Specialty Pharmacy

Payers Urged to Use Evidence-Based Medicine to Manage Specialty Drug Costs

Reprinted from the October 2006 issue of SPECIALTY PHARMACY NEWS, a monthly newsletter designed to help health plans, PBMs, providers and employers manage costs more aggressively and deliver biotechs and injectables more effectively.

As costs for many specialty drug products increase, health plans and pharmacy benefit managers should use an evidence-based medicine (EBM) approach in approving and utilizing new therapies, said David Coury, Pharm.D., manager of specialty injectable drug programs at PerformRx, the PBM division of AmeriHealth Mercy — a provider of managed Medicaid plans in 16 states with more than 2 million covered lives. Coury and Helen Sherman, Pharm.D., director of pharmacy services at The Regence Group, which operates Blue Cross and Blue Shield health plans in Oregon, Utah, Idaho and Washington state, spoke about the use of EBM during an AIS audioconference, "Strategies for Using Evidence-Based Medicine to Control Drug Spending," on Sept. 14.

Sherman said EBM involves gathering all available information on a particular medication and critiquing the studies' methods and data. Pay attention to the number of dropouts in a study, which sometimes are not accounted for in journal reports on the study, according to Sherman. The result is to recognize the limitations of some studies when weighing the results. "Evidence-based medicine is science and art coming together," she said. One pharmacy consultant has described a core principle of EBM as weighing safety and efficacy against cost without regard to other business considerations such as discounts, rebates and profit margins.

A problem with studies involving specialty drugs during the pre-approval stage, according to Coury, is that they are often placebo-based and rarely is there is a "head-to-head" trial of the drug against an existing one already approved for the condition.

New Drugs May Not Be Better

Any new FDA-approved drug is not necessarily more effective than ones already on the market, Sherman asserted. "The FDA's role is to ensure that the benefits of a drug are greater than the risks...They are not responsible for saying that a new medication is better than other options," she said.

The current pipeline of specialty drug products includes hundreds of drugs that are being designed to treat cancer — the disease state with the largest number of new specialty drugs being developed, according to Coury. Before some of these new therapies become available, he said, payers should undergo a self-assessment that examines their claims management process, injectable specialty drug utilization management and drug-utilization monitoring. He stressed that any utilization management program should be handled internally or by an independent third party that is not subcontracted for distribution. Payers should also examine net costs, examining vendor contracts and any drug manufacturer rebates that may be available, Coury said.

When PerformRx underwent its assessment, according to Coury, the firm realized there were several problems with its drug-utilization management program. "Essentially, there was no utilization management strategy in place," he said. Injectables were being inappropriately approved. He noted Synagis (palivizumab), used for the treatment of respiratory syncytial virus (RSV) in children, as an example. FDA approved the use of Synagis for children up to two years of age, according to Coury. However, the PBM was approving the drug for children who were three and four years of age.

To apply EBM with Synagis, PerformRx revised its prior-authorization (PA) protocols to align with the American Academy of Pediatrics guidelines. The PBM also utilized length-of-therapy protocols, academic detailing and dose monitoring and modification. In a case study of three of its health plans with a total of 480,000 lives, Coury said the management tools led to savings of $2.19 million excluding unnecessary physician visits, and resulted in a denial rate for Synagis of 35%.

The overall assessment also showed that there were no injectable formulary or preferred injectable lists and no standardized protocols used by the medical directors when approving injectable therapies. No prospective and concurrent drug utilization review was in place for any injectable or biologic product, he said, while retrospective DUR was nominal. Coury said most drugs were being billed under the "J3490" miscellaneous drug code, making monitoring utilization almost impossible.

The firm implemented a comprehensive drug management program focusing on high-cost injectable products, including chemotherapeutic agents, biologicals, and high-cost, office-administered drugs, with an emphasis on reducing product and service costs and improving utilization management. Coury noted that the PerformRx program expanded to other departments involved with the distribution or reimbursement of these products within AmeriHealth Mercy.

"Plans should be doing more with evidence-based medicine to manage these specialty costs....They could be leaving millions of dollars on the table if they don't," Coury said. He added that specialty drugs have their own unique issues that drive up costs. Often the product is the only FDA-approved drug for a condition, while the cost is usually non-negotiable. The cost, often mandated under state law or insurance regulation, can be 10 to 50 times that of more traditional treatment options, said Coury, while noting that the therapy is not necessarily that many times more effective.

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