Determining Value in Oncology and the Role of Specialty Pharmacy

The oncology treatment landscape is currently in the midst of an extraordinary evolution, with significant progress achieved in the development of both targeted and immuno-oncology treatments.

However, the framework that will determine the value of these treatments into the future is still very much in flux, with specialty pharmacy poised to play a key role in these discussions.

During a session at Asembia’s Spe- cialty Pharmacy Summit 2018 titled “The Future of Oncology and Impact on the Pharmaceutical Supply Channels,” moderator Burt Zweigenhaft, along with speakers Lyn Fitzgerald, MJ, senior vice president, US and global development at the Nation- al Comprehensive Cancer Network; Phil Hagerman, chairman emeritus of Diplomat Pharmacy, Inc; Bill McGivney, PhD, principal at McGivney Global Advisors; and Jayson Slotnik, principal and founding member of Health Policy Strategies, Inc, discussed how the value of new oncology treatments is determined holds ramifications for the entire health care landscape.

“Value frameworks are really not being used out there at all,” McGivney said. “They’re not being used by payers, specifically, they’re not being used by the provider side, etc.”

The discussion around value is significant given the enormous impact of specialty drugs on payers. Specialty medications currently represent 39% of overall pharmacy benefit spend, but specialty drug costs will grow to 48% by 2020, according to a new report by Magellan Rx Management, the pharmacy benefit management division of Magellan Health, Inc.

Fitzgerald noted that a recent survey found that even oncologists are unable to agree on the definition of value. As disagreement around defining value persists among providers, she said that pharmacy benefit managers (PBMs) are collecting data, to be published later this year, on every prescription written.

“While people argue about what is value and don’t come forward with 1 definition, which would be really helpful so patients can have access to therapies, payers are gathering their own data, and they will determine, from their perspective, what is value, and they will come to you to negotiate a better rebate,” she said.

By 2020, Magellan predicts, specialty drugs in the pipeline will comprise 25% of projected overall pharmacy benefit growth. Magellan projects that double-digit specialty drug cost growth will continue through 2020 but will be slower than the growth seen in 2018 and 2019. In oncology, approximately 65 drugs currently in the pipeline will compose 10% of overall condition costs. The authors predict that lenalidomide (Revlimid), palbociclib (Ibrance), and ibrutinib (Imbruvica) will drive 40% to 60% of growth, with Revlimid remaining the top oral oncology drug.

With the significant growth projected in the oncology space, Hagerman noted that capturing data has never been more important in specialty pharmacy.

“We have got to protect our turf, and really, as an industry, we haven’t always done the job we need to do to protect our turf and show our value,” he said. “So how do we look at value-based contracting and go beyond the cost of the drug and a negotiation between a manufacturer and a payer? How do we turn around and capture more of the outcome-driven information?

“How do we use technology to capture patient behavior, manage patient processes, and capture that data and be able to, over a linear period of time, track the savings? If we could do that and show more predictability around outcomes, then spe- cialty pharmacy can step up and get more involved in value-based pricing. I think we have to as an industry.”

A new report by the IQVIA Institute, titled “Medicine Use and Spending in the US,” predicts that few top specialty drugs will face a significant challenge by the loss of patent protection or biosimilars over the next 3 years. By 2020, drugs for oncology, anti-inflammatory conditions, and HIV/ AIDS will comprise 65% of specialty cost.

Of 42 new active substances launched in 2017, 32 were for specialty treatments. Meanwhile, the growth of oncology therapies decreased from $5.4 billion in 2016 to $2 billion in 2017, with new drugs for smaller patient populations likely to drive spending growth in the coming years.

As new cancer drugs reach the market, therapies are being adopted at a fast pace, before being superseded by newer treatments within a few years, according to IQVIA. As such, the pace of research and development is accelerating rapidly because of not only new therapies in the pipeline but also combination treatments with greater efficacy than individual drugs, according to the authors.

McGivney noted that with multiple agents that have similar mechanisms of action, leverage will be on the pharmacy side.

“How many PD-L1s are in development right now? It’s got to be 50, never mind all the combinations,” McGivney said. “So this is going to become just a wildly competitive space here. It’s going to end up, in my mind, as being really focused on financial differentiation after clinical differentiation.”

As far as intervention from Washington, DC, Slotnik said there will not be a definition of value from the government anytime soon, which leaves other stakeholders to wrestle over the framework to determine the value of a given therapy.

“You’ve got the specialty pharmacist, and you’ve got the manufacturer, and value will be defined differently for those constituents,” he said.

Such a situation is problematic for specialty pharmacy for a number of reasons. Slotnik noted that there is a strict formula for how a physician’s service is valued, but nothing similar for pharmacists.

“When you look at the work component for physicians, subsumed in that work component is nursing time, phlebotomist, social worker, physician’s assistant. Do you know which specialty component is not included in any calculation of work and intensity? Pharmacist,” he said. “It’s as if they do not exist in the health care system.”

Slotnik added that there is currently no reason for any kind of relationship between physicians and pharmacists from a financial point of view.

“So how do you demonstrate the value of a ser- vice for which one is not even measured?” he asked. “That’s major problem 1 through probably 10. The value of a specialty pharmacist is not even being captured right now.”

To address this, Slotnik said, pharmacists need to advocate for a role in how to determine value-based payments.

“There will be continued movement on the drug side toward value-based arrangements,” he said. “The government will continue to stimulate programs where there is risk sharing. But a definition [of value] is not coming.”

Beyond the uncertainty in determining value, there is also an industry in turmoil. Hagerman noted that many oncology practices are in financial trouble, with consolidation rampant.

“The biggest trend is hospitals are buying practices and we’re still seeing an ongoing trend of moving patients from a lower-cost site of care into a higher-cost site of care in the hospitals,” he said.

Recent data show that 14 oncology practices are either closing or merging into a hospital system each month, according to Hagerman. The potential impact of this trend on specialty pharmacy is significant. Hagerman said tens of thousands of patients with cancer are now being moved into a hospital management setting.

“As an industry, how do we become more relevant to the hospital health systems? How do we make sure, as an industry, that we bring value to those hospital systems?” he asked. “Because if we lose access to those patient populations over time, it’s a challenge.”

During the discussions of the value of oncology drugs, both McGivney and Fitzgerald said that patients must be at the forefront. Fitzgerald described a recent conversation with a group of cancer survivors, noting that the desperation they experience is palpable.

“What is value to those people? Life. So what I said to them was we believe in payment for quality,” she said. “We want you to receive the best care. We want you to have coordinated care. But you need to ask your physician [whether you] are getting the full choice or are they narrowing these choices for predictability, for shared savings.”

Hagerman noted that the determination of value will ultimately go hand in hand with improved outcomes for these patients. As such, specialty pharmacy will play a vital role in this evolving care continuum.

“When we talk about value-based care, we really think about cost. If the patient’s outcome is success- ful and we find a quicker path to that outcome for the patient, then we can save money and we can improve [oncology care model] data, and specialty pharmacy can be part of that capture,” Hagerman said. “We are still the quarterback of the patient’s care. We still are the ones that are in the best position to interact with the PBM, interact with the health plan, interact with the physician. We are more centralized in that model than any other stakeholders in the industry.”