2018 Pharmacy Education Series

Transcription

1 2018 Pharmacy Education Series August 15, 2018 Specialty Pharmacy...Past, Present & Future Turning Challenges into Opportunities Faculty Speaker: Sheila M. Arquette, RPh Executive Director National Association of Specialty Pharmacy Online Evaluation, Self-Assessment and CE Credit Submission of an online post test and evaluation is the only way to obtain CE credit for this webinar Go to Print your CE statement of completion online Credit for live or enduring (not both) Deadline: September 14, 2018 Pharmacists and Pharmacy Technicians: CE credit uploaded to CPE Monitor User must complete the claim credit step Attendance Code Code will be provided at the end of today s activity 2 1

2 How to Ask a Question Locate menu bar on your computer desktop Click orange arrow button to open menu box Type question into question box Click Send Do not close menu box This will disconnect you from the Webcast Please submit questions throughout presentation Enter question Click No! Click 3 Accessing PDF Handout No! Click the hyperlink that is located directly above the question box Do not close menu box This will disconnect you from the Webcast Click hyperlink 4 2

3 2018 Pharmacy Education Series August 15, 2018 Specialty Pharmacy...Past, Present & Future Turning Challenges into Opportunities Faculty Speaker: Sheila M. Arquette, RPh Executive Director National Association of Specialty Pharmacy It is the policy of to ensure balance, independence, objectivity and scientific rigor in all of its continuing education activities. Faculty must disclose to participants the existence of any significant financial interest or any other relationship with the manufacturer of any commercial product(s) discussed in an educational presentation. Ms. Arquette has no relevant commercial or financial relationships to disclose. Please note: The opinions expressed in this activity should not be construed as those of the CME/CE provider. The information and views are those of the faculty through clinical practice and knowledge of the professional literature. Portions of this activity may include unlabeled indications. Use of drugs and devices outside of labeling should be considered experimental and participants are advised to consult prescribing information and professional literature. 5 CE Activity Information & Accreditation (Pharmacist and Pharmacy Technician CE) This CE activity is jointly provided by and CHSPSC, LLC. ProCE is accredited by the Accreditation Council for Pharmacy Education as a provider of continuing pharmacy education. ACPE Universal Activity Number L04 P/T has been assigned to this knowledge based live CE activity (initial release date ). This CE activity is approved for 2.0 contact hours (0.2 CEU) in states that recognize ACPE providers. This CE activity is provided at no cost to participants. Successful completion of the online post test and evaluation at is required to receive CE credit. CE credit will be uploaded to NABP/CPE Monitor. No partial credit will be given. Funding: This activity is self funded through CHSPSC

4 Specialty Pharmacy...Past, Present & Future- Turning Challenges into Opportunities Community Health Systems August 15, 2018 Sheila Arquette, RPH Executive Director 7 Learning Objectives 8 4

5 At the conclusion of this presentation, participants will be able to: Describe specialty drug and specialty pharmacy Identify core elements of a high performing specialty pharmacy and the role of the pharmacist and pharmacy tech Discuss the evolution of specialty pharmacy practice Explain what a REMS program is and specialty pharmacy s role Describe specialty pharmacy key trends List the top 5 therapeutic classes treated by specialty drugs and examples of specialty drugs and their uses Identify the current specialty pharmacy marketplace participants Identify the biggest challenges(s) facing the specialty pharmacy industry today including DIR fees Identify professional societies supporting SP and their role in promoting specialty pharmacy practice 9 Introductions

6 Who is NASP? The National Association of Specialty Pharmacy NASP ( is the only national association representing all stakeholders in the specialty pharmacy industry. The core mission of NASP is to provide educational programs to pharmacists and other healthcare professionals and to promote specialty pharmacist certification for those working in specialty pharmacy. NASP is committed to educating and advocating on behalf of its multistakeholder membership to ensure specialty patients receive high quality patient care services from the pharmacy of their choosing and to transform the delivery of specialty healthcare through active engagement with improving the patient experience, enhanced clinical outcomes and by fostering the education and certification of pharmacists focused on specialty drug /disease management. 11 Who is NASP? (continued) NASP provides an online education center, with over 45 continuing pharmacy education programs, hosts an annual educational conference and expo that offers education sessions and continuing education credits, and is the only organization that offers a certification program for specialty pharmacists. NASP members include the nation's leading independent specialty pharmacies, pharmaceutical and biotechnology manufacturers, group purchasing organizations, patient advocacy groups, integrated delivery systems and health plans, technology and data management vendors, wholesalers/distributors and practicing pharmacists With over 100 corporate members and 1,200 individual members, NASP is the unified voice of specialty pharmacy in the United States. Not all NASP members are pharmacists but all in some way touch the specialty pharmacy patient along the patient care journey

7 What is a Specialty Drug? A universal definition of specialty medication has yet to be accepted. Defining the term specialty drug can be a challenge. For 2017, the Centers for Medicare & Medicaid Services (CMS) define a specialty medication as a drug which costs more than $670 per month. The National Association of Chain Drug Stores (NACDS) defines specialty medications as products used to treat chronic, high cost, or rare diseases that can be injectable, infusible, oral, or inhaled medications. Specialty pharmaceuticals tend to be more complex to maintain, administer, and monitor than traditional oral drugs; therefore they require closer supervision and monitoring of a patient s overall therapy. In the U.S. a rare disease is defined as a disease affecting fewer than 200,000 Americans at any given time 13 What is a Specialty Drug? (continued) Others incorporate prescriber type and exclusions in addition to the above mentioned components in their definitions: Products that are often injectable, high cost, biologics, or require coldchain distribution. They are often initiated by specialists, include treatments for cancer and other chronic conditions, and often require complex patient follow up and monitoring. The FDA, employers, health plans, and PBMs have their own ways of defining this fastest growing drug category There is a general consensus that the following elements currently define specialty drugs: Treat complex chronic and/or life threatening conditions Have a high cost per unit Require special storage, handling, and administration Involve a significant degree of patient education, monitoring and management

8 What is a Specialty Pharmacy? State licensed pharmacy that solely or largely provides only medications for people with serious health conditions requiring complex therapies. These include conditions such as cancer, hepatitis C, rheumatoid arthritis, HIV/AIDS, multiple sclerosis, cystic fibrosis, organ transplantation, human growth hormone deficiencies, and hemophilia and other bleeding disorders. Most specialty pharmacies are accredited by independent third parties such as URAC, the Accreditation Commission for Health Care (ACHC), the Center for Pharmacy Practice Accreditation (CPPA) or the Joint Commission, which ensures consistent quality of care. Connect patients who are severely ill with the medications that are prescribed for their conditions, provide the patient care services that are required for these medications, and support patients who are facing reimbursement challenges for these highly needed but also frequently costly medications. 15 What is a Specialty Pharmacy? (continued) Provide services that include training on medication use, comprehensive treatment assessment, patient monitoring, and frequent communication with caregivers and the patient s physician or other healthcare providers. The expert services that specialty pharmacies provide drive adherence and persistency, proper management of medication dosing and side effects, and ensure appropriate medication use. The specialty pharmacy s patient centric model is designed to provide a comprehensive and coordinated model of care for patients with chronic illnesses and complex medical conditions, achieve superior clinical and economic outcomes, and expedite patient access to care. A high performing SP operates at the intersection of the 5 Ps: Patient Prescriber Payer Drug Pipeline Pharmaceutical manufacturer

9 NASP Definition of Specialty Pharmacy Specialty drugs are more complex than most prescription medications and are used to treat patients with serious and often life altering and sometimes life threatening conditions. Specialty medications may be taken orally but often must be injected or infused and may have special administration, storage and delivery requirements. Many of these injectable medications are self administered in the patient s home. Infused specialty medications are administered in various treatment settings such as a patient s home with the support of a home health care professional, sometimes in a doctor s office or even in a hospital. Not all medications administered by home infusion providers or in the physician office or infusion center are specialty but can be. The complexity of these medications may be due to the drug itself, the way it is administered, the management of its side effect profile, the disease or condition it is used to treat, special access conditions required by the manufacturer, payer authorization or benefit requirements, patient financial hardship or any combination of these. As a result, patients being treated with specialty medications require comprehensive patient care, clinical management, and product support services. 17 Roles and Responsibilities Pharmacist Accurate prescription dispensing Disease management/compliance and adherence program development and maintenance Licensure and certification Accreditation/Quality Assurance Management of Relationships Employees Referral sources Payers Prescribers manufacturers Investors Drug pipeline management Data collection and reporting Subject matter expert in the drugs being dispensed and disease states being managed Trusted and knowledgeable resource Patients/caregivers Prescribers Payer customers Community Involvement Technician Insurance benefit investigation and verification Facilitation of the prior authorization process Financial assistance facilitation Foundations/manufacturer sponsored copay assistance, spaps Patient Care Coordination & outreach Scheduling compliance/adherence/disease management calls Scheduling medication refills and reminders Copay collection Patient/caregiver coordination Dispensing functions Inventory management Packing, Shipping and cold chain management Data collection Quality assurance

10 Evolution of Specialty Pharmacy Practice In its infancy specialty pharmacy (SP) truly was a niche industry serving a limited number of patients with a small number of high cost, low volume conditions such as hemophilia and Gaucher s disease Gaucher disease is a hereditary disease in which the metabolism and storage of fats is abnormal. It results in bone fragility, neurological disturbance, anemia, and enlargement of the liver and spleen. The incidence is up to 1 in 40,000 live births in the general population. Specialty pharmacies have their roots in the 1970s, when they began delivering temperature controlled drugs to treat cancer, HIV, infertility and hemophilia. In the mid 1990s there were fewer than 30 specialty drugs. By 2008 this number had increased to 200 and today there are close to 400. There are also close to 400 pharmacies with specialty pharmacy accreditation. Specialty pharmacies came into existence as a result of unmet needs. As more drugs became available for patients to administer or inject themselves and as insurers sought to manage expenses for patients with chronic conditions we saw the evolution od specialty pharmacy practice. 19 Evolution of Specialty Pharmacy Practice (continued) The primary goals of specialty pharmacies are to ensure the appropriate use of medications, maximize drug adherence, enhance patient satisfaction through direct interaction with healthcare professionals, minimize cost impact, and optimize pharmaceutical care outcomes and delivery of information. Manufacturers have increasingly relied on these pharmacies for medications that require special handling or have potentially dangerous side effects that require a comprehensive, coordinated patient care management program. Often manufacturers grant a limited number of specialty pharmacies with access to their medications. This network design can pose many challenges for patients, prescribers, payers and other specialty pharmacies. As the market demanded specialization in drug distribution and clinical management of complex therapies, specialty pharmacy has evolved

11 Does the name Stadtlanders ring a bell? In 1992 Stadtlanders Pharmacy was a grassroots company in Pittsburgh that occupied one floor of a seven story office building and had only a handful of employees and sold drugs using the mail order delivery model to patients with chronic conditions with higher than average prescription prices. In 1992 these medications included ancillary to primary therapies to manage side effects, as well as HIV, transplant, and a new growth area, multiple sclerosis (MS). By 1995 Stadtlanders added others, including growth hormone therapy. By 2000 Stadtlanders generated annual revenues of $500 million by dispensing drugs and delivering them via the mail to patients with chronic conditions. As more more expensive lifesaving therapies became available Stadtlanders began to do more than fill prescriptions. They facilitated the completion of insurance paperwork on behalf of patients and prescribers to obtain authorization and secure reimbursement. They coordinated insurance benefits to eliminate the potentially enormous outof pocket costs. 21 Does the name Stadtlanders ring a bell? (continued) They were able to keep these specialty drugs in stock when most retail pharmacies could not. In this way they could intervene for patients who needed immediate access to therapies to prevent organ rejection but who did not have the money for such payments, nor did they have the expertise they needed to complete the forms. They also coordinated referrals from hospital discharge planners and delivered the medication to the patients homes to allow therapy to begin immediately upon hospital discharge. Specialty pharmacies grew through word of mouth; nurses and physicians heard from their patients about the special services provided by these pharmacies and started to refer patients who required this white glove, high touch service

12 What else is SPECIAL about Specialty Pharmacy? Specialty drugs may be designated as orphan drugs or ultra orphan drugs under the U. S. Orphan Drug Act of 1983 (ODA). The ODA was enacted to facilitate development of orphan drugs drugs for rare diseases such as Huntington s disease, ALS, and muscular dystrophy which affect small numbers of individuals living in the United States. It is expected that orphan drugs will be approved from now until the year 2021 compared to the 66 orphan drugs that were launched in the past 5 years. Not all specialty drugs are orphan drugs. When an increasing number of oral oncology agents first entered the market between 2000 and 2010, most cancer care was provided in a community oncology practice. Now many cancer patients are treated solely with oral medications in their home. These patients need comprehensive and coordinated care services to ensure maximal therapeutic outcomes. 23 Risk evaluation and mitigation strategies (REMS) On September 27, 2007 President George W. Bush amended the Food and Drug Administration Amendments Act of 2007 (FDAAA) granting the FDA the authority to require a Risk Evaluation and Mitigation Strategy (REMS) from manufacturers to ensure that the benefits of a drug or biological product outweigh its risks. 3 A REMs may be required by the FDA as part of the approval of a new product, or for an approved product when new safety information arises. Essentially, a REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use. Since medicines are very different from each other, each REMS for each medicine is also different. Since 2007, there have been several hundred medications approved with REMS. With so many medications in the marketplace, the challenges include consistent access and guaranteeing high quality patient care. Both the FDA and pharmaceutical manufacturers are on the hook for ensuring not just compliance, but also appropriate use and care. FDA launched a website in mid 2015 to provide access to REMS@ FDA, a list of medications with REMS requirements. This was also important to ensure consistent access to the products by patients, providing safety information, pharmacy enrollment forms, and required actions for pharmacists who dispense the REMS medication

13 Risk evaluation and mitigation strategies (REMS) continued FDA launched a website in mid 2015 to provide access to REMS@ FDA, a list of medications with REMS requirements. This was also important to ensure consistent access to the products by patients, providing safety information, pharmacy enrollment forms, and required actions for pharmacists who dispense the REMS medication. Every practicing pharmacist and pharmacy technician can benefit from getting familiarized with REMS@ FDA. When the FDA approves a new drug they may require a REMS program which may contain any combination of the following 5 criteria: Medication Guide Communication Plan Elements to Assure Safe Use, Implementation System, and Timetable for Submission of Assessments. 25 REMS-Pharmacy s Growing Responsibility With the number of new products with REMS requirements entering the marketplace, pharmacy is positioned to expand its role in patient safety by assuming greater responsibility and authority in the management of products requiring REMS. Pharmacists are the most accessible, affordable, and trusted healthcare providers touching the patient in the community, so CMS and health plans are seeking pharmacy s help to be the gatekeeper for assisting patients with appropriate monitoring, safe use, and utilization of highrisk medications. Manufactures traditionally have looked to specialty pharmacies to help manage the requirements of REMS programs

14 Examples of Specialty Drugs with a REMS Program Drug Name Adempas Caprelsa Juxtapid Kynamro Lemtrada Prolia Revlimid Tysabri Vivitrol Zinbrtya Medication Use Pulmonary Hypertension Medullary thyroid cancer Homozygous familial hypercholesterolemia Homozygous familial hypercholesterolemia Multiple Sclerosis Osteoporosis Multiple myeloma, Myelodysplastic syndrome (MDS), Mantle cell lymphoma (MCL) Multiple Sclerosis Alcohol or drug abuse Multiple sclerosis 27 Breakthrough Therapies In 2013 the FDA introduced the breakthrough therapy designation program which cut the development process of new therapies by several years. This meant that the FDA could introduce important medicines to the market based on very promising phase 2 rather than phase 3 clinical trial results. In January 2013, ivacaftor became the first drug to receive the breakthrough therapy designation. Again health plans, payers and pharmaceutical manufacturers partner with specialty pharmacies to dispense these breakthrough therapies. Often times the FDA mandates post drug approval market research and specialty pharmacy's technical ability to capture the required data elements enables them to best support these requirements

15 Specialty Pharmacy Trends Each year, the specialty pharmaceuticals market share has grown The total number of specialty medications has increased: Increased approval for more common specialty diseases such as oncology and hepatitis Increase in rare or orphan disease medications We have seen an increased number of FDA approvals in several drug classes such as immunology and MS which has led to: Increased competition Payers beginning to mange specialty drugs as they have generic and traditional brand name drugs Overall use of specialty prescriptions: Less than 2% of the U.S. population Accounted for 28% of U.S. drug spend in Q and 43% in Q Projected to reach 50% by 2022 In 2017 drug spending grew by only 1.5%. Spending on traditional drugs dropped by mid single digits. Higher utilization was a much bigger contributor to spending growth for specialty drugs then was growth in unit costs The average monthly cost of a specialty medication is $2500 $3500 per patient 29 Specialty Pharmacy Trends (continued) In 2017, prescription dispensing revenues from specialty drugs at retail, mail, long term care, and specialty pharmacies reached $138 billion. This accounts for one third of the pharmacy industry s $413 billion in total dispensing revenues. By 2022, it is estimated that specialty drugs will account for almost 50% of the pharmacy industry s projected total dispensing revenue of $576 billion. These large dollars will be hard earned, as many challenges lie ahead for the specialty drug market, including changes in the reimbursement process, financial and regulatory pressures, and the need to expand communication and the level of transparency to all stakeholders. With 73 patent expirations for biologic agents by 2021, biosimilars will emerge as a larger market presence We also beginning to see an increasing focus on specialty drug development for the treatment of diseases and conditions that were historically managed by small molecule therapies asthma, urticaria, atopic dermatitis Specialty Pharmacy is the NEW pharmacy

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17 5 Therapeutic Areas Attributed to 76% of All Specialty Sales in June 2017 Dollar amounts reflect total sales 33 Top Selling Specialty Drugs Approved in 2017 and their Indications Drug Indication Sales through January 2018 Ocrevus Multiple Sclerosis $1.1B Mavyret Hepatitis C $480M Dupixent Moderate to severe atopic $319M dermatitis Spinraza Spinal muscular atrophy $240M Vosevi Hepatitis C $221M Eucrisa Mild atopic dermatitis $133M Radicava Amyotrophic lateral sclerosis $86M Kisqali Breast cancer $79M

18 Disease States Serviced and Drugs Dispensed According to the CSI Specialty Pharmacy 2018 Industry Report, rheumatology, oncology/hematology, dermatology, gastroenterology and neurology are the specialties driving SP growth. Examples of specialty medications used to treat conditions treated by these specialties include: Drug Name Specialty Indication Humira Rheumatology Arthritis, ankylosing spondylitis Xeljanz Rheumatology Arthritis Ibrance Oncology Breast Cancer NovoSEven RT Hematology hemophilia Taltz Dermatology Plaque Psoriasis Cosentyx Dermatology Plaque Psoriasis Humira Gastroenterology Crohn s Disease, UC Entyvio Gastroenterology Crohn s Disease, UC Avonex Neurology Multiple Sclerosis Tecfidera Neurology Multiple Sclerosis 35 Specialty Pharmacy Channel Size and Scope Specialty Channel is Increasingly Complex Prisons Warehousing Retail Chain Chain Drug Store Mail Order Pharmacy Food/Mass Merch Drug Store Manufacturer Distribution Centers Full-line Wholesalers Specialty Distributors Independent Drug Store HHC Long-term Care Acute Care Hospital Pharmacy HMO Government Physician Health Care Professional Patient Clinic Mail SPP Medical Groups VA + DoD

19 Specialty Market Participants Employers Health plans Pharmacy benefits managers (PBMs) Independent specialty pharmacies PBM/health plan owned specialty pharmacies Community hybrid pharmacies specialty at retail Grocers Hospital systems Physician dispensing Accreditation organizations Medication management companies who partner with payers to provide a single source for high touch patient care management to control side effects, patient support and education to ensure compliance or continued treatment, and specialized handling and distribution of medications directly to the patient or care provider as specialty medications may be covered under either the medical or pharmacy benefit. Technology and Data management vendors GPOs, wholesalers, distributors Patient advocacy groups 37 Challenges and Opportunities

20 The Specialty Pharmacy Boom is Expected to Continue Implications of everyone wanting to be a Specialty Pharmacy PBMs, pharmacies, wholesalers, health plans, and providers are battling for control of the specialty market and the patient journey Manufacturers specialty network design will be critical and have far reaching impact Channel control will continue to migrate from manufacturers to PBMs and payers Coevolving economics will consolidate specialty pharmacy market structure Organized channels new ownership and partnering relationships will emerge 39 Mergers & Alliances Walgreens and Rite Aid Albertsons and Rite Aid Walmart and McKesson Alliance Walgreens and PharMerica Amazon and Whole Foods Amazon, Berkshire Hathaway, and JPMorgan Chase CVS and Aetna Express Scripts and Cigna OptumRx and DaVita s medical group Walmart and Humana?

21 Vertical Integration More than 30 PBMs manage prescription drug expenditures in the US 72% of the prescriptions are processed by three PBMs: Caremark, Express Scripts (ESI), and OptumRx 41 Vertical Integration (continued) The market share of the three large PBMs has ensured a strong leverage position: Two thirds of all covered lives are managed by the top 3 PBMs (ESI, CVS and OptumRx) These PBMs also own their own specialty pharmacies Consumers are forced to use an in house pharmacy instead of independent specialty pharmacy: Eliminates choice Impacts the quality of care provided Large PBMs threaten to remove products from their national formalities which: Ensures bargaining power. Offers limited choices for a patient and physicians. Lack of incentives to compete on the quality of care and services provided to patients and physicians

22 The Impact of the Lack of PBM Transparency and Oversight From 2012 to 2016, several states enacted 32 laws regarding PBM pricing transparency, 36 laws regarding fair and uniform pharmacy audits, and 19 laws regarding PBM registration and reporting audits. Still, transparency issues persist The PBM Owned SP has Significant Incentive and Power to Exclude Independent SPs From Network. The PBM that owns its own specialty pharmacy is incentivized to exclude other competitor specialty pharmacies in its PBM network. In doing so, the PBM that owns a specialty pharmacy achieves two important financial goals. First, to drive greater revenue and profit to its own specialty pharmacy given that the PBM owned specialty pharmacy is obviously in network with its parent corporate entity. Second, to create greater leverage in its purchasing power against manufacturers and wholesalers as a result of its greater influence in the network. 43 Any Willing Pharmacy Provisions (AWP) Regulatory language and guidance provides for pharmacy network inclusion based on reasonable and relevant terms and conditions The contracts currently offered are neither reasonable nor relevant Vertical integration continues to drive policies and processes that ensure exclusion rather than promoting inclusion and provide unfair competitive advantage to PBM owned specialty pharmacies Specialty Pharmacy Performance Measures...or the lack thereof The current clinical measures used for the purposes of evaluating specialty pharmacy performance are based on primary care measures rather than the drugs dispensed by specialty pharmacy and the disease states managed

23 Minimum Network Adequacy Standards Currently regulatory language does not ensure Medicare access to SP however does establish minimum convenient standards for retail, mail order, home infusion, long term care pharmacy and I/T/U (Indian Health Service/Tribal/Urban Indian Health) pharmacy if applicable Reimbursement Current regulatory language states that reimbursement rates cannot be used to subvert the convenient access standards and it is not reasonable nor relevant to offer reimbursement that is below acquisition cost Lack of existing oversight and enforcement of these regulations PBMs design pharmacy reimbursement rates based on different criteria and networks. Often the contracting for all available networks and corresponding rates are not transparent. 45 Prescription Steerage The PBM uses its ability to see the adjudication process to steer prescriptions to its own SP The PBM owned specialty pharmacy configures their own claim processing system to reject a claim at the network pharmacy that it does not own. This then prompts the PBM to reach out to physician and redirect the prescription to their own specialty pharmacy. PBM that owns a specialty pharmacy calls the independent specialty pharmacy stating there is an error in the information entered for a prescription and asks the pharmacist and the independent specialty pharmacy to reverse the prescription submission, correct it and resubmit the prescription. During the minute it takes for the prescription to be reversed and updated by the independent specialty pharmacy, the PBM owned specialty pharmacy will fill the prescription. If the independent specialty pharmacy asks the PBM owned specialty pharmacy to reverse the claim it will state that the prescription was processed and is in the shipping department and cannot be reversed. The independent specialty pharmacy has now lost the patient to the PBM owned specialty pharmacy

24 Direct and Indirect Remuneration Fees (DIR) In 2016, a significant change was noted in the administration of direct and indirect remuneration or DIR fees by select PBMs and plan sponsors against a wide range of pharmacy practice settings, including Specialty Pharmacies, that participate in Medicare Advantage and Medicare Part D pharmacy networks. DIR fees originated from the Centers for Medicare and Medicaid Services ( CMS ) effort to better understand the true cost of prescription drugs and any post point of sale price concessions. CMS wanted to know what the actual cost of medications reimbursed under the Part D program were, appreciating there were discounts and rebates in the channel that were not being accounted for at the point of sale, but rather reconciled post claim adjudication. Beginning in 2016 select PBMs and Medicare Part D Plan Sponsors began assessing retroactive fees to pharmacies participating in Medicare Part D networks. These fees are charged against pharmacies based on their performance in a number of primary care focused quality metric categories, which are totally unrelated and irrelevant to Specialty Pharmacy scope of practice and specialty pharmacy patients. These DIR Fees have severely impacted the pharmacy industry, clawing back the funds dedicated to providing the comprehensive, coordinated, patient care and support services, and stand to threaten the continued ability of Specialty Pharmacies participating in Medicare Advantage and Part D networks to provide patient necessary services which ensure optimal clinical outcomes. 47 Exploring Potential Partnerships and Synergies

25 Partnerships and Synergies Hospitals Health Systems Contracted Specialty Pharmacies 49 Washington s Response to the Administration s Call for HealthCare Reform

26 On April 2, 2018 CMS issued a final Medicare Part D Rule and Part D Call Letter for CY 2019 The final Medicare Part D rule should expand access to more affordable drugs, and the agency outlined new limits on opioids The moves on drug costs should reduce cost sharing for some patients and might provide some savings for taxpayers, but they won't directly affect the prices drug companies charge. The final rule for the 2019 Medicare prescription drug program requires plans to have lower maximum co payments for biosimilar drugs for patients who receive low income subsidies. The rule also lets Part D plans immediately substitute newly released generics for brand name drugs at the same or lower cost sharing if they come on the market during the plan year. The rule also finalizes a policy that would let patients receive drugs at whichever pharmacy they prefer. The final Part D Call letter, which includes a number of new policies aimed at tackling the opioid epidemic. Health plans will be required to limit initial opioid prescriptions for acute pain to a maximum seven day supply. 51 Of particular interest to specialty pharmacy: Any Willing Pharmacy Standard Terms and Conditions and Better Define Pharmacy Types This provision clarifies Part D rules and CMS expectations regarding statutorilyrequired any willing pharmacy provisions, and revises the definition of retail pharmacy. This provision also establishes deadlines by which Part D sponsors must respond to requests for standard pharmacy contracting terms and conditions. AWP contracts must be available by September 15 th for the following plan year Manufacturer Rebates and Pharmacy Price Concessions to Point of Sale The proposed rule In November included a Request for Information soliciting comment on potential policy approaches for applying some manufacturer rebates and all pharmacy price concessions to the price of a drug at the point of sale. While the Trump administration has cheered recent decisions by some national insurers to share savings directly with patients, CMS will not mandate that insurance plans share a percentage of the rebates they negotiate with drug companies directly with patients purchasing the drug at this time, but rather will use the ideas and comments provided in the RFI to evaluate and consider proposals for future rulemaking

27 American Patients First Background On Friday May 11, 2018, President Trump presented his administration s blueprint for lowering prescription drug costs for Americans. The blueprint, entitled, American Patients First (Blueprint) provides an overview of the current biopharmaceutical market with a particular focus on the Medicare, 340B and Medicaid programs. Much of the blueprint restates proposed polices from the administration s proposed 2019 fiscal budget and includes both immediate and longer term initiatives, some which will require legislative action or substantial regulatory reform and compliance. Additionally, the Blueprint serves as a Request for Information (RFI) on many proposed policies that serve the Administration s goals of lowering drug prices; a separate RFI was released on May 14. Goals of the Blueprint Policy Proposals Establish incentives to lower list prices Improve market competition Allow for better negotiations on price Lowering out of pocket costs 53 Impact and Take a Ways The Blueprint does not directly address NASP s specific policy initiatives related to DIR Fees or definition of specialty pharmacy. The Blueprint focuses on the role that the PBM has in the Medicare Part D program in setting formularies, collecting rebates and how much of those rebate dollars are passed on to the point of sale (POS). NASP needs to continue to educate Congress and the administration on the distorted incentives that the current DIR program has on the Medicare program, its impact on patients and advocate for our solutions. The RFI seeks feedback on such issues as: transparency overall; the impact of shifting coverage of drugs from Part B to Part D; the role of PBMs, rebates, and list prices; and the impact of the gag clause

28 The Phair Pricing Act of 2018 H.R On May 24, 2018, Representatives Doug Collins (R GA) and Vincente Gonzalez (D TX) introduced legislation to rein in the high cost of prescription drugs and support the needs of specialty pharmacy patients living with life altering and life threatening medical conditions. The Phair Pricing Act of 2018 ensures that medication savings are passed along to seniors at the pharmacy counter and not otherwise used to manipulate drug costs or disadvantage the specialty pharmacies serving these patients. Requires pharmacy negotiated price concessions and pharmacy incentive payments and adjustments to be included in negotiated prices at the point of sale under Part D of the Medicare Program Establishes a Quality Measure Working Group for the purposes of establishing quality measures applicable to pharmacy type and ensures pharmacy representation from all pharmacy practice types 55 Looking to the Future

29 Factors Affecting the Evolution of the Specialty Pharmacy Marketplace A wave of new treatments for diseases traditionally treated with small molecule therapies is on the horizon Alzheimer s, asthma, allergy, Parkinson s Disease, heart failure, COPD, malaria, osteoarthritis, stroke, and pain Many are chronic diseases with large patient populations high cost per patient is a major concern The late phase R&D pipeline remains robust and we will see a high number of new brand launches by 2021 with innovative medication launches each year In the next 5 years Oncology, Autoimmune and Diabetes categories will drive the therapeutic growth 57 Factors Affecting the Evolution of the Specialty Pharmacy Marketplace (continued) Nearly 50% of consumers have a pharmacy benefit deductible and the majority are part of an integrated medical pharmacy deductible design Payers are shifting more cost onto patients through benefit designs with higher co pays and pharmacy deductibles Coupons and manufacturer out of pocket offsets have increased steadily as patient cost exposure has increased Industry expenditures on Patient Savings Programs topped $8 Billion in 2016 In 2015, 27% of specialty brand prescriptions were abandoned by patients during their deductible phase of their benefit

30 Medication adherence is at the core of the healthcare value equation impacting all stakeholders: Patient Better health defined by Lower total medical costs Less ER visits Fewer hospitalizations and readmissions Pharmacy Improved engagement Rx growth Enhanced clinical outcomes Hospital Increased CMS reimbursements due to better patient outcomes Reduced ER visits Reduced admissions particularly preventable patient readmissions Physician Increased CMS reimbursements and improved patient ratings Increase in patient engagements Improved patient outcomes Insurer Significant reduction in total allowable costs and increased CMS reimbursements particularly for the most vulnerable patient populations Improved patient health Improved relationship with members and providers CMS Reduced total healthcare costs and improved patient outcomes 59 Market Access Trends We are approaching the tipping point of payer price sensitivity and willingness to pay Employers and consumers will stretch the boundaries of meaningful differentiation and what is comparable as they both struggle with the rising costs of these medications Stricter payer utilization management Increased patient out of pocket ( OOP ) Increased focus on drug pricing and transparency and shift from deep rebate model to lowest net unit cost Value based contracting will continue to be refined as payers want to contract not just on volume but on the outcome of the patient journey and share this financial responsibility with the manufacturer More aggressive medical specialty drug benefit management and emphasis on care coordination Collecting and using data to modify behavior and improve health outcomes will be increasingly important

31 What does all this mean for me? 61 Get involved! Look for opportunities at the local, state and national levels Consider joining NASP, NCPDP, NABP, ASHP and other pharmacy societies and associations Get to know your elected officials Host elected officials at your pharmacy practice setting Consider becoming certified Your voice counts and serves to amplify the message

32 Summary 63 SUMMARY Specialty continues to grow and now approaches 45% of drug spending in the US but only represents 2% of total prescriptions dispensed Biosimilars will begin to penetrate the market in part due to help from the FDA and CMS Abandonment and affordability is a concern, adherence and compliance a challenge and opportunity Innovation is robust however, different with a focus on orphan drugs and biologics being developed for the treatment of diseases historically treated with small molecule therapies As the Administration and governmental agencies continue to focus on drug pricing, affordability, and transparency the specialty pharmacy industry will continue to be demanding, dynamic and disruptive. Specialty pharmacy is in a perfect position to enhance and tailor approaches to patient care, adapt operational processes and drive toward establishing standardizations as the health care delivery model changes and evolves

33 SUMMARY (continued) Specialty Pharmacy must turn their focus to demonstrating how the high touch comprehensive patient care services they provide positively impacts quality and total cost of care and advocate for reimbursement for the clinical services they provide separate from the reimbursement for the drug Experienced and qualified specialty pharmacists and specialty pharmacy technicians will become increasingly important as payers and patients continue to struggle with the affordability and complexity of these medications and treatment regimens Certification and programs that demonstrate proficiency in the management of specialty pharmacy patients and diseases treated with specialty drugs will help to differentiate these experts Involvement with professional organizations and societies that focus on education and advocating on behalf of specialty pharmacy is key to ensuring competition, quality and patient access to the medications they need from the pharmacy of their own choosing. 65 Questions

34 Contact Information Sheila Arquette, RPh Executive Director National Association of Specialty Pharmacy (NASP)