Prescription Solutions Specialty Pharmacy

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1 May/June 2010 Prescription Solutions Specialty Pharmacy Utilization Management Programs Utilization management evaluates the appropriateness, clinical need and efficiency of prescription medications, based on established criteria or guidelines. We integrate utilization management components into all aspects of our specialty pharmacy operations. Our utilization management programs aim to provide outreach, education, and comprehensive guidance to physicians on national, peer-reviewed guidelines. These programs include: Case review and prior authorization Step therapy Medication adherence Risk assessment Copay assistance referral programs Case Review and Prior Authorization We offer comprehensive case review and prior authorization (or pre-certification) services that serve as an integral part of the overall clinical management and cost management of injectables. We work with clients directly to determine medical necessity requirements, adapt our existing guidelines to meet client needs, and incorporate plan-specific criteria as necessary. We are able to accept partial or full delegation for utilization management through application of case review and authorization procedures. We can also accommodate processes for partnering with the client or the client s medical vendors to coordinate authorization. For example, we can work directly with health plans to communicate authorization requests and obtain plan approval prior to dispensing. Case review is a highly recommended process to promote appropriate medication use that is consistent with the benefit. Case review is an integral part of the overall clinical management and cost management of injectables. Case review is accomplished through a dedicated team of nurse care managers, registered pharmacists, and Pharm.D.s interacting by phone or fax with the requesting physician offices. If the request is for an eligible member and is for a covered service, it is reviewed using evidenced-based guidelines. A clinical pharmacist renders all injectable case review decisions. We also support development of clinical recommendations on appropriate guideline criteria and communication of industry updates as new drug therapies arrive on the market or new evidence-based literature indicates the need for a change in criteria.

2 Case review and authorization services offered through our organization are accomplished through a dedicated team of licensed pharmacists and pharmacy technicians who interact via phone or fax with physician offices and/or client or health plan contacts. The process includes the following key steps: The physician initiates a request via our toll free phone number or by fax. A certified pharmacy technician performs intake, which includes an eligibility and basic drug coverage check. Note: If the request is by phone, the technician will ask questions to solicit information necessary to review the request. If the request is by fax and is incomplete, it will be logged in and then faxed back to the prescriber with detailed instructions as to what information is required. Once all necessary information is obtained, the pharmacist will review the case using prior authorization guidelines established through collaboration with the client. If the request meets the guidelines, it will be approved. A fax communication of the approval is sent to the provider, and the client upon request, and the authorization is entered into the PAL system. Once the authorization is entered, the member s prescription may be processed at any participating network pharmacy, including mail service or home infusion, within seconds. If the request does not meet the guidelines, the clinical pharmacist has access to a medical director for consultation, as needed. If the case is denied, the physician will receive a faxed notification, which includes the reason for denial, formulary alternatives as appropriate, and additional information that may be submitted for reconsideration. Members receive denial notification by mail. The denial process may be modified to accommodate a client s specific needs. All pertinent information is entered into our authorization system, which tracks and reports all case review activities. Step Therapy One of our key clinical management techniques is step therapy. This drug utilization review strategy focuses on specific drugs and drug classes to promote utilization of effective, safe, and less costly first-line medications. Ultimately, this strategy helps encourage improved member behavior patterns and awareness of appropriate drug use, and influence physician prescribing patterns. We can apply our step therapy guidelines through contingency edits and prior authorization. Programming for contingency edits is included in our administrative fee. Application of step therapy via prior authorization will incur a charge per authorization. We work with clients to recommend the most clinically appropriate and cost-effective means of implementing step therapy. Contingency Edits Our dynamic claims system can administer contingency edits that apply our step therapy criteria at the point of sale. This type of online edit searches a member s claim history to determine satisfaction of the designated criteria before the final payment or claim reject response is returned to the dispensing pharmacy.

3 Prior Authorization Another method of managing step therapy is through administration of prior authorization (PA) guidelines. Similar to point-of-service contingency edits, PA guidelines require fulfillment of specific criteria before a second-line agent will process. For both of the methods described above-contingency edits and prior authorizationprescription requests that fail to meet the step therapy criteria are rejected and may be subject to clinical review and medical necessity determination. We can support such review and determination if requested by our clients. Medication Adherence Continuity of care and compliance monitoring by patient care coordinators (PCCs) and clinical pharmacists are the cornerstone of our medication adherence program. When a new prescription is received, a PCC will call the member to arrange for delivery, verify demographic information, and identify any special needs the member may require. Seven days prior to their next refill date, PCCs will proactively call patients to schedule their next delivery and assess compliance. In addition, clinical pharmacists will monitor for compliance with medication dosing regimen, supplies required, changes to dose or frequency, and side effects. Patients are provided 24-hour access to clinical pharmacists who can address questions or any urgent concerns that may arise. Risk Assessment The pharmacists and pharmacy technicians within our specialty pharmacy are trained to monitor clinical issues and risk-related factors for all patients who use our facility. During the order and refill process, these clinicians work with patients to discuss disease progression, side effects, lifestyle concerns and other health matters. If they determine there is a clinically relevant reason for a discussion with the member s health care provider, then they are trained to communicate with the provider and determine any adjustments to medication as necessary. Risk assessment is a key element of our disease therapy management programs. The pharmacists and nurses who support this program assess all eligible patients and stratify them according to specific risk factors. Our risk assessment tool measures disease complexity and health care needs to stratify members into either a high-risk or a low-risk category. Eligible disease therapy management program participants receive consultative/care management services for seven months. For members in the high-risk category, an extension can be considered on a case-by-case basis. Copay Assistance Referral Program Continuity of therapy is crucial with specialty medications. In order to avoid interruptions in drug therapy, we can refer qualified members to programs that offer copay assistance. Programs that offer support include pharmaceutical manufacturers, HealthWell Foundation and Patient Access Network Foundation (PAN). Contact us today to learn more about how our Utilization Management programs can help save clients money and improve members outcomes! Warren Beiderman Specialty Sales Representative warren.beiderman@prescriptionsolutions.com

4 EMD Serono Flagship Report Name Change Reflects Changing Specialty Drug Landscape The changing dynamics of the Specialty Drug landscape are signaled as clearly by the change in name of the latest edition of the EMD Serono Specialty Digest (formerly the EMD Serono Injectibles Digest) as by the content. The 6th edition was released in April, 2010 by EMD Serono, an affiliate of Merck KGaA of Germany. The report is released at the annual meeting of the Association of Managed Care Pharmacy (AMCP). Each year it provides a comprehensive overview of Specialty Pharmacy therapeutic management trends, based on voluntary reporting through an online survey. The 2010 report says, recent advances in science have expanded the specialty umbrella to include oral, topical and inhaled therapies as well as certain diagnostic tests and medial devices, prompting the name change. This year s report represents more than 120 million covered lives- an increase of 45% from 2009 from 85 diverse health plans from across the country. This included: 88.5 million commercial lives (HMO and PPO members); 10.3 million Medicare Advantage PDP lives; 13.2 million managed Medicaid lives; and 8 million other lives. The report says that there is still no consistent definition of what constitutes a specialty pharmacy medication, although as the number of products within broad specialty drug categories increases, there seems to be increasing consensus on what is considered a specialty drug. However, each plan has its own criteria for defining and including drugs on its specialty [drug] list. One significant trend or large and growing pain point for payers, as industry analyst Adam Fein, Ph.D., puts it, is the tension between health plans medical and pharmacy benefits, highlighted in the EMD Serono Specialty Digest. Fein, president of Pembroke Consulting, Inc., and author of the blog recently wrote in his blog that the battle of whether a specialty medication is covered under a medical or pharmacy benefit is the critical future strategic battleground facing manufacturers, payers and drug channels. Traditionally, specialty drugs have been under either a plan s pharmacy or medical benefits, depending on factors such as what provider is billing for the drug, and whether a drug is selfadministered or administered by a health care professional. This year s survey data indicate that 76% of plans cover self-administered agents (SAAs), including oral and injected medications, under the pharmacy benefit only, which is a significant shift from 2009, the Digest says. Office administered agents (OAAs), including infused or healthcare practitioner-administered medications, are covered under the medical benefit by only 73% of plans. Less that one-fourth of plans cover SAA and OAA agents under both the pharmacy and medical benefits depending on the site of administration or specific provider, it adds.

5 Fein s blog notes another inconsistency highlighted in the Digest; specialty and retail pharmacies are reimbursed using List Minus formulas computed as a discount off Average Wholesale Price (AWP), while a growing share of medical benefit providers are reimbursed for specialty drugs based on Average Sales Price (ASP) plus a mark-up. On average, 36% of commercial plans, 49% of MA-PD plans and 34% of Medicaid plans reimburse medical benefit providers based on an ASP schedule, the Digest says. Average reimbursement rates range from ASP plus 6.7% for home health providers to ASP plus 10.5% for physicians. Provider Reimbursement (AWP) Q. What is the average percentage of AWP for speciatly pharmacy products through the various distribution channels for each line of business 2008 (N=69) 2009 (N=85) 20% 15% 16.8% 17.5% 15.8% 16.4% 15.2% 14.1% 15.4% 14.7% 14.5% 11.7% 10% 5% 0% Specialty Pharmacy Retail Pharmacy Physician Office - Non-Oncologists Physician Office - Oncologist Home Health Care Source: EMD Serono Specialty Digest, 6th Edition Health plan pharmacy departments are increasingly being given management responsibility for managing specialty pharmacy products under both pharmacy and medical benefits, the Digest says. Under the pharmacy benefit, the pharmacy department has primary responsibility in 88% of plans, while under the medical benefit the pharmacy department has primary responsibility in 45% of plans and shared responsibility with the medical department in 33% of plans. The Digest also says that health plans are improving their ability to capture and report their specialty pharmacy financial data compared to previous years. The percent of plans that know their specialty pharmacy financial data under the medical benefit this year doubled and the percent of plans that know their specialty pharmacy benefit financials under the pharmacy benefit increased by 24% compared to 2008, it says. Of the plans responding to the survey, 64% said they knew their specialty PMPM cost and trend rates for the medical benefit, up from 29% in 2008; 80% said they knew the same data for their pharmacy benefit in 2009, up from 65% in The Digest adds that in 2009, plans experienced a greater PMPM specialty drug cost than in 2008, but showed a similar trend rate. The most significant operational changes that occurred in 2009 across all lines of business focus primarily on clinical and utilization management strategies, including the creation or enhancement of practices related to prior authorization (PA), step edits, and selection of preferred products.

6 Another key trend is that as health plans, PBMs, manufacturers and specialty pharmacies experiment with ways to increase adherence, an increasing number of health plans are implementing benefit designs that may shift more of the cost of the medication to the member by applying coinsurance, where the patient pays a percentage of the cost of the drug, resulting in higher out-of-pocket (OOP) costs for the member. People who use specialty medications often require education about their condition, as well as self-injection training and how to recognize and manage potential side effects. In order to optimize the care of these patients, health plans are looking for a distribution model to meet these needs, resulting in the adoption of a custom specialty pharmacy network. The majority of the plans participating in the survey (87%) are already contracted or are in the process of contracting with one or more Specialty Pharmacy Providers (SPPs) to help them manage specialty pharmaceuticals, the Digest says. Conclusion: In his blog, Fine says that the tensions portend a competitive battle to manage specialty drugs for payers, with factions including manufacturers, PBMs, health plan, specialty pharmacies, retail pharmacies, home health care providers, specialty distributors and independent service companies. Numax (motavizumab) MedImmune Motavizumab is the follow-on product to Synagis (palivizumab), the standard of care for preventing respiratory syncytial virus (RSV) hospitalization in high-risk infants. RSV infections cause serious respiratory infection in high-risk infants, young children, and the elderly. Highrisk children include those born prematurely and with underlying conditions, such as heart disease, pulmonary disease, and immunocompromised status. High-risk children are also more likely to be hospitalized following RSV infection. Approximately 125,000 children are hospitalized annually with RSV infections causing 1,250 to 2,500 deaths per year. Motavizumab is a monoclonal antibody that targets and binds to the F protein of the RSV, thereby combating infection by the virus without affecting tissues of the body. In vitro studies showed that motavizumab binds to RSV F protein 70-fold better than palivizumab, and exhibits about a 20- fold improvement in neutralization of RSV. In a phase III trial evaluating 6,635 pre-term infants at high risk for RSV, motavizumab demonstrated an overall 26% fewer RSV hospitalizations compared with palivizumab; motavizumab was non-inferior to palivizumab (p < 0.01 for noninferiority). In addition, motavizumab demonstrated a statistically significant 52% reduction in the incidence of RSV-specific medically attended outpatient lower respiratory infections vs. palivizumab (p < 0.01). The incidence of AEs was similar between the two groups. Transient mild erythema at the injection site was the most common drug-related AE in each group, occurring in 15.2% and 11.4% of the motavizumab and palivizumab groups, respectively. Motavizumab is administered as an intramuscular (IM) monthly injection, beginning just prior to and continuing during the RSV season which usually lasts four to five months. Similarly, palivizumab is dosed as a monthly IM injection. MedImmune is expected to receive a decision from the FDA for the approval of Numax by June 23, The sales for Synagis in the first three quarters of 2009 were $519 million. References: MedImmune website. Numax Achieves Primary Endpoint In Preliminary Analysis Of Data From Comparative Phase 3 Trial With Synagis. Accessed May 3, MedImmune website. MedImmune Announces Positive Clinical Results at PAS Annual Meeting From Large Prospective Trial in Prevention of Serious RSV Disease. Accessed May 3, 2010.

7 About Prescription Solutions Prescriptions Solutions is more than just a mail order pharmacy. We are a focused, collaborative, and innovative leader in the pharmacy benefit management (PBM) industry. Today, we serve more than 10 million people through our state-of-the-art mail service pharmacies and a national network of more than 64,000 community pharmacies. We manage prescription drug benefits of commercial, Medicare, and government health plans, and those of employers and unions. Prescription Solutions: Your Integrated Specialty Pharmacy Solution With the sheer number of specialty pharmaceuticals and the high costs associated with them, it makes sense to address specialty pharmaceuticals with a completely integrated solution. Yet administering an effective program requires intensive effort. The dollars are high, the patient populations are small, the administration complicated and the medications themselves require care beyond the norm. Prescription Solutions meets these challenges by applying proven pharmacy and medical management techniques - utilization management, targeted disease interventions, case management, prior authorization and health outcomes management, for example. The result is a program that provides you with a single source for all specialty pharmacy needs. Medications are ordered, overnight delivery is coordinated, patients are monitored, claims are captured and data is tracked. In the process, you ll see a positive impact on your injectable and overall medical costs.

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