1. Specialty Pharmacy Management
Susan Cooper MPH RPh
Sr. Director, Pharmacy Services
HealthPartners
October 24, 2012

2. Agenda
Strategies HealthPartners is using to manage specialty drug trend
Pharmacy benefit strategies
Medical benefit strategies
Integrated strategies
Off label and safety

3. Specialty Pharmacy management goal
Affordable access to specialty medications that improve health and reduce total cost of care
Triple aim approach
Strengthen provider/patient relationships and member experience
Integrate with existing programs (DM, CM, MTM)

4. Integrated Specialty Drug spend
Costs
40% Rx
60% medical
Integrated view protects against “balloon effect”
Variations by class
Benchmarking used to compare to other plans

5. Trend management strategies
Appropriate use
Unit cost contracting
Channel management
Site of care
Claim edits and controls
Benefit design
Provider incentives
Benchmarking

6. Appropriate use management
Same process used for Pharmacy and Medical benefit
New drug reviews/formulary management
Utilization Management (UM)
Prior Authorization (PA)
Step edits, quantity limits, diagnosis edits
Pathways and guidelines
Off label use management
Drug interactions and safety
Adherence monitoring

7. Appropriate use example 1
Clinical review recommended lowest cost option
Total cost is $700 less a month per member
Model for biosimilars
$$$

8. Appropriate use example 2
Prior authorization used to drive preferred therapies within medical benefit
Lowest cost but similar clinical results
Savings >$20,000 per year per utilizing member
PA announcement
$$$ $

9. Appropriate use example 3
High returns from generally low denial rates
Drug
Criteria
Denial Rate
ROI
Enbrel
Specialist must prescribe
Failure of standard therapies for rheumatoid arthritis and psoriasis
Dose/administration limitations 5%
25:1
Botox
FDA-approved indications
Quantity limits
14%
15:1
Incivek & Victrelis
Documented genotype I hepatitis virus infection
Prescribed in combination with interferon and ribavirin 3%
39:1

10. Appropriate use example 4
Waste Management:
Trial Drug Program for oral cancer drugs
$4000 savings per impacted member
Pro-rated cost share for member

11. Unit cost strategies
Exclusive vendor contract for self administered drugs (Rx Benefit)
Best discounts and most control
Drug specific pricing
Channel management (Rx Benefit)
>96% use of specialty vendor for self administered drugs
Aggressive provider contracting for professionally administered drugs (Medical Benefit)
Cost advantages
Pharma contracting (Rx and medical)
Rebates- access and outcomes
Net cost must be reviewed at drug specific level

12. Medical management: market myth
Myth: There is a high mark-up resulting in significant profit margins on provider administered specialty medications
Fact: Providers can often buy drugs at a lower cost than pharmacies
Fact: Since CMS instituted ASP based reimbursement in 2005, profit margins have decreased
Fact: Some plans are reversing requirements to use a specialty pharmacy

13. Site of care
Self administered medications are usually lowest cost option
Medical claim edits prevent self-administered drugs from being administered in clinics
Professionally administered drugs
Monitor site of care use and costs
Management strategies
Education, benefit design and/or site of care restrictions.

14. Claim controls: market myth
Myth: There’s no controls for medical claims
Fact: Medical claim controls in place
Unclassified J-Codes require NDC detail
Prior auth, quantity limits and maximum dose edits
Diagnosis edits
Fact: Integrated claim monitoring exists
Specialty dashboard by therapeutic class
Drug Utilization Reviews (DURs)
High cost claim reviews and FWA checks
Benchmarking

15. Medical claim control example
Unclassified drug controls
Ensures claims do not have assigned J-Codes
Allows contracted payment rates
Estimated $1000 savings per impacted claim
Billed Proc Cd
NDC Code
Label Name
Primary Diagnosis Code
Diagnosis Code Description
Date of Service
Status
J3590
EYLEA 2 MG/0.05 ML VIAL
362.52
EXUDATIVE SENILE MACULAR DEGENERATION OF RETINA
01/13/2012
PAID
PROLIA 60 MG/ML SYRINGE
733
OSTEOPOROSIS, UNSPECIFIED
01/03/2012
DENIED
Touch on what J-Codes are

16. Specialty drug benefit parity
Member cost share often varies between site of administration and/or benefit
Copays vs. co-insurance, deductibles
Professionally administered drugs vs. home care
Recommend benefit parity for specialty drug classes to prevent adverse utilization
Give example of benefit parity
Rx Benefit
Medical Benefit
Member Cost
Medical Copay Plan
Drugs: 20% / $200 max
No cost for drugs
Use Enbrel = $200
Use Remicade = $25 office copay
Benefit Parity
Drugs: 20% / $200 max
Use Remicade = $200

17. Provider incentives Specialty vendor performance guarantees:
Service levels
Accuracy
Medication adherence rates
Provider Total Cost of Care (TCOC) arrangements support specialty initiatives: lowest cost and best outcomes
80% of HealthPartners claims come from provider groups who have total cost of care incentives

18. Key messages Focus on integrated trends and detail by drug class
Align incentives- total cost of care contracting, benefit parity
Partnership between medical and pharmacy to control trend
Coordinate programs with disease management, case management, and medication therapy management

19. Contact info
Susan Cooper MPH, RPh
Sr. Director, Pharmacy Services
HealthPartners, Inc.
phone: