Session 103 Panel Discussion: A Prescription for Success ... · • Capturing when someone has used...

Session 103PD, A Prescription for Success: Using Pharmacy Transparency to Improve Outcomes

Moderator/Presenter:

Marilyn M. McGaffin, ASA, MAAA

Presenters: Sean Karbowicz

Gregory L. Warren, FSA, MAAA, FCA

SOA Antitrust Disclaimer SOA Presentation Disclaimer

https://www.soa.org/legal/antitrust-disclaimer/

https://www.soa.org/legal/presentation-disclaimer/

2018 SOA Health MeetingMARILYN M. MCGAFFIN, ASA, MAAA, REGENCE

SEAN KARBOWICZ, RPH, PHARMD, MEDSAVVY

GREGORY WARREN, FSA, MAAA, OPTUM

Session 103, A Prescription for Success: Using Pharmacy Transparency to Improve Outcomes

June 26, 2018

Agenda• Current Rx Landscape

• Defining and Measuring Value

• Transparency Solutions

• Potential Limitations to Transparency

• Transparency Success Stories

2

3%

19%

9%

19%

53%

0%

10%

20%

30%

40%

50%

60%

Pharmacy Pricing of Health Plans,excluding drugs

Valuation of HealthPlans, excluding drugs

Medicare Part D Other

What is your area of practice?

44%

26%29%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Yes No Don't Know

Does your employer use patient-facing transparency service?

43%

57%

0%

10%

20%

30%

40%

50%

60%

Yes No

Who has used a transparency service for medical or medication information (Pricing, Quality)?

9

Current Rx Landscape

9

C O S T S

Top concerns in prescription medications 2018

S P E C I A LT Y O P I O I D S

7/3/2018 10© 2018 MedSavvy – Confidential and Proprietary – Not For Distribution

47% 47%

23%27%

30%

43%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

UnscrupulousPhRMA

manufacturers

Direct to ConsumerMarketing

Prescribers lack"skin in the game"

Demographics(aging population)

PBMmiddlemanrebates

Science andInnovation

What drives prescription costs?

Drug prices in the news

13

Insurers Battle Families Over Costly Drug for Fatal Disease

Tired of the cost of prescription drugs? Share your story.

7/3/2018© 2018 MedSavvy – Confidential and Proprietary – Not For Distribution 13


https://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDER/ReportsBudgets/UCM591976.pdf

Are medications being rushed through the FDA?


Number of New FDA Approvals by type, 2011 through 2017

More Medications are approved via “expedited” approval pathways than traditional pathways

0

20

40

60

80

100

120

140

2011 2012 2013 2014 2015 2016 2017 Total

Expedited

Traditional

www.fda.gov

Trending issues in specialty medications 2017 - 2018


I n n o v a t i o nB i o s i m i l a r s P r i c e C o m p e t i t i o n ? ?

Biosimilar Compound Similar to:

Cyltezo Adalimumab-adbm

Humira

Ixifi Infliximab-qbtx

Remicade

Mvasi Bevacizumab-awwb

Avastin

Ogivri Trastuzumab-dkst

Herceptin

Renflexis Infliximab-abda

Remicade

Product / Grade

Condition Price

Yescarta B cell Lymphoma

$373 -$500 K

Kymriah acute lymphoblastic leukemia ; B cell Lymphoma

$373 -$500 K

Aliqopa (I) relapsed follicular lymphoma

$15 K / Month

Besponda(I)

acute lymphoblastic leukemia

$90 K / Cycle (x3)

Calquence(I)

mantle cell lymphoma

$17 K / Month

Idhifa (I) acute myeloid leukemia

$24 K / Month

Product / Grade

Condition Note:

Mavyret(A)

Hep C $26 K (8 weeks)

Ocrevus(A)

Multiple Sclerosis

Beat Interferon$8 K per month

Tremfya(A)

Psoriasis Beat Humira$5 K per month

Xadago(B)

Parkinson’s Disease

Similar to generics$800 per month

Defining and Measuring Value

17

21%15%

6%

79%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

The effectiveness of the drug,regardless of cost

The price of the drug to theinsurance company, net of

rebates

The cost of the drug to theindividual

All of the above

We often associate cost with quality and/or value. However, in the pharmacy world, does value pertain to

Proprietary and Confidential. Do not distribute.

Defining the Value of a Treatment or Program

20

Clinical Value

Financial Value

Quality of Life Value

Societal Value

Improving clinical measures such as lab test results, medication adherence, etc.

Reducing a health payer’s medical claim costs and/or total cost of care in current or future time periods.

Increasing a patient’s quality of life through reduced pain, lengthened lifespan, or improved functionality.

Increasing productivity, relieving caregiver burden, lessening reliance on social programs.


Calculus-Based Statistical Theory

Measuring Results

Health Economic Impact

Dealing with Uncertainty

Model-Building Experts

Measuring the Value of a Treatment or Program

CommonFoundations

Law of Large Numbers (minimize statistical variation)

Estimate Confounding Factors

Financial Outcomes

Book of Business Focus

Identify Correlations

Short/Intermediate-Term Horizons

Up-front iterative

Divergent Approaches and Applications

Characteristic-Matched Studies (minimize confounding factors)

Eliminate Confounding Factors

Clinical & Economic Outcomes

Disease Focus

Identify Causations

Intermediate/Long-Term Horizons

Back-end iterative

Actuaries Health Economics &Outcomes Research

21

Medication Cost ⍯ Value


Complications of diabetes: Increased risk of a heart attacks, damage to eyesight, nerves and the kidneys

Ivokana (approved 2013):

• More costly• No proven impact on outcomes• Unproven track record of safety• FDA warning of increased

amputations (5/2017)

Traditional Rx coverage dilemmas

23

Image: http://www.versatile-ag.ca/NA/imgs/Product-Tractor/HHT/Hyd-Controls-lb.jpg

Open Access (non-managed)

Managed Care (highly managed)

Doctor prescribes it, it’s covered

• High Deductibles• Greater Copays• Tight Formularies• Prior Authorization• Mail Order• Narrow Networks

7/3/2018© 2018 MedSavvy – Confidential and Proprietary – Not For Distribution

What’s the new prescription?


Empowering Resources

Put the patient at center of decision-making

Coordinate with Providers

Accessible and Person-Focused

> 60% actively seek information to

select treatments

37% asked MD or RPhfor less expensive

generic

Americans with a Smartphone:

MedSavvy Consumer Survey 2017. Data on Filehttp://www.consumerreports.org/cro/news/2015/08/are-you-paying-more-for-your-meds/index.htm

http://www.pewinternet.org/fact-sheet/mobile/

0%10%20%30%40%50%60%70%80%

2011 2017

http://www.consumerreports.org/cro/news/2015/08/are-you-paying-more-for-your-meds/index.htm

25Propriety and Confidential. Do not distribute. 25Proprietary and Confidential. Do not distribute.

Payer ROI Model for a Treatment or Program

25

Typical ROI Model Inputs Include:1) Cost Trend

• Applied to project annual costs2) Interest Rate

• Used to calculate net present value of potential savings

3) Churn Rate• Simulates the population that will

stay with the plan each year4) Initial Investment

• Anticipated contract costs/initial plan investments

5) Medical Offset• Potential medical cost savings

6) Risk Adjustment• Applied to cost estimates to

account for population risk

Common ROI Model Outputs are:


Value Case Study for New Brand Medication

26

1 2Existing Generics New Brand Calculation

Annual Ingredient Cost $400 $4,000 ARebate Percent 0% 20% BAnnual Rebate Amount $0 ($800) C=AxBAnnual Net Cost $400 $3,200 D=A+CPayer "Investment" Per Patient $2,800 E=D2-D1

Hospitalization Frequency * 10% 8% FHospitalization Cost $20,000 $20,000 GHospitalization Cost Per Patient $2,000 $1,600 H=FxGPayer "Return" Per Patient $400 I=H1-H2

Payer "Return on Investment" 0.142857 J=I/E

* Clinical Trials show 20% reduction

What is the ROI?



27

Clinical Value

Financial Value


Societal Value


Reducing medical claim costs and/or total cost of care in current or future time periods.

Increasing quality of life through reduced pain, lengthened lifespan, or improved functionality.


What type(s) of value exist?



28

Clinical Value

Financial Value


Societal Value


Reducing medical claim costs and/or total cost of care in current or future time periods.

Increasing quality of life through reduced pain, lengthened lifespan, or improved functionality.


What type(s) of value exist?

Transparency Solutions

29

Build it, but they won’t come (previous attempts at transparency)


The Market Still Needs to be Informed

Health Aff (Millwood). 2017 Aug 1;36(8):1401-1407. doi: 10.1377/hlthaff.2016.1636.JAMA. 2016 May 3;315(17):1874-81. doi: 10.1001/jama.2016.4288.

Dilemmas for transparency services: - Low uptake- Many point solutions- Many consumers unaccustomed to driving decisions in health care- Consolidation among providers may impact steerage- No/Minimal impact on overall costs among previously marketed services

10 to 12% of people use services >1 time

Only 1% of people who got imaging used service

12-15 months

https://www.ncbi.nlm.nih.gov/pubmed/28784732

https://www.ncbi.nlm.nih.gov/pubmed/27139060

Road to “Return on Investment” for transparency services


PHASE 1: Initial Awareness

PHASE 2: Targeted Engagement

PHASE 3: Target Opportunities

PHASE 4: RoutineEngagement

• Opportunity analyses • Registration Rates • Activity Metrics • Claims impact

Registers

Product launch

Learns basic capabilities and offerings

Receives, responds to outreach

Benefits from outreach

Promotes, regularly uses service

Use

r Tru

st a

nd F

amili

arity

Low

Med

High

ROI / V

Opportunities for improvement


Attributes of successful transparency services- Individualized- Easy to use (Supported)- Trustworthy - Partnering with employer, health plan

12-15 months

>30% registration

http://www.managedhealthcareexecutive.com/managed-healthcare-executive/news/three-attributes-successful-healthcare-cost-transparency-tools

10%

38%

31%

10% 10%

0%

5%

10%

15%

20%

25%

30%

35%

40%

6 months 1 year 2 years 5 years I don't know

For patient facing cost transparency service, how long might you expect it to take before ROI can be seen?

ROI Challenges for patient-facing cost transparency services


Moving beyond associations and proving causal effect

• IT infrastructure• May have difficulties with PHI and linking the transparency app to claims data

• Linking use for dependents

• Time Sync• Capturing when someone has used the tool and made a change vs attrition, eligibility

• Resulting approaches• Manually assessing what the insured has researched and to check against claims to determine

what was done need a better long term, scalable evaluation strategy• Use a PMPM approach, and assess confounders

Proprietary and Confidential. Do not distribute.36

Provider Transparency: Confusion

Multiple Formularies

UM and Clinical Programs

Benefit Designs

Pharmacies

Utilization History

Ambiguity and uncertainty at the point of prescription


Provider Transparency: Empowering Physicians

>20% of physicians switched to an alternative drug1

>30% Prior authorizations were avoided or initiated1

1. 2017 PreCheck MyScript program results

Cost share Formulary placement

Real-time prior authorization Clinical alerts

Visibility at the point of care

Streamliningprior authorizations

Finding lower cost alternatives

Improving plan performance


Provider Transparency: Clarity

aboutcoverage

aboutprice

aboutprior use

to help patients stay on track

The right information at the right time


Member Transparency: Digital Member Tools

Family and Caregiver Management

Refill, renew or transfer

AdherenceReminders

Pharmacy Locator

Order history and claims detail

Key Features


Member Transparency: Consumer Dashboard

*Different levels of data available. For illustration only. Contains no actual personal information.

Opportunity alerts

Algorithms go through hundreds of potential opportunities for each consumer and display three most relevant for the “next best health action.”

Connecting back to consumer data and goals

Available programs

History of contact

Real-time accumulation data*

Shows rewards earned

Displaying real-time Rx+ Medical claims history


Payer Transparency: Payer Clinical DashboardDate filled: Jan 2017 – Oct 2017

generic dispensing rate

opioids

7.4%% of Opioid Members w/

MED >120/day

1 OXYCODONE HCL

top 5 drugs by claims

% of all members 10.0%

23

HYDROCODONE/ACETAMINOPHEN

OXYCODONE/ACETAMINOPHEN

Specialty Avg Cost $3,677.31 $3,511.87

Gen Avg Ing Cost $22.18 $28.31

Total Avg Ing Cost $115.02 $104.05 4

5TRAMADOL HCL

SUBOXONE

key performance indicatorstop traditional classes

measure HPHC Mco % of all claims 3.4%

Brand Avg Ing Cost $644.21 $609.75

HPHC 9.9%Mco 11.6%

#2 Diabetes% total Ing Cost

percent of total ing cost

specialty top disease states

#1 Inflammatory Conditions% total Ing Cost

HPHC 17.4%Mco 17.3%

percent of all claims

53.6%46.4%

56.0%

44.0%

0%10%20%30%40%50%60%

traditional specialty

HPHC Mco

0% 20% 40% 60% 80% 100%

Chronic Inflammatory…

Inflammatory Bowel…

Gold Compounds

HPHC Mco

0% 20% 40% 60% 80%

Insulin

Injectable Diabetic Meds

DPP-4 Inhibitors &…

HPHC Mco

0.0% 2.0% 4.0% 6.0% 8.0%

Insulin

ADHD & Narcolepsy…

Inhaled Asthma/COPD…

Anticonvulsants - 2nd…

Impotence Agents

HPHC % Ing Cost Mco % Ing Cost

85.1%

87.0%

84.0%84.5%85.0%85.5%86.0%86.5%87.0%87.5%

HPHC Mco

0% 10% 20%

Chronic InflammatoryDisease

Multiple Sclerosis

Oncology

HIV-Multiclass Combo

Hepatitis C

Top Classes

HPHC % Ing Cost

Mco % Ing Cost

1.5%

1.3%

1.2%1.3%1.3%1.4%1.4%1.5%1.5%

HPHC Mco

Top Classes’ % of total ing cost

Top traditional classes % of ing cost

Actual

Benchmark

Actual

Benchmark

Actual Bchmk

Actual

Benchmark

Transparency Success Stories

42

Measuring Impact


Opportunity• Therapeutic

category• Dollar value

Activities• Registration• Outreach• Communication

Outcome• PMPM trend• Impact on

product mix

Example: Therapeutic category market basket


High Cost16%

Low Cost84%

High Cost14%

Low Cost86%

Opportunity• $17,000 potential savings

Activities• Frequently viewed

• High frequency of activity

• Mature therapy category

Outcome• Fewer “High cost” prescriptions used relative to low cost

options

• Market Basket Changes (less opportunity over time; accounts for lower cost use within product groupings)

2016 Switch Opportunity: $17,000

2017 Switch Opportunity: $11,000

Example Actual Case: Psoriasis switch via customer service dashboard (“Jane”)


1.

2.

3.

Injection

• In May and June, Jane contacted call center twice re: pharmacy questions

• In late July, Jane had a dermatologist appointment and subsequently had a refill for Stelara

• Less than a week later, Jane navigated to MedSavvy thru the Employer Dashboard

• On MedSavvy, she compared Stelara and Humira

• After a subsequent dermatologist appointment, Jane was prescribed Humira at a savings of ~$2,000/mo.

• No subsequent prescriptions for Stelara were filled

JANE DOE HISTORICALLY USED STELARA REGULARLY TO TREAT PSORIASIS

Why do opportunities exist despite prior authorization?

Example Actual Campaign Case: Switch


1.

2.

3.

Employee taking Oracea® (PA required) @ $626 / mo

Alert recommending consideration of alternative

Employee switched to alternative (different dose) saving >$600 per month

“Grandfathering”:New members to planMedication pricing changesAlready established on therapy (samples)

Prior Authorization EfficienciesElectronic Algorithms3rd Party Vendors

Unaware of potential savings

Errors

Example Assessment: Employer bottom line financial impact analysis


Implementation

Baseline Rx PMPM

Potential Limitations of Transparency

48

Impact of opioids on America

7/3/2018 49© 2018MedSavvy – Confidential and Proprietary – Not For Distribution

U n p r e c e d e n t e d I m p a c tU.S. Therapeutic Opioids• >42,000 deaths 2016, ~64,000 in

2017• Leading cause of deaths of Americans

under 50• 20% of decline in labor force

participation due to opioid abuse• US uses 80% of global opioid supply

http://www.painphysicianjournal.com/2008/march/2008;11;S63-S88.pdf

https://www.forbes.com/sites/nicholaswyman/2017/12/12/americas-workforce-is-paying-a-huge-price-for-the-opioid-epidemic/#473c910571bd

W h a t w o r k s

Restricting access• DEA Rescheduling (22% decline)• Prescriber, pharmacist re-training• Revising protocols / quality metrics• Drug screening by providers, employers

Conclusion


• Costs continue to rise despite tight managed care controls• Cost transparency websites alone will not lead to change• Members seek personalized information, support• Reimbursement, provider incentives coupled with transparency can instill market

forces on prices• Employer and plan engagement augment success of transparency• Surfacing support services to members at right time can facilitate change

51

THANK YOU

Sean Karbowicz, RPh, PharmDFounder, General [email protected]

Gregory Warren, FSA, MAAAVice President, Pharmacy Advisory [email protected]

Marilyn M. McGaffin, ASA, MAAAActuarial [email protected]

Session 103 Panel Discussion: A Prescription for Success ... · • Capturing when someone has used...

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