SPECIALTY RX

Report
Lessons Learned from Sovaldi -
The Future is NOW in Specialty Pharmacy
August, 2014
Presented by Bob Kordella, Chief Clinical Officer of Excelsior Solutions
L
O
C
K
T
O
N
C
O
M
P
A
N
I
E
S
Meet Bob Kordella, RPh
Chief Clinical Officer
Robert Kordella, Chief Clinical Officer, has more than 27 years of diverse experience
in the pharmacy industry. Bob has practiced in retail pharmacy, in a large academic
medical center setting, and, for the last sixteen-plus years, has been an effective,
widely known, and well-respected leader in the PBM industry. Over the course of his
tenure with LDI Integrated Pharmacy Services, National Medical Health Card
Systems, CVS PharmaCare, Eckerd Health Services, and TDI Managed Care Services,
Bob has led clinical and PBM operations teams that successfully managed over $4
billion in annual drug spend while limiting per member per year spending growth to
levels that have simultaneously drawn industry acclaim and consistently high levels
of member and payer satisfaction.
Bob received his Bachelor of Science in Pharmacy from the University of Pittsburgh
School of Pharmacy. He went on to receive his Masters in Business Administration
from The University of Pittsburgh, Katz Graduate School of Business.
1
Past Performance is no Guarantee of Future Results
 Never
a good idea to drive down an interstate highway with
your gaze fixed in the rear-view mirror
 Sovaldi
isn’t an exception, it represents the new rule
 That
“coming tsunami” in
Specialty Pharmacy has arrived
2
What Was Different About Sovaldi?
 Seeming
Surprise
 Higher
Unit Costs
 Higher
Utilization
 Higher
Visibility
 Clear
Link to Medical Management
 Ethical
Concerns – Is It For Everyone?
 Government
Role, Clinical
 Government
Role, Economic
3
Will All New Specialty Pharmacy Drug Launches
Have Impact Like Sovaldi’s?
 That
depends…
 MAJOR:
Treats
what was previously untreatable, OR
Treats what was previously treatable in such a superior
way that old ways will no longer suffice
High incidence disease categories
Rationale for high cost
 MODERATE:
Lower
incidence disease categories, OR
Lower cost premium, OR
Less potential to unlock “pent-up demand”
4
Did Sovaldi’s Launch Surprise You?
 Clinically
 Financially
 “Ergonomically”
 Lesson
Learned: Pay attention to the
wealth of information at your disposal
5
Why Will Specialty Rx Unit Costs Be Higher?
 Higher
true costs to develop
What is a true cost?
Acthar HP example
 Convenience
premium
 Lesson
Learned: The market has shifted from costs being
driven down by “small molecule” patent expirations to costs
being driven up by “large molecule” innovation
6
Why Will Specialty Pharmacy Utilization Be Higher?
 Unleashed
pent up demand as “watchful waiting”
transforms to action driven by new oral dosage forms
 Lesson
Learned: Oral dosage forms will drive utilization
and product adoption of new Specialty Rx products higher,
faster than has historically been the case – old actuarial
and underwriting models are obsolete if these changes
aren’t reflected
I’m going to prescribe something that works
like aspirin but costs a whole lot more.
-A. Bacall
7
Why Will Visibility Be Greater?
 Initiatives
to support enhanced screenings will quietly
support new Specialty Rx product launches
 The
early lessons of Pharma direct-to-consumer advertising
will be migrated to Specialty Rx
 It
is in Pharma’s interests to make the pool of potential
customers larger
 Lesson
Learned: Don’t lose control of screening initiatives
8
Why Are Pharmacy & Medical Management Linked More Closely?
 The
questions surrounding new Specialty Rx drugs are not
as simple as, “Formulary or Non-Formulary” or “Which tier
to place it on?”
 It’s
evaluating 84 days of Rx at $1,000 per day vs.
probability and cost of a subsequent liver transplant based
on current clinical condition of patient
 Lesson
Learned: Your predictive analytics capabilities will
be as important to your future success as your clinical
capabilities, and they must work more closely together than
ever
9
Will Everyone Be Eligible to Receive the New Meds?
...Who’s to Say?
 This
isn’t about rationing, per se, it’s about establishing
reasonable and defensible unbiased patient characteristics
that point to success from a $1,000 per day (or more), 84day long (or longer) treatment
 Lesson
Learned: Ethical issues will also become more
prominent as Specialty Rx costs rise
10
What Role Will Government Play Clinically?
 Many
State Medicaid agencies have stepped in to work with
plans to develop and implement regional or state-wide
utilization management criteria
 Lesson
Learned: Avail yourselves of this opportunity if
available in your state, or seek to lead such an initiative if
one doesn’t exist
11
What Role Will Government Play Financially?
 Some
State Medicaid agencies have stepped in to work with
plans to develop and implement reinsurance initiatives to
mitigate the financial ramifications of high-cost Specialty Rx
products
 Lesson
Learned: Sustainability is a concern as more
products launch
12
What’s a Plan to do…

Watch out for combination therapies in Hepatitis C
2 separate pills/copays replaced with 1 pill/1 copay
 Therapies will be significantly more expensive




Anticipate increased costs due to drug regimen add-on. Not all
new specialty therapies replace prior options.
Consider appropriate Utilization Management criteria

s:\filepath
Plans should not be covering all of these products for all patients.
Suggestions: Evaluate formulary status, add appropriate utilization
management controls and screenings
Be alert for first-in-class products that now offer drug
therapy in addition to or replacing medical treatments


$84K for Sovaldi versus $100K - $150K for combination product
Not every drug has to be (or should be) available for all patients.
Qualify patients prior to approving
13
Conclusion
 Sovaldi
has fundamentally transformed how payers must
think about and deal with Specialty Pharmacy
 Clinical,
Economic, Ethical, Financial, and Regulatory
minefields abound
 The
Specialty Rx pipeline is rich and more transformative
products that share many of the characteristics of Sovaldi
are queuing up to launch
14
Appendix
The Specialty Drug Pipeline (as of August 2014)
s:\filepath
15
Specialty Pipeline – Hepatitis C
Drug Name
Disease
Treated
ledipasvir /
sofosbuvir*
Hepatitis C
genotype 1
ABT-450 /
ritonavir/
ombitasvir /
dasabuvir*
MK-5172 / MK
8742*
daclatasvir /
asunaprevir
Hepatitis C,
genotype 1
Hepatitis C,
genotype 1
Hepatitis C,
genotype 1b
Approx.
Approval
Date
Oct. 2014
Dec. 2014
2015
Dec. 2014
Route of
Admin
Projected
Costs
Oral
$100 - $150K
per tx course
Sovaldi, Olysio,
Incivek,
Victrelis
Evaluate formulary status
PA/UM and qualify
appropriately
(genotype 1)
$75 - $90K
per tx course
Sovaldi, Olysio,
Incivek,
Victrelis
Evaluate formulary status
PA/UM and qualify
appropriately
(genotype 1)
$80 - $100K
per tx course
Sovaldi, Olysio,
Incivek,
Victrelis
Evaluate formulary status
PA/UM and qualify
appropriately
(genotype 1)
$80 - $100K
per tx course
Sovaldi, Olysio,
Incivek,
Victrelis
Evaluate formulary status
PA/UM and qualify
appropriately
(genotype 1b only)
Oral
Oral
Oral
Current
Disease
Treatments
Recommended
Potential Action
The three genotype 1 products and the combination therapy of Sovaldi + Olysio are transforming the Hepatitis C class
dramatically. The combination of two drugs in one tablet represents the next evolution of oral treatment in Hepatitis C.
*Combination therapies (such as the above three) will compete with
Sovaldi/Olysio and continue to increase costs
16
Specialty Pipeline – Cystic Fibrosis, Multiple Sclerosis & High
Cholesterol
Drug Name
Lumacaftor
Disease
Treated
Cystic Fibrosis
Approx.
Approval
Date
June 2015
Route
of
Admin
Oral
Projected
Costs
$300K per
year
Current
Disease
Treatments
First in class
Recommended
Potential Action
PA/UM for gene
mutation; qualify
appropriately
Lumacaftor is considered to be an orphan drug because it treats a very specific gene mutation in cystic fibrosis. Its use will
be rare, but its costs will be material when required. *Screening test under development.
Lemtrada
Relapsing
Multiple
Sclerosis
Nov. 2014
IV
$40K per
year
Copaxone,
Avonex
Not initial therapy;
consider step or PA for
trial of initial therapy
drugs
Lemtrada will be a mixed bag of benefits and costs. In the short-term it will likely displace less expensive Rebif therapy, but
in the long-run it will be more effective at preventing relapses leading to better outcomes and lower costs.
Evolocumab
Hypercholesterolemia
2015
Sub Q
$10 - $18K
per year
Statins
Close monitoring of FDA
approval status
Currently slated for narrow (and rare disease state) approval. However, if approved for broader treatment, could replace or
be adjunct therapy with statins for cholesterol treatment. If granted broad approval, expect significant treatment protocol and
cost increases for cholesterol therapy.
Evolocumab has potential to redefine clinical management
of high cholesterol with significant cost impacts against a
mature (generic-heavy) statin category
17
Specialty Pipeline - Miscellaneous
Drug Name
Alexion
Disease
Treated
Hypophosphatasia
Approx.
Approval
Date
2015
Route of
Admin
Sub-Q
Projected
Costs
$200 $300K per
year
Current
Disease
Treatments
First in class
Recommended
Potential Action
Examine medical
claims for evidence of
these patients;
pharmacy data will not
indicate
With the incidence of hypophosphatasia most recently estimated to be one in three hundred thousand, the need for this
orphan drug will be rare, but the costs will be material when it is required. Alexion is considered to be a “breakthrough
therapy” meaning that its mechanism of action is superior to any previous treatments.
Ruconest
Hereditary
Angioedema
July 2014
IV
$200K per
year
Berinert,
Kalbitor,
Firazyr
Consider allowing as
first line therapy as
HAE is life-threatening
Ruconest has the potential to displace Berinert, Kalbitor, and Firazyr in the treatment of acute attacks of Hereditary
Angioedema with a single IV dose. Received final orphan drug designation in July. There are 6,000 to 10,000 patients in the
US who seek treatment for acute HAE attacks annually.
Cerdelga
Gaucher Disease
Aug. 2014
Oral
$240K per
year
Cerezyme,
Vpriv, Elelyso,
Zavesca
Consider allowing as
first line therapy for
convenience and
efficacy
Cerdelga, an oral therapy, has the potential to displace traditional infused treatments for Gaucher disease. Costs will offset
somewhat as this therapy replaces other available treatments.
18
Specialty Pipeline - Miscellaneous
Drug
Name
Disease
Treated
Approx.
Approval
Date
Route of
Admin
Projected
Costs
Amigal
Fabry Disease
June 2015
Oral
$100 - $300K
per year
Current
Disease
Treatments
Fabrazyme
Recommended
Potential Action
Keep watching – could be
approved as combo
therapy ($$$)
Amigal, an oral therapy, has the potential to displace traditional Fabrazyme therapy in the treatment of rare Fabry disease, however it may
also be approved to be used in combination with Fabrazyme, in which case cost impact will be more material, although the incidence of
Fabry disease is low. **Screening test under development
Esbriet
Idiopathic
Pulmonary
Fibrosis
Nov. 2014
Oral
$100K per year
Oxygen,
pulmonary rehab,
lung transplant
Expect to cover; may help
defer/prevent lung
transplants
Esbriet would be the first drug treatment in this disease that currently affects between 100,000 and 200,000 patients in the US, and so has
the potential to reduce lung transplant rates in advanced disease.
Synageva
Lysosomal Acid
Lipase (LAL)
Deficiency
Jan. 2015
IV
$250K per year
First in Class
Rare occurrence disease;
qualify appropriately
Synageva is considered an orphan drug drug due to low incidence of LAL deficiency, with only 8 cases of the early onset form per year,
and approximately 4,000 patients with the late onset form in the US currently.
secukinumab
Moderate to
Severe Plaque
Psoriasis
Oct. 2014
Sub-Q
$5K per month
($60K per
year)
Methotrexate,
Enbrel, Humira,
Stelara, Remicade
“Me too” drug – no clear
therapy advantage;
consider costs for
formulary placement
Secukinumab will compete primarily with well-known high cost therapies in the treatment of moderate to sever plaque psoriasis at similar
costs
19
Specialty Pipeline – Cancer Therapies
Drug Name
Disease Treated
Approx.
Approval
Date
Route of
Admin
Projected
Costs
Current
Disease
Treatments
idelalisib
Recommended
Potential Action
Indolent nonHodgkin’s Lymphoma
Aug. 2014
Oral
$10 - $12K per
month
Rituxan, Treanda,
Arzerra
“Me too” – evaluate
cost/appropriateness for
formulary
pembrolizumab
Refractory melanoma
& non-small cell lung
cancer
Oct. 2014
IV
$120K per year
Yervoy
“Me too” – evaluate
cost/appropriateness for
formulary
palbociclib
Hormone sensitive
advanced breast
cancer
Jan. 2015
Oral
$5 - $10K per
month
First in Class
Potential to be
blockbuster. Hung up
with FDA for data issues
nivolumab
Squamous non-small
cell lung cancer
June 2015
IV
$150K per tx
course
Yervoy
“Me too” – evaluate
cost/appropriateness for
formulary
daratumumab
Multiple Myeloma
2015
IV
Unknown
Velcade, Kyprolis,
Pomalyst, Revlimid
Game changer for
therapy options; expect
to cover
panobinostat
Multiple Myeloma
Nov. 2014
Oral
$54K per tx
course
Velcade, Kyprolis,
Pomalyst, Revlimid
To be given in
combination with Velcade
olaparib
BRCA mutationpositive ovarian cancer
Summer 2016
Oral
$12 - $15K per
month
First in Class
Likely delays with FDA
approval
Daratumumab has the potential to improve patient outcomes in multiple myeloma patients, but cost is yet unknown. Other oncology therapies are
expected to have moderate impact at similar costs to existing therapies.
20
Contact
For questions or more information:
Martha Allen, VP Business Development
Excelsior Solutions
7401 Metro Blvd, Suite 210
Edina MN 55439
mallen@excelsiorsolutions.com
(o) (952) 562-5542
(m) (612) 325-7594
Please check out our team and client testimonials at:
www.excelsiorsolutions.com
21
Our Mission
To be the worldwide value and service leader in
insurance brokerage, employee benefits, and risk management
Our Goal
To be the best place to do business and to work
www.excelsiorsolutions.com
www.lockton.com
© 2012 Lockton, Inc. All rights reserved.
Images © 2012 Thinkstock. All rights reserved.
22

similar documents