Specialty Pharmacy? Disclosure. Objectives Technician
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1 Disclosure What s so SPECIAL about? I have no actual or potential conflict of interest in relation to this program/presentation. Michael DeCoske, PharmD, BCPS Associate Chief Pharmacy Officer Duke University Hospital Objectives Pharmacist Evaluate the growing specialty marketplace and its impact on health system Analyze the unique and specialized services that health system specialty pharmacies can provide Determine whether expanding specialty services is advantageous for a hospital or health system Objectives Technician Describe the key components of a specialty List the differences between a specialty and a traditional retail or mail order Understand the unique role of a technician in a health system specialty Questions What is specialty? What special services are involved? How do health systems interact with specialty today? Should my health system consider building its own specialty? What is? No singular definition of specialty pharmaceutical (SP) Continuing to evolve and expand Drugs and biologics that are: High in cost Difficult to manage Challenging reimbursement issues You know it when you see it Large percentage of newly FDA approved pharmaceuticals fall into specialty category Jorgenson, JA. AJPB. 2(6)
2 Specialty Pharmaceuticals Biotech or gene based drug therapies Target and treat chronic and sometimes rare conditions Prescribed by specialist Often have a required Risk Evaluation and Mitigation Strategy (REMS) program Likely require complex dosing, patient education, and continuous monitoring May require special handling Cold chain Specialty Pharmaceuticals Traditionally administered in a clinic, infusion center, or a hospital outpatient setting Newer products are being produced that can be self administered in the home or taken orally High cost >$600/Month (Medicare) Average $2,654/month (in 2011) Depending on site of service and insurance requirements, can be billed through prescription or medical benefit Limited distribution Specialty Growth Specialty Growth Specialty drugs often have little competition and often see significant price increases each year ESI 2012 Drug Trend Report Specialty Pharmaceuticals Specialty drug spend is growing at a rate of ~20% per year while traditional drug spend is flat ESI 2012 Drug Trend Report Specialty Pharmaceuticals Specialty Therapeutic Classes FDA Approvals July September 2012 Inflammatory Conditions, MS & Cancer are 67% of the Specialty Market ESI 2012 Q3 Drug Trend Quarterly ESI 2012 Q3 Drug Trend Quarterly; FDA FY 2012 Innovative Drug Approvals 2
3 Specialty Pipeline for: 1) Insurance companies 2) Manufactures 3) Patients Insurance companies Specialty services improve care Expect high level of customer service Competitive contracts with selected pharmacies Medication management Appropriate utilization Reduce cost Monitor and facilitate patient adherence Enforce prior authorizations and preferred product selection Manufacturers Appropriate utilization Post market outcomes data Increased control of supply chain Control costs Ensure adherence to regulatory requirements associated with SP Retail Pharmacy The Patient Brand/generic medications Storefront Limited mail order capabilities Real time benefits adjudication Fast turnaround times Limited medication therapy management Limited experience with and access to SP 3
4 Patients Navigation of SP programs Benefits investigation Linkage to patient assistance programs Ensure appropriate billing & collection Patients Clinical expertise Pharmacist and nursing Medication therapy management 24/7 availability Mail order Adherence reminders Accreditation Provides a framework for standardized services offered by all pharmacies who dispense SP Requirement for some insurance plans prior to contracting with specialty pharmacies URAC ACHC Implications on Health Systems We care for patients who receive SP We employee physicians who prescribe SP Brown Bagging White Bagging Limited distribution networks decrease access Patients admitted to hospitals on SP Health System Health System Should my health system enter the specialty marketplace? 1) Benefits 2) Barriers 3) Business case 4
5 Benefits We care for patients who receive SP We employee physicians who prescribe SP We conduct SP Phase II/III trials Singular care provider for all health care needs Allows health system to ensure continuity of care Benefits Health system specialty Clinical interface with providers Access to the medical record Maintain complete inventory of SP Eliminate delays to patient care Ensure supply chain integrity Major revenue enhancement opportunity of your organization Revenue Potential Revenue Generated Annually Excluding Oncology Infusion Medications $152.2 M $190.6 M $268.2 M $376.6 M Barriers Access to limited distribution drugs Access to PBM contracts Some patients may not be able to use a health system specialty Investment into specialty infrastructure requires substantial capital Lack economies of scale with specialty services $205.5 M $264.1 M UHC Committee Health System Developing your business case Health System Specialty cannot just be traditional retail repackaged Assess the building blocks that are already in place at your institution Specialty practices Accountable Care Organization Ambulatory infusion clinics Ambulatory pharmacies Home care Retail Mail order 5
6 What infrastructure already exists? Retail computer system Benefits investigation Prior authorization Billing & collection Patient assistance programs REMS capability Specialty infrastructure Contracts with insurers Need support of contracting specialists Internal/External Access to limited distribution drugs Relationships with wholesaler and pharmaceutical companies Stay on top of/ahead of SP pipeline Collection and reporting of clinical/outcomes data Collection/reporting of customer service data Adherence strategy Specialty infrastructure Clinical training of staff on specialty disease states Nursing support for self injectable medications Marketing of specialty program within health system Call center services 24/7 access Multi lingual services Software for case management Accreditation Analyzing YOUR specialty market Analyze prescribing trends in your health system (e RX) Build a needs assessment Survey physician and provider leadership Build the specialty market for your health system Do not focus on every category of SP Analyzing YOUR specialty market Align around strategic priorities for health system Focus on areas of targeted growth Focus on high volume areas Understand the local and regional specialty competition Understand the third party specialty requirements for the largest payers in your area Analyzing YOUR specialty market Complete a SWOT analysis SWOT MATRIX STRENGTHS Large footprint of planned CCSP Convenient location within Duke Cancer Center Billing expertise Same day access to medications Free mail order to retain prescription volume WEAKNESSES Difficulty accessing on weekends Not convenient for all Duke Health Plan beneficiaries OPPORTUNITIES Increases in oncology and transplant patient volume at DUH Duke employee population incentives to use a Duke Retail Pharmacy PHS pricing for prescription drugs Substantial increase in outpatient revenue and DCM Coordination of care between medical team and retail services SO Increase in prescription volume and DCM by providing convenient access and expanded services WO Open weekend hours for discharge prescriptions and employee access Continue to explore alternate options with Duke Hospital to expand access THREATS Competition from community and specialty pharmacies Third parties requiring specialty Lack of internal physician referral Inadequacy of current retail space to meet the needs of expansion ST Meeting with key physician groups to advertise new services and understand needs Extensive marketing of services within clinics, at time of discharge for select patient populations, and to employees WT Will need to ensure Duke pharmacies are considered an in-network specialty for select third parties 6
7 Build a Business Plan Gap analysis of accreditation standards Start up costs will exceed those of a traditional retail Consultants available to help with planning Case management software Call center capabilities On call services Cold chain management Mail order (complimentary) Accreditation? Build a Business Plan Significant inventory expense Drug Cost/RX will be increased compared to traditional retail Labor expense/rx exceeds traditional retail Specialized services require significant human resources to deliver on customer service Build a Business Plan Profit margin in publically traded specialty pharmacies 3 10% Profit depends on: 1. Billing method (Medical vs. RX) (B) status 3. Collection of co payments Budget 5% Profit Margin Final Thoughts on Here to stay Part of a paradigm shift in patient care Increasing patient convenience Acute care Ambulatory care Supported by strong pipeline Major area of opportunity for health system to improve: Patient experience Continuity of care and patient safety Health system revenue 7
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