Optimizing a Health System’s Access to Novel Therapies, Payor Networks Can Keep Drug Costs Down

Author(s):

Mo Kharbat, RPh, MBA, FACHE

According to the CDC, 6 in 10 Americans live with at least 1 chronic disease, and 4 in 10 adults live with 2 or more.¹ Chronic disease is the leading cause of death and disability and a foremost contributor to the staggering $4.1 trillion annual health care costs in the US. This number will continue to rise as the number of people age 50 and older climbs to more than 60% in 2050 as compared to 2020, and chronic disease cases increase by 99.5% from 71.52 million in 2020 to 142.66 million by 2050.²

The prevalence of chronic disease in the US is accompanied by a huge influx of specialty medications that are helping to manage disease progression and, in some cases, leading to complete remission and cure. While new medications and therapies have potential to greatly improve population health outcomes, they can also come at a steep cost both financially and logistically. About 75% of all newly approved medications in 2023 were considered specialty drugs.³ While encompassing less than 1% of US prescriptions, specialty drugs now account for 53% of pharmacy spending.⁴

novel therapies hospital payors cost health care

Creative Solutions Improve Access to Novel Therapies

To help hospitals and health systems gain access to life-saving medications for their patients and keep patient care integrated, optimizing relationships with manufacturers, payers and pharmacy benefit managers (PBMs) is vital. However, historically, the incentives of pharmacy manufacturers, payors, and PBMs have not been aligned.

In today’s news, there are many stories about these conflicts, but not many solutions to improving these important relationships.⁵ If health systems can implement creative solutions for furthering these relationships, and create more accessibility for new medications, chronic disease management and patient care will improve, and health care costs will be lower for all parties involved. This skillset requires discipline and focus and makes a tremendous difference in improving access to limited specialty medications and payor networks.

Clinical Leadership and Drug Research

Establishing research programs within a health system
One way to improve a health system’s access to limited distribution drugs is to establish a research program. By administering and monitoring the effects of such medications even while they are still under development, health systems will be in a good position to access these medications after they are approved. Pharmaceutical manufacturers need facilities that can offer phase 2 and 3 clinical trials in which new medications are evaluated.

Not only will the health system be well-positioned to gain early access to these medications, but hospital clinicians gain experience with the new medications and can put them into optimal use for their patients when they are approved and come to market. In turn, patient care is improved as access to more effective medications is enhanced and care becomes more fully integrated and closely monitored by a team of physicians and health care staff within the health system.

Sharing medication clinical data
Manufacturers also work with health systems that provide clinical data after a new medication has been approved by the FDA and is on the market. These data typically includes how often the medication is dispensed, how often patients experience adverse effects that may lead to discontinuing the therapy, and also data on favorable clinical outcomes resulting from using the medication.

Drug pipeline updates
New medications are being approved by the FDA at an increasing rate. To improve access to these new medications, health systems should be continuously monitoring the drug development pipeline, including which medications are in clinical trials, which are being reviewed by the FDA, and determining how the health system can make them available safely and effectively. Having the most up-to-date information helps hospitals capitalize quickly when new medications come to market. It is not uncommon for some novel medications to have the promise of treating conditions that currently have no treatment and/or offer hope to patients who may have tried all available therapies with no clinical success. Having access to novel medications as soon as they become available can save lives.

Preparing to meet criteria for new medications
Hospitals and health care facilities often have to meet certain criteria to offer a new medication to patients. As soon as a medication comes to market, health care facilities can work with manufacturers to prepare to meet new requirements, offer education to providers and pharmacists, and update IT systems as needed. Manufacturers typically ask for dispensing and adherence data as well as data on adverse events, safety issues, and therapy discontinuations.

Accessing Payors and PBM Networks

Embedding a specialty pharmacy into the health system
Health systems with an embedded specialty pharmacy are especially attractive to payors because the long-term care of the patient can be fully managed by the health system. When the patient receives care from the health system, including their medications and supplies, their care remains coordinated by the care team. This integrated model reduces care fragmentation, allows the clinical team to manage the care of their patients across the continuum, and simplifies the care journey for patients. All pertinent care notes are documented in the same electronic health record, further improving the collaboration among clinicians and preventing the duplication of services.

Conversely, filling prescriptions at a mail-order or pharmacy is usually separate from the rest of the care that patients receive from their providers. Filling a prescription this way may be more cost-effective for some payors initially; however, if the patient is not tracked by the medical team, there is higher risk of non-adherence and increased costs in the long term. For example, patients being treated for hepatitis C typically require an 8-week treatment course that costs $20,000 to $25,000. If there are missed doses, the entire course fails and the patient has to start the treatment over again. In this case, the payor will need to pay for another course of treatment for the patient, thus significantly increasing their costs.

If the patient is part of a health system that can provide high-touch services where the regimen can be explained in detail, and pharmacists can check in with the patient to make sure they are taking their medication, and adverse events are being monitored and addressed more quickly, there is a much higher likelihood the patient will complete the course of treatment without interruptions. If the pharmacy is embedded in the care network, the benefits in care and health care costs are felt by all stakeholders including the payor and PBM.

Tracking detailed requirements
Health system pharmacies can join payor and PBM networks by adhering to their requirements. These requirements may involve filling out lengthy applications where proof of staff competencies, clinical notes, lab tests and other criteria must be proved before the payor will admit the pharmacy to their network. Often the biggest barrier to strengthening payor relationships is the time commitment needed to become accredited, complete payor/PBM applications, and meet network criteria. Once completed, the effort can be very fruitful for a health system and its patients.

End Result: Patient and Financial Health Improvements

When patients receive integrated care through a specialty pharmacy within a health system, they can stay under the care of the same provider and pharmacy resulting in better care coordination, better access to pharmacy services in the community and a streamlined treatment journey that is easier for patients to navigate. Health care costs can be reduced because the long-term care of the patient is closely followed by an integrated team of medical experts. Improved therapies can be offered, helping to also reduce chronic disease and improve population health. The ability to dispense more limited distribution medications also results in realizing a greater financial margin for the health system. These additional funds help health systems flourish and improve health care services and public health initiatives for patients and the local community.

About the Author

Mo Kharbat, RPh, MBA, FACHE, is the senior vice president and chief pharmacy officer at Clearway Health.

REFERENCES

Living with a Chronic Condition. CDC. May 15, 2024. Accessed May 30, 2024. https://www.cdc.gov/chronic-disease/living-with/
Ansah JP, Chiu CT. Projecting the chronic disease burden among the adult population in the United States using a multi-state population model. Front Public Health. 2023;10:1082183. Published 2023 Jan 13. doi:10.3389/fpubh.2022.1082183
IDP Analytics. Industry-Leading Drug Life-Cycle Insights. Accessed May 30, 2024. https://www.ipdanalytics.com/
IQVIA. The Use of Medicines in the U.S. May 27, 2021. Accessed May 30, 2024. https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/the-use-of-medicines-in-the-us
Gale A. If Pharmacy Benefit Managers Raise Drug Prices, Then Why Are They Needed?. Mo Med. 2023;120(4):243-244.