Express Scripts, one of the nation's largest pharmacy benefit management firms, is creating a new organization that offers insurers guaranteed savings on high-cost oncology therapies and other so-called specialty pharmaceuticals.
Express Scripts Specialty Benefit Services says it is the first organization to simultaneously manage the three ways that cancer patients receive drugs:
* Intravenous chemotherapy delivered in the physician's office or hospital outpatient setting.
* Drugs delivered through home infusion.
* Oral oncology and pain medications obtained from a retail pharmacy.
“That line of sight really hasn't been there to date for anyone in the health care system,” said Matt Totterdale, who leads the new organization at Express Scripts.
Typically, drugs that a patient buys through a retail pharmacy are covered by a patient's pharmacy benefit. Companies like Express Scripts use various techniques, such as different copayment levels, to encourage the patient to use the lowest-cost drug that will be effective.
Chemotherapy agents delivered at the physician's office or hospital outpatient department, however, are covered under a patient's medical benefit. The oncologist buys the drugs and bills the insurer through a “buy and bill” arrangement, with the physician generating revenue from the markup on the drug price.
Insurers generally do not know what drugs the oncologist has used until the insurance claim arrives; even then, the insurer may not know the exact dose because the codes used for claims under the medical benefit do not provide much detail.
What Makes the New Initiative Unusual
What makes Express Scripts' new initiative unusual is that it will manage the drugs covered under the medical benefit as well as those purchased through a retail pharmacy. By knowing—in advance—the full range of medications a patient will receive, the company can identify potential drug/drug interactions, duplicate therapies, and treatments that do not conform to an insurer's policy.
For oncologists, that will mean getting prior authorization before treating patients who are insured by companies using Express Scripts Specialty Benefit Services.
“Before the patient ever goes on the therapy, we're actually collecting the data on what their cancer is, the details of the disease they have, and what the recommendations around that treatment will be,” Totterdale said.
“It allows us then to prospectively look across the patient's home infusion benefit, the pharmacy benefit, and medical benefit to look for duplicate therapies, safety issues, and other potential problems.”
Dawn Holcombe, owner of DGH Consulting, lists the reasons oncologists hate to hear the term “prior authorization.”
“Experience with existing prior authorization programs have led to delays in care, greatly increased overhead and labor costs to practices, and questions of medical decision-making being done by non-physicians without direct knowledge or understanding of the individual patient, their disease, or health status,” she said. “Insertion of prior authorization programs on a broad scale just for the sake of inserting a new layer of management will be of great concern to physicians.
Totterdale said his company will use each insurer's coverage policy to determine whether an oncologist's choice of treatment is acceptable.
What Insurers Want to Hear
In promising savings on specialty drugs for cancer care, Express Scripts is singing the song insurers--and the employers who buy insurance for their workers—want to hear.
Almost all the drugs approved for cancer treatment in the past four years cost more than $20,000 for a three-month course of treatment, according to the Medco 2010 Drug Trend Report. With more than 800 cancer drugs in the pipeline and the incidence of cancer increasing as the population ages, everyone is worried about how cancer treatment can be afforded.
“I think all health plans and all pharmacy managers are going to have to have some approach to this fast-growing area of drug spend over the next three years,” said Alan Lotvin, MD, President of ICORE Healthcare, a specialty pharmacy firm that includes an oncology management program. “We think there will be a sea change in this market.”
Comes on Heels of Medco Health Solution's Launch of New Oncology Service
In fact, Express Script's announcement came just few months after Medco Health Solution's, the country's largest pharmacy benefit management company, launched a new service to manage more than 850,000 Medco patients currently living with cancer.
Medco Therapeutic Resource Center is using specialist pharmacists to “actively participate in the care of cancer patients, identify treatment gaps, and address quality of life issues, such as managing side effects of their drugs,” according to a news release.
Holcombe agrees that insurers are looking for new ways to control their cancer care costs. But she thinks prior authorization and other drug-management practices to be a poor way to do so.
Drugs and office visits account for only about 20% of total spending on cancer care, while diagnostics, hospitalizations, radiation oncology, imaging, and end-of-life care eat up the rest.
“If you only focus on drugs, you're missing three-quarters to 80 percent of the total cancer spend,” she said. “And the only way you can effectively address any of that larger piece is through collaboration with the physicians. It can't be mandates, it can't be oversight, it's got to be true ‘let's sit down and talk about what choices we're making and why and what makes sense.'”
Tested on Small Scale Over Past 18 Months
Nonetheless, Totterdale says the specialty benefit service has been tested in a small scale over the past 18 months, during which Express Scripts proved it can save insurers money without driving oncologists out of business.
“We started with a philosophy that was very simple: We have to find a solution in the marketplace that works for payers, physicians, and the patients,” he said.
What is a ‘Specialty Pharmacy'?
Specialty pharmacy is sometimes used as a synonym for biotechnology therapies, but that shorthand does not always work. The Academy of Managed Care Pharmacy defines specialty medications as high-cost medications prescribed for people with complex or chronic medical.
These medications typically exhibit one or more of the following characteristics:
* Drugs that are injected or infused, although some may be taken by mouth.
* Drugs that have unique monitoring, storage, or shipment requirements.
* Drugs that require special support from a health care professional.
* Drugs that are usually not available at retail pharmacies.