The Evolving Role Of Prescription Benefit Managers

Transcription

1 The Evolving Role Of Prescription Benefit Managers Steve Miller, MD Senior Vice President & Chief Medical Officer November 1,

2 Prescription drugs: A growing share of U.S. healthcare spend Net spending increase ( ) 20% Rx coverage constitutes 19 % 11% of employer-based insurance benefits Health Care Prescription Drugs Source: The High Cost of Prescription Drugs in the United States, A. Kesselheim M.D., et al, JAMA 2016; 316(8):

3 Specialty Rx: Bigger piece of an increasing pie 30% 50% % 50% Specialty Traditional Source: Express Scripts research 3

4 Brand Rx inflation grows at unsustainable rate 164 % Increase in average price of brand medications since 2008 Source: 2015 Drug Trend Report 4

5 >7,000 potential drugs in development Pipeline Products by Therapeutic Area , ,256 1,813 1,329 Cancer Neurological Infectious Disease Immunology Cardiovascular Mental Health Diabetes HIV/AIDS Source: 2015 Profile Biopharmaceutical Research Industry, PhRMA 5

6 FDA new drug approvals keep climbing 6

7 FDA approves novel, but unproven Duchenne drug 7

8 Cost of drugs at introduction increases Source: Express Scripts research 8

9 $ Billions Generic savings opportunities declining $35 $214 Billion $30 $25 $20 $15 $10 $5 $0 9

10 Market conditions enable price spikes in generics Industry consolidation Limited production Pay to delay schemes Captive pharmacies New exclusivities 10

11 Anger over high cost continues to grow January 2014 September 2016 Source: Rebecca Robbins / STAT 11

12 What can a PBM do? 12

13 PHARMACY. SMARTER. SM Complex classes require holistic management CARE Risk Sharing VALUE Specialist Pharmacist Fair Drug Pricing Medication Adherence Holistic Management Utilization Management Pharmacy Practice Formulary Management Channel Management 13

14 Acting to improve health and financial outcomes Diabetes Hepatitis C Inflammatory Cancer High Cholesterol 14

15 HCV drugs: Price shock not felt round the world Harvoni $94,500 $84,000 Sovaldi (12-week cycle) $63,000 $57,000 $900 $900 U.S. U.S. Germany U.K. India Egypt Source: The Price Of Sovaldi and Its Impact On the U.S. Health Care System, Dec report prepared for the Committee on Finance, U.S. Senate 15

16 HEPATITIS CURE VALUE PROGRAM SM Delivering results Industry-leading adherence rate Risk sharing with adherence guarantee All patients have access, not just sickest Cured more people with hepatitis C than at any time in history $1B in savings for our book of business in

17 Today: Paying a fair price for Hep C medication Price at U.S. introduction (Net per course of treatment) Price in 2015 (Net per course of treatment) $94,500 $84,000 $52,280 $45,100 $50,400 $52,280 $44,520 $45,100 Harvoni Sovaldi Harvoni Sovaldi United States EU5 (Avg.) Source: IMS Institute for Healthcare Informatics July

18 Oncology Drug Spend Forecast (PMPM) Oncology cost continues to rise 44% S P E N D I N C R E A S E Cost drivers More patients More chronic therapy Expensive drugs Combination therapy 18

19 Monthly Price of Treatment (2014 $, log scale) Oncology drug prices surge since mid-1990s Monthly & Median Costs of Cancer Drugs at the Time of FDA Approval fold price increase Individual Drugs Median Monthly Price (per 5-year period) Year of FDA Approval 19

20 Price per life year gained ($1,000s of 2013 USD) Survival benefit outpaced by price inflation Price per life year gained versus approval date of cancer drugs Approval Date The best fit line is: Price per life year gained = $54,100 + $8,500 x Approval year. Approval Year = 0 for 1995, 1 for 1996, etc Source: David H. Howard, et al, National Bureau of Economic Research 20

21 Progression-Free Survival (PFS) Probability Overall Survival (OS) Probability One drug, two very different results Tarceva on Non-Small Cell Lung Cancer Tarceva on Pancreatic Cancer DOUBLES SURVIVAL (5.2 months) EXTENDS SURVIVAL ONLY 12 DAYS (0.4 months) Placebo median PFS: 5.2 Tarceva median PFS: Placebo median OS: 6.0 Tarceva median OS: Duration of Progression-Free Survival (in months) Overall Survival (in months) 21

22 ONCOLOGY CARE VALUE PROGRAM SM Pricing medication according to efficacy B A S E D O N I N D U S T R Y T H O U G H T L E A D E R S H I P M U LT I P L E I N D I C AT I O N FAC T O R S C O N S I D E R E D Steve Pearson, MD, MSc, FRCP President of Institute for Clinical and Economic Review Factor Factor Unique Attributes Factor Adverse Events Factor Clinical Outcomes Factor Factor Peter Bach, MD Director, Memorial Sloan Kettering s Center for Health Policy & Outcomes I N D E P E N D E N T F E E D B A C K O N C O S T B A S E D O N E F F I C A C Y FAIR INDICATION PRICING 22

23 ONCOLOGY THERAPEUTIC RESOURCE CENTER Specialized pharmacists provide expert care Deep clinical knowledge Breast/ ovarian cancer GI/GU cancer Hematologic disorders Pediatric cancers Lung cancer Physician outreach and clinical support Holistic approach to patient care Copay assistance Higher adherence Reduced waste 23

24 Inflammatory Spend Inflammatory conditions: Highest Specialty spend $200 2X $180 $160 $140 $120 $100 Actual Projected $3,036 average cost per prescription $80 $60 1. Source: 2015 Drug Trend Report % of patients are nonadherent 24

25 Biosimilars and new drugs will enable competition Rheumatoid arthritis Psoriasis & psoriatic arthritis Ankylosing spondylitis Crohn s disease & ulcerative colitis Taking a right patient, right drug approach 25

26 Segmenting the market to drive better pricing and patient outcomes Rheumatoid Arthritis Rheumatoid Arthritis-Like Dermatological GI Ankylosing Spondylitis Psoriatic Arthritis Juvenile Idiopathic Arthritis Psoriasis Crohn s Disease 1.5M 0.5M 0.6M 0.3M 7.5M 0.7M 0.7M Humira Enbrel Xeljanz Orencia Remicade Cimzia Simponi Actemra Kineret Rituxan Simponi Aria Humira Cimzia Enbrel Simponi Remicade Humira Otelza Remicade Cimzia Enbrel Simponi Stelara Humira Enbrel Actemra IV Orencia IV Remicade Kineret Humira Otezla Enbrel Cosentyx Stelara Taltz Remicade Humira Cimzia Remicade Ulcerative Colitis Humira Simponi Remicade I N T H E P I P E L I N E adalimumab baricitinib etanercept inflectra sarilumab Cosentyx etanercept Inflectra brodalumab Cosentyx etanercept inflectra Taltz N/A adalimumab brodalumab etanercept inflectra sarilumab inflectra Stelara IV Xeljanz inflectra Negotiation & indication-based pricing create competition 26

27 What can other stakeholders do? 27

28 Pharmaceutical companies Show better judgement in pricing Support biosimilars Reduce international price disparities Stop patent gaming 28

29 Federal government Better fund FDA Boost NIH research Reform patent system Adjust malpractice laws Bring cost into care equation 29

30 Payers Continue to provide coverage Rational benefit design Advocate for policy changes Work together for common cause 30

31 Takeaways 1 The rising cost of prescription drugs is unsustainable Managing Rx spend requires a holistic approach that improves both care and value PBM innovations are addressing the changing landscape for better outcomes Providing affordable, high-quality care means rebalancing innovation, policy and pharma ROI 31