CVS Caremark's View of Oncology Drug Management, Part 2

CVS Caremark is expanding into the realm of specialty oncology management for drugs covered under the medical benefit and traditionally administered in physician offices or clinics.

In Part 1 of this 2-part series (May 2011), Dr. Troy Brennan, CVS Caremark Chief Medical Officer, articulated the challenges and our organizational guiding principles for improving care and lowering cost of specialty drugs used to treat patients with cancer as the following:

• Promote quality care through use of evidence-based criteria that reduce widespread treatment variances for cancer care.
• Use of technology that emphasizes electronic communication yet reduces physician office administrative burdens.
• Where applicable, implement preferred agent strategies in which drugs are essentially interchangeable as supported by evidence- based criteria.
• Ensure that oral oncology drugs are managed through specialty pharmacy, taking advantage of consistency in high-touch patient care management.
• Creation of new scientific advisory boards made up of worldclass experts who are free of conflicts of interest with pharmaceutical manufacturers.

Based on these guiding principles, CVS Caremark is now expanding into the realm of specialty oncology drug management for drugs covered under the medical benefit and traditionally administered in physician offices or clinics. Independent analysis indicates that more than 50% of 2010 specialty drug spend is covered under the medical benefit and that this spend is expected to increase 60% by 2015. CVS Caremark research further highlights that oncology drugs, inclusive of drugs used to mitigate the side effects of cancer drug therapy, comprise more than 50% of total specialty drug spend under the medical benefit.

For many payers, oncology drug trend under the medical benefit can approach as much as 30% annually and traditional drug management programs have met with little success in either identifying high-quality care or effectively addressing trend. Historically, key challenges to oncology drug management have included:

• Political sensitivity and legislative mandates requiring cancer drug coverage
• Increasingly aging population that is more susceptible to cancer
• Limited clinical data visibility due to current medical claims processes
• Misaligned financial incentives due to physician drug buying and billing model
• Robust drug pipeline

More recent challenges include:

• Increasing number of cancers being treated as a chronic condition
• Emergence of oral formulations as a core therapy option for certain cancers
• Innovative, highly targeted, yet very high cost drug treatment options

For specialty pharmacy, previous attempts to manage oncology drugs under the medical benefit were relegated to mandatory vendor imposition (MVI), requiring physicians to relinquish drug buying and billing and obtain all medications from a specialty pharmacy provider. Also known as “brown bagging” or “white bagging,” indicating drug fulfillment directly to the patient (brown bagging) or to physician offices (white bagging), these programs may have created the impression of drug savings; however, they also created unintended operational burdens on physician offices.

We have long recognized the nuances of drug therapy for cancer patients and the potential for frequent dosing or regimen changes and that mandatory vendor imposition programs can actually create undesired drug waste and increasing rather than decreasing costs to payers. While there may be some market areas with successful MVI programs, it is generally recognized that broad adoption by oncologists and hematologists remains highly unlikely. One only needs to look at the limited physician adoption of the Centers for Medicare & Medicaid Services (CMS) competitive acquisition program, which was subsequently withdrawn from the market.

Other historical oncology drug management programs have relied heavily on prior authorizations to establish medical necessity; reducing physician drug reimbursement by implementing average selling price (ASP)-based models, or changing benefit designs, thereby requiring patients to accept more cost responsibility through increased copay or coinsurance requirements. Most of these programs focused on expensive individual drugs yet did not necessarily emphasize quality of care or recognize therapies consisting of complex multidrug regimens that are a mainstay of oncology drug therapy.

Taking a Global Approach

Nonetheless, as noted in Part 1, the significant increase in oncology drug costs is driving payers to take a more global approach to improving quality care and outcomes yet reducing health care costs. For new oncology management strategies to be effective, payers and physicians have increasingly recognized the need to move from a traditionally adversarial relationship to a more collaborative approach. Payers have long recognized that communitybased oncology practices and clinics provide a significant portion of cancer care, and when compared with similar services provided through hospitals, more cost-effective care.

While the challenges of oncology drug management under the medical benefit appear to be daunting, payers are seizing on opportunities that address key areas of:

• Trend
• Reducing treatment variation
• Financial alignment between payer and physician

While medical benefit oncology drug trends vary by payer type (eg, Commercial, Medicare, Medicaid, Employer) and respective markets (eg, local, regional, national), reported oncology drug trends for larger health plans generally range from 15% to 30% per year. Contributory factors include increased utilization of existing drugs, price increases, and new drug approvals (7 in 2011). Payers— and increasingly physicians—generally acknowledge that this trend is not financially sustainable.

Reducing Treatment Variation

It is well documented that there is significant treatment variation for cancer care. This is particularly true for drugs that are used outside of FDA-labeled indications, which for oncology is estimated to be more than 50% of the time. Payer-mandated drug coverage rules for off-label use are usually deferred to CMS-recognized compendia such as the American Hospital Formulary Service Drug Index, Elsevier Gold Standard Clinical Pharmacology, NCCN Drugs and Biologics Compendium, and Thomson Reuters DrugDex. Drug coverage rules may also defer to nationally recognized treatment guidelines published by organizations such as NCCN or ASCO. Finally, an additional measure of evidence-based support for drug coverage is provided by nationally recognized peer-reviewed literature such as the Journal of Clinical Oncology, New England Journal of Medicine, Annals of Internal Medicine, and Journal of the American Medical Association.

The payer dilemma is that given such a broad range of nationally recognized evidence-based references, legislative mandates, political sensitivity, and less than adequate tracking and reporting mechanisms, it is difficult to quantify the most clinically appropriate and costeffective drug therapies.

The emergence of evidence-based clinical pathway programs that measure efficacy, safety, and cost of drug regimens has recently gained market traction. Key elements for an effective clinical pathway program:

• Payer and physician collaboration on determining clinical pathways
• Contain a degree of flexibility to account for individual patient responses
• A financial model that supports nationally recognized evidencebased care yet encourages costeffective drug therapy

We view evidence-based clinical pathways as a positive progression toward reducing treatment variation, and coupled with an effective mechanism to collect, track, and report results, as an effective step toward improving the quality of care while lowering health care costs.

While drug margins for communitybased oncologists and hematologists have significantly eroded primarily due to the introduction of ASP models, drugs continue to provide a key source of revenue and margins for physicians participating in the physician drug buy-and-bill model. While physician drug buy-and-bill profits are critical to sustaining access to care, the model also encourages the use of higher-cost drugs.

Payers are implementing pilots or other programs that seek to de-emphasize physician drug buy-and-bill profits yet support new reimbursement models that address improving quality of care. Episodic care or bundled rates, clinical pathways, and preferred drugs that provide higher levels of reimbursement are some examples.

Conclusion

Oncology drug management has historically been complex and relatively unmanaged. Adding to the complexity is a deeper understanding of cancer cell biology leading to more highly targeted drugs that result in even higher drug costs. Our belief in providing a global solution to medical benefit oncology drug management would therefore rely on the use of evidence-based care that can produce the optimal clinical and financial outcomes, minimize physician and payer administrative burdens, and efficiently collect, track, and measure quality outcomes with new reimbursement methodologies that preserve convenient access to cost-effective quality care. SPT

About the Author

As director of medical pharmacy management services, Kirby J. Eng, RPh, is responsible for the development and implementation of medical benefit drug management business and clinical strategies for CVS Caremark healthplan and employer clients. Mr. Eng has broad experience in strategic planning, program development, marketing and sales leadership for specialty pharmacy, group purchasing, specialty drug distribution, oncology network development, and drug manufacturing. Prior to CVS Caremark, Mr. Eng served as vice president of oncology for CuraScript, the specialty pharmacy division of Express Scripts, and held positions with US Oncology, Oncology Therapeutics Network (McKesson Specialty), Sicor (Teva), and Eli Lilly and Co. Mr. Eng has presented at numerous health care forums (eg, AMCP, NCCN) on topics related to oncology drug management, specialty pharmacy, and managed care. Mr. Eng has also been an active participant on NCCN workgroups involving oral chemotherapy, specialty pharmacy, and risk evaluation and mitigation strategies (REMS) with results published in the Journal of NCCN. Mr. Eng is a graduate of the Arnold and Marie Schwartz College of Pharmacy in New York.