Las Vegas may be a place known for glitz, glam and famous stars, yet every year specialty pharmacies, manufacturers, payers, and other stakeholders gather there to address the business and clinical components of specialty pharmacy. This year’s Asembia Specialty Pharmacy Summit conference, held April 29 – May 2 in Las Vegas, saw more than 5,000 attendees for three and half days of networking and information sharing, and more than 160 exhibitors spanning the specialty pharmacy industry.
Sentry was able to meet with our industry peers in the hospital, specialty pharmacy, wholesaler, legal and consulting space to discuss the intersection of 340B and specialty medication access. Appearances included well-known personalities from many industries and spaces, from journalist and former First Lady of California Maria Shriver, to outgoing FDA Commissioner Scott Gottlieb, MD. We left this conference with a new sense of invigoration for data—the shining star of specialty pharmacy and Sentry Data Systems.
Flash forward a month later and the American Society of Health-System Pharmacists (ASHP) hosted its first-ever specialty pharmacy track for health-system leaders in Boston, Massachusetts at the ASHP Summer Meeting, June 8-12. Leaders shared the challenges health systems face in the specialty pharmacy space, how to manage payer negotiations and other operational pearls of wisdom for health systems.
How is the specialty pharmacy industry evolving?
As with other elements of the pharmaceutical industry, the public has taken interest in the rise of drug costs. As with the rise in cost of Mylan’s EpiPen from approximately $100 to $600 between 2007 and 2016, we see this trend continuing in 2019, with a greater emphasis this Congressional year on overcoming the challenge of rising drug prices.
We already know that verticalization is impacting the business of specialty pharmacy; Wall Street has been watching these trends. It is also clear that specialty pharmacy utilization is on the rise—as can be seen by the more than 45% increase in the purchasing of these high-cost drugs as reported by Doug Long from IQVIA, and by the fact that there were 911 total specialty pharmacies accredited in the US in 2018, according to data collected by Drug Channel Institute.
The key to specialty pharmacy is twofold—access to high-cost drugs followed by access to payers. Once these two elements of access are met, pharmacies must demonstrate to accreditors that they have patient care plans that include monitoring patient outcomes.
What makes specialty pharmacy unique is that the manufacturer can limit distribution based on patient care monitoring requirements, while payers can limit access by requiring accreditation through organizations such as Utilization Review Accreditation Commission (URAC), ASHP Collaborative Center for Pharmacy Practice Accreditation (CPPA), or Accreditation Commission for Health Care (ACHC). URAC continues to lead the market in providing guidance and is accepted by the industry as a standard for setting specialty pharmacies apart, due to their rigorous evaluation.
At ASHP in June, a presentation from the Joint Commission and two of those accreditation groups, CPPA and ACHC, discussed the accreditation process. In a peer-to-peer engagement session, facilitators noted that in some instances, health systems have been required to have two types of accreditation, and offered advice for health systems on how to manage these types of requests.
The challenge today is that as payers continue to link to pharmacy benefit managers, certain pharmacies are excluded from participation in these much-needed networks. The power of data comes into play in showing how better outcomes can be achieved, thus opening doors to participate in the network. This is a battle that hospital pharmacies must endure.
Because of access and outcomes limitations, we saw many networking meetings taking place during the Asembia conference between hospital-owned specialty pharmacies, manufacturers and payers, to provide insight into the unique factors that set hospitals apart from the other specialty pharmacy players that own most of the marketplace volume. These types of discussions can lead to value-based care payment models that incorporate hospital-owned specialty pharmacies because of their ability to reduce readmissions and improve time to therapy and coordination of care.
The trend of specialty pharmacies being incorporated into the hospital practice setting was also highlighted at the Asembia event—presenters discussed everything from the hospital-owned setting to leased space by specialty pharmacy-owned models. Dean Erhardt, Principal at D2 Pharma Consulting, LLC, described the unique specialty pharmacy-payer-PBM models as “physician-ownership, retail-delivery, low-cost leader, and an ‘I’ll meet you anywhere’ model” in his presentation. The purpose of his presentation was to place the major specialty pharmacies into specific categories for their delivery models, to help attendees understand the connection to payers and pharmacy benefit managers. Some examples Erhardt provided of such relationships were:
|Aetna||CVS Caremark||CVS Caremark Specialty||Retail-Delivery|
|Cigna||Express Scripts (ESI)||Accredo Specialty||I’ll Meet You Anywhere|
|Humana||Humana Pharmacy||Wal-Mart||Low-Cost Leader|
Erhardt also noted that 60% of all PBM claims are retail pharmacy-owned PBMs, rather than health plan-owned.
When we evaluate the impact of the marketplace, we see that six PBMs control a total of 90% of the market share, and six payers cover just over 50% of all insured patients across the US. Health system-owned specialty pharmacies are a very small percentage of the specialty pharmacy space, yet provide unique coordinated care models with the shortest time to therapy and best adherence rates for patients, according to ASHP presenter William Roth, founding partner at Blue Fin Group.
Biosimilar, gene therapy and other landmark approaches to cancer, arthritis, inflammatory bowel disease and rare diseases were also top-of-mind at ASHP this year. This growth has led to a continued trajectory of spending. ASHP leaders discussed the different disease states and how health systems should review where to begin focusing on specialty pharmacy opportunities through development of relationships with providers.
Focus on the future
Discussions around technology solutions, from patient monitoring programs to robotics, as well as talks about supporting compliance in high-cost drug markets, drew great interest from the Asembia attendees. Investors and others are still monitoring Haven’s (formerly Brookshire Hathaway/JP Morgan) cost-containment health plan strategy, which will first be rolled out to its own employees, with the intent to spread into wider markets in the future. The consolidation and verticalization in the marketplace are being monitored closely, due to the ties between payers and pharmacies and between pharmacies and pharmacy benefit managers.
Health system specialty pharmacies play an integral role in healthcare today; while the market is shifting, the data speaks for itself and requires hospitals to not only look at the clinical components of specialty drugs but also to consider the business angle. No other specialty pharmacy is placed in a more unique situation than a hospital-owned pharmacy when it comes to the opportunity to impact patients. The question at hand is access—will payers cooperate? Will manufacturers support providing access? As we move forward, hospital pharmacy leadership will be increasingly required to analyze data and present real-world evidence, similar to that which Sentry has developed through our Continuous, Rapid-Cycle Analytics (CRCA) methodology. The goal is to prove not just what one hospital can do, but what many can do together.
What lies ahead?
Specialty pharmacy will continue to rise and to be the star of the show. It is important for hospitals and hospital pharmacies to have a plan in this space to ensure their patients have access to highly specialized drugs—either through their own specialty pharmacy operation or via a combination of contract pharmacies that can cater to their patient’s needs, which include payer access and limited distribution access. We know that politics, economics, social issues and technology advancements will continue to advance the future of specialty pharmacy. Sentry can help hospitals review the landscape and provide options based on their market. Specialty pharmacy is in an industry that requires constant monitoring; as new drugs come to market with limited distribution patterns, hospitals will need to make sure that they have a way to fill the gaps for their patients.