Tag Archives: specialty pharmacy

Getting the 5 Rights Right: Right Drug, Right Price, Right Place, Right Patient Support, Right Data By: Carolyn Pare

“To say, ‘well, this is covered by insurance, so what are people worried about?’ makes no sense. The insurance company doesn’t pay for the drug. The insurance company bills somebody for the drug and pays pharmacies for it. The insurance company just processes transactions.”

Dr. Stephen Schondelmeyer
PBS Newshour, August 29, 2016

The recent price increase on the lifesaving EpiPen — up 400 percent in a decade — outraged patients, parents and lawmakers, igniting a media frenzy and lighting up social media channels. But the CEO of Mylan, the EpiPen manufacturer, deflected blame, pointing the finger at “an outdated health care system that incentivizes higher prices.”

What she failed to acknowledge is that the money coming from insurance companies to pay the steep cost comes from policyholders. Ultimately, increases affect all people, not companies or health care systems. And discount coupons are not the answer because that just redistributes the cost in an inequitable way.

Telling insurance companies they have to pay more toward the cost of unaffordable drugs doesn’t solve anything. Insurance companies aren’t creating money in the basement; they charge consumers — all consumers — whether or not they are taking a particular drug.
This is why The Action Group’s Specialty Pharmacy Action Network members have been hard at work for nearly two years identifying the issues surrounding the high cost of specialty drugs, developing possible solutions, and learning what actions need to be taken to reshape the marketplace. On August 11, 2016, we held a Community Dialogue, bringing together all interested stakeholders to share perspectives, knowledge and ideas about how we can collaborate to develop solutions for getting the 5 rights, right: Right drug, right price, right location, right patient support, right data.

  • View the Community Dialogue presentation here.
  • View the Stakeholder Call to Action here.

Our next step is to form a Guiding Coalition with representatives from employers, pharmacy benefit managers, health plans, specialty pharmacies, provider organizations, and pharmaceutical manufacturers to develop a shared vision and action plan for stabilizing a very broken system. Minnesota needs to continue leading the way in health care innovation, which includes gaining control over the high cost of prescription drugs on behalf of our entire nation and its people.

If you are interested in learning more about the Guiding Coalition, please contact me (cpare@mnhealthactiongroup.org).

Why Getting the 5 Rights, Right Matters:

The example below shows just one condition at one Minnesota employer, illustrating why it’s so important to get the 5 rights right. With MS therapy costs increasing 500% in a decade, just 40 patients cause costs to increase by $51.88 per health plan member, per year, or $2.08 million per year. Now multiply this by countless other conditions requiring lifelong drug therapies.

Multiple Sclerosis and Plan Cost: 2013
Multiple-Sclerosis-Plan-Cost--2013


Carolyn Pare is the President and CEO of the Minnesota Health Action Group.

Guest Blog Post: How the Midwifery Model Benefits Families and Payers

By: Tricia Balazovic and Dr. Steven Calvin, The Minnesota Birth Center

Childbirth is the leading reason for hospitalization in the United States.

Assuming a $10,000 savings per birth converted from cesarean to vaginal, and a reduction in cesarean rates from 30% to 20%, an employer with 25,000 covered lives and 350 births per year would see total annual savings of $350,000. This does not take into consideration additional savings from reduced neonatal care, complications and readmissions, all of which are more common for cesarean births.

From the MN Health Action Group Maternity and Infertility Employer Purchaser’s Guide.

The cost of having a baby in a hospital varies by nearly $10,000 across the United States. The analysis of 2011 data from 463 hospitals nationwide found the average bill for a maternity stay ranged from $1,189 to $11,986. Costs at hospitals with higher rates of cesarean delivery or serious pregnancy complications were much higher than those with lower rates, according to Health Affairs.

Highly variable interventional procedures (e.g., cesarean sections and early elective inductions) have been increasing dramatically over time, which is why we are committed to offering healthy, sensible alternatives. While our focus has always been on supporting the needs of our patients, in working with The Action Group on its Maternity and Infertility Employer Purchaser’s Guide, we gained a new and important perspective on the far-reaching implications these often-unnecessary procedures have on employers and other payers, too.

In our Mission Statement, we say: “The Minnesota Birth Center supports health and wellness for women throughout their life cycle in a manner that is safe and seamless. Women are encouraged and empowered through our midwife-led care model at clinics, birth centers and hospitals — which includes a medical safety net when necessary. Our core emphasis is support for the normal physiologic birth of a healthy newborn. We are committed to providing excellent clinical outcomes to satisfied women and families at a reasonable cost.”

True to our mission and complementing our work with The Action Group, we now offer the BirthBundle ® (BB), which assures access to the holistic approach of the midwifery model, coupled with complete price transparency. This innovative, comprehensive maternity and newborn service product provides better clinical outcomes to mothers at a lower cost, using a proven coordinated clinical care model that is paid as a single price for the entire prenatal, delivery and immediate newborn episode.

The BB includes the options of doula services, prenatal and parenting education, group prenatal services, water tubs for labor and birth, and self-administered nitrous oxide for pain control — all in an empowering birth environment that treats pregnancy and birth as normal events while still having an immediately available medical safety net for the rare complications.

Over 600 mothers have received care through the MBC since 2012, with high satisfaction rates and favorable clinical outcomes. Cesarean section rates are below 10 percent, and newborn outcomes are identical to those of babies born in the hospital. A majority of mothers and babies go home within 4-6 hours after birth and then have a follow-up home visit in 24-36 hours, at a cost that is substantially less than that of comparable hospital services.

With BB, we have an opportunity to start at the very beginning. We believe health care reform should start where we all did — with pregnancy and birth. The pregnancy episode is the ideal time to test new care delivery and payment models. As system changes occur and cost pressures increase, we expect the BB to become a very successful clinical and payment model across Minnesota and beyond.

Action Group members may access the Maternity and Infertility Purchaser’s Guide by logging into the Member Center from the homepage.

Guest Blog Post: Sue Abderholden Executive Director, National Alliance on Mental Illness (NAMI) Minnesota

I attended the 10th anniversary recognition event for Minnesota Bridges to Excellence where clinicians who delivered improved care resulting in better outcomes for patients with diabetes, vascular disease, and depression were honored. Delivering better care to people with these conditions can drive down the costs of health care, benefiting the people themselves and their employers.

I was especially pleased to have been invited to speak because of the attention being paid to depression. I was part of the committee that provided input into the development of the toolkit, “Help and Healing: Resources for Depression Care and Recovery.” The toolkit includes things like patient and provider talking points, treatment planning guides, and self-management techniques. Not only does it promote the involvement of family and education of the individual, it also provides information about suicide, (which has been rising in Minnesota), and recognizes that effective treatment is more than taking a pill – it involves nutrition, exercise, meditation, mindfulness and more.

Next to anxiety, depression is one of the most common mental illnesses in the U.S. According to the National Institutes of Mental Health, about 6.7 percent of U.S adults experience major depression.

While the Minnesota Health Action Group seeks to improve health, reduce health care costs and ensure the economic vitality of all Minnesota communities, reducing the impact of depression on the individual, their families and employers is equally important.

Families and employers intimately understand the impact untreated depression has on people’s lives.

As families, we watch as our loved one loses interest in once enjoyable activities, they become more distant, less responsive.

Employers see workplace productivity affected due to absenteeism and presenteeism. Employers see workers who have difficulty handling time pressures and stress, who have problems concentrating or remembering things.

Untreated mental illness results in 27 lost workdays per year, nine to sick days, and 18 to lost productivity. It is the leading cause of short-term and long-term disability. Many people with depression lose their jobs because they are unwilling to talk about their symptoms, obtain treatment, or ask for accommodations. It’s ironic since we know that work helps people get better – it provides structure, interaction with others, and a reason to get up in the morning.

So when clinicians do better at early identification of depression and improve the quality of treatment, it’s not just the patient that benefits – but their family and employer as well.

A friend of mine writes an inspiring and thoughtful blog on dealing with his depression. He recently wrote “Depression and anxiety can rob you of the desire to interact with the world:  learn nothing, do nothing, be a part of nothing. Thinking of yourself as nothing, as of no worth…or worse yet, as a drain to all that surrounds you…this is the absence of any sense of health.”

In another post, when he was really struggling with his symptoms he wrote, “During my deepest bouts with depression I cannot get myself to enjoy much of anything. And it really hurts for me not to be able to enjoy music. It’s a very weird feeling. To be so consumed with — so frustrated with, so pained by — my inability to care.

“You doubt yourself and everything you do. You are convinced you are worthless…worse than that, a drain on everyone and everything. For me, it shakes me to my core. I doubt every role I think I usually fill well: advocate, yogi, gardener, friend, husband.

“And with this doubt, comes an intense feeling of loss. I remember who I once was and what I once was capable of. And I don’t question if I will ever have that ‘me’ or those ‘capabilities’ again. In fact, I am certain I never will.”

Despite the number of people who develop depression and the effectiveness of treatment, few seek treatment. Some studies have reported that people live with their symptoms an average of 10 years before seeking help.

Think of how much pain they and their families must experience before they seek help. We do know that stigma plays a role in the reluctance to seek treatment.

People worry about what others will think and frankly, mental illnesses are the “no hot dish” illnesses – you don’t get meals brought over, there are no get-well cards or CaringBridge sites.

Starting the dialogue in every clinic, by asking a few simple questions, is how we break down these barriers, how we make it O.K. to talk about depression, thus opening the door to talking about other mental illnesses as well.

Depression, even the most severe cases, can be effectively treated. But the earlier treatment can begin, the more effective it is.

I am grateful for the work everyone involved with Minnesota Bridges to Excellence does to help people get better, to not be disabled by their depression. The outcomes are impressive, and the financial rewards are validating, but the true reward comes in having helped people recover from their depression and let them take on their roles again as a family member, friend, employee and contributing member of our communities. Providing hope for recovery is the best reward of all.

Sue Abderholden is Executive Director at National Alliance on Mental Illness (NAMI) Minnesota

Blog Post: Specialty Pharmacy Pricing: Will the Buck Ever Stop? by Carolyn Pare

“Some problems are so complex that you have to be highly intelligent and well informed just to be undecided about them.”
– Laurence J. Peter

With hundreds of new drugs in the pipeline that will exceed $100,000 per patient, per year, costs for specialty medications are projected to quadruple by 2020. Given the lack of checks and balances to hold drug makers and sellers accountable for rational pricing practices, specialty pharmacy has been called the New Gold Rush.

“It may come down to ‘naming and shaming.’ We’ll report extremely high prices drug companies are charging and ask them to justify their actions publicly.”

Stephen Schondelmeyer, Pharm.D., Ph.D.

The NY Times recently published a letter from Academy of Managed Care Pharmacy (AMCP) CEO Edith A. Rosato, RPh, objecting to the newspaper’s May 5 editorial supporting government price negotiations of pharmaceuticals. (Click here to view her letter and the original editorial.)

In a quest for price-setting transparency, the Obama administration has asked Congress to allow Medicare officials to negotiate prices with drug manufacturers. Additionally, several states are considering bills that would require drug companies to justify their prices to public agencies, according to the NY Times editorial.

While I agree that Medicare should be able to negotiate, and that drug companies should be held accountable for questionable pricing practices, these efforts alone will not magically rein in the skyrocketing costs of certain therapies for the long term. As Ms. Rosato astutely points out, “Regulated prices can simply cause cost-shifting to other consumers.” This is because the health care industry is so blatant in their justification for shifting costs from one payer to another, rather than containing costs in ethical and responsible ways.

Public, private and individual purchasers all need to optimize their negotiating power to address the cost-plus pricing used throughout the health care industry. Just like in other health care segments, pharmaceutical manufacturers and sellers simply pass costs on in new ways if they don’t achieve their profitability goals. We’ve come to accept that costs will continue to escalate and payers need to capitulate to the whims of a market in disarray.

Through The Action Group, we bring all purchasers together, regardless of sector, to create a cohesive approach, instead of fueling the cost-shifting fire. We must all work together to drive down egregious cost-plus pricing practices.

Members of The Action Group’s Specialty Pharmacy Care Delivery Learning Network are here to say, “We’re mad as hell and we’re not going to take it any more.” For the past six months — and for at least the next six — we’re studying the issue of specialty drug costs and working with employers, policymakers and health care industry groups to set forth a strategy to push for price transparency, while adopting coverage and benefit policies that encourage appropriate pricing and appropriate use of high-cost prescription drugs.

In addition to looking for opportunities to join forces and collaborate for change with other employers, here are five key drug management goals for payers as identified by The Minnesota Health Action Group Learning Network:

  • Understand your current specialty pharmacy drug spend, including all drugs administered as part of your medical benefit.
  • Ask vendors to project specific future costs given your company history and drugs in the pipeline.
  • Make sure your benefit plans don’t drive patients to higher-cost sights of care, such as outpatient hospital settings, which can cost twice as much as care given in a clinic.
  • Require health plans to contract with providers to eliminate any incentive for them to administer more expensive drugs in more expensive settings.
  • Require pharmacy benefit managers (PBMs) and health plans to administer prior authorization and step therapy programs based on clinical, objective evidence.

All the people who write the checks for health care services — employers, public purchasers, and individuals — should be informed about this issue and work together to hold drug manufacturers and sellers accountable for ethical, rational and sustainable pricing practices.

Carolyn Pare is the President and CEO of the Minnesota Health Action Group.

Blog Post: Will Specialty Drug Pricing Be The Straw? by Carolyn Pare and Brian Klepper

Over the next few years, drug manufacturers will unleash an unprecedented raft of new drugs into the marketplace. The good news is, there will be better “precision therapy” solutions for common problems, and products for problems that have never before had solutions. The bad news is that the price tags in the U.S. are breathtaking — even scandalous — and are often a high multiple of conventional drugs.

Drug companies argue that these new products are harder to develop and manufacture and worth the additional cost. But U.S. pricing is often three to 10 times that in other developed nations, and it’s safe to assume those sales are profitable. It’s tempting to conclude that drug makers charge exorbitant prices because few U.S. businesses apply the same rigor to buying health care that they do to everything else.

Concerned, engaged HR and benefits leaders from 17 Minnesota Health Action Group member organizations are mobilizing, having joined our exclusive Specialty Pharmacy Care Delivery Learning Network. Each participant has already committed hundreds of hours to becoming better educated so we can effect change in the marketplace in an informed, united way. The goal is to ensure that Minnesotans are receiving the right therapies, in the right place, at the right price, and at the right time.

As many people know, the Hepatitis C drug, Sovaldi® made headlines last year when a course of treatment was pegged at $84,000 in the U.S., crushing previous cost and use records. The same drug is priced at $900 in Egypt and $51,000 in France. U.S. costs for a powerful new cholesterol management drug, PCSK9, are expected to be $7,000-$12,000 per patient per year, compared with about $1,000 on average for conventional drug therapies. Given the number of patients who might benefit, the market for this one drug could easily reach $100 billion/year, or about 1/33 of what we currently spend on all U.S. health care. And, of course, this is not a cure but a maintenance drug, with annual, lifelong, recurring costs.

Hundreds of specialty drugs are in the pipeline, and, by 2018, their costs are expected to account for more than half of total U.S. drug spend, up from 25 percent in 2006. Spending on this category is currently growing almost 20 times as fast as non-specialty drug spending. Unless something changes, in a few years, we’ll spend more on specialty than on non-specialty drugs or, for that matter, on doctors. The likelihood that this trend could financially overwhelm health care purchasers is real.

It’s hard to know how employers and unions will cope with the new pricing. Purchasers might ask a couple questions. First, what additional measurable value will each new drug bring? This is hardly cynical; one recent study found that cancer drugs approved by the Federal Drug Administration over the past decade only lengthened life by 2.1 months, on average. Courses of many of these drugs cost in excess of $100,000. When most of us buy anything, drugs included, we want to know what tangible value we can expect. In health care, that value has proven elusive.

Second, what is the pricing based on? What cost components, exactly, make it more expensive to buy these drugs in the U.S.? What justifies Gilenya®, a multiple sclerosis drug, costing almost six times here what it does in Spain?

The battle over specialty drug pricing could come down to a standoff between drug manufacturers and purchasers. In the past, drug companies have had every reason to believe that employers and unions were too pre-occupied with other matters to mobilize around a problem like specialty drug costs.

Minnesota Health Action Group Members are here to say enough is enough…and we invite Minnesota employers of all types and sizes to join us as we strive to hold drug manufacturers and sellers accountable for rational pricing practices. The rest of the nation has always looked to us to lead the way in health care innovation, and it’s time for us to step up again.

But in every business, union and governmental agency, chief financial officers and benefits managers have been watching their specialty drug spending…and calculating. To their minds, excessive specialty drug costs could capsize their plans, making it untenable to maintain good health coverage without severely compromising some other important health plan benefit. Just as worrisome, these costs are substantially increasing their already heavy health care cost burden, cannibalizing profits.

It is possible that, in their zeal for ever greater profits, specialty drug manufacturers could finally lay on the straw that breaks the tolerance of the nation’s health care purchasers for excessive health costs. If that happens, almost certainly, health care will finally change.

Carolyn Pare is the President and CEO of the Minnesota Health Action Group. Brian Klepper is CEO of the National Business Coalition on Health.