1. Specialty Medical Benefit Management of IG: Issues for Consideration
Lauren Barnes
Senior Vice President
Avalere Health, LLC

2. Under Medicare, the Benefit Category Determines Coverage, Coding and Payment
Pump Coverage, Coding, and Payment
HyQ Drug
Coverage, Coding, and Payment
HyQ Administration Coverage, Coding, and Payment
DME
“Incident to”
E Code
DME fee schedule
N/A
J Code
95% AWP
N/A (patient self-administers)
Home Health + DME
Home Health PPS3
Physician Office
Supply (no payment)
ASP+6%1
CPT Code
MPFS
HOPD*
C/J Code
ASP+X%2
CPT Code/APC
OPPS
1Reimbursement will be at WAC+6% until ASP is available.
2Reimbursement will be at 95% of AWP until WAC is available and then will be WAC+6% until ASP is available. When eligible for pass- through payment, reimbursement will be ASP+6%; after pass-through status expires, reimbursement will be ASP+5% (CY2011).
3Patient must meet eligibility criteria for home health services (patient must be deemed “home bound”).
Medicare coverage and payment varies significantly by setting of care
*See Appendix slides 60-61
PPS = Prospective Payment System
HOPD = Hospital Outpatient Department
CPT = Current Procedural Terminology
ASP = Average Sales Price
AWP = Average Wholesale Price
MPFS = Medicare Physician Fee Schedule
OPPS = Outpatient Prospective Payment System
APC = Ambulatory Payment Classification

3. Private Payer Coverage, Coding and Payment for IG Varies By Setting of Care
Immune Globulin
Coverage and Coding
IG Administration
DME
Drug: J-code
External Infusion Pump: E/S Code
Home health or home infusion benefit1
Coding & payment vary
Home Health +DME
Coding and payment vary
Physician Office
CPT Code
Fee Schedule
HOPD
Private payers may use different reimbursement benchmarks for drug payments (e.g. average sales price (ASP), wholesale acquisition cost [WAC]), and Average Wholesale Price [AWP])
In all settings of care, other than the hospital inpatient setting, Immune Globulin is paid for separate from the administration
CPT = Current Procedural Terminology
1Patient must meet private payer eligibility criteria for home health/home infusion benefit; these criteria are generally much less stringent than Medicare’s criteria.

4. Private Payers Are Likely to Focus on Management of Specialty Drug Spending, Including IG
Drug Spending Trend,
Specialty drugs, such as IG, are the fastest-growing segment of drug spend. This is likely to lead to an increased focus on utilization management (UM) techniques for expanded indications
Source: ESI Drug Trend Report, 2011

5. Most Private Plans Manage IG Through the Medical Benefit Using a Specialty Pharmacy
In addition, 80 percent of payers managed IG through specialty pharmacy in 2011
Source: EMD Sereno Specialty Digest, 2011

6. Private Payers Are Likely to Increase Their Focus on Management of IG
Pressures to Control Costs
Due to the changing landscape, health plans are likely to increase their focus on management of specialty medical benefit drugs through increased UM
Increase in Specialty Products
The prevalence of specialty products is increasing in the market and these products account for a large portion of total drug spend making them a target for health plans
Potential for Increased Focus on Management of IG through Specialty Pharmacy
40 percent of private payers indicated that within the next year they intended to limit the number of subcutaneous IG agents on formulary based on favorable pricing or rebates from manufacturers*
Source: *EMD Sereno Specialty Digest, 2011

7. Private Payers Increase Thresholds for IVIG Coverage and Payment
Private Payer Perspective
Private Payers may demand increased evidence to differentiate IG products
To date, limited evidence has differentiated IG products
Absent evidence, payers may view products as interchangeable and demand price concessions for preferred positioning
Increases pressure on medical versus pharmacy benefit IG products
Private Payers may have higher thresholds for coverage of expanded indications for IG
Private Payer Tools
Clinical policies (cover or non- cover decisions)
Utilization management
i.e., Step edits
Guidelines and care pathways
Formulary evaluations
Pay-for-performance initiatives
Value-based insurance designs
Payers are likely to demand increased evidence to differentiate IG Products and when considering expanded indications

8. Panel Discussion

9. Specialty Medical Benefit Management: Immunoglobulin
Michael Baldzicki, CRCM
Vice President
AxelaCare Health Solutions
A National Home Infusion Provider

10. Payer & Specialty Medical Benefit

11. Payer Insight Areas: Specialty Pharmacy
Pharmacy claims system
Medical claims system
Specialty fulfillment system
Data
Average wholesale price (AWP)
Average sales price (ASP)
Average manufacturer price (AMP)
Wholesale acquisition cost (WAC)
Reimbursement
Home health
Physician office
Hospital (inpatient and outpatient)
Ancillary
Site of Care
Copayments
Coinsurance
Out-of-pocket (OOP) max/min
Deductibles
Doughnut hole
Benefit Design

12. Site of Care: Shift of Reimbursement
Site of Care Options: Payers
Hospital Outpatient
Expensive
Hospital Inpatient
MD Office – Buy & Bill
Decrease Total Cost of Care
MD Office Specialty – Medical Benefit
MD Office Specialty – Pharmacy Benefit
Cost-effective for Member
Pharmacy Benefit
Home Infusion

13. Product Demand & Clinical Needs
IVIG & Subcutaneous Immune Globulin - United States
United States IVIG Forecast, 2009 – 2015
Percentage of Usage Volume
Patients Growth Per Year
Primary Immunodeficiencies
36.0%
2.1%
Neurology
25.1%
9.9%
Hematology / Oncology
25.7%
3.8%
Cardiology
1.5%
5.6%
Rheumatology / Nephrology
5.4%
11.5%
All Others*
6.3%
13.4%
TOTAL
100.0%
8.2%
IVIG products differ in regard to AE risk
Risk of aggregation in products with PH over 6:
Products w/ PH > 6 need to add stabizlers such as Sucrose, sorbitol, dextrose – diabetic or renal dysfunction (90% of IVIG associated renal adverse events occurred when products stabilized with sucrose were used) (of patients who experienced renal Aes 59% had one or more of the following - - prior renal insufficiency, diabetes, advanced age
Osmolatity – High osmo may increase the risk of infusion related Aes in patients with cardiac impairment, renal dysfunction or high risk of thromboemolic event - high osmo should not be used in neo or elderly patients
Formulation - fixed concentrations are ready to use - lyophilized can take up to 20 minutes to reconstitute and may not be reimbursed by Medicare
Concentration Volume Load - impacts total volume and time of infusion – higher concentration will lower fluid and shorter infusion time – 10% requires half the infusion time of a 5% = time, money & convenience
Infusion Rate - Patients may tolerate products differently
Pathogen Safety- where products were sourced needs to taken into consideration
Indications-
Dose, Package Size and Storage - different indications require different doses – variety of doses is important to best meet prescribed dose to cut wastage 13 13

14. A New, Proprietary Home Infusion Tool
A new, proprietary iPAD home infusion tool, tool functions as an outcomes reporting and medical management resource for referring physicians and payers.
I-Pad based product wireless connectivity
Physical assessments & questionnaires
Patient management tool for physicians
Nursing driven
It is a web-based product with wireless connectivityEducation, Outcomes tracking, disease management, comparison of dosing strategies.

15. Home Infusion Therapy Monitoring
Validated
Outcomes
Measures
Physician Data Review
IVIg Patient Data Collection
Physical Assessments Disability / Activities of Daily Living (ADL) Quality of Life (QOL)
Outcomes vs. Dose Over Time
Careators
Care Support
CIDP/GBS/Peripheral Neuropathy
Myasthenia Gravis
Primary Immunodeficiency
Pharmacist Data Review
Administrators Coordinators
Researchers
Dose, Side Effect, Clinical Monitoring

16. Case Study 1 New Neurology Patient – Response to Therapy
Case Study Example: Immune Therapy Monitoring
Case Study 1 New Neurology Patient – Response to Therapy
Peripheral neuropathy patient, new to IVIG, receives recommended dosing of 2gm/kg followed by 1gm/kg every three weeks.
Physical ability as measured by grip strength increases over 20% after only three doses (less than two months)
Outcomes tool shows physician that patient has responded to therapy, confirming diagnosis, and dramatic patient benefit.
A non-responsive patient would be identified in this timeframe (2 mo.), and could come off of drug, saving payer as much as 60% to IVIG drug cost, as compared to typical 6 mo. office visit decision. This would be approximately $50k in savings for a non-responder, and faster change to a more effective therapy option.

17. IVIG – Alzheimer’s Indication

18. Alzheimer’s Prediction

19. GLOBAL DEMAND FOR IVIG/SCIG WITH/WITHOUT ALZHEIMER’S DISEASE - 2008 - 2018 (Metric Tons)

20. US source plasma collection forecast, 1996 -2013

21. IVIG & Alzheimer’s
Currently, IVIG is not FDA approved for the treatment of Alzheimer's disease, but physicians are free to prescribe it if they believe it is warranted in a particular case.
Manufacturers are confident it will be approved in the next few years.
Some analysts estimate that as many as 2,000 Alzheimer's patients in the US have received IVIG treatment.

22. Questions

23. References International Blood & Plasma News
The Marketing Research Bureau, Inc.
PPTA (Plasma Protein Therapeutics Association)
NDDR=National Donor Deferral Registry
FFF - Plasma New Products and Development
Dermatology, Infectious diseases, Ophthalmology, Obstetrics/Gynecology, others
IVIG 2015: A Forecast of the Polyvalent Intravenous Immune Globulin (IVIG) Market in the United States in Orange, CT
*AMR Patient Profile "Intravenous Immune Globulin Hospital Patient Profile Reports" - United States Edition 2009
Axelacare Health Solutions Internal Data Analytics & Outcomes
Annual Reports of major pharmaceutical companies: Baxter, CSL, Grifols, Octapharma, Telecris
U.S. Census Bureau’s released data

24. Specialty Medical Benefit Management: Immunoglobulin
Site of Service Implications on IVIG Cost to Treat
Michael T. Einodshofer, RPh, MBA
Director of Utilization Management, Walgreens Specialty Pharmacy Division
©2013 Walgreen Co. All rights reserved.

25. Site of Care Optimization – distribution of drugs covered in the medical benefit generally reside in 3 main sites of service
Site selection for infusion is largely dictated by the prescribing physician
Each place of service may have different fee schedules for medications
Each place of service may have different benefit implications and limitations
Remicade, IVIG, Tysabri are the most prevalent non-chemo drugs in medical.
Typical drug related medical benefit costs by site of care*
Home Infusion / Infusion Suite
All Others
~5%
~10%
~40%
~45%
Maximize savings by focusing on opportunities at the outpatient hospital site of care where infusion drug costs are often 2x the cost at other places of services.
Move patients from high cost/high risk setting to low cost/low risk setting
Patient’s drug, dose, frequency and prescribing physician typically remain unchanged.
Savings from physician office place of service must be evaluated independently
Managing specialty drug utilization at the site of care has become critical to health plans. Each site of care within the medical benefit presents its own challenges, and not all strategies can be applied uniformly across the various sites of service
We help payers identify areas of inefficient and wasteful spend—and provide actionable recommendations specific to each medical site of care.
The first focus of the program is to drive down the costs associated with non-self administered specialty drugs to the most cost-effective site of care
It is not uncommon for some drugs to be reimbursed 100% - 200% higher at the Outpatient Hospital site of care vs. other sites of care
Walgreens Specialty Care centers help clients lower the cost to treat patients requiring infusion services without compromising quality—high-touch experience and higher member satisfaction scores
Patients continue to receive their medications uninterrupted, providers can continue to prescribe as they have without any new administrative burden
Costs typically decrease significantly from the payer though simply shifting site of care
Alternative care sites include Walgreens Specialty Care Centers as well as patients’ homes and places of employment.
Members’ satisfaction improves based on better access, more convenience and greater affordability.
Physician Office
Outpatient Hospital
Allowable amounts based on Walgreens internal analysis, will vary by client
©2013 Walgreen Co. All rights reserved.

26. Site of Care Optimization to manage medical pharmacy costs
Specialty Infusion Site of Care Optimization
Move clinically appropriate patients from high cost of care delivery settings to lower cost of care alternate treatment sites (aka “ATS”)
Home Infusion
Higher cost
(Outpatient Hospital)
Lower cost, lower risk, more convenient ATS options
Physician Office
Infusion Suites
A somewhat unique lever to manage drug spend
No perfect parallel to traditional pharmacy spend management
©2013 Walgreen Co. All rights reserved.

27. Site of Care Optimization
Each “dot” represents the cost per 500mg per immune globulin claim.
Significant pricing variability is observed within hospital outpatient site of service.
Site of Care Optimization lowers the average price per unit and provides more price consistency.
An emerging cost-saving discipline that leverages cost variance within different healthcare locations that provide essentially the same healthcare services.
Typically, $20-$40 PMPY saved through specialty infusion/injection site of care optimization.
$10-$20 PMPY on non-chemotherapy products.
Walgreens client date on file. Dates of service 1/1/2011 – 12/31/ million commercial lives. IVIG defined as J1459, J1557, J1561, J1566,J1567, J1568,J1569, J1572, J Claims meeting specified exclusion rules are not included herein.
©2013 Walgreen Co. All rights reserved.

28. Much lower variance and lower average cost per unit at MD office and Home Infusion / Infusion Suite
Walgreens client date on file. Dates of service 1/1/2011 – 12/31/ million commercial lives. IVIG defined as J1459, J1557, J1561, J1566,J1567, J1568,J1569, J1572, J Claims meeting specified exclusion rules are not included herein.
©2013 Walgreen Co. All rights reserved.

29. While home infusion offers the lowest cost per unit, majority of patients are treated in the most costly place of service
Walgreens client date on file. Dates of service 1/1/2011 – 12/31/ million commercial lives. IVIG defined as J1459, J1557, J1561, J1566,J1567, J1568,J1569, J1572, J Claims meeting specified exclusion rules are not included herein.
©2013 Walgreen Co. All rights reserved.

30. Questions?
©2013 Walgreen Co. All rights reserved.

31. Specialty Medical Benefit Management: Immunoglobulin
Ann Nguyen, PharmD
Staff Vice President

32. Immunoglobulins Challenges
IVIG Products
Clinical mechanism of IVIG/SQIG action remains undetermined
Lack of disease specificity, numerous FDA indications and many off label uses
Outcomes
Clinical effectiveness and follow-up are often not documented
Extended treatment length without clinical outcomes observed
Market
Market consolidation, fewer manufacturers controlling distribution channel and allocation
Consumer demand and consumption continuing to grow

33. Immunoglobulins Mgmt Strategies
Benefit alignment: Rx & Med
In-Network incentives
Member
Physician
Ancillary HIT & SPP
Utilization Mgmt
Care Mgmt
Case Mgmt & Coordination
Robust meaningful analytics
In office infusion incentives
Limit IVIG distribution channel to a select few
Appropriate use w/clinical outcomes & length of therapy criteria
Preferred product selections
Pre-cert required (med)
Preferred HITs / SPPs w/demonstrable outcomes
Contract pricing

34. Bruce Phelan Compass BioPharma, LLC
Specialty Medical Benefit Management: Immunoglobulin Alignment of the Patient, Provider, Plan and SOC Continuum
Bruce Phelan
Compass BioPharma, LLC
Compass BioPharma, LLC- All Rights Reserved

35. Chronic Care Management
40% + of the US population has one or more chronic condition1
50% of working age Americans have at least one chronic condition2
The prevalence of chronic disease is increasing in the elderly and non-elderly populations3,4
A significant number of people have multiple chronic diseases
Chronic conditions account for 75% of health spending in the US5
By 2017, insurers will be spending an average of 32% more for their individual members' medical claims6
Increases in disease state patient populations are driving increased Immunoglobulin utilization to address disease state needs – not the cost of Ig products
[1] Chronic diseases are “conditions that last a year or more and require ongoing medical attention
and/or limit activities of daily living.”W. Hwang, et al., “Out of Pocket Medical Spending for Care for
Chronic Conditions.” Health Affairs. 20:2689 (2001).
[2] C. Hoffman and K. Schwartz. “Eroding Access Among Nonelderly U.S. Adults with Ch
ronic Conditions: Ten Years of Change.”Health Affairs. 27:w340 w348 (2008).
[3] K. A. Paez, L. Zhao, W. Hwang. Rising Out Of Pocket Spending for Chronic Conditions: A Ten
Year Trend. Health Affaris. 28:1525 (2009).
[4] K. E. Thorpe, Lydia L. Ogden, K. Galactionova. Chronic Conditions Account for Rise in Medicare
Adapted from Health ReformGPS, L. Cartwright-Smith, 2011
[5] H.Tecco, Rock Health, HIT Consultant, February2013
Cost of the Future Newly Insured under the Affordable Care Act (ACA), Society of Actuaries, March 2013
Compass BioPharma, LLC- All Rights Reserved

36. Immunoglobulin Dynamics
Primary Immunodeficiency (PI) – 300K patient population
10% ~ 28,000-30,000 patients receive Ig therapy
Neurologists have demonstrated a growing acceptance of IVIg for patients with Neurological conditions
Safety, Efficacy, Supply, and Outcomes (CIDP, MNN, MG, GB, and AD)
Ig Manufacturers' have leveraged significant investments to ensure:
Expanded donation, efficient Ig fractionation, and adequate Ig supply
Disease state awareness and education
Distribution and service models to provide access to care
Although SCIg has experienced significant growth, Allergy/Imn continue to utilize IVIg for PI patients
Neurological Patients: ~70% of Dx and Trx in Ambulatory Care setting, 30% Institutional (In-patient and OPIC)
High awareness of potential Alzheimer’s Disease treatment
Compass BioPharma, LLC- All Rights Reserved

37. Ig Ambulatory Variables
Opportunity To Adapt
MCO
AWP to ASP
Methodology
Appropriate Patient
Cost Containment
HC Reform?
Reimbursement
Compression
M&A
Specialty Infusion/Pharmacy
Consolidation
Competition
Cost of Goods
(acquisition / procurement)
Labor Costs
(Fixed/Variable
Clinical/Op’s/Corporate)
Infrastructure
(IT, Logistics, DMP’s)
Compass BioPharma, LLC- All rights reserved

38. Moving from Volume to Value
Medical and Pharmacy Benefit Designs that encourage benefit and SOC migration
IVIg
SCIg
SCIg
Med Benefit
Med Benefit
SOC significantly influences Ig “Total Cost of Care” under the medical benefit
Pharmacy Benefit 2
Homecare
Homecare 4 5
Homecare
Hospital 1
Pharmacy
Pharmacy
Pharmacy
IVIg PI
Patient
Medical
Benefit
(1-2X)
60-65% of all IVIg grams still
administered in a hospital setting 3
IVIg
IVIg
IVIg
Med Benefit
Med Benefit
Med Benefit
AIS
Phys Office
Amb Clinic
AIS
Phys Office
Amb Clinic
AIS
Phys Office
Amb Clinic
Compass BioPharma, LLC- All Rights Reserved

39. Ig Efficiency Considerations
Although only 7 FDA approved indications, 100+ ICD-9 codes support Ig through proven clinical data and historical acceptance
Leads to inefficient/experimental Ig dosing patterns
Opportunity for Clinical / Medical treatment algorithms (IVIg /SCIg)
Medical Benefit data barriers exist to track, monitor, and manage
IT / data management enhancement- integrated EMR/EHR transference
Medical Benefit Data Stratification (Hospital, OPIC, HIT, AIS, Phys Office)
New models of care represent an effort to solve deeply
embedded Healthcare delivery problems experienced
by organizations of all sizes and SOC’s
GE Health, 2011, 01-Elhauge-Chap-01.indd, Oxford Press, 2010
Compass BioPharma, LLC- All Rights Reserved