Drug Pricing Concerns for Specialty Pharmacy

When discussing specialty pharmacy, the issue of drug costs will almost always be a topic of controversy. Specialty drugs that treat cancer and autoimmune diseases dominate the market and come with a high sticker price, however, many of these drugs have been proven to provide immeasurable value to patients, according to the Saving Lives Comes at a Cost: Positioning and Preparing for Specialty Drug Pricing Concerns session presented at the Asembia Specialty Pharmacy Summit 2017.

As specialty drugs continue to drive health care spending, costs associated with certain drugs, such as hepatitis C antivirals, have begun to taper off compared with the cost when they hit the market. The specialty drug market will continue to prosper, as illustrated by the expansive pipeline of complex therapies in development for numerous disease states, according to the panel.

Approximately 37% of the 630 drug development programs in phase 2 or later are for specialty drugs. Looking at specialty drug cost management into the future, there must be a solid understanding of what is driving pharmacy and medical spend, according to the panel. Regardless of new drug launches, year after year, autoimmune drugs remain a driver of overall medical spend, the panelists noted.

There may be novel cost-containment opportunities in this therapeutic class due to the high volume of sales. For oncology specifically, value-based solutions may be an opportunity to reduce costs that have long been discussed, according to the panelists. This would require stakeholders to determine not only pharmacy spend on oncology drugs, but overall medical costs and medical outcomes for each patient as well.

Leveraging benefit design as a way to control costs requires ensuring that the right drugs are included in the right tiers in payer formularies, according to the panel. Additionally, payers can work closely with manufacturers to benefit from the lowest net costs, while patients can be directed to in-network pharmacies to further mitigate spending.

Payers are also exploring potential cost-savings by managing sites of service, mainly for certain infusion or injectable products, as opposed to oral drugs. Due to changes in reimbursement, some specialty pharmacies have expressed difficulties affording the administration of high-cost injectable drugs; however, infusion suites may not have these issues.

Rather than administer a drug at home or at ancillary sites, payers are looking to move patients to infusion suites, the panel reported. Changing sites of service may not affect patients or may provide improvements. In the past, Walgreens looked at the location of patients to determine if they lived near a hospital, infusion site, or if they would be better treated at home, and subsequently made adjustments to the reimbursement model, according to the session.

Moving towards value-based outcomes, real-world data have also become a significant factor in determining whether the drug is as valuable as its price dictates. In exploring this, payers should ask: Does the drug meet or exceed the manufacturer’s claims regarding patient benefits?

If it does not perform well, the reimbursement should be paid less. Overall, this may reduce costs by ensuring that only highly efficacious drugs are being prescribed.

The speakers also suggested a need for significant change in the timing of drug pricing. While Medicare requires all costs by a certain date, other payers do not have this mandate. Specialty drug cost containment is eventually going to be dependent on transparency and what that drug is actually going to cost beyond the sticker price, the panel concluded.