Trend Drivers & Innovation in Pharmacy Benefit Management - PowerPoint PPT Presentation

Trend Drivers & Innovation in Pharmacy Benefit Management

Today’s presenters Marly Arbuckle Kelly Chillingworth Sherry Pate Director - Human Resources Specialty Products & Affairs Director Senior Vice President Pharmacy Practice Leader Total Comp & HRIS MedTrakRx Lockton INTRUST Bank

What is a “carve-out”? Drug Companies – Pharmacy Network MTM Vendor Rx Rebates PBM Vendor- Homecare Vendor(s) Carved Out Other insurance Medical Carrier Client- ASO Drug Companies – Medical Rebates (no Rx) Employer Group products MD / Provider Network Member

Why did INTRUST consider an Rx carve-out? Rx Expenses $1,600,000 $1,373,468 $1,400,000 $1,186,350 $1,200,000 $1,138,214 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2015 2016 2017 Avg Members: 1,330 1,336 1,334 Paid PMPM: $71.32 $73.99 $85.80

How did we get started? • Turned to our consulting team • Clearly laid out our wish list, which included: • Access to data • Transparency in terms of costs and rebates • Better understanding of rebates and the financial impact • Pro’s and Con’s of carving in vs. carving out • Disruption analysis • Cost management • Choosing a PBM that fits my needs

Benefits of Unbiased RFP Modeling • Wide selection of PBM options, formularies, benefit designs • PBM Summit allows for face-to-face evaluation and trust building • Pros and cons of each vendor partner to accompany financials • Evaluate 100% historical claims to capture drug mix, channel and brand/generic distribution • Apples-to-apples comparison of line items including: • Rebate guarantees by channel (retail, mail, specialty) • Network discounts by channel • Administrative, dispensing, other fees by type • Implementation credits • Clinical savings guarantees

Cost vs. Value • Cost was very different from traditional drugs and “value” was the sales angle • Targeted therapies emerged with fewer side effects • Attention to rare and formerly underserved populations • Genetic testing to diagnose disease and treat “the right” patients • Cost of the drug can offset future medical costs • Gene therapies – are they truly curative? palliative? • Are the costs and payments sustainable? • Is the benefit exclusion of specialty or gene therapy drugs discriminatory? • Helpful article: https://www.specialtypharmacytimes.com/news/something-has-to- give-balancing-specialty-drug-cost-with-value/P-1 7

Utilization and Cost Drivers • Manufacturer drug pricing increases that potentially offset an increasing demand for rebates • DTC (direct to consumer advertising) for specialty and non-specialty drugs • An aging population • Drug innovation for rare diseases • Improved diagnostics including Source: 2018 PBMI Research Report genetic testing for specific mutations 8

Specialty Management Levers • Pricing guarantees and rebate optimization • Tiered formulary – preferred and non-preferred • Formulary exclusions • Medical vs. pharmacy benefit cost analysis • Site of care optimization for medical specialty • Intensive utilization management (UM) • Prevention of waste – 30 DS limits, no auto-shipments, split fill • Benefit design changes • Variable copay / coinsurance programs • Grants and pharma financial assistance • Specialty Predictive Drug Modeler 9

Member Cost Sharing Source: 2018 PBMI Research Report 10

Member Impact - High Cost Drugs • Increased member portion can result in non-adherence & treatment avoidance • Fear of side effects & not understanding proper dosing and administration can compound non- adherence. 11

Coinsurance and Copay Cards Source: 2018 PBMI Research Report 12

Look for a PBM that understands the “Pain Points” of Plan Sponsors …..and provides solutions for them. Possible Pain Points PBM Solutions Complex drug landscape Application of appropriate utilization management strategies Costly medications Execution of specialty tiering & accumulator programs Disincentivizing tactics Development of strategic programs Lack of education on new therapies Focus on member & provider education Inconsistent payment models Successful execution of site-of-care management Waste and inappropriate use Prior authorization & specialty pharmacy management Barriers to adherence Case management through specialty pharmacy Poor customer service Focus on member experience

Challenge: Complexities of Specialty Drug Space 02 01 Pipeline Medical Drug Channel Management • Targeted therapies • Reimbursement varies by site of care • Gene therapies • Benchmark billing models vs. ambiguous “percent of charges” • Rare, orphan and ultra-orphan conditions • Disparities that are 3-4x cost of the drug • Oncology • Unnecessary spend under medical benefit • Peanut allergy • Lack of proper precertification • $$$$$ 03 04 Copay Assistance Programs Biosimilars & Specialty Generics • Members artificially meet deductibles and OOPs • Patent protection • Plans pay more earlier in plan year • Lack of interchangeability • Members don’t understand true cost of therapy • Perceived lack of efficacy • Brand loyalty • High-cost and lack of copay cards for specialty generics • Benefit design lack proper incentives

Challenge: Getting Basic Questions Answered “Are they “How are staying out of the hospital?” my members doing?” “Can you show “How do I know if the savings?” therapy is actually working?”

Designing with Customization – Finding the Balance Across the industry, plan sponsors are adopting more clinical controls and Utilization Management (UM) tactics, but should be careful as not all approaches are created equal . MEMBER CLINICAL ECONOMIC EXPERIENCE EFFECTIVENESS IMPACT

Proactive Approach: Sometimes your best defense is a strong offense Internal Strategies External Strategies Specialty Drug Mgmt. BIC Specialty Network Hand-selected network to drive - New-to-Market Hold - Precision PA cost efficiences and improve - Program Development health outcomes - Formulary Copay Management Biosimilars & Specialty BIC Maximizing, tracking & reporting Generic Planning copay assistance to reflect TROOP Strategic selection vs. SpecialtyRx & reduce overall plan costs global adoption BIC Quarterly Reporting Medical & Rx Alignment - Utilization & trends Infusion Channel - Clinical management & outcomes Management program with - Patient-level, group-level reporting site of care neutral payment - Cost-avoidance interventions model - Individual member success stories

Best-in-Class SpecialtyRx Network EXTENSION OF THE  Specialized RFP Process Every 2 years BENEFIT  Patient centric  Cost conscience Review of Clinical Processes  Innovative and Programs  Competitive FOCUS ON MEMBER  Trustworthy OUTCOMES Analysis of Discounts  Responsive  Proactive  Collaborative DEDICATION TO PLAN SAVINGS & COST- Rigorous Interview Process  Holistic AVOIDANCE

BIC Align Program  Specialty drugs are only utilized  Program is designed for non-HDHP  Member out-of-pocket costs are by less than 1% of members but plans with lower specialty tier reduced contribute to nearly 45% of overall copays spend  Copay assistance is tracked and  MedTrakRx manages drug list reported  Manufacturer copay assistance is  MedTrakRx monitors available available for most of the top-  Plan pay amount per claim is utilized specialty drugs (Hepatitis copay assistance reduced C, Inflammatory Conditions, MS, Oncology, etc.)  MedTrakRx has pre-designed  Amounts vary, but plans can save specialty copay tiers an average of 20% per claim  BIC Align maximizes available manufacturer copay assistance

Tracking Copay Assistance Manufacturers offer BIC SpecialtyRx Pharmacies connect Pharmacies track and approved patient Network pharmacies have members to programs that report assistance to assistance programs access to manufacturer reduce member OOP reduce overall plan assistance programs costs costs.

Result: Cost-Effective Specialty Drug Benefit The BIC SpecialtyRx Program expands beyond the clinical strategies within the PBM and leverages integration with the BIC SpecialtyRx Network to provide a cost-effect specialty drug benefit. Condition-Focused Individualized Care True Integration Meaningful Data Clinical Controls • Auditable reporting • Disease and drug specific • New patient assessments • More efficient PA management • Balanced UM and formulary • Patient specific care pathways • Dynamic plan design • Risk profiling and gap closure • Care Management best practices • Right Med at Right Time • SOP Customizations • Specialty business reviews

Focus on Member Experience Keys to Success: 97 % 8 seconds • No voice response unit (VRU) Member CallTrak SM call monitoring system • Average Speed Satisfaction for of Answer • In-depth hiring & training processes – initial 6+ years and ongoing • Proactive and empowered PBA’s provide 89 % timely issue resolution PBA Help Desk has direct and immediate access First Call to all functional SME’s (including Clinical) to • Low turnover and several tenured employees Resolution quickly and accurately resolve issues. promoted to management positions