Frank Diamond
Managing Editor
MANAGED CARE June 2011. ©MediMedia USA

Express Scripts’ program manages biologics dispensed under the pharmacy and the medical benefit

Managing Editor

Market forces and the implementation of parts of the Affordable Care Act force insurers to adjust their strategies constantly, but they’re not the only health care stakeholders doing so. A recent effort by Express Scripts, the giant PBM, illustrates how quickly the terrain changes.

Express Scripts recently launched a program called “specialty benefit services” that manages the distribution of biologics under both pharmacy and medical benefits. Officials at Express Scripts say they’re bringing together the three functions needed to manage specialty benefits: pharmacy benefit management, specialty pharmacy and distribution, and medical benefit management.

“Ten years ago, the industry reacted to the need for managing biologics by creating specialty pharmacies,” says Matt Totterdale, the vice president who oversees the effort. “But as costs associated with specialty medications continued to rise, it became clear that specialty pharmacy only gets you so far.”

One of the pro-physician services that traditional specialty pharmacies cannot provide is the buy-and-bill function, says Totterdale. “It’s very necessary that a physician be able to draw labs in his office, or that a hospital be able to draw labs,” says Totterdale. “They need to be able to make decisions in real time and administer drugs. Specialty pharmacy cannot, and has not, solved that problem. We can’t ship the drug in an hour; we ship the drug overnight. So buy-and-bill is very necessary. Our program offers buy-and-bill to physicians through access to wholesale drug prices and expedited reimbursement processes.”

F. Randy Vogenberg, PhD, RPh, a principal at the Institute for Integrated Healthcare and member of the MANAGED CARE Editorial Board, says that “PBMs have been trying to figure out how to get a piece of the specialty action in the doctor’s office. Since CAP blew up in the feds’ face, it really hasn’t been solved.”

Totterdale also cites the Competitive Acquisition Program (CAP) under Medicare Part B. Created under the Medicare Modernization Act of 2003 (MMA), the program, launched in 2006, was expected to cover all injectables given in a physician’s office, outpatient treatment, and equipment. However, CAP didn’t ease physicians’ administrative burden, and in fact made it worse. “It was a retrospective approach,” says Totterdale. “It cut reimbursement, and made it harder for them to do business.”

The Express Scripts program, on the other hand, is prospective, says Totterdale. It uses utilization management to ensure that therapies are delivered to patients at the most cost-effective, clinically equivalent facility.

The new medical loss ratio rules in the Affordable Care Act must also be taken into account. “With the MLR there’s a bigger incentive to better coordinate medical and pharmacy benefits, where they have to look at the whole spend,” says Vogenberg.

Costs keep climbing

Spending on specialty drugs climbed 19.6 percent in the last year, according to the Express Scripts 2010 Drug Trend Report. The pharmacy and medical costs for specialty drugs are expected to total 40 percent of national spending on drugs by 2014.

Of the nation’s total spending on specialty drugs, only 45 percent is managed under the pharmacy benefit and therefore under the effective trend management programs offered by traditional PBMs, according to the report. The remaining 55 percent of costs are in the medical benefit.

“There are going to be home infusion providers, doctors, and hospitals who are going to be skeptical,” says Matt Totterdale of Express Scripts.

“PBMs have been trying to figure out how to get a piece of the specialty action” since CAP (the Competitive Acquisition Program) blew up, says F. Randy Vogenberg, PhD, RPh.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.