First DMD Drug Will Cost About $300,000, Be New Therapy for Specialty Pharmacies

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1 Volume 13, Number 10 October 2016 News and Strategies for Managing High-Cost Specialty Products 3 Contents Prime Examines Drug Use Across Different Autoimmune Conditions 4 Competition, Transparency Could Help Counter High Drug Prices CVS Exec Defends Stance, Says Change Adheres to CMS Policy New FDA Specialty Approvals Express Scripts Executive Calls for Vigorous Biosimilar Market Under Pressure, Community Cancer Clinics Are Closing COA Report Examines Changing Landscape of Cancer Care First DMD Drug Will Cost About $300,000, Be New Therapy for Specialty Pharmacies The FDA recently approved the first drug to address the underlying problem in Duchenne muscular dystrophy. The decision followed an extremely contentious process within the agency, and manufacturer Sarepta Therapeutics, Inc. still needs to conduct trials confirming the effectiveness of Exondys 51 (eteplirsen). The condition is one new to specialty pharmacies, as the standard of care prior to this approval was oral corticosteroids. And at least one major health plan has said it considers the drug investigational and will not provide coverage, which will run approximately $300,000 per patient per year. On Sept. 19, the FDA granted accelerated approval to Exondys 51 in people with Duchenne muscular dystrophy who have a confirmed mutation of the DMD gene that is amenable to exon 51 skipping. The FDA gave the drug fast track designation, priority review and orphan drug status. It also received only the seventh rare pediatric disease priority review voucher that the FDA has issued. Exondys 51 represents an important new treatment option for patients with specific forms of DMD, says Stephen Cichy, founder and managing director of Monarch Specialty Group, LLC. This is the first new biologic treatment that s approved by the FDA for this condition. Although the drug won t cure DMD, it has the potential to slow progression, which is exactly the same outcome desired for many other biologics approved for treatment of other conditions such as multiple sclerosis, rheumatoid arthritis and many forms of cancer. continued on p News Briefs Cigna Expands Collaborative Care Program Don t miss the valuable benefits for SPN subscribers at AISHealth. com searchable archives, back issues, Hot Topics, postings from the editor, and more. Log in at www. AISHealth.com. If you need assistance, customerserv@aishealth.com. Managing Editor Angela Maas amaas@aishealth.com Executive Editor Jill Brown Director, Databases and Directories Susan Namovicz-Peat Through Oncology Agreement With NYUPN Having had success with its collaborative care deals with large primary care provider groups, Cigna Corp. continues to expand these arrangements to more specialized groups such as oncologists. Earlier this month it unveiled its latest Cigna Collaborative Care agreement with the NYUPN Clinically Integrated Network. The value-based initiative will include using evidence-based guidelines and tracking the quality and cost of care for Cigna members. University Physicians Network and NYU Langone Medical Center came together to form the clinically integrated network known as NYUPN, which consists of more than 2,000 physicians. Cigna already had a large physician group collaborative arrangement with NYUPN that went into effect July 1, explains E. David Perez, M.D., New York-New Jersey market medical executive for Cigna. The agreement with NYUPN s oncology practice started Oct. 1. We were eager to enter a collaborative arrangement with NYUPN s oncology practice because of their industry leadership and because we already have a very successful collaborative arrangement in place with NYUPN s large physician group practice. In fact, it is Cigna s largest value-based partnership in the New York market, he tells SPN. continued Published by Atlantic Information Services, Inc., Washington, DC An independent publication not affiliated with insurers, vendors, manufacturers or associations

2 2 Specialty Pharmacy News October 2016 Cigna Collaborative Care is Cigna s approach to achieving better health, affordability and experience, working with health care professionals across the care delivery spectrum, including large and small physician groups, specialist groups and hospitals, says Perez. The initiative is only one approach contributing to the company s commitment to having 50% of payments in alternative payment models and 90% in value-based deals by Five specialties account for 57% of Cigna s medical spending: cardiology, gastroenterology, obstetricsgynecology, oncology and orthopedics. Cigna expanded the collaborative care program into oncology through a collaboration with Regional Cancer Care Associates LLC (RCCA) in May 2014 (SPN 5/15, p. 4). In July 2015, it added Florida Cancer Specialists & Research Institute and the following month unveiled a deal with Virginia Cancer Institute. Most recently, it expanded to three medical practices in August: Northwest Georgia Oncology Centers, P.C. in Atlanta, Oncology Consultants in Houston and Cedars-Sinai in Southern California (SPN 9/16, p. 12). With the NYUPN agreement, We anticipate that at least 100 Cigna customers per year will be eligible for this program, Perez says. Patients undergoing cancer treatment will have same-day appointment availability; Specialty Pharmacy News (ISSN: ) is published 12 times a year by Atlantic Information Services, Inc., th Street, NW, Suite 300, Washington, D.C , , Copyright 2016 by Atlantic Information Services, Inc. All rights reserved. On an occasional basis, it is okay to copy, fax or an article or two from SPN. But unless you have AIS s permission, it violates federal law to make copies of, fax or an entire issue, share your AISHealth.com subscriber password, or post newsletter content on any website or network. To obtain our quick permission to transmit or make a few copies, or post a few stories of SPN at no charge, please contact Eric Reckner ( , ext. 3042, or ereckner@aishealth.com). Contact Bailey Sterrett ( , ext. 3034, or bsterrett@aishealth.com) if you d like to review our very reasonable rates for bulk or site licenses that will permit monthly redistributions of entire issues. Contact Customer Service at or customerserv@aishealth.com. Specialty Pharmacy News is published with the understanding that the publisher is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Managing Editor, Angela Maas; Executive Editor, Jill Brown; Director, Databases and Directories, Susan Namovicz-Peat; Publisher, Richard Biehl; Marketing Director, Donna Lawton; Fulfillment Manager, Tracey Filar Atwood; Production Director, Andrea Gudeon Subscriptions to SPN include free electronic delivery in addition to the print copy, e-alerts when timely news breaks, and extensive subscriberonly services at that include a searchable database of SPN content and archives of past issues. To order an annual subscription to Specialty Pharmacy News ($583 bill me; $553 prepaid), call (major credit cards accepted) or order online at care and clinical advice after normal operating hours, including around-the-clock access to clinical triage staff; and access to an oncology care coordinator who will help patients and make sure their care is coordinated. According to Perez, The oncology care coordinator is a registered nurse who is employed by the NYUPN practice and helps ensure the consistent delivery of all care coordination model activities for the oncology program participants, including the coordination of oncology patients throughout the treatment process; facilitating access to care beyond standard practice hours when necessary; and helping the patient transition back to treatment by their primary care physician at the appropriate time. Cigna Is in CMS Oncology Care Model Cigna, explains Perez, is one of the participants in the CMS Oncology Care Model, which is scheduled to go into effect on Nov. 1, This is a new payment and delivery model designed to improve the effectiveness and efficiency of specialty care. Cigna s collaborative arrangements include care coordination fees paid up front, with any savings due to care intervention shared with our collaborative partner at the end of the performance year. We are thrilled to join forces with Cigna in an effort to further improve the cancer treatment experience for patients within our network, said Abraham Chachoua, M.D., associate director of Cancer Services at NYU Langone Perlmutter Cancer Center, in a statement. By bringing health plan and clinical resources together, we can ensure that our patients get services and support they need, during what can be a physically and emotionally challenging time. Cigna Collaborative Care initiatives support the medical practices commitment to follow evidence-based medicine guidelines for cancer care, as well as their push to expand access to care and clinical advice, says Perez. He confirms that the evidence-based guidelines are those of the National Comprehensive Cancer Network (NCCN). Approximately 1% of our customers at any given time are in active oncology treatment, accounting for approximately 13% of our total medical costs, Perez explains. We ve had much success with our collaborative care arrangements for large primary care physician groups, and are now applying that successful model to drive similar improvements in quality and cost of cancer treatment. This includes helping to decrease ER visits and the need for inpatient care. When asked about outcomes data from the other Cigna Collaborative Care oncology agreements, Perez responds that these are still fairly new relationships EDITORIAL ADVISORY BOARD: Al Heaton, Pharm.D., Director of Pharmacy Management, UCare, Chris Nee, Pharm.D., President, PharMedQuest, Lee Newcomer, M.D., Senior Vice President of Oncology Services, UnitedHealthcare, Bill Noyes, Vice President, Health Information Policy, National Home Infusion Association, Nicholas Opalich, President and Chief Operating Officer, Western Operations, ProCare Rx, Elan Rubinstein, Pharm.D., Principal, EB Rubinstein Associates, Rebecca Shanahan, CEO, Avella Specialty Pharmacy, Debbie Stern, Senior Vice President of Strategy and Business Development, CareCore National, William Sullivan, Principal Consultant, Specialty Pharmacy Solutions, LLC, David Willcutts, President and General Manager, Integrated Home Care, Univita Health

3 October 2016 Specialty Pharmacy News 3 our first oncology collaborative arrangement was formed with RCCA, in New Jersey, in May We will be in a better situation to evaluate outcomes as these relationships mature. Contact Perez through Phil Mann at phil.mann@ cigna.com. G Prime Examines Drug Use Across Different Autoimmune Conditions Payers consistently rank the autoimmune specialty therapy class at the top of their specialty drug spend categories. But oftentimes these rankings are based solely on pharmacy data. This siloed approach that doesn t consider the medical benefit data is giving an incomplete picture of these high-cost drugs, shows a recent study. Armed with comprehensive medical and benefit data across specific indications and specific drugs, Prime Therapeutics LLC is talking to manufacturers about pursuing indication-specific arrangements. The data was presented as a poster at the Academy of Managed Care Pharmacy Nexus 2016 the first week of October. We intentionally looked at [the autoimmune specialty drug class] because it s one of the highest drug spend classes, explains Pat Gleason, Pharm.D., director of health outcomes at Prime Therapeutics LLC and co-author of the poster. In terms of annual spending on specific drugs, Enbrel (etanercept) and Humira (adalimumab) are almost always up there. And Remicade (infliximab) is one of the top expenses in the medical benefit. The firm wanted to see what the trend for the class has been, and the study looked at 14 specialty drugs from 2012 to 2015 among a 4.4 million patient population, of which 27,341 used an autoimmune specialty therapy during those four years. The study broke down the specialty drug-treated autoimmune categories into Crohn s disease, ulcerative colitis, psoriasis, psoriatic arthritis, ankylosing spondylitis, juvenile idiopathic arthritis and rheumatoid arthritis. Prime wanted to leverage our integrated medical and pharmacy data in order to provide proof of concept to show we have the capability to understand the entire trend landscape, including which benefit the costs are coming from, Gleason tells SPN. Researchers found that there was a 38.8% increase in the number of people using these drugs, from 16,247 in 2012 to 22,543 in But payments for these treatments rose 102.7% over those four years, from $360 million to $729 million, an increase of $6.74 per member per month to $13.66 PMPM. In 2012, the class itself made up 8.1% of total drug costs across the medical and pharmacy benefits, rising to 9.9% last year. We were somewhat surprised at the doubling of per-member per-month costs from Another important finding is that 25% of the expenditures are coming through the medical benefit, says Gleason. If you re not looking at the medical benefit, you re missing one-quarter of the drug spend. The study also broke down drug use by indication, and Gleason notes that for inflammatory bowel disease, which consists of Crohn s disease and ulcerative colitis conditions that have a lot of medical spend due to their high use of Remicade you re missing half the spend if you only look at the pharmacy benefit. Looking solely at the pharmacy benefit doesn t seem to be the best way to manage these drugs, says Gleason, although that s what some companies in fact do. Our goal is to understand where the spend is and where the trend is. Class Is $1 of Every $10 of All Drugs This drug class is about $1 of every $10 of all drugs, says Gleason. The only other class that s kind of like that is diabetes, which also is $1 of every $10 of all drugs. Taking the two classes together represents $1 of every $5. If we understand where our expenses are, we can optimize the use of medications. Of the $13.66 PMPM spent on the class overall, researchers found that 26% of that was spent on the two inflammatory bowel disease conditions, 32% on psoriasis and psoriatic arthritis and 34% on rheumatoid arthritis. Another finding was with Enbrel and Humira only one-third of the spend for these drugs is in rheumatoid arthritis, notes Gleason. People often assume these are just rheumatoid arthritis drugs, which is a common misperception. The study revealed that Crohn s and ulcerative colitis actually had high Humira use. Over the four years, there was a 38.8% increase in utilization, points out Gleason, so essentially a 10% increase year over year. The remaining 60% increase in PMPM costs was primarily driven by inflation. There clearly is an increase in utilization, but there were also substantial price increases over the four years. The increased utilization could be due to a couple of factors, including just the fact that more therapies are available, as well as a movement to use specialty autoimmune drugs earlier in the course of treatment. Now that Prime has this comprehensive information on the autoimmune class, we are pursuing creating an indication-based formulary, says Gleason. We are talking with pharmaceutical manufacturers to show them the comprehensiveness of our medical data. At Prime, we have that capability [to look across both the Get instant pharmacy benefit news! Follow SPN at:

4 4 Specialty Pharmacy News October 2016 medical and pharmacy benefits], but others do not. So now we re seeing if companies have interest in Prime preferring their products. Prime has asked its pharmacy and therapeutics committee to determine how many therapies each condition needs and what do we need to cover by name? We re dealing with a diverse list of autoimmune conditions. The category now also includes an additional specialty drug, Taltz (ixekizumab), which was approved in March 2016, after the study time frame, as well as biosimilar versions of three drugs: (1) Inflectra (infliximab-dyyb), a biosimilar Remicade approved in April (SPN 4/16, p. 1); (2) Erelzi (etanercept-szzs), a biosimilar Enbrel approved in August (SPN 9/16, p. 9); and (3) Amjevita (adalimumab-atto), a biosimilar Humira approved last month (see brief, p. 6). Contact Gleason through Denise Lecher at denise. lecher@primetherapeutics.com. G Competition, Transparency Could Help Counter High Drug Prices Competition within the pharmaceutical space, including through biosimilars, will help mitigate high drug prices, agreed speakers from across the pharma industry at a recent conference in Washington, D.C. And while issues such as implementing price controls and reducing patent expiration periods were raised, all agreed that those were not steps to be taken immediately, if at all. The Sept. 15 event, Solving for the Rising Cost of Complex Drugs, was sponsored by Express Scripts Holding Co. America s at a crossroads. Scientific discovery has never been greater. The pipeline is full of great drugs, which are coming onto the marketplace at a tremendous pace, said Steve Miller, M.D., senior vice president and chief medical officer for Express Scripts, in his opening remarks. But the challenge is they are coming out at prices never seen before. In the U.S., we are spending $400 billion per year on medications, and by 2018, that will have increased to more than $500 billion, he told attendees, adding that half of those drugs are consumed by people with rare and unmet needs. There is a problem with sustainability. Get SPN to others in your organization. Call Bailey Sterrett to review AIS s very reasonable site license rates , ext Carl Cannon, Washington bureau chief of RealClear- Politics, interviewed Rep. Xavier Becerra (D-Calif.) for the initial session. Asked why drug prices in the U.S. are higher than in other countries, Becerra said four things tend to drive up prices: patient demand, cost of innovation, middlemen in the supply chain and lack of competition in drug classes. Rep. Calls on Pharma to Police Itself He called for more oversight at the congressional level and greater transparency into what s making prices rise. Becerra said he hopes the pharmaceutical industry realizes something needs to be done and will work with us before some kind of legislation is imposed upon it. If you don t want me to pass a law impacting your industry, show me you re doing something about bad actors such as Martin Shkreli, ex-ceo of Turing Pharmaceuticals LLC, which purchased the toxoplasmosis agent Daraprim (pyrimethamine) and then hiked up its price from $13.50 to $750 per capsule overnight. As more Americans get frustrated by Turing Pharmaceuticals and drug prices going up 5,000%, this will force change, he maintained. The free market always has parasites, and Shkreli is one of them. Asked what Hillary Clinton would do were she to be elected president, Becerra said, My sense is she ll tell the pharmaceutical industry, Tell me there are no Shkrelis in your neck of the woods, or she ll step in. According to Becerra, the regulatory environment does cause difficulty for competition, which can be helped by provid[ing] the FDA with the resources it needs instead of constantly shifting its budget. Cannon also interviewed Rep. Bill Johnson (R-Ohio), who called for policies that will stimulate innovation, specifically free-market solutions, not price controls. He pointed to Medicare Part D as being one example of a free-market solution that s worked so well but deemed transparency more of a Band-Aid approach. Johnson also called for competition, which could be helped by get[ting] the backlog [at the FDA] eliminated in the generic arena. The lack of competition is what s driving prices up, he maintained. During a panel discussion, Mona Chitre, M.D., chief pharmacy officer and vice president for workplace wellness at Excellus BlueCross BlueShield, said that specialty drugs are the hottest topic in our organization. Two percent of our population is driving 20% of our trend. Specialty medications are part of every stakeholder s conversation. Demand constraints on pricing have been drastically reduced, said Paul Ginsburg, Ph.D., director of the center for health policy at the Brookings Institution. While patients have access to medications, it s an unsus- Copyright 2016 by Atlantic Information Services, Inc. All rights reserved. Please see the box on page 2 for permitted and prohibited uses of Specialty Pharmacy News content.

5 October 2016 Specialty Pharmacy News 5 taking a more dramatic step such as implementing price controls. One way to do this, he said, would be giving manufacturers less patent exclusivity. There is a lot we can do to foster competition. But Durham argued that for the biopharmaceutical industry, those intellectual property rights are its life blood, and it would be a mistake to take away or reduce this patent protection. Right now it s just over two years until a brand drug has competition. In the end, the best thing is to let the market work, maintained Merritt. If you re going to look at fixing programs, let s look at fixing ones that are broken. Perhaps we need a budget [for the FDA] that s much, much bigger, as well as new thinking on how the FDA works and what its job is, Merritt said. If the FDA could get on the market new competitors, that would be huge. There is a tremendous opportunity with biosimilars bringing about competition, said Chitre, but the FDA still has guidance to offer around interchangeability. She noted, though, that at issue in some situations will be how do we determine the value proposition when there are 14 drugs on the market in one therapeutic class, and a 15th one is approved. Asked about compartainable pricing environment. It used to be that when a drug came out at a high price, it stayed there. Drugs are not priced based on R&D costs. These are for-profit companies, and they price their products to maximize their profits. Dan Durham, executive vice president for health policy at the Biotechnology Innovation Organization, called for FDA rules that allow biopharmaceutical companies to go and talk to health plans earlier in order to provide them with pharmacoeconomic data that will help the plans budget for drugs. When asked about PBMs profiting from the way the system is organized, as Mylan N.V. CEO Heather Bresch has claimed, Mark Merritt, president and CEO of the Pharmaceutical Care Management Association, said the idea that rebates cause high drug prices is ridiculous. He echoed the oft-heard contention that the key to bringing down costs is competition. He pointed to hepatitis C drug Sovaldi (sofosbuvir), which had competitors relatively quickly, bringing down costs by as much as 50% (SPN 1/15, p. 1), but he noted that not every situation is like that. The real dollars are in the drugs that have monopolies, pointed out Ginsburg. We need to do everything we can to make those markets more competitive before CVS Exec Defends Stance, Says Part D Change Adheres to CMS Policy A white paper released in late August called out CVS Health for a change to the company s Medicare Part D pharmacy network that will be effective Jan. 1. One of the firm s executives recently commented to SPN about his response to the report s claims, which he said are overblown and do not adhere to CMS regulations. At the beginning of next year, CVS will terminate dispensing physicians from its Medicare Part D networks, due to a new interpretation of existing Medicare Part D regulations, says the report, titled Pharmacy Benefit Managers Attack on Physician Dispensing and Impact on Patient Care: Case Study of CVS Caremark s Efforts to Restrict Access to Cancer Care. The white paper was prepared by Frier Levitt, LLC for the Community Oncology Alliance. The report contends that putting limits on physician dispensing of outpatient medications will disrupt the care of tens of millions of patients with cancer (SPN 9/16, p. 12). The white paper claims that Federal law protects dispensing physicians and physicianowned pharmacies against termination from Medicare networks, and that CMS clearly requires that Part D sponsors comply with the Medicare Any Willing Provider requirements. A PBM s refusal to contract with any provider that is willing to comply with their terms and conditions is a violation of these Federal statutes. However, CMS itself says that to be in a Part D network, you must be licensed as a pharmacist, a fact CVS discovered through a regulatory review, explains Alan Lotvin, M.D., executive vice president, CVS Specialty, CVS Health. He tells SPN that the vast minority single-digit percentages is the number of prescriptions being impacted by not allowing in-house physician dispensing. So it s a little disingenuous that they re saying this is impacting care for so many people. He says there is an easy solution for those physicians who will be excluded from the network: If they want to become licensed as a pharmacist and come back into the network, they can do that, says Lotvin. View the white paper at zacarka. Contact Lotvin through Christine Cramer at Christine.Cramer@CVSHealth.com. Subscribers who have not yet signed up for Web access with searchable newsletter archives, Hot Topics, Recent Stories and more should click the blue Login button at then follow the Forgot your password? link to receive further instructions.

6 6 Specialty Pharmacy News October 2016 ative-effectiveness studies, she said, We re always looking at real-world analyses. Our ultimate goal is to make sure patients have access, Chitre said. She called for more competition, including through biosimilars; ensuring products clinical value by letting experts review products and show comparative evidence ; and making sure policies around drugs are sound. When patents are extended by adding an XR, for extended release, or CR, for controlled or continuous release acronyms she said many refer to as extended revenue and continued revenue where is the value proposition for these products? She asserted NEW FDA SPECIALTY APPROVALS u September 15: The FDA approved Shire plc s Cuvitru (immune globulin subcutaneous [human], 20% solution) for treatment of primary immunodeficiency in adults and children at least two years old. The drug is administered by subcutaneous infusion, with frequency varying from daily up to every two weeks. The company says people will have fewer infusion sites and shorter infusion rates compared with conventional subcutaneous immune globulin treatments. Visit u September 19: The FDA granted accelerated approval to Sarepta Therapeutics, Inc. s Exondys 51 (eteplirsen) to treat people with Duchenne muscular dystrophy (DMD) with a mutation of the dystrophin gene amenable to exon 51 skipping. The injectable is the first product approved for the lifethreatening DMD, which is the most common type of muscular dystrophy and primarily affects boys (see story, p. 1). The FDA gave the drug fast track designation, priority review and orphan drug status. It also received only the seventh rare pediatric disease priority review voucher that the FDA has issued. The annual price for Exondys 51 will be around $300,000. Visit u September 23: The FDA approved Amgen s Amjevita (adalimumab-atto) for the treatment of seven inflammatory conditions: moderate to severe rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, moderate to severe Crohn s disease, moderate to severe ulcerative colitis, moderate to severe plaque psoriasis and moderate to severe polyarticular juvenile idiopathic arthritis. The drug is a biosimilar version of AbbVie, Inc. s Humira (adalimumab), which was first approved in the U.S. in It s unclear when Amjevita will launch, as Amgen and AbbVie are involved in patent litigation. Humira dosing is weight-based and differs also depending on the indication. According to website GoodRx, one carton with two 40mg/0.8ml pens of Humira costs more than $4,000 with a coupon. Visit u September 23: The FDA expanded the label of Ilaris (canakinumab) to include the treatment of three types of periodic fever syndromes: tumor necrosis factor-receptor associated periodic syndrome, hyperimmunoglobulin D syndrome/ mevalonate kinase deficiency and familial Mediterranean fever. The FDA already had approved the Novartis Pharmaceuticals Corp. injectable for the treatment of two other inflammatory conditions. Dosing is weight-based and differs depending on the condition being treated, but annual costs generally are more than $100,000. Visit u September 26: The FDA granted an additional indication to Stelara (ustekinumab) for the treatment of moderately to severely active Crohn s disease in people at least 18 years old who have failed or could not tolerate treatment with immunomodulators or corticosteroids but not tumor necrosis factor blockers or who have failed or couldn t tolerate one or more TNF blockers. The agency already has approved the Janssen Biotech, Inc. infusible to treat plaque psoriasis (SPN 10/09, p. 6) and psoriatic arthritis (SPN 10/13, p. 10). Recommended dosing for Crohn s is an initial weight-based intravenous infusion and then a 90 mg subcutaneous injection every eight weeks. GoodRx lists the price of one 45 mg/0.5 ml as more than $8,900 with a coupon. Visit u September 28: The FDA expanded the label of Orkambi (lumacaftor/ivacaftor) to include treatment of children with cystic fibrosis who are between the ages of 6 and 11 and have two copies of the F508del mutation. The agency already had approved the Vertex Pharmaceuticals Inc. tablet for use in patients at least 12 years old (SPN 7/15, p. 6). Dosing for the pediatric population is two tablets of Orkambi 100 mg/125 mg every 12 hours. GoodRx lists the price for 112 tablets of the higher 200 mg/125 mg dose as more than $20,000 with a coupon. Visit Call to receive free copies of other AIS newsletters, including Health Plan Week, AIS s Value-Based Care News, Drug Benefit News and Medicare Advantage News.

7 October 2016 Specialty Pharmacy News 7 that there are many places we can go [to manage high drug prices] before government control. Durham also asserted that there s a lot of misinformation out there on what s driving premiums. Citing Avalere Health, he said hospital costs are responsible for much more of the increase than drugs are (SPN 8/16, p. 10). That analysis found that based on proposed rate filings in nine states, prescription drugs will make up only 14.3% of premium increases next year, while outpatient spending was responsible for 29.9% of 2017 rate increases. It s not prescription drugs costs that are driving premiums, he said. It s hospitals. He also pointed out that we re not seeing 50% coinsurance on specialty surgery, but we are seeing it on breakthrough therapies. It s penny wise and pound foolish to have a higher coinsurance on drugs that can keep people out of the hospital and a lower coinsurance on hospitalizations, agreed Chitre. View a video of the conference at com/zmnss5f. G Portions of this article were excerpted from the Sept. 23 issue of SPN sister publication Drug Benefit News. Visit the MarketPlace at for more information. Express Scripts Executive Calls For Vigorous Biosimilar Market A recent conference in Washington, D.C., brought together multiple stakeholders from the health care industry to discuss how to counter the growing costs of pharmaceuticals (see story, p. 4). The Sept. 15 event, Solving for the Rising Cost of Complex Drugs, was sponsored by Express Scripts Holding Co. Following the conference, SPN spoke with Steve Miller, M.D., senior vice president and chief medical officer for Express Scripts, on some current industry trends. Here are his thoughts: On biosimilars: Although the FDA has approved four biosimilars so far, only one, Zarxio (filgrastim-sndz), has launched (SPN 9/15, p. 8), as brand manufacturers have filed numerous patent litigation suits against biosimilar manufacturers. Express Scripts has estimated that a biosimilar Remicade (infliximab) could bring about $17 billion in savings over its first decade on the U.S. market (SPN 12/14, p. 1). A U.S. district court recently ruled that the second approved biosimilar, Inflectra (infliximab-dyyb), which is a Remicade biosimilar, could come onto the market no sooner than Oct. 3 (SPN 9/16, p. 1), but as of SPN press time, it had yet to launch. At the time of the FDA s approval, though, a spokesperson for Pfizer Inc., which will market the drug in the U.S., told SPN that while launch timing will ultimately depend on a number of factors, we are moving ahead with the preparation of our launch plans for I believe pharmaceutical companies are doing everything they can to get these products to the marketplace, says Miller. Having a vigorous biosimilar market is in the best interest of the marketplace. We ve got to move past that point of tying up launches in litigation. Pharma companies will hopefully back down from all the lawsuits (SPN 9/16, p. 9). In the long run, we all want innovative products, but we need to be able to afford them. According to Miller, When generic statins came out, they freed up a ton of money to pay for new treatments. A vigorous biosimilar marketplace is crucial for the sustainability of our system. Miller also addressed the issue of biosimilar names. In August 2015, the FDA, in guidance titled Nonproprietary Naming of Biological Products (80 Fed. Reg , Aug. 28, 2015), proposed that both reference products and biosimilars share nonproprietary names indicating the core substance, but that each product has a four-letter, FDA-designated suffix attached with a hyphen that is unique to each product but otherwise has no meaning (SPN 9/15, p. 1). This would apply to biologics already on the U.S. market, as well as ones yet to launch. A randomly generated suffix has the potential to lead to confusion among physicians and pharmacists, he says, and confusion could hamper biosimilars uptake. We have a safe and effective drug dispensing system in which every drug has a unique NDC [i.e., National Drug Code]. When a drug is dispensed, you grab the NDC, but a big hole is in doctors offices, where they don t record the NDC. But this is an easy fix, and it makes for a safe system, and it allows us to use the INN [International Nonproprietary Name] system already in place. Since 1952, the World Health Organization has overseen a globally recognized system that develops INNs based on active pharmaceutical ingredients a process that the FDA has followed, but, if it finalizes the proposed guidance, will break from. The FDA is ready to do this and can do this, says Miller, adding that most of the delays are not at the FDA. They re in the courts. continued AIS s Rx Benefit Data Detailed Data, News and Insight on Prescription Drug Benefit Parameters of Health Plans See an Interactive Demo and Subscribe Now at Subscribers who have not yet signed up for Web access with searchable newsletter archives, Hot Topics, Recent Stories and more should click the blue Login button at then follow the Forgot your password? link to receive further instructions.

8 8 Specialty Pharmacy News October 2016 On Mylan N.V. CEO Heather Bresch s contention that the pharma supply chain is one of the problems that led to the EpiPen (epinephrine) price controversy: The supply chain was not responsible for raising the price of EpiPen, maintains Miller, who says he was a bit shocked at the comments. Bresch is in full control of the situation and could just lower the price. Why did we drive the price of hepatitis C drugs down 50% if the PBM was interested in raising drug prices, he asks. Every action you see us take is to lower high prices. It s like blaming Wal-Mart for the price of a Coke. On drugs in the pipeline that payers should track: Drugs to treat nonalcoholic steatohepatitis (NASH) may hit the market in a couple of years, he says. And if you think there are a lot of people with hepatitis C, there are probably five times more patients that suffer liver disease from NASH. We ve been talking to our plan sponsors, which are hopeful we ll have something to treat Alzheimer s. And the PCSK9 inhibitors Repatha (evolocumab) and Praluent (alirocumab) which launched last summer with annual price tags north of $14,000 (SPN 8/15, p. 1; 9/15, p. 10) are undergoing clinical trials for use as primary prevention. The current labels are narrow, notes Miller, but if they expand their indications, this could be an enormous cost driver. Contact Miller through David Whitrap at (314) G Under Pressure, Community Cancer Clinics Are Closing, Being Acquired Community oncology clinics continue to close down, and the rate at which this is occurring is increasing, according to a new report from the Community Oncology Alliance (COA). Also rising is the number of practices acquired by hospitals and the number that have merged or been acquired by a corporate entity. The 2016 Community Oncology Practice Impact Report, which is the sixth COA has issued, covers the period from January 2008 through September The newest report shows the rate at which clinics are closing increased 87% since the prior report, issued in October Since 2008, 380 practices have closed, an increase from 172 in the first report, published in July 2010 (see table, p. 9). In addition, 609 clinics have been acquired by hospitals, up from 544 in the 2014 report and the 224 reported in And 157 have merged or been acquired by a corporate entity, an increase from the last report s 149 and the first report s 102. COA spokesperson Nick Ferreyros tells SPN that it can be difficult to nail down how many community oncology practices exist, as it can depend upon how the way practices are classified, as well as the churn within the space. That said, we have estimated that there are about 5,000 oncologists in the community setting, he says. Florida had the most clinic closures with 37, followed by Texas at 36 and Michigan with 34. Pennsylvania led all states in the number of clinics acquired by hospitals with 49, followed by Ohio with 37 and Florida with 33. Florida also led, with 49, in the number of practices merged or acquired by another entity, with Texas having 27 and California 15. The number of clinics that say they are struggling financially is down to 390 from 395 in the previous report but still an increase from the 323 reporting this in the initial report. And 45 said they are sending all of their Medicare patients somewhere else for chemotherapy treatment, down from the 46 reporting this in the prior study and up slightly from the 44 in the first report. Reimbursement Rates Present Challenge In a survey by the Berkeley Research Group (BRG) commissioned by COA and released in March 2015, community oncology practices said drug reimbursement rates was the No. 1 very important or extremely important challenge threatening the ongoing viability of their practices, with 98% citing this. Other top challenges were reimbursement rates for chemotherapy administration, at 90%, and costs associated with regulatory compliance, at 87%. Among the practices surveyed, 33% were in serious discussions with hospital systems over acquisitions and with other practices over mergers. Among these practices, 56% cited declining reimbursement, 48% cited a need to decrease costs, and 44% cited increased competition as the primary reasons for considering a merger or acquisition. More than 65% of respondents also said that drug pricing available to hospitals through the 340B Drug Purchasing Program was a primary contributor in the shift in site of care from physician offices to hospital outpatient departments. According to a COA-commissioned paper released in April, the shift in the site of care for infused chemotherapy from physician offices to hospital outpatient departments has meant extra per-person per-year (PPPY) costs for both Medicare and commercial plans. If the site of service distribution was the same in 2014 as in 2004, the average PPPY cost in 2014 for actively treated chemotherapy patients would have been about $51,900 per Medicare beneficiary receiving infused chemotherapy Call Bailey Sterrett at , ext for rates on bulk subscriptions or site licenses, electronic delivery to multiple readers, and customized feeds of selective news and data daily, weekly or whenever you need it.

9 October 2016 Specialty Pharmacy News 9 instead of the $56,000 observed (7.5% lower cost) and $89,900 in the commercial population instead of the $95,400 observed (5.8% lower cost), said the report, titled Cost Drivers of Cancer Care: A Retrospective Analysis of Medicare and Commercially Insured Population Claim Data and prepared by Milliman. For 2014, we estimate that Medicare spending would be about $2 billion lower if the infused chemotherapy site of service shift had not occurred. And although CMS had not yet unveiled the Medicare Part B Drug Payment Model (81 Fed. Reg , March 11, 2016) when the survey was conducted, oncologists and hospital outpatient departments are among the top three entities expected to experience the most revenue loss (SPN 4/16, p. 1). Phase I of the twopart proposed program would test changing the addon payment to the average sales price (ASP) of a drug (SPN 3/16, p. 1). Currently these drugs are reimbursed at ASP +6%, but the proposal would change the add-on payment to 2.5%, plus a $16.80 per-drug per-day flat fee payment. This test would begin later this year, no earlier than 60 days after the final rule is published. The second phase of the proposed payment model would begin on or after Jan. 1, It would test one or more value-based purchasing strategies, such as indication-based pricing or reference pricing. The proposal has received significant pushback from a wide range of stakeholders (SPN 6/16, p. 8). We are witnessing the dismantling of the best cancer delivery system in the world when the Cancer Moonshot calls for the exact opposite, said Ted Okon, executive director of COA, in a statement when the impact report was released. It is no coincidence that this aligns perfectly with the enormous growth of the 340B program and misguided government experiments that continually ratchet down reimbursement. Policymakers should be alarmed at the real world impact D.C. has had on community oncology, and particularly think twice about the proposed CMS Part B experiment on cancer care. This must stop before it is too late. As the Baby Boomers age and the number of survivors increases every year, lives depend on a strong community cancer care system. View the report at G FDA Approves Duchenne Therapy continued from p. 1 This is a huge win for the patient community, asserts Matt Mackenzie, an analyst with Decision Resources Group. Muscular dystrophy consists of a group of genetic diseases in which people lose muscle mass and strength over time. DMD is the most common form of the condition, and Exondys 51 targets those with a mutation of the DMD gene that is amenable to exon 51 skipping about 13% of the Duchenne patient population, or about 1,000 to 1,500 patients in the U.S., says Kendra Curry, Pharm.D., corporate director of specialty infusion programs at Option Care. Mackenzie explains that Duchenne is a progressive disease, which usually leads to a loss of ambulation in the second decade of life, following by declining heart and lung functions. People with the condition usually die in their 40s. The annual price for Exondys 51 will be around $300,000, which actually is less than what some analysts had predicted it would be. The drug will be available in a 2 ml vial, which will cost $1,600, and a 10 ml vial, which will be $8,000, according to Sandy Mahatme, Sarepta s senior vice president and chief financial officer, who disclosed the information during a Sept. 19 conference call, according to Seeking Alpha. The per-patient per-year cost is pretty much in line with other ultra-orphan therapies, such as cystic fibrosis treatments Kalydeco (ivacaftor) and Orkambi (lumacaftor/ivacaftor), says Mackenzie. He points out, though, that dosing is weight-based, and the annual cost is based on an average weight of 25 kg per patient, or about 55 pounds. It s likely that younger patients will cost signifi- COA Report Examines Changing Landscape of Cancer Care 7/23/10 3/31/11 4/4/12 5/25/13 10/21/14 8/23/16 % Increase Since 2008 Per Month Average Clinics Closed % 3.62 Struggling Financially % 3.71 Sending Patients Elsewhere % 0.43 Acquired by Hospital % 5.80 Merged or Acquired % 1.50 Totals 865 1,042 1,254 1,338 1,447 1,581 83% 15.1 SOURCE: Community Oncology Alliance, 2016 Community Oncology Practice Impact Report, released October View the report at www. communityoncology.org. Web addresses cited in this issue are live links in the PDF version, which is accessible at SPN s subscriber-only page at

10 10 Specialty Pharmacy News October 2016 cantly less, but in older patients, costs will increase, he says, noting that patients are usually diagnosed at 5 years old. The presence of new drugs like Exondys 51 for the treatment of complex disease in today s specialty pharmacy market is often a double-edged sword, says Cichy, in that patients gain access to a viable new treatment option, but at an extremely high cost. In this case, it s fairly well recognized that corticosteroids don t work especially well with this patient population, and so the availability of treatment with Exondys 51 is likely a real step forward. With any high-cost, complex medication in today s market, we re likely to see the primary managed care response to Exondys 51 to be prior authorization. Prior-use/step-therapy requirements aren t likely to present a major market access barrier for this drug due to the generalized lack of alternatives. The distribution channel set-up for Exondys 51 may be its biggest watch-out, with potential site-of-care challenges (owing to the fact this drug is administered via intravenous infusion requiring once weekly dosing) and cost-payer reimbursement issues (including potential impact on patient out-of-pocket costs). Anthem Will Not Cover Therapy Mackenzie tells SPN that he believes insurance companies will cover Exondys 51. Despite the high cost, I think the drug will have broad coverage, mostly due to the severity of the disease and lack of other treatments. But apparently the drug s approval does not guarantee that every payer will cover it. On Oct. 6, Anthem Inc. unveiled its medical policy on Exondys 51, which deems the product investigational and not medically necessary for all indications, including but not limited to the treatment of Duchenne muscular dystrophy. At Aetna, Inc., As with all new FDA approved products, we are conducting a full clinical review of Exondys 51 (eteplirsen) to determine our clinical coverage policy, spokesperson Trasee Carr tells SPN. Exondys 51 will be covered under the medical benefit with prior-authorization requirements at United- Healthcare, confirms spokesperson Lynne High. And Cigna Corp. covers Exondys 51 for the treatment of Duchenne muscular dystrophy in patients who have a confirmed mutation of a specific section of the DMD gene, spokesperson Karen Eldred tells SPN. Because Exondys 51 received accelerated approval by the FDA, a definitive clinical benefit of the drug has not yet been established. We will continue to follow the clinical trials of Exondys 51 to ensure that this new drug is delivering value to Cigna s customers and clients for the money they are spending. Playing a role for the first time in managing DMD will be specialty pharmacies. The previous treatment was oral corticosteroids, which people don t need to go to a specialty pharmacy to get, says Mackenzie, but simply a retail pharmacy. For the 13% of patients eligible for Exondys 51 treatment, the drug will shift the treatment paradigm. While initial infusions likely will occur in physician offices, it is likely that patients could transfer to home infusion administration, says Cichy. Depending on Sarepta s supply chain, it s also possible that Exondys 51 could see utilization through physician clinics, hospital outpatient or ambulatory treatment centers, in the same manner that drugs like Remicade or Tysabri are commonly serviced. The treatment setting will depend on the provider, says Curry. This is a chronic therapy that patients are on long term. To go in once per week for infusions is a lot to ask, especially if a patient is in a wheelchair. Due to this drug s need for high-touch, high-skilled nursing and pharmacy support together with its onceweekly dosing schedule, it s reasonably likely that we ll see home infusion pharmacy emerge as an important new player in the approach to care for DMD, says Cichy. Home infusion hasn t really played a role yet in this disease, and the commercial presence of Exondys 51 may represent a real shift in the means in which patients and physicians access medication for this condition. Disease Is New to Specialty Pharmacies According to Cichy, This is a new disease state for the specialty pharmacy industry. The patient population is somewhat less traditional than what specialty pharmacies typically see with other chronic and life-threatening diseases like multiple sclerosis, rheumatoid arthritis and oncology. The prevalence of DMD resembles that of hemophilia. Also, new patients are typically young with an average age of diagnosis for DMD at/around age 5. Specialty pharmacy services for Exondys 51 will need to focus on clinical infusion support, clinical monitoring and addressing the likely commercial payer challenges of drug cost and reimbursement. This also means limited Medicare involvement. Curry maintains that other than the disease state itself, administering infused biologic therapies safely to pediatric patients is in the realm of what we do. Anytime you re providing infusion therapy, you need to monitor patients throughout the infusions, including checking their vitals and making sure they re tolerating the treatment. In fact, Option Care is one of the contracted providers of the drug. We re working to develop a very comprehensive program that includes working closely Copyright 2016 by Atlantic Information Services, Inc. All rights reserved. Please see the box on page 2 for permitted and prohibited uses of Specialty Pharmacy News content.