The Opportunities and Challenges of Specialty Distribution

The world of specialty medications gets more complicated and more important each day. My column in the May/June 2016 issue discussed some of the issues associated with specialty medications. In this column, I want to focus specifically on the issues associated with the distribution of infusible specialty medications.

First, let me say that I am a big fan of specialty pharmacies. Many of them bring value to both the patient and the payer. That said, I also believe they often forget how some of their decisions can affect the patient.

This is even more evident when speaking about the specialty medications that are most often covered by the medical benefit. For a long time, specialty pharmacies had little to do with these medications. Over the past year, in working with my clients, I have seen a movement in which specialty pharmacies are managing the specialty medications, regardless of whether they are paid for through the pharmacy or the medical benefit. Additionally, I have noticed an increase in specialty pharmacies offering my clients cost savings for limiting where the patient receives their infusible medications.

These plan designs are touted as a method of payers to decrease medication costs. Unfortunately, there is little discussion around the financial impact or care disruption that occurs for the patient. Please don’t get me wrong. I do understand the cost implications of these very expensive medications for a payer. I just don’t believe that many payers understand the overall implications of the decisions being made.

Let’s start this conversation by looking at the potential cost implications for a patient. To best articulate this issue, I will use payer X as the payer, patient Y as the patient, and Remicade as the drug. Payer X was offered a plan design that required their members to receive the infused medication from a specialty pharmacy’s mail-order program, much like they have been doing for self-injectable specialty medications.

At first glance, the program seemed to make a good deal of sense. The member had the convenience of receiving the medication directly at their home, and the payer saved money. Unfortunately, the discussion did not go deeper than that. The contract gave the payer the opportunity to lower the cost of Remicade by receiving a portion of the rebate that the specialty pharmacy was receiving from the manufacturer. This lowered the overall net cost of the medication.

In many cases, this is a good thing. Unfortunately, the net cost implication was not passed on to the member. For members who have a coinsurance plan design model, receiving the medication directly from the specialty pharmacy has the potential to have a significant negative implication, as the coinsurance does not take the rebate into consideration. I have found this to be occurring more often recently.

The second area where we are increasingly seeing a negative impact on the consumer is in the difficulty they face getting their medication infused once it is sent to their home. It is not unusual for providers to refuse to give medications, such as Remicade, to a patient if the medication was not dispensed from their office.

The reasons that providers give vary, but most often focus on the safety and liability associated with the handling of the medication. If a patient’s physician declines to infuse the medication, it falls on the consumer to find someone who will do the infusion, such as a home health agency or an infusion center. Doing so can be equally as difficult, which leads to a disruption in care that creates the potential for wasted medication.

The message is 2-fold: first, specialty pharmacies that are managing infused medications need to create a system that includes care coordination that integrates medication delivery and infusion. Do not leave this integration to the patient.

Second, it is important that the payer understand the implications that the plan design has on the patient. It is not unreasonable to use a coinsurance model for infused medications, but it is unreasonable to require that a patient go to a more expensive distribution model. Additionally, it is unfair to require a patient to identify providers who will infuse a medication when their physicians refuse to do so. Plan designs need to pass a headline test: Does the design create undue burden on any affected stakeholder?

I look forward to hearing from you.