Don't share risk with insurers without first learning about specialty pharma use and sourcing pathways

More than 10 years ago, I did an extensive project for Allergan Pharmaceuticals on the therapeutic use of BOTOX? (onabotulinumtoxinA) in physician offices to help physicians get paid on denied claims when they used the drug for medically necessary, approved uses extending beyond cosmetic indications.

Botulinum toxin is one of the most poisonous substances known to man. Scientists have estimated that a single gram could kill as many as 1 million people and a couple of kilograms could kill every human on earth. Botulinum toxin has proven to be a successful and valuable therapeutic protein that can be injected into humans in extremely small concentrations and works by preventing signals from the nerve cells reaching muscles, acetylcholine (a neurotransmitter) therefore paralyzing them. Acetylcholine attaches to receptors on the muscle cells and causes the muscle cells to contract or shorten.

Injected botulinum toxin prevents the release of acetylcholine, preventing contraction of the muscle cells. Botulinum toxin causes a reduction in abnormal muscle contraction, allowing the muscles to become less stiff. The problem I was hired to deal with was the sourcing of the drug, not the drug itself.

Doctors sourced the medication from Specialty Pharmaceutical distributors instead of going through the contracted payers preferred PBM. Listening to their reasoning, the clinician in me was sympathetic to the words. But I wasn't sure if 100% of the time, the words were the team "fight song" or the reality. In fact, it would be difficult to determine which was true - in their specific case.

Specialty pharmaceuticals continue to account for an increasing percentage of drug spend, a pattern that appears unlikely to change given new agents recently or soon to be introduced into the market.

The list of top 20 highest-spend products outside of health systems has largely remained static in recent years. In addition, total spend is dominated by disease-modifying anti-rheumatic drugs (DMARDs), agents for multiple sclerosis, oral oncology agents, and multiple treatments for hepatitis C.

Given the development pipeline, the list is not expected to change dramatically in the near future no matter what the president of the United States says or does on Twitter or in press conferences. Prices continue to rise on both high cost and low cost medications.

Last year, the FDA approved 42 novel drugs (i.e., new molecular entities).Given generally accepted classification criteria, all but seven of those products could be considered “specialty” medications. As a result, expanding functional capacity to deliver high-quality specialty pharmacy services, either alone or in concert with an external provider, remains a critical objective for member organizations. Fortunately, member health systems are expanding their proficiency in providing this care and the clinical and operational results (such as abandonment rate, time to fill, compliance and persistence) continue to improve compared with the performance of traditional “big box” specialty pharmacies. 

When health systems, IPAs, PHOs, ACOs, or MSOs contract with health plans for 2019 and beyond, a significant number of those contracts will have shared risk features for the financial performance of the group healthcare treatment spend.

Before agreeing to accept risk on pharmacy spend, follow one best practice I implemented with my client networks back in 1992. (Gosh that's 26 years ago and I remember the day as if it were an hour ago!)

Determine what your doctors are using now AND WHY they use what they use, order it from where they order it, and how open they might be to changing suppliers.

What I learned as the developer of over 420 of these IPAs, PHOs, MSOs, ACOs and other OWA's (other weird arrangements) was that a) you can't control doctors' behavior with contracts, withholds, or rules; and b) if you believe you can - there's a 12-step program for you up the street. You can only change yourself. You cannot force change in others.

You are essentially powerless to change the doctors' behaviors over the long run, so change your contracting strategy, instead. It will always be a sparring match between the "suits" and the "labcoats". And even if the "labcoat" changes teams and becomes a "suit", chances are slim to none that the rest of the team will accept new rules from the new suit.

You are powerless to change the doctors behavior over the long run, so change your contracting strategy, instead.

One thing I initiated long ago as an Executive Director of an IPA that assumed shared risk by contract, including shared risk for pharma, was a home-made database (courtesy of my husband) that became a lookup table that listed the preferred formulary drugs. It listed each drug, plan by plan, brand-by-brand for each plan we were contracted with. this was a tedious and painstaking exercise because back then, (1990s - mid 2000s) plans would change brand positioning on the formulary almost monthly with kickbacks ?? and rebates if they would position the pink pill better than the blue pill, then the purple pill would come in and upend that deal. It was maddening! The database was a pain in the ass-ets to build, but the maintenance was 10x worse!

These days, PBMs and plans have this data at their fingertips. Will they share it with a trading partner? That's your first questions: "IF" and "HOW FREQUENTLY" will they update it for you. The way I handled this was to ask for it in CSV so that updates could be managed digitally instead of manually.

Next, I went on a crusade training not the doctors - as we cannot change them with a memo or a baseball bat to their heads, so don't bother. Nope. Instead, I trained their medical assistants and LPNs, LVNs and RNs. Train those who do the refills to verify the patient's insurance (in case it changed) on every refill and to check the database to make sure that some other generic or therapeutic equivalent was not on the preferred formulary.

I created an incentive and I found out the needle moved more towards cost containment with the specialty and surgical practices moreso than the PCP offices. PCPs were far more engaged in saving patients money. Specialists - not as often though, to their credit some were heroes!

Specialists would order new drugs without a second thought. They held fast to their sourcing pathways and prescribing habits - sometimes for excellent clinical reasoning, sometimes because they were drunk on the incentives and amenities from the pharmas - which has since been prohibited - to a certain extent.

I set up a peer review committee within each specialty and had them come up with a position paper on what to use, why, when, and acceptable substitutes. These were then voted on by them and passed to the utilization and contracting and quality committees and pharmacotherapeutics committee of the IPA, PHO, or MSO. Yes, as the network designer, I set up 17 different committees to operate an IPA, PHO, ACO or an MSO. This gave everyone some role and accountability, gave me as Executive Director (pro tem), 17 committee chairs to deal with instead of 144 to 800 physicians one-by-one, and caused them to speak with 17 voices plus specialty chairs for each specialty appointed for a year by their "labcoat" peers, not a "suit".

So while the plan may bitch and moan that the doctors are naughty and wont follow the formulary, I gave the doctors full clinical autonomy to be doctors, provided they at least took the preferred formulary choices into consideration. If the attending physician had an objection or an exception to the formulary preferred drug or supplier, they could get a "pass" from the specialty chair.

This step in the process helped me three ways: it encouraged peer-to-peer interaction, it preserved my internal hierarchy, and the attending and the chair would team up to talk to the health plan medical director for an exception and pre-authorization without penalty. Often I would also participate in these sessions because I was directly involved in the contract negotiations, contract compliance, and reporting and naughty-doctor "interventions".

Another bit of assistance I asked for from our trading partner health plans was to ask for a list of non-compliant naughty doctors, by name, by drug or drug class and by financial impact. If the naughty behavior was frequent but immaterial, I didn't sweat it. If the naughty behavior caused the entire network to suffer and there wasn't good cause (by medical necessity) there was an intervention. In one case, a doctor was expelled from the IPA because his peers found no just cause for his decisions and he would not agree to a corrective action plan, counseling or improve on his own. Who terminated him for cause? ME. By being terminated from the IPA, he was terminated from all 14 contracts we had in the marketplace. They would not contract with him individually - because of the reason for termination. So he was out. I hear he's doing research these days.

If you don't think you can get that sort of list from your trading partner health plans, don't be so quick to assume. They not only have it, (I used to be a contracting manager for a big box health plan) they review it frequently, just like Santa Claus - to determine if you are getting that super duper Lego set under the Christmas tree -- or lumps of coal - or if you are getting terminated.

These days plans watch pharma spend like a hawk. A visit or consult may cost them $200-$400 but the power of that prescription may be $30,000 a dose! the problem is, I don't see any IPAs, PHOs, MSOs, or ACOs, I work with watch pharma spend until they wake up one day and say "OH CRAP! Where did our cash go?" or "What happened to the pharma spend?" Too late!

Revlimid, which treats blood cancer and costs about $20,000 for a 30-day supply. A patient on Medicare Part D, the program's prescription plan, pays 5% of the price, about $1,000 a month, plus a $5,000 copay. How much shared risk does the ACO, IPA, PHO or MSO take on one prescription? Where does stoploss protection kick in?

Some drugs have hit close to the $1 million mark, including a gene therapy, Luxturna, that can restore sight to children with a rare retinal disease. Its price was set at $850,000. A drug to treat hemophilia B that's making its way through the approval process, SPK-9001, could cost $1.5 million. Actimmune is used to boost the immune system in chronic granulomatous disease. It can also slow malignant osteopetrosis, a rare bone-hardening disorder. It runs just over $52,000 a month! Daraprim is an antiparasitic used to treat toxoplasmosis, an infection caused by one of the most common parasites in the world. More than 60 million Americans may be infected with it, at a price tag of $45,000 a month. If you don't know your prescription medications and your drug costs and your negotiated sourcing pathways under each contract, DON'T ACCEPT SHARED RISK FOR PHARMA EXPENSE!

Another bit of training on our cost containment initiative, was to train the MAs, LPNs, LVNs, and RNs on how to help patients complete the compassionate discount forms for patients on the various drugs and supplied them with the necessary forms. I became a master of the system - but it was much smaller then.

Now, so many pharma manufacturers have these programs so instead of an internal doing this, ask the drug reps and detail reps to do the training as an inservice to the support staff. If the doctors are so inclined to attend, great, but the heavy lifting on this is really the unsung heroes of the supporting cast members.

What's in it for them? Create an incentive program for them to share in some bonus pool when the numbers are met or contained each month. An outing, a gift, something based on their showing effort and initiative and results. You are limited here only by your imagination and compliance regulations. As long as the goal is quality, savings, and following the contract rules and procedures, you shouldn't have much to worry about. If you are concerned, run it by your legal counsel.

Do these recommendations seem practicable? What's stopping you from trying them? Time, staffing, no one to do it for you? I'll help! But I don't cold call. If you want my help, you have to send the email or dial the phone.

I promise you that I can do this and you'll realize many multiples of my fee in cost containment, better contracting, better operations, happier doctors and support staff, happier health plans, happier patients, and you'll have a system in place when I leave that can be maintained and sustained.