Cost Considerations for Self- vs HCP-administered Agents

Cost considerations when choosing a route of administration and the importance of transparency for patient out-of-pocket costs for oral or self- and HCP-administered medications.


Neil B. Minkoff, MD: Does the route of administration affect coverage overall and preferred versus nonpreferred, or at this point, is it a case-by-case basis that’s impacted by drug, persistence, the network, and so on?

Michael Fine, MD: It mostly doesn’t affect the coverage, as we’ve said. It’s usually about what the best drug is. However, there are examples, I don’t think MS [multiple sclerosis] is one of them, but rheumatology might be an example where there are similar drugs, some of which are self-administered and some of which are health care professional-administered. In that scenario, then yes, most payers would prefer a self-administered drug through some sort of utilization management,. They can directly purchase that drug, and they can usually save money. In most cases, in the physician office, the mark-up isn’t that high for buy-and-bill drugs, but at the hospital and other sites, it could be high. It’s more of a tiebreaker than an important decision maker. Efficacy and safety always come first.

Neil B. Minkoff, MD: Others?

Eric Cannon, PharmD, FAMCP: The market is changing. We’ve now got biosimilars entering the market. If you look at the MS category, we’ve got 1 generic drug now, and by all accounts, we’ll have another generic drug coming out in September or October. You’ve got another manufacturer that’s entering into this space with a new oral drug. You’ve got 1 drug that’s a prodrug, and we now have the metabolite coming onto the market. Some of the ways we used to look at this are different, and 10 years ago, we absolutely would have opted for oral drugs and self-injectable drugs. We’ve got more sophistication today in the marketplace. We’ve maximized how we use transportation benefits, and we’ve maximized how we use home care, home delivery, or home infusion. For some of the things that we maybe weren’t comfortable with, we’re looking at them now. Rheumatology is definitely one of them, where a biosimilar with home infusion is probably something that’s going to save us significant amounts of money, whereas we would have opted 10 years ago to go with a self-injectable. How do you equalize the medical benefits versus pharmacy benefits? How you equalize copay assistance and other factors are absolutely going to play into that. What we would have done 10 years ago is absolutely not what I see us doing today.

Neil B. Minkoff, MD: Let me ask a question about that, though. This is for all of you, but I’ll start with Eric. How do you work in the indirect costs of the visits, the cost to the patient, the infusion cost, overall clinic costs, and so on? Do you roll all that up when evaluating the drug, or is it molecule versus molecule?

Eric Cannon, PharmD, FAMCP: We roll it all up. If I go to my P&T [pharmacy and therapeutics] committee, and we present an infused drug and say, “Here’s the annual cost,” but we neglect to include the infusing costs and the facility costs and everything else, we’re going to get eaten alive. Ultimately, what we’re all being held accountable for, which is a good advance in how we’re managing things, I’m no longer accountable for just what happens on the pharmacy benefit. I’m accountable for whatever happens with these respective drugs, which includes medical benefit, pharmacy benefit, and associated costs or administration costs. There were years where, if you take migraine for example, it was easy to cut back the number of tablets you gave someone for an acute migraine treatment, and you didn’t worry about the corresponding increase in emergency department visits. Now, as we measure this, present it, and put it out there, we’re accountable for every aspect of what happens with the patient in terms of drug therapy. We’re measuring all of those costs, we’re taking them into account, and we work more closely than we ever have before with our actuaries to make sure we are capturing every single cost associated with the administration of that drug. We didn’t do that 10 years ago.

Neil B. Minkoff, MD: One of the things that came out, which a couple of people have touched on, is how does cost flow to the patient. I think Mike was talking about how, on the medical benefit, at a certain point, the patient may have zero cost share, copay, etc. How do the different costs and the different route of administration affect this? Using MS as an example, if you’re using oral versus self-injected versus IV [intravenous] administration, how do those costs transfer to the patient in terms of your most common benefit structure?

Eric Cannon, PharmD, FAMCP: Neil, one of the things we’ve tried to do is align the costs: coinsurance on our pharmacy benefit for the specialty care, coinsurance under the medical benefit for medical injectable types of treatments. We’ve tried in the underwriting process, we’ve told the underwriters that, whatever coinsurance you apply based on your underwriting amount, that’s great, but if it’s 15% on the pharmacy side, then it better be 15% on the medical side, and if it’s 20% on the pharmacy side, then it’s 20% on the medical side. The other piece that we look at is that, for most of these drugs now, there is copay assistance, medical benefit versus pharmacy benefit. With the ACA [Affordable Care Act], we saw patients who now have combined out-of-pocket maximums that include both pharmacy and medical benefits. Some of the misaligned incentives that we would have encountered 10 years ago, with combined out-of-pockets and different things has been eliminated. Where we’re struggling at this point is in looking at biosimilars and generic drugs that may not have copay assistance and how we level that playing field. Even if we put a patient on a biosimilar, and we’re saving their employer 40% to 50%, if the patient has any kind of copay or coinsurance, then they may not be as motivated. What do we as a plan need to do to level that playing field? Do we need to offer our own copay assistance? Do we need to have some kind of incentive program in place to level that field? We’re talking about aligning incentives with those people participating from a plan and a PBM [pharmacy benefit manager] or provider standpoint, but we also need to make sure we’ve aligned the incentives for the patient. If we don’t do that, then we’ve also failed.

Neil B. Minkoff, MD: Kevin, I can come right back to you because Cheryl has been trying to jump in on what Eric was saying. I’ll come right back.

Cheryl Larson: I was just going to say that patient out-of-pocket cost is a big deal. Do employers love copay assistance cards? No. They love them on one hand; on the other hand, oftentimes it might be a more expensive drug than an equally good drug, and now you’ve got that patient on that drug. We’ve seen the PBMs and the plans come to the table with copay accumulator programs, which shifted more cost to the patient instead of helping, as a way to look like superheroes to the employers, which is good. I think they’ll hide it up the health plans. We as employers have to look at those more carefully. It was a way to shift more cost. I don’t see any biosimilars offering 40% to 50% savings. If we’re lucky, we see 10% to 15%, maybe 20%, and it’s a shame that they have been held back from being utilized more by players who didn’t want to lose revenue from a branded drug they had, or they weren’t getting a rebate on it. We’ve been doing research on that, and it’s a real eye-opener. I’d like to see more transparency in the industry. That’s not even something that we’ve talked about. I know you guys are on the payer/provider side, and I would love for us to start looking at ways to do that without government influence because they are often choosing the wrong things to focus on. Eric, I’ve appreciated much of what you’ve said about the need to collaborate, the need to work together, and the need to partner. Employers have no access to the provider community. The network is 100% driven by the insurer, yet we know that there’s starting to be more movement toward direct contracting with employers and providers. Are we saying that’s the best way to do it? Maybe not. We don’t know. It’s working in some markets, not in all. Hopefully we’ll start to see more collaboration post-COVID-19 [coronavirus disease 2019], or at least during COVID-19 because we don’t know when that post period is. Thank you.

Neil B. Minkoff, MD: Kevin, you were trying to chime in.

Kevin U. Stephens, Sr, MD: I wanted to say one quick little part. You also have to take the financial status of the patient into consideration. As we see across the board when you have copayments and deductibles, many times, they could get out of their budget, and they don’t have it, particularly now in the time of COVID-19 where there have been many layoffs and reductions in the workforce, so people can’t afford it. Then what happens is that they go to the emergency department [ED], and they get admitted on an emergency basis, which costs more. It’s a complicated picture when you start looking at that. I don’t know if you’ve ever played this game, Whac-A-Mole, but you hit down on one little head, and then something else pops up, you hit that down, then another one pops up, and you just keep whacking at it. That often happens in medicine; we have to make sure that what we’re doing here doesn’t cause unintended, unexpected consequences, like ED visits.

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