Traditional Pharmacy Management Versus Oncology Pharmacy Management:
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From this document you will learn the answers to the following questions:
What are being developed to come to market?
What type of care is being used in Oncology pharmacy management?
What is the main focus of these strategies?
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1 Traditional Pharmacy Management Versus Oncology Pharmacy Management: Analyzing the Similarities and the Differences David G. Frame, PharmD Hematology/Oncology and Bone Marrow Specialist University of Michigan Health Systems Assistant Professor of Pharmacy University of Michigan Assistant Professor of Pharmacology and Medicine Rush University
2 Outline Prevalence and burden of cancer in the US Example of the economic burden of cancer: multiple myeloma Oncology pharmacy management Traditional approach Recently implemented approaches Evolving approaches Summary
3 Prevalence and Burden of Cancer: Brief Overview
4 Prevalence of Cancer (2007 Data) 11.7 million Americans (4% of the population) have a history of cancer 60% of survivors are currently 65 years of age and older 67% of adults diagnosed with cancer will be alive in five years >77% of children with a cancer diagnosis i will be alive after 10 years An estimated 14% of cancer patients were diagnosed >20 years ago Altekruse SF, et al, eds. SEER Cancer Statistics Review National Cancer Institute Web Site. Updated Accessed February 10, 2010.
5 Economic Burden of Cancer Economic burden (2008 data) Total cost: $228.1 billion Direct medical costs: $93.2 billion Indirect morbidity costs: $18.8 billion Indirect mortality costs: $116.1 billion Economic Impact of Cancer. American Cancer Society Web Site. Updated May 20, Accessed February 10, 2011.
6 Impact of Cancer Trends on Oncology Pharmacy in Managed Care For every 1,000 plan enrollees, five are diagnosed with cancer each year 1 Cancer is becoming a chronic disease involving long-term therapy 2 ~800 cancer products in development to come to market 3,4 Nearly all recently approved oncology drugs cost >$20,000/12-week course 3 A large portion of oncology drugs currently covered under the medical benefit 2 Use of oral drugs (which shifts costs to the pharmacy benefit) continues to increase 2 1. Surveillance, Epidemiology, and End Results Program, Delayadjusted Incidence database: SEER Incidence Delay-adjusted Rates, 9 Registries, , National Cancer Institute, Drug Trend Report. Medco Health Solutions, Inc., Web Site. Accessed February 10, The Pink Sheet. October 12, Peto R, et al. N Engl J Med. 2008;359:
7 Oncology Pharmacy Is the 3 rd Largest Specialty Pharmacy Category Cancer Comprises 16.9% of Plan Costs Among Specialty Medications 2010 Drug Trend Report. Medco Health Solutions, Inc., Web Site. Accessed February 10, 2011.
8 Oncology Pharmacy Is the 3 rd Largest Specialty Pharmacy Category PMPY Spend Under the Pharmacy Benefit, 2009 With many drugs in the FDA pipeline for cancer, cancer therapies may soon comprise the highest percentage of spending in the specialty pharmacy category PMPY=per member, per year. Express Scripts Drug Trend Report. April 2010.
9 Economic Burden of Cancer: Focus on Multiple Myeloma
10 Multiple Myeloma: A Rapidly Moving Target ABMT VAD High-dose therapy mabs; Growth blockers; proteasome with autologous stem inhibitors; immunomodulators; HDAC cell support inhibitors; Akt inhibitors; Hsp90 inhibitors; mtor inhibitors; CDK inhibitors; RANK Ligand inhibitors Bisphosphonates h Bortezomib High-dose High-dose melphalan dexamethasone Thalidomide Oral melphalan; prednisone Lenalidomide Anderson KC, et al. Advances in the treatment of multiple myeloma. Cancer Care Connect Web Site. reading_room/booklets/ccc_multiplemyeloma.html?source=whatsnew#tab=4. Updated January Accessed February 22, 2011.
11 Example of the Economic Impact of Cancer: Multiple Myeloma Multiple myeloma (MM) accounts for only 1% of cancers 1 Despite relatively low incidence, economic impact is high 1 Even though the incidence of lung cancer is 11 times greater than the incidence of MM, costs associated with MM are more than $100 million greater than the total costs for patients who have lung cancer with metastatic bone disease 2 1. Cook R. J Manag Care Pharm. 2008;14(suppl S):S18-S Schulman KL, Kohles J. Cancer. 2007;109:
12 Example of the Economic Impact of Cancer: Multiple Myeloma Cost drivers include: Intensive chemotherapy regimens Novel drugs (eg, immunomodulators, proteasome inhibitors) used as add-on therapies to chemo regimens Stem cell transplants Diagnostics to measure disease progression and response to therapy Treatment of complications (eg, lytic bone disease, infection, anemia) Supportive care Cook R. J Manag Care Pharm. 2008;14(suppl S):S18-S21.
13 Direct Medical Cost of Drug Therapies for MM $70,000 $64,806 $60,000 Cost ($) per the erapeutic course $50,000 $40, $30,000 $20,000 $10,000 $22,734 $34,794 $37,281 $0 Bortezomib PAD (bortezomib, Lenalidomide + Thalidomide + doxorubicin, and Dexamethasone Dexamethasone dexamethasone) This model assumes the following methods: 1. Direct medical costs compared using one therapeutic course of bortezomib, bortezomib/doxorubicin, bi i thalidomide/low-dose d dexamethasone, and lenalidomide/low-dose lid d dexamethasone treatment with drug costs from the 2007 Red Book, and 2. Duration of therapy was based on published median duration therapy protocols and dosages. Fullerton DS, et al. American Society of Hematology Annual Meeting. Atlanta, GA; December 8-11, 2007 [Abstract No. 3324].
14 Costs of MM Drug Therapies With Prophylaxis 80,000 Cost ($) per th herapeutic course 70,000 60,000 50,000 40,000 30,000 20, ,000 0 WP WOP WP WP WOP WP WOP Bortezomib PAD (bortezomib, Lenalidomide + Thalidomide + doxyrubicin, and Dexamethasone Dexamethasone dexamethasone) This model has the following assumption: Recommended prophylaxis for herpes zoster and DVT/PE are based on NCCN guidelines. WP=with prophylaxis; WOP=without proophylaxis. Fullerton DS, et al. American Society of Hematology Annual Meeting. Atlanta, GA; December 8-11, 2007 [Abstract No. 3324].
15 Availability of Generic Drugs Within the Oncology Pharmacy Category Brand Name (Generic Name) Uses Generic Availability Gleevec (imatinib mesylate) Chronic Myeloid Leukemia (CML) No Prograf (tacrolimus anhydrous) Organ Transplant Yes Temodar (temozolomide) Brain Tumors No anticipated 3Q 2014 Revlimid (lenalidomide) Multiple Myeloma (MM) Myelodysplastic Syndromes No Arimidex (anastrozole) Breast Cancer Yes Xeloda (capecitabine) Colorectal Cancer Breast Cancer No Femara (letrozole) Breast Cancer No anticipated 2Q 2011 Sutent (sunitinib) Tarceva (erlotinib) Thalomid (thalidomide) Gastrointestinal Stromal Tumor Renal Cell Carcinoma Non-Small Cell Lung Cancer (NSCLC) Pancreatic Cancer Multiple Myeloma (MM) Erythema Nodosum Leprosum (ENL) No No No 2010 Drug Trend Report. Medco Web Site. Accessed February 10, 2011.
16 Oncology Pharmacy Management: Traditional Approach (Circa pre-2005)
17 Traditional Approach to Oncology Management Employer Payer Provider Representative (IPA, PPO, Integrated Health Provider Patient System, etc.)
18 Oncologist Traditonally Responsible for the Selection of Cancer Therapy Buy-and-bill Physicians bought chemotherapeutic products Stored inventory in the office/clinic Drug administered in the office Payer billed directly Reimbursement based on average wholesale price (AWP) Coverage provided under the medical benefit Gebhart F. Formulary. January Accessed February 16, 2011.
19 Oncology Pharmacy Management: Recently Implemented Approaches
20 Oncology Pharmacy Management Is Rapidly Evolving Payers are adapting management techniques used in other chronic diseases (eg, diabetes, hypertension, asthma) for use in oncology These models strive for cost-control via Reduced provider reimbursement Decreased utilization Greater cost-shifting to patients Increased operational efficiency Stern D, et al. J Manag Care Pharm. 2008;14(suppl S):S12-S16.
21 Oncology Pharmacy Reimbursement Reimbursement is being reduced since Medicare s 2005 move to use average sales price (ASP) instead of the traditional average wholesale price (AWP) ASP is 49 percent lower than AWP Many payers now reimburse based on ASP vs traditional AWP New levels of reimbursement often do not cover the cost of doing business g Butcher L. Manag Care. April Department of Health and Human Services. Medicaid drug price comparison: ASP vs. AWP. Accessed February 28, 2011.
22 Utilization Management Tools Recently Used in Oncology Pharmacy 2008 Survey of 100 health plans covering 105 million lives and 126 oncologists Prior authorization 78% Cost-sharing sharing Compendia listing requirement Tiered formularies Use supported by large clinical trials Use of specialty pharmacy services Quantity limits Specific lab or diagnostic values Step edits Butcher L. Manag Care. April % 56% 53% 53% 50% 48% 48% 48%
23 Impact of Utilization Controls Step edits and prior authorization typically used by payers for all cancer drugs, particularly higher cost agents Challenges with utilization controls include: Drug utilization in oncology not routinely tracked Tracking systems are not standardized di d even within institutions/settings >95% of prior authorization requests are approved Butcher L. Manag Care. April 2008.
24 Impact of Increased Cost-Shifting Increasingly, payers are shifting costs to patients through the use of co-pays and co-insurance 1 Oral oncology drugs are becoming increasingly covered under the pharmacy, rather than the medical benefit Higher-cost oncology drugs are frequently placed in a higher formulary tier There is a large variation in the willingness of patients t to pay for their drugs 2,3 Out-of-pocket (OOP) cost changes have little effect on ongoing treatmentt t 2 However, compliance declines once OOP costs reach $1,000 3 Although the intent is to reduce the payer s financial risk, costshifting can make therapies unaffordable for many patients23 2,3 1. Butcher L. Manag Care. April Goldman DP. Health Serv Res. 2010;45: Willey VJ. Health Aff. 2008;27:
25 Impact of Strict Adherence to Restrictive Treatment Algorithms Therapeutic targets are rapidly evolving Response to oncology therapy highly individual Treatment algorithms often developed with little input from oncologists Financial incentives may steer providers away from these therapies, despite what is in the best interest of the patient Many effective regimens are based on small trials with limited data Small trials seldom included in treatment guidelines Danielson E, et al. J Natl Compr Canc Netw. 2010;8(Suppl 7):S28 S37.
26 Oncology Pharmacy Management: Evolving Approaches
27 Need for New Oncology Pharmacy Management Programs Payer reactions to the growing costs of oncology care, such as increasing patient cost-sharing or cutting physician reimbursements, are not sustainable solutions There is a need for oncology management programs that are: Simple Easily replicated Measurable Flexible enough to be customized on a local or regional scale Soper AM, et al. Am J Manag Care. 2010;16:e94-e97.
28 Novel Approaches to Oncology Pharmacy Management Oncology pharmacy management strategies that focus on the overall value of treatment vs drug costs are being designed and implemented Scope and structure t of these programs vary widely, but there is an attempt to strike a balance between the interest of the payers, patients, and physicians Strategies include: New reimbursement models that reduce financial incentives for the use of more costly drugs Example: episode-based payments Increased emphasis on influencing the behavior of plan participants Example: incentives for completing a Health Risk Assessment (HRA) Develop coverage policies for specific kinds of cancer drugs Danielson E, et al. J Natl Compr Canc Netw. 2010;8(Suppl 7):S28 S37.
29 Features of the Novel Oncology Pharmacy Management Programs Patient-centered strategies that educate and empower patients 1,2 Access to all available appropriate p treatment options 1 Reduced variability in care 1 Improved end-of-life care 1 Coordinating care among providers 2 Reducing out-of-pocket expenses for the patient 1 Greater consensus between payer and providers 1 Emphasis on managing the total cost of patient care through comparative effectiveness research 2 1. Soper AM, et al. Am J Manag Care. 2010;16:e94-e Danielson E, et al. J Natl Compr Canc Netw. 2010;8(Suppl 7):S28 S37.
30 Providing Access to All Appropriate Treatment Options Goal Provide access to all available and appropriate treatment options Approach Select therapies from widely accepted evidence-based clinical guidelines for oncology care National Comprehensive Cancer Network (NCCN) American Society of Clinical Oncology (ASCO) Practices that meet established benchmarks could potentially receive incentive payments Danielson E, et al. J Natl Compr Canc Netw. 2010;8(Suppl 7):S28 S37.
31 Decreasing Variability of Oncology Patient Care Goal Reduce variability in oncology care Approach Utilize pathways programs (developed in conjunction with oncologists) that identify preferred options: either a single-treatment option per condition or a subset of treatment options per condition Equalize incentives so physicians choose the best treatment t t without t considering i revenue implications Oncologists who achieve a specified level of pathway compliance may receive additional compensation Soper AM, et al. Am J Manag Care. 2010;16:e94-e97. Danielson E, et al. J Natl Compr Canc Netw. 2010;8(Suppl 7):S28 S37.
32 Improving End of Life Care Goal Minimize use of emergency and inpatient services at the end of life Approach Educate patients about the outcomes associated with some fourth-line drug therapies Provide improved management of therapy-associated adverse effects (ie, nausea and pain) Soper AM, et al. Am J Manag Care. 2010;16:e94-e97.
33 Providing Support Services to Cancer Patients Goal Coordinate care among providers to ensure a whole person approach to care Approach Utilize generalist nurses and pharmacists to address a range of health conditions, including cancer Provide patient education to empower patient decisionmaking Danielson E, et al. J Natl Compr Canc Netw. 2010;8(Suppl 7):S28 S37.
34 Minimizing the Effect of Out-of-Pocket Expenses Goal Ensure co-payments, co-insurance, and other out-ofpocket expenses will not compromise compliance with therapy Approach Requiring mail order delivery of certain drugs Implementing reminder programs Using pharmacists to counsel patients on treatment costs Danielson E, et al. J Natl Compr Canc Netw. 2010;8(Suppl 7):S28 S37.
35 Engaging Oncology Providers Goal Encourage greater consensus between payer and providers Approach Collaborative development of clinical pathways programs and performance metrics Pay-for-Performance initiatives in cancer remain uncommon, although some consider pathways programs to be a Pay-for-Performance P f model Danielson E, et al. J Natl Compr Canc Netw. 2010;8(Suppl 7):S28 S37.
36 Comparative Effectiveness Research Goal Manage costs and utilization to improve quality Approach Conduct comparative effectiveness research (CER) in place of coverage policies and reimbursement models to control costs and use Application of CER within oncology requires full understanding of its potential consequences for all stakeholders, including patients, t providers, and payers Danielson E, et al. J Natl Compr Canc Netw. 2010;8(Suppl 7):S28 S37.
37 Summary Cancer is becoming a chronic disease involving long-term therapy Many payers are adapting management techniques used in other chronic diseases (eg, diabetes, hypertension, asthma) for use in oncology Certain payer reactions to the growing costs of oncology care are not sustainable solutions Novel oncology benefits management are being created that strike a balance between the interest of the payers, patients, and physicians
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