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Examining Payer Strategies, Impact on Managing Specialty Medications


For pharmacy practices to effectively manage specialty drugs, an extensive staff of pharmacists with clinical and managed care expertise is needed, as well as a collaborative effort between all those involved in the care team.

For pharmacy practices to effectively manage specialty drugs, an extensive staff of pharmacists with clinical and managed care expertise is needed, as well as a collaborative effort between all those involved in the care team, said Babette S. Edgar, PharmD, MBA, FAMCP, senior area vice president at BluePeak Advisors, and Dino Conti, PharmD, MBA, consultant of AVP Health Plan Pharmacy at Solid Benefit Guidance.


At this year's AMCP Nexus 2020 virtual meeting, a panel will discuss strategies to manage specialty drugs. In the current payer landscape, how are specialty medications managed when coming to the market?

Conti: I believe that it all starts prior to the drug coming to market. So, hopefully the plans and payers realize that the specialty drug is about to hit the market, they've seen some pipeline reports that have given them a sense of how the drug should be used in context of the current therapies that are on the market, especially with specialty products, given that many of them are coming out to treat rare diseases. Hopefully, the plans understand many potential candidates for therapy that they have, within their population type.

So, it all starts in that preapproval phase, and then I would say that some of the plans that are most aggressively managing will likely have for some of the drugs that are expected to have the greatest impact, some type of management policy or preliminary management policy kind of written up so that they can easily funnel that information to P&T [pharmacy and therapeutics] to get formal strategies approved after next meeting, as opposed to maybe punting until a meeting that could be several months down the road.

Edgar: I agree with Dino on that. There are plans that we’ll aggressively manage for at least for 6 months when the drug comes out onto the market. So, they can see what the prescribing patterns are going to look like, they're going to see how the physicians are using the drugs, and then make determinations whether they can remove some of the utilization management or sometimes they have to increase the utilization management or do something a little bit different.

Over the past several years, approvals of specialty drugs have surpassed even that of traditional drugs. Factoring in the cost of many of these emerging specialty medications, can you speak on some short-term strategies that have proven successful?

Conti: One of the first things that I think plans need to do is determine the benefit that it belongs under, this is more true for your commercial plans and payers. So, depending on the route of administration, how other therapies that treat the same disease are being managed and handled, and just based on your provider contracts through your specialty pharmacy, the actual physician providers on the medical side determine where that product should land. From there, it's a matter of also taking a look at the rebate strategies that could or could not be at play.

So, for some of these products, rebates aren't even a discussion. For other products they are though, and so understanding the contingencies of coverage of that particular drug is going to be something that's really important first and foremost. Then, it kind of goes down to just looking at the preliminary data as well. So, when a product first comes out, especially if it's on the medical side, it's likely not to have an assigned J-code, and so being sure you have policies in place to capture NDCs [National Drug Codes] for unassigned J-codes from your medical providers, so you can actually track to see, do you even have any of this utilization? So, that's some of the preliminary things that I think most plans should do.

Edgar: Especially, if you look at the Medicare side, for example, Dino was talking about the medical side—well, in Medicare, it falls under the Part B side, and CMS is allowing step therapy now on the Part B side, as well as on the Part D side, and even crossover between B and D. So, in Medicare, that's another consideration that the plans need to take when looking at specialty drugs, and it is being used more and more as the years go on.

From a long-term perspective, how have payers worked to manage overall drug spend, and have any strategies led to significant change in this industry?

Conti: The number one thing is getting all of your data in the same place. I've seen a lot of disjointed systems over the years where people are kind of familiar with what's going on in the medical side if they're on the on the pharmacy team, and vice versa on the medical side, but the best strategies are really pulling it all together and looking at the data on an ongoing basis.

Although there are a lot of companies in the marketplace that can do this for you, it doesn't need to involve a highly technical or an expensive option. So, something that I talked about during my presentation, you really only need pharmacists or any other clinician that's very familiar with specialty therapies, and you need a good analyst, and you need to have a cadence in terms of how everything is viewed, and you need to have those people focus on that purely. There's enough money running through specialty pharmacy and specialty drug costs to substantiate the need for 2 individuals, even at a health plan to be squarely focused on that on an ongoing basis.

From there, that's where everything branches off, right? So, once you have the data, you can understand what your trends are, you can understand your outliers, you can look across the benefits to determine potential conflicts, you can even improve the quality of management at a patient level. You find these things within the data. Somebody from the case or disease management team can pick up the phone and alert the member that: hey, we noticed that you potentially have some issues here based on our review—and recommend that they reach out to the prescriber. So, everything kind of starts from getting a handle on what type of utilization you're experiencing today.

Edgar: There's some interesting contracting strategies that are being tested out there. For example, you've probably heard of the Netflix model. There have been, especially in Medicaid, where 1 state for example, Louisiana, contracted with a manufacturer for hepatitis C products, and they had a capped payment, whereby they would pay a certain amount or up to a certain amount, and then if there were beneficiaries after that, that needed product, they then wouldn't pay any more for that product. So it'll be interesting to see when the data comes out, how much that actually saved the state, and I'm sure there's other lines of business as well that are looking at those types of contracting strategies.

Concluding thoughts?

Conti: I think a lot of it has to do with confidence, and do you have the the right individuals on staff, quality clinicians in order to manage the specialty space. I think there's a comfort level with small molecules, with most pharmacists, that's traditionally where the large focus of the management has been, that's where the volume is and everybody's pretty comfortable there, but, as soon as you start to get out into the specialty space, everybody's experience could be varied. Just due to the pure nature of that, you could go a couple years without even hearing a drug name, because you have nobody using that medication, because it's for such a rare condition, and all of a sudden, you're being asked to manage it. So, I think just having a well rounded staff, some individuals who maybe come from more of a clinical setting, as opposed to a pure managed care setting, really will bring a lot of value and something that health plans should think about doing if they're not doing so already.

Edgar: To add on to that, I think, not only are we thinking about that team that's managing the products as Dino was talking about, but if you look at all of the stakeholders that touch a specialty product from the manufacturer to the distributor, the specialty pharmacies, the pharmacists, the health plans, the physicians, the nurses that are administering the drugs—I think it really is a team effort, and it's going to take the whole team in order to make sure that we have the right products for the right patients and to control the costs. I think everybody has to be on board and has to have a piece of owning the cost of the drug and trying therefore to get the cost down.

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