A Guide to Specialty Drugs for Employers. Overview. Sue Heineman, PharmD, BCPS National Employer Medical Outcomes Specialist Pfizer Inc.

Transcription

1 A Guide to Specialty Drugs for Employers Sue Heineman, PharmD, BCPS National Employer Medical Outcomes Specialist Pfizer Inc. 10/12/2016 1

2 A Guide to Specialty Drugs for Employers: of specialty drugs of specialty drugs to therapy is critical to achieving value Pfizer wishes to acknowledge A. Mark Fendrick, MD, Director of the Center for -Based Insurance Design (V- 2 BID) and Brenda Motheral, RPh, MBA, PhD, President of Artemetrx for their contributions in reviewing and helping to shape this publication.

3 1 of specialty drugs Therapeutic targets Characteristics and definitions Specialty drug categories

4 1 Effective use of specialty drugs has the potential to benefit both employers and their employees Employee s perspective Specialty drugs may improve Quality of life Ability to function Life expectancy Employer s perspective Specialty drugs may help Improve employee s ability to function productively Avoid high-cost complications in the future Avoid time lost due to caregiving 4 Fendrick AM et al. Supporting consumer access to specialty medications through value-based insurance design. National Pharmaceutical Council (NPC) Web site. Accessed December 13, 2014.

5 1 Specialty drugs have improved outcomes in an expanding number of therapeutic targets Chronic conditions (eg, multiple sclerosis and rheumatoid arthritis) 1 Have improved clinical and functional outcomes vs traditional agents Rare, serious conditions (eg, blood or metabolic disorders) 2,3 May be the only available treatment options Specific types of cancer (eg, CML and multiple myeloma) 4 Prolong survival and improve function (with targeted therapy) Genetic conditions with identified markers (eg, a subtype of cystic fibrosis) 5 Target underlying cause of disease CML= chronic myelogenous leukemia. 1. Zalesak M et al. Am J Manag Care. 2014;20(6): Sullivan SD. J Manag Care Pharm. 2008;14(4)(suppl S):S3-S6. 3. Hyde R, Dobrovolny D. Am Health Drug Benefits. 2010;3(1): Boodman SG. Cancer patients dilemma. KHN Kaiser Health News. April 27, Accessed March 30, Paving the way for personalized medicine. Food and Drug Administration 5 (FDA) Web site. Accessed December 13, 2014.

6 1 Specialty drugs target a variety of serious, complex conditions Cancer 1 Cardiovascular conditions 2 End-stage renal disease 2 Growth deficiency 1 Hemophilia 1 Hepatitis C 1 HIV 1 Inflammatory conditions 1 Immunoglobulin * -treated conditions 2 Miscellaneous specialty conditions 1 Multiple sclerosis 1 Pulmonary arterial hypertension 1 Lung disorders 3 Transplant 1 6 *Administered intravenously (IVIG). HIV = human immunodeficiency virus Drug Trend Report.The Express Scripts Lab Web site. Accessed March 19, UnitedHealth Center for Health Reform & Modernization. UnitedHealth Group Web site. Accessed November 19, Looking back moving forward. Prime Therapeutics Web site. c8ea45ca5f37f3c8048bd8e82779c650/5476_k_reportrxdrugcosts_2014.pdf. Accessed March 30, 2015.

7 1 General characteristics of specialty drugs Specialty drugs are characterized by one or more of the following Complex manufacturing processes 1 Need for special handling and/or administration 1,2 May be injected, infused, or taken orally 3 Need for complex patient care and drug management 3 As well as complex patient self-management Cost >$600 /month (CMS- defined threshold) 2 1. UnitedHealth Center for Health Reform & Modernization. UnitedHealth Group Web site. Accessed November 19, Fendrick AM et al. Supporting consumer access to specialty medications through value-based insurance design. NPC Web site. Accessed December 13, Specialty Drug Benefit Basics. Pharmacy Benefit Management Institute 7 (PBMI) Web site. Accessed December 1, 2014.

8 1 Orphan drugs are usually included in the specialty drug category Specialty drugs account for 60% of orphan drugs 1 Orphan drug status * applies to drugs or biologics that offer major improvements in the treatment of rare, serious diseases 2 Prevalence Ultra-orphan drugs target 3 < 200,000 individuals in the US Conditions that affect only a few thousand individuals annually Treatment with orphan drugs is costly 4 Average annual cost in 2014 ~ $138,000 But annual costs can reach > $500,000 5 *Therapeutic agents that target diseases that affect >200,000 individuals but are not expected to recoup costs of development and marketing may also qualify for orphan drug status. 2 Through the FDA Orphan Drug Designation Program UnitedHealth Center for Health Reform & Modernization. UnitedHealth Group Web site. Accessed November 19, Developing products for rare diseases & conditions. FDA Web site. Accessed January 11, Medicine Use and Shifting Costs of Healthcare. IMS Institute for Healthcare Informatics Web site. IMS%20Health%20Institute/Reports/Secure/IIHI_US_Use_of_Meds_for_2013.pdf. Accessed November 18, Average annual cost of orphan drugs per patient from 2010 to The Statistics Portal Web site January 11, Cohen JP, Felix A. J Market Access & Health Policy. 2014(2): Accessed April 13, 2015.

9 1 Specialty drugs may be subject to REMS Risk Evaluation and Mitigation Strategies (REMS) * are mandated by the FDA for some drugs To address safety risks to ensure that benefits outweigh risks REMS may include Patient and provider education about the risks associated with therapy, for example, Safety protocols (eg, laboratory monitoring) Advice about serious adverse events REMS may also include elements to ensure safe use Special training or certification for prescribers or dispensing pharmacies Limitations on settings in which drug can be administered or dispensed Requirements for certain types of testing/monitoring Mandatory enrollment of patients in registry for safety monitoring *REMS are not limited to specialty drugs. 16 Specialty Drug Benefit Basics. PBMI Web site. Accessed December 1, 2014.

10 2 High drug spend, low utilization Drivers of specialty drug trend Biosimilars

11 2 Specialty drugs significantly influence drug spend, despite low rates of utilization Today s specialty drugs are prescribed to only a small number of individuals 1 About 3 to 4 of every 100 enrollees have at least one prescription for specialty medications 1 But they are important contributors to the total drug spend * Estimated 30% of total spend in Predicted 50% of total spend by * Medical and pharmacy benefits. 1. UnitedHealth Center for Health Reform & Modernization. UnitedHealth Group Web site. Accessed November 19, Johnson S et al. Specialty drugs are forecasted to be 50% of all drug expenditures in Poster presented at the 25th Annual Meeting & Expo of the Academy of Managed Care Pharmacy (AMCP). April 2014;Tampa, FL.

12 2 Total spend for specialty drugs reflects an almost even medicalpharmacy split Often, specialty drugs administered by a health care provider are billed through the medical benefit. 1 Approximately 50% of specialty drug spending is billed through the medical benefit 2 Range of reported estimates of medical benefit billing: 47% to 53% 3,4 R 1. UnitedHealth Center for Health Reform & Modernization. The Growth of Specialty Pharmacy. UnitedHealth Group Web site. Accessed November 19, Drug Trend Report.The Express Scripts Lab Web site. Accessed March 19, Johnson S et al. Specialty drugs are forecasted to be 50% of all drug expenditures in Poster presented at the 25th Annual Meeting & Expo of the AMCP. April 2014 ;Tampa, FL. 4. Insights 2014:7 sure things. CVS Web site Accessed March 31, 2015

13 2 Drug spend as percentage of PMPY through the pharmacy benefit Percentage of PMPY spend within the top 10 categories* 10% 4% 4% 2% 2% 2% 29% 29% Inflammatory conditions 19% Multiple sclerosis 15% Cancer 14% Hepatitis C 10% HIV 4% Miscellaneous specialty conditions 14% 19% 4% Growth deficiency 2% Hemophilia 15% 2% Pulmonary hypertension 2% Transplant The top 10 categories accounted for 89% of the total specialty pharmacy spend. PMPY = Per member per year. *Express Scripts, 2014, drugs billed through the pharmacy benefit. Approximately 50% of the total specialty drug spend is billed through the medical benefit. HIV= human immunodeficiency virus Drug Trend Report.The Express Scripts Lab Web site. Accessed March 19, 2015.

14 2 Important drivers of specialty trend include drug mix and utilization Drug mix Type of drugs used (Low-cost vs high-cost drugs) 1,2 For specialty drug-treated conditions, there may be few or no less expensive treatment alternatives 1 Newer, higher-cost specialty drugs may displace older, less expensive medications, altering drug mix 1 Administration costs and differential billing through medical and pharmacy benefits may influence impact of drug mix 1 Utilization Demand for use of drugs is affected by 1,2 New indications for treatment Changes in treatment guidelines Increasing number of prescriptions written and drugs approved 1.Insights Specialty trend management. CVS Web site. Accessed January 18, Looking back moving forward. Prime Therapeutics Web site Accessed March 30, 2015.

15 2 Expanding indications have contributed to the increased utilization of specialty drugs Therapeutic targets for specialty drugs now include Some high-prevalence conditions 1 An increasing number of rare or low-prevalence conditions 1 Chronic conditions that require long-term, possibly life-long, therapy 1 Newly approved drugs to treat hepatitis C with the potential to treat millions of patients 1 Small populations of individuals with specific 1 genetic profiles Individuals with low-prevalence diseases characterized by specific genetic markers, including subpopulations of patients with cancer 1 Patients with rheumatoid arthritis, multiple sclerosis, psoriasis, HIV/AIDS, and some types of cancer 2 24 Indication refers to the FDA-approved use of a drug for treating a particular disease. HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome Drug Trend Report.The Express Scripts Lab Web site. Accessed March 19, Fendrick AM et al. Supporting consumer access to specialty medications through value-based insurance design. NPC Web site. Accessed December 13, 2014

16 2 The use of specialty drugs is expected to continue to drive pharmacy benefit spending Commercial drug trend, 2014 vs Double-digit increases predicted through % % 22.3% 21.3% % 10 Percent increase % Traditional Specialty All Percent increase Specialty drug trend increases Specialty drugs are also expected to continue to drive medical benefit spending (because >50% of specialty drug spending is through the medical benefit). 2 Drug trend reflects both utilization and drug cost Drug Trend Report.The Express Scripts Lab Web site. Accessed March 19, Insights 2014: 7 sure things. CVS Web site Accessed March 31, 2015.

17 2 Should purchasers anticipate lower costs due to the influence of biosimilars in the near future? In the traditional drug market 1 Patent expirations and development of generics have led to billions of dollars in savings In the specialty drug market Biosimilars have the potential to generate savings and efficiencies, but estimated savings from biosimilars vary considerably 2,3 Factors that may affect the savings potential of biosimilars include 3 Perspectives of stakeholders Assumptions of the analysis The class of biologics Timing of entry of biosimilar into the marketplace Degree of competition 1. Schilling B. Purchasing High Performance. April 11, Commonwealth Fund Web site. purchasing-high-performance/2012/april /featured-articles/specialty-drug-costs-poised-to-skyrocket. Accessed February 18, Data on file. Pfizer Inc, New York, NY. 3. Mulcahy AW et al.the cost savings potential of biosimilar drugs in the United States. Rand Corporation Web site. 28

18 2 The cost-saving potential of biosimilars can be influenced by multiple factors Comparative safety and efficacy Payers will need to compare cost-effectiveness of available therapeutic options (including secondand third-generation biologics, when available) Biosimilars Reimbursement policies set by payers Higher reimbursement rates for biosimilars in certain sites of care may incentivize their use Acceptability of biosimilars to patients, payers, and medical community Competition in the marketplace May be influenced by high costs of manufacturing, legal and regulatory barriers, and anticipated overall return on investment Mulcahy AW et al.the cost savings potential of biosimilar drugs in the United States. Rand Corporation Web site Accessed February 18, 2015.

19 2 Generics and biosimilars are developed using different production processes Small-molecule generic vs brand 1 Identical copy of branded drug Identical active ingredient in generic and brand Generic Branded Biosimilar vs branded biologic 2 A biosimilar is not identical to its originator biologic Biologics are large, complex molecules manufactured in living cells Reproducibility in sensitive living systems is a key challenge for biosimilar manufacturers The biosimilar product must demonstrate no clinically meaningful difference in safety, potency, or purity from originator product Biologics and biosimilars: an overview. Amgen Web site. Accessed January 11, Data on file. Pfizer Inc, New York, NY.

20 33 3 of specialty drugs Total cost of care Low-prevalence, high-impact conditions Clinical value Business value

21 3 Top 3 therapy classes accounted for 56% of pharmacy spend for specialty drugs in 2014 No. of Therapy class prescriptions (PMPY) 1 Inflammatory conditions (eg, rheumatoid arthritis) Average Prevalence cost / of use prescription % $ Multiple sclerosis % $ Cancer % $6191 PMPY = per member per year Drug Trend Report.The Express Scripts Lab Web site. Accessed March 19, 2015.

22 3 Pharmacy spend on hepatitis C drugs increased over 700% from 2013 to 2014 In 2013, hepatitis C was not in the list of top 10 therapy classes In 2014, hepatitis C was ranked #4 among the top 10 classes * No. of Prevalence Average Therapy class prescriptions of use cost / (PMPY) prescription 4 Hepatitis C % $16,373 *After the new oral hepatitis C drugs came on the market Drug Trend Report.The Express Scripts Lab Web site. Accessed March 19, 2015.

23 3 Does the potential impact of conditions targeted by specialty drugs justify the high spend? What is the potential impact of conditions targeted by specialty drugs on business value? Do employers and employees receive value in return for high spending on specialty drugs? 36

24 3 The business value of employee health reflects the total cost of care To understand the impact of the total cost of care, look beyond direct costs 1 Direct costs of treatment 1 Medical Pharmacy Indirect costs Lost productivity 1 Absenteeism Presenteeism Disability Missed opportunities for revenue (eg, lost sales) 2 Staffing strategies (eg, overtime, replacements) 2 Caregiving 1. Loeppke R et al. J Occup Environ Med. 2009;51(4): Gifford B.The cost of an absence. Integrated Benefits Institute (IBI) Web site Accessed March 19, 2015.

25 3 Total disability-related costs underscore need to identify and address low-prevalence conditions Modeled total disability wage replacement and lost productivity costs for an individual who enters the STD system* Rheumatoid arthritis $7000 Short-term disability $14,800 Long-term disability $6000 Additional lost productivity $27,800 Cancer $7800 Short-term disability $4700 Long-term disability $6700 Additional lost productivity $19,200 Overall average for total costs $12,200 Additional lost productivity Missed opportunities for revenue Costs related to staffing, overtime, or replacement workers *Assuming that the claimant who reaches the STD maximum is covered for LTD and enters the LTD system. Because ~ 24% of STD claims for rheumatoid arthritis enter the LTD system, the LTD costs were estimated by calculating ~ 24% of the total average LTD costs ($62,200) for that condition. Ranking among 11 conditions for total costs Rheumatoid arthritis was the most expensive Cancer was the fourth most expensive 39 Gifford B.The high costs of low prevalence diseases. IBI Research. September 2014.

26 3 Looking at the cost of specialty medications in context: Clinical value Will specialty drugs be of significant clinical value to members of your population?? To answer this question, employers need information about their populations 1 What is the prevalence of conditions targeted by specialty drugs within the covered population? What is the health status of employees with these conditions? 2 Are their conditions well managed? 3 1. Schilling B. Purchasing High Performance. April Commonwealth Fund Web site. purchasing-high-performance/2012/april /featured-articles/specialty-drug-costs-poised-to-skyrocket. Accessed March 19, Gifford B.The high costs of low prevalence diseases. IBI Research. September Loeppke R, et al. J Occup Environ Med. 2009;51(4):

27 3 Evaluating the comparative value of different therapeutic options Quality-adjusted life-years (QALYs) reflect both quantity and quality of life 1 A QALY assigns weighted values to an intervention, 1 such as drug therapy One year of perfect health = 1 QALY A year of less than perfect health generates QALYs <1 but above 0 Example: 0.5 QALY = 6 months in good health QALY values reflect the average across a population 2 Calculating the QALY 2 Intervention adds 3 years of life Quality rating for those 3 years is 0.1 } x 0.1= QALY The incremental QALY = the difference in QALYs between interventions 3 Allows comparison of different interventions within and across disease states 1. What is a QALY? University of Oxford Web site. Accessed January 27, Freiberger M. How to measure life. NICE Web site. Accessed March 19, Chambers JD, et al. Health Aff (Millwood). 2014;33(10):

28 3 Specialty drugs offered reasonable value compared with traditional drugs Analysis of data for 58 specialty drugs and 44 traditional drugs Differences in health gains were measured as QALYs The clinical perspective Health improvement over preexisting care Specialty drugs tended to offer greater health gains than traditional drugs Specialty drugs accounted for13 of the 15 drugs offering the greatest health gains 4 4 Based on literature review and analysis of published data for 58 specialty drugs and 44 traditional drugs approved by the FDA for the period Chambers JD et al. Health Aff (Millwood). 2014;33(10):

29 3 Compared with traditional drugs, a higher percentage of specialty drugs offered substantial health gains 4 5 An incremental benefit of 6 months of QALY was achieved by 14 of 58 specialty drugs 2 of 44 traditional drugs Percentage of drugs achieving incremental QALY 0.5 Percentage of drugs achieving incremental QALY % Specialty 4.5% Traditional Based on literature review and analysis of published data for 58 specialty drugs and 44 traditional drugs approved by the FDA for the period Chambers JD et al. Health Aff (Millwood). 2014;33(10):

30 3 Oral oncology drug transforms outlook in patients with chronic myelogenous leukemia Initiation of Gleevec, a tyrosine kinase inhibitor, in patients with newly diagnosed CML Has prolonged median overall survival from 4 years to 20 years or longer 1 Number of QALYs Gleevec yielded 9 incremental QALYs vs traditional chemotherapy 2* Gleevec 6 Chemotherapy 9 * Interferon-α + low-dose cytarabine (IFN + LDAC). CML = chronic myelogenous leukemia. Gleevec (imatinib) is a registered trademark of Novartis Pharmaceuticals Inc Westin JR, Kurzrock R. Mol Cancer Ther. 2012;11(12): Reed SD et al. Pharmacoeconomics. 2008;26(5):

31 3 of specialty drugs in chronic conditions: Rheumatoid arthritis Biologics vs conventional synthetic disease-modifying antirheumatic drugs Significant improvement with biologics in almost 20,000 patients studied Enhanced radiographic image Clinical outcome (efficacy) 1,2 * Percent improvement in tender and swollen joint counts Changes in additional measures, including pain and global assessments by patients and physicians Significant improvement with biologics in over 11,000 patients studied Functional outcome 1,3 Based on responses to a questionnaire that assesses an individual s ability to perform various categories of activities of daily living * Clinical outcome assessed using American College of Rheumatology (ACR) 20%, 50%, or 70% score for RA. Functional status assessed using the Health Assessment Questionnaire (HAQ). Findings shown here were reported by Zalesak et al in a systematic review of articles published after 1990 that reported clinical and functional outcomes for conditions treated with biologics for which traditional therapies were also available. 1. Zalesak M et al. Am J Manag Care. 2014;20(6): ACR score. Arthritis Self-Management Web site Accessed June 11, Maska L et al. Arthritis Care Res. 2011;63(S11):S4-S13.

32 3 of specialty drugs in chronic conditions: Multiple sclerosis Specialty drugs vs traditional therapies Effect on clinical outcome 1 Clinical improvement with specialty drugs in over 8,000 patients studied Clinical outcome Relapse rate Effect on functional outcome 1* Significant improvement with specialty drugs in about half of patients studied 8 of 14 studies (n = 4400) Neutral effect vs traditional agents in about half of patients studied 6 of 14 studies (n = 4500) * Based on score on Expanded Disability Status Scale (EDSS). Functional outcome 1,2 * Evaluated using a scale that scores disability status based on ability to walk Systematic review of articles published after 1990 that reported clinical and functional outcomes for conditions treated with specialty medications for which traditional therapies were also available. 1. Zalesak M et al. Am J Manag Care. 2014;20(6): Tarver ML. Kurtzke Expanded Disability Status Scale. Department of Veterans Affairs Web 48 site. Accessed June 11, 2015.

33 3 Hepatitis C: Traditional therapy vs treatment with novel therapies Specialty drugs offer promise of effective interferon-free therapy for HCV-infected patients Novel combination antiviral therapies have achieved sustained response rates In 83% to100% of patients treated 1 Side effect profiles are excellent and discontinuation rates are low 1 Duration of therapy and response may be influenced by individual patient characteristics 1 Traditional therapy with ribavirin + interferon Sustained responses seen in 40% to 75% of patients 2 High rates of toxicity and side effects associated with 10% to 20% discontinuation rate 3 Need for dose reduction in 20% to 30% of patients 3 1. Kowdley KV et al. N Engl J Med. 2014;370(3): Sulkowski MS et al. N Engl J Med. 2014;370(3): Manns MP et al. Gut ;55:

34 3 Looking at the cost of specialty medications in context: Business value Can the clinical benefits of these drugs be expected to create business value? What is the prevalence of conditions targeted by specialty medications within your employee population? Do these conditions negatively affect productivity through increased absenteeism, presenteeism, and/or disability? 50 Gifford B.The high costs of low prevalence diseases. IBI Research. September 2014.

35 3 Measures of productivity showed improvement * after 6-month therapy with a biologic Productivity gains in individuals with moderate-to-severe rheumatoid arthritis after 6 months of therapy with a biologic * Self-reported changes in work impairment versus baseline after 6 months of biologic therapy Baseline 6 months Overall work impairment 42% 25% Absenteeism 8% 2% Presenteeism 39% 24% * Compared with baseline. Mean WPAI scores. Prospective, observational study based on responses from 204 patients who initiated etanercept therapy between January 2009 and March 2010 (153 patients continued biologic therapy). The WPAI and a domestic productivity questionnaire were administered by telephone at 1, 2, 3, and 6 months. 52 Hone D et al. Arthritis Care Res (Hoboken). 2013;65(10):

36 4 to therapy is critical to achieving value Rates of adherence to specialty drugs Impact of good adherence in chronic conditions Impact of poor adherence in the setting of cancer Factors that influence adherence Impact of increases in cost sharing on adherence

37 4 The potential value of specialty drugs depends on good medication adherence Specialty medications can improve clinical outcomes and functional status and can even prolong survival 1,2 Poor adherence to specialty medications may lead to increased morbidity and even increased mortality 3 Potential consequences of poor adherence to specialty drugs Relapse or progression of disease 2,4 Exacerbation of symptoms and increased morbidity 4 Development of drug-resistant disease 4 Higher costs related to increased utilization of resources 5 Higher costs related to health-related loss of productivity 4 1. Zalesak M et al. Am J Manag Care. 2014;20(6): Dusetzina SB et al. J Clin Oncol. 2014; 32: Fendrick AM et al. Supporting consumer access to specialty medications through value-based insurance design. NPC Web site. Accessed December 13, Understanding and improving adherence for specialty products. IMS Web site Improving Specialty_Products_IMS_Health.pdf. Accessed March 26, Wu EQ et al. Curr Med Res Opin. 2010;26(1):61-69.

38 4 Chronic conditions: Good adherence to specialty drugs associated with lower medical costs Decrease in mean medical costs with good adherence over 1 year 1 HIV/AIDS $1239 Transplant $2577 Multiple sclerosis $2183 Immune inflammatory conditions $2091 Good adherence evaluated using the medication possession ratio (MPR) 1 MPR > 80% MPR > 90% Renal transplant (n= 2044) Immune inflammatory conditions (n= 7348) Multiple sclerosis (n= 3909) HIV/AIDS (n= 7842) MPR = The ratio of the number of days supply of medication divided by 365 days. 2 HIV/AIDS = Human immunodeficiency virus/acquired immunodeficiency syndrome. Retrospective study of relationship between adherence to specialty medications and medical costs using administrative pharmacy and medical claims and member eligibility data for over 21,000 individuals Smolskis J et al. Medical cost differences associated with adherence and nonadherence to specialty medications. Poster presented at AMCP Nexus J Manag Care Pharm. 2013;19(8): Understanding and improving adherence for specialty products. IMS Web site content/uploads/pdf/understanding_improving Specialty_Products_IMS_Health.pdf. Accessed March 26, 2015.

39 4 Cancer: Poor adherence to Gleevec leads to higher direct medical costs Total medical cost was almost $50,000 higher in patients with poor adherence (even though the cost of Gleevec was $17,000 lower) Total cost $107,341 Poor adherence $58,278 Good adherence ~$5 0,0 00 Poor adherence vs good adherence: Impact on costs over 1 year Higher inpatient costs: $44,498 vs $3758 Higher non-gleevec pharmacy costs: $5652 vs $2743 Higher outpatient costs: $34,097 vs $11,548 evaluated using the MPR Poor adherence = MPR < 85% Good adherence = MPR > 85% Mean: 52% (n=242) Mean: 97% (n= 350) MPR is the total days supply of Gleevec during the 12 months following the first prescription divided by 365 days. Direct medical costs paid by insurer inflated to 2008 dollars. Study evaluated adherence to Gleevec and its association with medical costs and resource use using medical claims data for 592 commercially insured patients with chronic myelogenous leukemia (study period: January 2002 to July 2008). 58 Wu EQ et al. Curr Med Res Opin. 2010;26(1):61-69.

40 4 Consumers beliefs and attitudes can influence adherence to specialty drugs Perceived lack of efficacy Lack of understanding of the role of diseasemodifying therapy during asymptomatic phases For example, when patients expect rapid and/or dramatic relief Patients (for example, those with multiple sclerosis) may discontinue therapy when their symptoms improve or their disease goes into remission Understanding and improving adherence for specialty products. IMS Web site content/uploads/pdf/understanding_improving Specialty_Products_IMS_Health.pdf.Accessed March 26, 2015.

41 4 The consumer cost-sharing burden is an important determinant of adherence When out-of-pocket (OOP) costs increase, patients are more likely to discontinue their medication Impact of OOP cost >$50/week vs OOP cost <$50/week Patients with rheumatoid arthritis were 58% more likely to stop therapy with TNF blockers For every $10 increase in the weekly OOP cost The likelihood of stopping therapy increased by 8% TNF = tumor necrosis factor. 61 Curkendall S et al. Arthritis & Rheum. 2008;59(10):

42 4 Chronic conditions: Increases in cost sharing can affect likelihood of beginning treatment OOP cost Rate of drug abandonment: Newly diagnosed rheumatoid arthritis (TNF blocker) 5% 11% 26% < $100 $101 $150* >$500* Rate of drug abandonment: Newly diagnosed multiple sclerosis (Biologic) OOP cost 6% 27% 29% < $100 $201 $250* >$500* Cost-sharing values depicted above represent values associated with a significant increase in drug abandonment. Abandonment = Failure to start therapy. OOP = Out-of-pocket. * P < vs < $100. Retrospective analysis of prescription abandonment of newly prescribed TNF blocker or MS therapy using claims data from over 10,000 commercially insured members of a managed care organization for the period from July 2006 through June Gleason PP et al. J Manag Care Pharm. 2009;15(8):

43 4 Cancer: Patients are less likely to start therapy when faced with high out-of-pocket costs 1 in 10 patients overall failed to initiate therapy with a newly prescribed oral cancer agent OOP cost Rate of drug abandonment: Newly prescribed oral cancer agent 6% 12% 25% < $100 $201 $250* >$500 Cost-sharing values depicted above represent values associated with a significant increase in drug abandonment. * P =0.004; P <0.001 vs <$100. Study examined data from a national pharmacy claims database for 10,508 patients with prescriptions for oral cancer agents between 2007 and Cost sharing and abandonment of newly initiated oral cancer therapy were examined for 8 oral agents: capecitabine, erlotinib, imatinib, lapatinib, lenalidomide, sorafenib, sunitinib, and temozolomide. 63 Streeter SB et al. J Oncol Pract. 2011;7(3S):46s-51s.

44 4 Consumers in plans with specialty tiers are more likely to be responsible for coinsurance $ Percentage of consumers with different types of cost-sharing responsibility (pharmacy benefit) 1 * Tier 1 Co-payment 85% Coinsurance 11% Tier 2 Tier 3 Tier 4 (Specialty tier) 22% 25% 39% 49% 73% 77% Co-payment = defined, fixed-dollar payment for prescriptions. 2 Coinsurance = Consumer pays a fixed percentage of the cost of a prescription drug. 2 *Percentages may not add up to 100% because a very small proportion of plans (1% to 9%) have different cost-sharing arrangements. 1. Employer Health Benefits Annual Survey. KFF Web site. -employer-health-benefits-survey-full-report. 65 Accessed March 12, Robinson JC. Health Aff (Millwood). 2010;29(11):

45 4 How would the increasing use of coinsurance in specialty tiers affect employees? $ $ $ In plans with specialty tiers, consumers face an average coinsurance responsibility of 29% 1 What is the potential impact for an employee who is a candidate for specialty drug therapy?* $3000 x 0.29 $870 Average monthly cost of specialty drug therapy 2 Average specialty-tier coinsurance1 Average consumer cost-sharing responsibility per month (Some plans have a maximum cost-sharing cap. 1 ) *Hypothetical example. 1. Employer Health Benefits Annual Survey. KFF Web site. Accessed March 12, Prescription Drug Benefit Cost and Plan Design Report. PBMI Web site. = Accessed March 10, 2015.

46 4 Key takeaways Good adherence to specialty drugs is critical if employers are to realize the potential business value of specialty drugs Poor adherence can increase overall medical costs and health-related lost productivity 1,2 can be negatively affected by increases in cost sharing When cost-sharing responsibility increases, consumers are Less likely to fill a new prescription 3 More likely to discontinue existing therapy 4 The increasing use of specialty drug tiers puts consumers at risk for a substantial financial burden 5 What factors influence adherence? 1,6 Patients expectations and attitudes about the potential role of therapy Drug-related side effects and the complexity or inconvenience of treatment regimens Consumer cost-sharing responsibility 1. Understanding and improving adherence for specialty products. IMS Web site. Specialty_Products_IMS_Health.pdf. Accessed March 26, Wu EQ et al. Curr Med Res Opin. 2010;26(1): Gleason PP et al. J Manag Care Pharm. 2009;15(8): Curkendall S et al. Arthritis & Rheum. 2008;59(10): Employer Health Benefits Annual Survey. KFF Web site. Accessed March 12, UnitedHealth Center for Health Reform & 68 Modernization. UnitedHealth Group Web site.

47 149 PP-PCA-USA Pfizer Inc All rights reserved. Printed in USA/November 2015