markets therapeutic areas*: Rheumatoid Arthritis Multiple Sclerosis Oncology HIV/AIDS Human Growth Hormone Hepatitis C Infertility Auto-Immune * - Sample list not meant to be exhaustive

23 The Specialty Markets Are About Growth Drug Spend - Prescriptions $270B Drug Spend: $270B, $320B, $404B Sources: HIRC & IMS Estimates

24 Multiple Influences Affecting Specialty Health Care Reform Rising Health Care Costs Patient Pool Increases Provider Pool Decreases New & Improved Specialty Biologics Quality of Care Affordable Care Act Actual Care Act Innovation Costs/drug Spend Increase ????? Increasing Challenges = Increasing Opportunities Complex Picture

25 Trends Impacting Specialty Health Care Reform Multiple Moving Parts – Not All in the Same Direction Patient Protection Act Affordable Care Act More Patients ACO/Health Exchanges Technology Push Comparative Effectiveness Research

26 Trends Impacting Specialty Health Care Costs/Drug Spend Increasing costs/spend ProviderEmployers Cost Containment Outcomes Demonstrated Value PatientPlan Utilization Management Pharmacy/Medical Benefit Management Decision/Payment Criteria

27 Trends Impacting Specialty Drug Pipeline Simple /Traditional Complex/Specialty Retail/ Specialty Channels Therapeutic Expertise Critical Patient Needs Limited/ Restricted Channels Increasingly Orphan Drugs Reimbursement Needs REMs Requirements

28 Trends Impacting Specialty Other ImportantStuff Simple /Traditional Complex/Specialty BiosimiliarsTBD Copay Programs Generics Employment Situation

29 Multiple Stakeholders & Multiple Interests Specialty Pharmacy Patient Physician HUB/ Patient Center Mfg Payer Data, SP/ patient performance Funds Patient, Program Support Services Reimbursement Data, Data, Referrals Data Data, SP/Plan Performance Data, Referrals Patient Info, care planning & mgt

30 Stakeholder – SP Value Propositions StakeholderService(s)Value Proposition Patient Benefits Investigation, Clinical/patient assessments, product fulfillment Product availability, financial support on OOP expenses, increased compliance and persistency, increase overall quality of life Physician Coordinated support for patient care, reimbursement support, Collaborative partner to extend, execute and report on patient care Payer Implement drug utilization requirements and report on patient and SP performance Cost savings through appropriate drug utilization, compliance data reporting to validate performance Manufacturer Patient delivered benefits support, compliance and disease management services, inventory management and data Provides valuable data that provides insight into patients and business performance, deliver services that increase compliance & persistency and supply chain efficiencies through inventory management and decreased returns HUB/Patient Support Center Interfacing with HUB for referrals, coordinate product fulfillment, benefits verification, services and data Coordinated care/data between SP, HUB and physician


Download ppt "Specialty Pharmacy: The Inside Story John Aforismo, B.Sc. Pharm., R.Ph Chairman & Founder RJ Health Systems International, LLC."

Similar presentations

Ads by Google