1. June 29, 2016 Employer Forum on Pharmacy Benefits & Specialty Drugs:
Finding the Truth in Vendor Transparency, Rebates,
Contracting & Premium Relief to Stay in the Game
June 29, 2016

2. MBGH Employer Member Survey 2015
Priorities in next 12 to 24 months
Copyright © 2016 MBGH/IIH

3. National Employer Initiative on Biologics & Specialty Drugs Project Overview

4. National Employer Initiative on Biologics & Specialty Drugs - 2011 to 2016
Employer-driven initiative providing knowledge and no-cost resources to support cost management efforts and patient outcomes
Employer Advisory Council
Annual Employer Benchmarking Surveys
Online Toolkit – – serving as a roadmap to support employer efforts in:
Effective benefit design coverage approaches focused on total cost of care and patient outcomes
Education on best approaches to managing costs in the medical and pharmacy benefit
Addressing vendor performance – transparency, accountability, contracting
Access to no-cost resources that support strategy assessment and consumer communications 4
Copyright © 2016 MBGH/IIH

5. National Employer Initiative on Biologics & Specialty Drugs - 2011 to 2016
Annual Multi-Stakeholder Collaboration
Employer-Driven Research with Coalitions
Employers’ Health Coalition – Arkansas
Employers Health Coalition – Ohio
Florida Healthcare Coalition – Florida
Healthcare 21 – Tennessee
Mid-America Coalition on Health Care – Kansas
Midwest Business Group on Health – Midwest
National Educational Outreach
Employer Interviews
Employee/Employer Tools 5
Copyright © 2016 MBGH/IIH

6. Employer & Employee Resources No cost tools for employers/employees
Pharmacy Benefits Assessment/Audit Recommendations
(PBM & Health Plan)
Understand the types of benefit assessments and reviews that are commonly conducted
Learn what elements should be included in your pharmacy benefits audit 6
Copyright © 2016 MBGH/IIH

7. Employer & Employee Resources No cost tools for employers/employees
Pharmacy Benefit Inclusion Criteria (PBM & Health Plan)
Comprehensive list provides 28 criteria that should be included in PBM contract to drive market change 
Can also can be used for auditing performance and enhance assessing pharmacy contract to determine if your vendor is delivering results 7
Copyright © 2016 MBGH/IIH

8. Employer & Employee Resources No cost tools for employers/employees
Employer Checklist for Site of Care
Identify what questions you need to review to determine if a site of care strategy is beneficial for your company 8
Copyright © 2016 MBGH/IIH

9. Employer & Employee Resources No cost tools for employers/employees
Employer Checklist for Designing Specialty Drug Benefits
Determine what key elements need to be gathered before you begin or while reviewing your specialty drug benefit strategy and contracting 9
Copyright © 2016 MBGH/IIH

10. Employer & Employee Resources No cost tools for employers/employees
Consumer Education Strategy on Specialty Drugs
Specialty Drugs: The Future of Pharmacy Benefits & What You Need to Know
Communication strategy for use with employees and members on specialty drugs
Includes brochure, newsletter articles and strategy for how to integrate into existing benefit communications 10
Copyright © 2016 MBGH/IIH

11. Web site 11

12. 2015 Multi-Stakeholder Meeting on Specialty Drug Management
Changing the overall lack of industry knowledge on drug pricing, comparative effectiveness and related value of specialty drugs
Getting PBMs to be transparent on pricing, rebates and contracting to support employer decision-making
Redefining narrow networks as Centers of Excellence or High- Performing Networks that are also outcomes-based
Identifying what future ethical decisions employers will have to make from a cost and access perspective
Understanding that if something is not effective it needs to be paid for differently – e.g. performance and outcomes-based guarantees 12
Copyright © 2016 MBGH/IIH

13. 2015 Multi-Stakeholder Meeting on Specialty Drug Management
Using data to address specialty drug costs and outcomes in actionable ways and taking workable steps to solve critical issues
Ensuring vendors contracts include access to actionable data
Developing value-based tools that are credible, useable and look at treatments within guidelines that include affordability, safety and efficacy
Ensuring coalitions and stakeholders continue to work together to represent the collective voice of the employer  13
Copyright © 2016 MBGH/IIH

14. MBGH Employer Member Interviews Employers & Offering Benefits
Employers believe that specialty drug coverage is an important component to maintain in their overall health benefits designs and are seeking to develop strategies to accomplish this in a high quality, cost-efficient manner
They will continue to offer health benefits to attract and retain the best employees in a competitive market, but…..
If cost trends continue, significant changes may be made in other areas of benefits design to offset the impact on their abilities to provide high quality benefits 14
Copyright © 2016 MBGH/IIH

15. MBGH Employer Member Interviews Plan Design
There are similarities in their benefit designs using common approaches such as step therapy, prior authorization and quantity limitations
Some allow a limited number of specialty fills at retail pharmacies while others restrict the location of purchase at first fill
Use of coinsurance is the preferred design for member minimum and maximum out-of-pocket payments
They are applying higher maximums for specialty drugs compared to non-specialty
Case management and disease management via medical and pharmacy vendors are typically not coordinated – an area of improvement for all
Most rely on their specialty pharmacy vendors to address member treatment adherence 15
Copyright © 2016 MBGH/IIH

16. MBGH Employer Member Interviews Plan Design
All use some form of value-based design for traditional benefits but most do not use for currently released specialty drugs
Only a few extend the approach to currently released specialty drugs and incentives for use of a specialty pharmacy are not in play, yet they require the use of a specialty pharmacy for any drug coverage to occur
Tiered member costs based on a formulary approach drives the use of specific drugs for most employer designs; while a few have an open formulary design and rely on clinical guidelines to determine drug use
Some use J code blockage in their medical plans to steer members to the specialty pharmacy; others are still developing these strategies and focused on steering use of self-administered specialty drugs to the drug benefit 16
Copyright © 2016 MBGH/IIH

17. MBGH Employer Member Interviews PBMs & Contracting
Some require bids on both traditional and transparent models and use outside vendors to assist in contract negotiations as well as auditing and/or monitoring PBM performance against contracted metrics
Use of AWP minus a percentage is the popular pricing strategy and is applied either on a per-drug or per-drug category basis
One employer has an at-will opt-out clause to allow cessation of specialty drug coverage in case they decide to adopt a single procurement approach
Most use of ancillary programs providing one-on-one assistance with services such as second opinions, member counseling and support groups
They recognize the required use of specialty pharmacies, step therapy and prior authorization as the strategies most effective in managing costs and outcomes 17
Copyright © 2016 MBGH/IIH

18. MBGH Employer Member Interviews The Future
Employers expect specialty drug coverage will evolve into a much more robust state as they continue to push the market for changes, including:
Use of measureable clinical outcomes as the driver for determination of provider use through prior authorization, step therapy and utilization reviews
Required pre- and ongoing clinical testing to determine appropriate initial prescribing and ongoing use of drug
Restricted off-label use when possible or feasible
Development of high quality treatment adherence programs to drive desired clinical outcomes with carrot and stick approaches to achieve member engagement
Increased standardization of care with outcomes-based utilization guidelines specific to specialty drugs included in national standards of excellence in care programs 18
Copyright © 2016 MBGH/IIH

19. Future Impacts on Employers
Specialty drugs will become the main driver of overall health care benefit cost trends
Mergers and acquisitions of specialty pharmacies and PBMs will continue to occur
There will be greater interoperability of systems to improve communications across transitions of care
Biologic products will begin to go off patent but not at the discounts anticipated
Intensive case management will be critical to successful and cost- effective patient outcomes 19
Copyright © 2016 MBGH/IIH

20. Future Impacts on Employers
Employers will require PBMs, health plans and even pharma to go at risk (e.g. performance guarantees, value-based contracts, comparative effectiveness)
With requirements to meet goals for improved outcomes for drugs and related treatments, clinical utility and quality of well-being measures
An increase in state level regulatory mandates will be seen for specialty plan designs that are at parity with non-specialty benefits
Employers and employer coalitions will continue to influence this marketplace
Doing nothing is no longer an option 20
Copyright © 2016 MBGH/IIH

21. Tools to Support Employer Management
MBGH Employer Benchmarking Survey
& Website Review

22. Annual Employer Benchmarking Survey 2011 Highlights
FOCUS
Employer understanding of specialty drug benefits,
Plan design options, Vendor contracting
78% of employers nationally had a low to moderate understanding
70% did not know medical plan specialty drug spend
30%
didn’t know specialty cost increases
past 3 to 5 years
Majority use traditional benefit plan designs
Vendor Costs
#1 reason to contract with PBM or specialty pharmacy

23. Annual Employer Benchmarking Survey 2012 Highlights
FOCUS
Diversity of employer size, Leadership knowledge, Medical & pharmacy benefit challenges
Size Doesn’t Matter
Employers need support to effectively navigate challenges of managing medical and pharmacy benefits
Cost Increases
31 – 50% (10%)
11 – 30% (35%)
36% completely unaware specialty drugs and services
were paid out of medical benefit
53% Leadership had average to low understanding
TOP PRIORITIES
Case management
Drug utilization
Cost sharing

24. Annual Employer Benchmarking Survey 2013 Highlights
FOCUS
Employers seeking best strategies to manage specialty drugs
Top Priorities
Reducing
inappropriate use Improving adherence Reducing variability between pharmacy and medical plan design
General lack of awareness
Limited fill supply - “Low-hanging fruit”
Negative impact of cost sharing
78% of employers had an above average understanding specialty drug benefits
Popular Tactics:
Case care management
Benefit design coordination
Incent for use of specialty pharmacy

25. Annual Employer Benchmarking Survey 2014 Highlights
FOCUS
Employers seeking effective approaches with
benefit design strategy and contracting
Top 3 Cost Management Strategies
Coordinated info on disease therapies
Vendor performance guarantees
Limited fill supply
68% of employers are considering use of
a narrow network
Very few offer incentives for
adherence
lower-cost site of care
90% agree that new solutions are needed to manage specialty drugs
Over 50% Considering
shifting more costs
to employees - 18% do

26. 5th Annual Employer Survey - 2015
Demographics
Average employer size: 18,800
50 large, self-insured public and private employers
Represent over 125M employees
Primary industries
33% - Manufacturing
12% - Education Services
9% each - Financial Services, Insurance, Health Care 26
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27. 5th Annual Employer Survey - 2015
Level of Understanding
What specialty drugs are
Effectively ways to manage them
What coverage / costs run through medical vs. pharmacy
Cost trends 27
MBGH © Copyright 2016

28. 5th Annual Employer Survey - 2015
Level of Agreement 28
MBGH © Copyright 2016

29. 5th Annual Employer Survey - 2015
88% of employers still use traditional plan designs but are willing to try new strategies 29
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30. Oncology Benefit Plan Design
5th Annual Employer Survey
Oncology Benefit Plan Design 30
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31. Most cost effective patient management strategies
5th Annual Employer Survey
Most cost effective patient management strategies
Patient support and case management
Required use of a specialty pharmacy
Prior authorization for pharmacy claims approval
Step therapy edits for claims approval
Tie……Specialty distribution requirements (i.e. closed system delivery) & Coordinated info on disease therapies 31
MBGH © Copyright 2016

32. 5th Annual Employer Survey - 2015
Plan design elements to drive people to lowest cost site of care (for infusion) 32
MBGH © Copyright 2016

33. Impact of employee cost sharing
5th Annual Employer Survey
Impact of employee cost sharing 33
MBGH © Copyright 2016

34. 2016

35. Specialty Rx Toolkit Website Evolution
Item/Activity
Old Website
New Website
Purpose
To provide foundational knowledge
To provide up-to-date information
Guide with specific action steps
Areas of Focus
Overview of Specialty
Elements of Benefit Design
Basics of Contracting
Industry overview
Strategies
Benefit design/Contracting
Continuum of care
Patient outcomes
Resources and tools
Employer Stories
Assessments
Checklists
Overall Goals
Enhance employer knowledge & understanding of the business case
Provide employer experiences and real solutions

36. Web site 36

37. Specialty Rx Toolkit New Site Features
New Logo
Redesigned
Main Navigation
Simplified
Sub Navigation
& Text
Call To Action
Buttons

38. Specialty Rx Toolkit New Site Features
Section Overview
Use of Tiles
Simplified
User Experience

39. June 29, 2016 Employer Forum on Pharmacy Benefits & Specialty Drugs:
Finding the Truth in Vendor Transparency, Rebates,
Contracting & Premium Relief to Stay in the Game
June 29, 2016