Hos­pi­tals launch spe­cialty phar­ma­cies to curb drug costs

Modern Healthcare - - NEWS - By Me­lanie Evans

With spe­cialty drug spend­ing soaring 60% in the past five years, large health sys­tems have jumped into the spe­cialty phar­macy busi­ness to as­sert some con­trol over those costs by dis­pens­ing the drugs to their pa­tients and cov­ered employees.

Health sys­tems say those phar­ma­cies help them bet­ter man­age out­pa­tient drug costs. A grow­ing num­ber of in­sur­ance con­tracts and Medi­care ini­tia­tives tie pay­ments to qual­ity met­rics that reach be­yond hos­pi­tal stays to hold providers ac­count­able for pa­tients’ to­tal med­i­cal costs, in­clud­ing drugs.

It’s also a ro­bust busi­ness for those sys­tems that can suc­cess­fully ne­go­ti­ate with man­u­fac­tur­ers and health plans so they can com­pete with the big­ger play­ers.

“It you want us to be re­spon­si­ble for the to­tal cost of care, al­low us to be able to care com­pre­hen­sively for th­ese pa­tients,” said Dick Schir­ber, a spokesman for Ex­cel­er­aRx Corp., a for-profit spe­cialty phar­macy ser­vices com­pany owned by six health sys­tems. Com­pre­hen­sive care, Schir­ber said, in­cludes man­ag­ing the very ex­pen­sive pre­scrip­tions that pa­tients take at home for can­cer or chronic diseases, so that providers have more con­trol over waste as well as com­pli­ca­tions.

Ex­cel­er­aRx pro­vides ser­vices to sys­tem-owned spe­cialty phar­ma­cies, such as ne­go­ti­at­ing with drug­mak­ers and han­dling data re­port­ing.

Phoenix-based Ban­ner Health started its own spe­cialty phar­macy last year, tak­ing its busi­ness away from Premier, which ac­quired Comm­care Spe­cialty Phar­macy in 2010 for $35.9 mil­lion. Ban­ner employees en­rolled in the sys­tem’s health plan were the phar­macy’s first cus­tomers.

“For ev­ery­one, every­where, the phar­macy ex­pense is in­creas­ing,” said Pam Nen­aber, Ban­ner’s CEO of phar­ma­ceu­ti­cal oper­a­tions.

Ban­ner Health hired three clin­i­cal phar­ma­cists, three pa­tient ad­vo­cates and three staff mem­bers to sup­port oper­a­tions. The sys­tem also spent $1 mil­lion on a drug-dis­pens­ing robot for the spe­cialty phar­macy’s new home-de­liv­ery ser­vice. The robot fills pill bot­tles, which are ver­i­fied by a phar­ma­cist be­fore be­ing shipped. Clin­i­cal phar­ma­cists also talk to pa­tients at home to an­swer prescription ques­tions.

In the first year, Ban­ner shaved about 1% off its spe­cialty drug spend­ing for about 1,200 work­ers and their fam­i­lies cov­ered by the sys­tem’s em­ployee health plan.

Health sys­tems that own spe­cialty phar­ma­cies ar­gue they can do a bet­ter job over­see­ing the use of the drugs they dis­pense. That’s be­cause their phar­ma­cies can eas­ily ac­cess med­i­cal records, lab­o­ra­tory re­sults and physi­cian notes, al­low­ing phar­ma­cists to closely mon­i­tor the ef­fec­tive­ness of the drugs pre­scribed and re­act quickly when some­thing goes wrong or pa­tients need help.

“They know if the pa­tient is get­ting the value for the high-cost drug,” said Steven Rough, di­rec­tor of phar­macy for the Univer­sity of Wis­con­sin Hos­pi­tal and Clin­ics, which be­gan han­dling trans­plant drugs in 2006 and ex­panded

Spe­cial­tyto treat drugs diseases such as can­cer, mul­ti­ple scle­ro­sis and hep­ati­tis C now ac­count for one-third of drug spend­ing.

its spe­cialty phar­macy in 2011.

Launch­ing a spe­cialty phar­macy does not re­quire sig­nif­i­cant cap­i­tal in­vest­ment, and the high prices of the drugs—even sold at slim mar­gins— make it pos­si­ble to quickly see a re­turn on that in­vest­ment.

“It’s a quite vi­able busi­ness,” said Scott Knoer, chief phar­macy of­fi­cer at the Cleve­land Clinic, which opened its spe­cialty phar­macy roughly a year ago, and advises other sys­tems to do the same. “Get on it and get on it fast,” he said.

The Cleve­land Clinic es­ti­mates it will re­coup its up­front in­vest­ment from the spe­cialty phar­macy’s prof­its within 16 months of open­ing.

That’s true even as the Ohio health sys­tem ex­pands its oper­a­tions. The phar­macy is hir­ing more staff be­cause the vol­ume of pre­scrip­tions has in­creased about 10% a month. It now em­ploys 25 work­ers, and that num­ber is ex­pected to reach 66 employees within three years.

New drugs last year boosted spend­ing for spe­cialty phar­ma­ceu­ti­cals 25% over the prior year, IMS Health re­ported in April. Spe­cialty drugs to treat diseases such as can­cer, mul­ti­ple scle­ro­sis and hep­ati­tis C now ac­count for one-third of drug spend­ing. So­valdi and other new treat­ments for hep­ati­tis C boosted spend­ing by $12.3 bil­lion, IMS said.

Phar­ma­ceu­ti­cals still ac­count for just 10% of U.S. health­care spend­ing, but a 12.3% surge in 2014—in­clud­ing $12.6 bil­lion spent on new spe­cialty drugs to treat hep­ati­tis C—con­trib­uted to the year’s uptick from the record-slow health spend­ing that started with the Great Re­ces­sion.

That growth makes dis­pens­ing spe­cialty drugs an in­creas­ingly im­por­tant piece of health­care de­liv­ery, as well as an at­trac­tive busi­ness line, said John Ran­som, a man­ag­ing di­rec­tor of health­care re­search at Ray­mond James. “It’s rid­ing the wave of where the in­no­va­tion is,” he said.

But sys­tems will face fierce com­pe­ti­tion as they try to ride that wave, Ran­som said. “It can be a tough busi­ness.”

They will have to vie with na­tional phar­ma­cies like CVS Health, Ex­press Scripts and Diplo­mat Phar­macy to be in­cluded in health in­sur­ance net­works. CVS and Ex­press Scripts also own phar­macy ben­e­fit-man­age­ment com­pa­nies, so they “have a vested in­ter­est in lim­it­ing the net­work of spe­cialty phar­ma­cies be­cause they are spe­cialty phar­ma­cies,” Ran­som said.

Phar­ma­ceu­ti­cal man­u­fac­tur­ers also limit ship­ping of some of their drugs to a hand­ful of phar­ma­cies, in what are called lim­ited-dis­tri­bu­tion net­works.

Get­ting a spot in drug man­u­fac­tur­ers’ lim­ited net­works re­quires in­tense ne­go­ti­a­tion, and the ca­pac­ity to re­port qual­ity and use data back to drug­mak­ers.

Ex­cel­er­aRx, launched in 2012 with in­vest­ment from Min­neapo­lis-based Fairview Health Ser­vices, helps its own- ers and clients with those tasks. En­gle­wood, Colo.-based Catholic Health Ini­tia­tives, which opened its own spe­cialty phar­ma­cies in Ken­tucky and Ne­braska last year, in­vested in Ex­cel­er­aRx to “su­per­charge” the new busi­ness line, said Nick Barto, the health sys­tem’s se­nior vice pres­i­dent for cap­i­tal fi­nance.

How­ever, an­other dan­ger for providers is that pa­tients may be­gin to see them as “the or­ga­ni­za­tion that’s pro­vid­ing the drugs that you can’t af­ford,” said Ben­jamin Is­gur, di­rec­tor of thought lead­er­ship at Price­Wa­ter­house­Coop­ers’ Health Re­search In­sti­tute.

But health sys­tem ex­ec­u­tives say they’ve hired staff to help pa­tients iden­tify dis­counts, coupons and other fi­nan­cial aid for drug costs not cov­ered by in­sur­ance. And health sys­tems can fur­ther mar­ket their in­de­pen­dence from share­hold­ers and the phar­ma­ceu­ti­cal in­dus­try.

Ban­ner Health started its own spe­cialty phar­macy last year. Employees en­rolled in the sys­tem’s health plan were the phar­macy’s first cus­tomers.

Source: IMS Health

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.