Innov Innovations nova nov vat ations in Oncology gy Mana gy anagement an agem ag gement
Volume 2 • Number 2
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Specialty Pharmacy Services: An Overview for Oncology Practices
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he term “specialty drug” refers to high-cost, high-touch STAKEHOLDER PERSPECTIVE medications for patients with diseases such as cancer, multiple sclerosis, rheumatoid arthritis, and other chronic or Understanding Specialty Pharmacy rare conditions.1,2 Specialty drugs are typically complex to manuDistribution: The Oncology Practice facture and often require special handling and administration; they Perspective .................................. 6 may be challenging for providers to manage and may necessitate An Interview with Dawn Holcombe, ongoing clinical support to facilitate proper administration and B:8.375” MBA, FACMPE, ACHE, President, adherence.3,4 The specialty pharmacy model requires ongoing DGH Consulting, South Windsor, CT; T:8.125” communication and collaboration among providers, patients, and Executive Director, Connecticut Oncology S:7.625” payers, and is designed to deliver services in a coordinated, Association, South Windsor, CT patient-centric manner.2 Between 2000 and 2010, an increasing number of oral oncology agents began to enter the market, and by 2011 oral drugs represent- cialty pharmacy model became increasingly popular and was ed approximately 35% of cancer medications in the pipeline.5 At embraced by payers as a way to control cost and access.7 In addithat time, the majority of cancer care was provided in the commu- tion, manufacturers found that specialty pharmacies offered an nity setting. Accustomed to managing office-administered chemo- effective way to manage product inventory.7 They also offer a therapy agents, the majority of community oncology practices were variety of support services to patients, with the goal of improving unfamiliar with the process of prescribing and obtaining drugs that patient outcomes, and may carry out functions typically associated are covered under the pharmacy benefit.5 Likewise, conventional with retail pharmacies or home infusion agencies.2,8 retail pharmacy chains were ill-prepared to stock oral oncology According to the National Comprehensive Cancer Network agents, and were not set up to deliver the counseling that often Specialty Pharmacy Task Force, the primary goals of specialty pharaccompanies these medications.5 macies are to ensure the appropriate use of medications, maximize Responding to this unmet need, specialty pharmacies––original- drug adherence, enhance patient satisfaction through direct interacly established to distribute hemophilia therapies to patients’ tion with healthcare professionals, minimize cost impact, and optihomes––began to distribute oncology drugs.5,6 Over time, the spe- mize pharmaceutical care outcomes and delivery of information.9
Editor’s Note Welcome to Innovations in Oncology Management™, a newslet- practice managers and other healthcare professionals understand ter series that provides concise, up-to-date information on current how specialty pharmacy providers work, as well as the advantages issues that are impacting the business of oncology. Developed for and disadvantages associated with their use. As specialty pharmaoncology practice administrators, administrative staff, advanced cy distribution becomes more commonplace—especially for oral practice clinicians, and oncology pharmacists, our second news- oncology drugs—oncology practices, clinics, and institutions will letter in this second series focuses on specialty pharmacy services. need to consider how best to take advantage of some of the valThe past decade has seen a surge in the number of oral oncolo- ue-added support services that specialty pharmacies offer. gy drugs coming on the market. Medical practices, hospitals, and We hope you enjoy this newsletter and find it to be a valuable their patients are increasingly obtaining these specialty drugs resource for your practice. Previous newsletters have explored a through specialty pharmacy providers. To make informed deci- variety of topics and can be found by visiting www.innovations Patients, Science, are thethat foundation everything sions for their practicesand and Innovation patients, it is essential oncology of inoncologymanagement.com.
we do. At Celgene, we believe in an unwavering commitment to medical innovation, from discovery to development. Our passion is relentless—and we are just getting started. Supported by funding from Celgene Corporation and Celgene Patient Support. Manufacturer did not influence content.
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Innovations in Oncology Management
Volume 2 • Number 2
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Specialty Pharmacy Services: An Overview for Oncology Practices
T
he term “specialty drug” refers to high-cost, high-touch medications for patients with diseases such as cancer, multiple sclerosis, rheumatoid arthritis, and other chronic or rare conditions.1,2 Specialty drugs are typically complex to manufacture and often require special handling and administration; they may be challenging for providers to manage and may necessitate ongoing clinical support to facilitate proper administration and adherence.3,4 The specialty pharmacy model requires ongoing communication and collaboration among providers, patients, and payers, and is designed to deliver services in a coordinated, patient-centric manner.2 Between 2000 and 2010, an increasing number of oral oncology agents began to enter the market, and by 2011 oral drugs represented approximately 35% of cancer medications in the pipeline.5 At that time, the majority of cancer care was provided in the community setting. Accustomed to managing office-administered chemotherapy agents, the majority of community oncology practices were unfamiliar with the process of prescribing and obtaining drugs that are covered under the pharmacy benefit.5 Likewise, conventional retail pharmacy chains were ill-prepared to stock oral oncology agents, and were not set up to deliver the counseling that often accompanies these medications.5 Responding to this unmet need, specialty pharmacies––originally established to distribute hemophilia therapies to patients’ homes––began to distribute oncology drugs.5,6 Over time, the spe-
STAKEHOLDER PERSPECTIVE Understanding Specialty Pharmacy Distribution: The Oncology Practice Perspective................................... 6
An Interview with Dawn Holcombe, MBA, FACMPE, ACHE, President, DGH Consulting, South Windsor, CT; Executive Director, Connecticut Oncology Association, South Windsor, CT
cialty pharmacy model became increasingly popular and was embraced by payers as a way to control cost and access.7 In addition, manufacturers found that specialty pharmacies offered an effective way to manage product inventory.7 They also offer a variety of support services to patients, with the goal of improving patient outcomes, and may carry out functions typically associated with retail pharmacies or home infusion agencies.2,8 According to the National Comprehensive Cancer Network Specialty Pharmacy Task Force, the primary goals of specialty pharmacies are to ensure the appropriate use of medications, maximize drug adherence, enhance patient satisfaction through direct interaction with healthcare professionals, minimize cost impact, and optimize pharmaceutical care outcomes and delivery of information.9
Editor’s Note Welcome to Innovations in Oncology Management™, a newsletter series that provides concise, up-to-date information on current issues that are impacting the business of oncology. Developed for oncology practice administrators, administrative staff, advanced practice clinicians, and oncology pharmacists, our second newsletter in this second series focuses on specialty pharmacy services. The past decade has seen a surge in the number of oral oncology drugs coming on the market. Medical practices, hospitals, and their patients are increasingly obtaining these specialty drugs through specialty pharmacy providers. To make informed decisions for their practices and patients, it is essential that oncology
Supported by funding from Celgene Corporation and Celgene Patient Support. Manufacturer did not influence content.
practice managers and other healthcare professionals understand how specialty pharmacy providers work, as well as the advantages and disadvantages associated with their use. As specialty pharmacy distribution becomes more commonplace—especially for oral oncology drugs—oncology practices, clinics, and institutions will need to consider how best to take advantage of some of the value-added support services that specialty pharmacies offer. We hope you enjoy this newsletter and find it to be a valuable resource for your practice. Previous newsletters have explored a variety of topics and can be found by visiting www.innovations inoncologymanagement.com.
PUBLISHING STAFF Senior Vice President/Group Publisher Nicholas Englezos nenglezos@the-lynx-group.com Vice President/Group Publisher Russell Hennessy rhennessy@the-lynx-group.com Publisher Cristopher Pires cpires@the-lynx-group.com Vice President/Director of Sales & Marketing Joe Chanley jchanley@the-lynx-group.com Director, Client Services Zach Ceretelle zceretelle@the-lynx-group.com Senior Editorial Director Dalia Buffery dbuffery@the-lynx-group.com Editorial Director Anne Cooper acooper@the-lynx-group.com Copyeditor Hina Khaliq Senior Production Manager Lynn Hamilton The Lynx Group President/CEO Brian Tyburski Chief Operating Officer Pam Rattananont Ferris Vice President of Finance Andrea Kelly Human Resources Jennine Leale Director, Strategy & Program Development John Welz Director, Quality Control Barbara Marino Quality Control Assistant Theresa Salerno Director, Production & Manufacturing Alaina Pede Director, Creative & Design Robyn Jacobs Creative & Design Assistants Lora LaRocca Wayne Williams Content Marketing Director Samantha Weissman Web Content Manager Anthony Trevean Content Digital Manager Allison Musante Digital Programmer Michael Amundsen Jr Digital Media Specialist Charles Easton IV Meeting & Events Planner Linda Mezzacappa Senior Project Manager George Fuller Project Managers Deanna Martinez Jeremy Shannon Project Coordinator Rachael Baranoski IT Manager Kashif Javaid Sales Assistant Aadam Mohamed Administrative Assistants Sara Mohamed Colette Puhalski Office Coordinator Robert Sorensen Engage Healthcare Communications, LLC 1249 South River Road - Ste 202A Cranbury, NJ 08512 phone: 732-992-1880 fax: 732-992-1881
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EDITOR’S NOTE Welcome to Innovations in Oncology Management ™ ..............................1
FEATURE Specialty Pharmacy Services: An Overview for Oncology Practices .......1
STAKEHOLDER PERSPECTIVE Understanding Specialty Pharmacy Distribution: The Oncology Practice Perspective An Interview with Dawn Holcombe, MBA, FACMPE, ACHE, President, DGH Consulting, South Windsor, CT; Executive Director, Connecticut Oncology Association, South Windsor, CT ......................................................6
MISSION STATEMENT Oncology healthcare requires providers to focus attention on financial concerns and strategic decisions that affect the bottom line. To continue to provide the high-quality care that patients with cancer deserve, providers must master the ever-changing business of oncology. Innovations in Oncology Management™ offers process solutions for members of the cancer care team—medical, surgical, and radiation oncologists, as well as executives, administrators, and coders/billers—including patient financial support services, health policy legislation, and emerging payment models.
Innovations in Oncology Management™ is published by Engage Healthcare Commu nications, LLC, 1249 South River Road, Suite 202A, Cranbury, NJ 08512. Copyright © 2015 by Engage Healthcare Communications, LLC. All rights reserved. Innovations in Oncology Management is a trademark of Engage Healthcare Communications, LLC. No part of this publication may be reproduced or transmitted in any form or by any means now or hereafter known, electronic or mechanical, including photocopy, recording, or any informational storage and retrieval system, without written permission from the publisher. Printed in the United States of America. The ideas and opinions expressed in Innovations in Oncology Management do not necessarily reflect those of the editorial board, the editors, or the publisher. Publication of an advertisement or other product mentioned in Innovations in Oncology Management should not be construed as an endorsement of the product or the manufacturers’ claims. Readers are encouraged to contact the manufacturers about any features or limitations of products mentioned. Neither the editors nor the publisher assume any responsibility for any injury and/ or damage to persons or property arising out of or related to any use of the material mentioned in this publication. Postmaster: Correspondence regarding subscriptions or change of address should be directed to CIRCULATION DIRECTOR, Innovations in Oncology Management, 1249 South River Road, Suite 202A, Cranbury, NJ 08512. Fax: 732-992-1881.
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Figure Specialty Pharmacy Distribution Model
Drug Procurement
Drug Dispensing/Administration Prescription for oral anticancer agents, self-injectible medications, etc.
Drug Manufacturer
Oncology Care Team
Specialty Pharmacy
Wholesale or Specialty Distributor
Montitoring for adherence, outcomes, etc.
Clinical services • Assessment • Monitoring • Patient education • Etc. Dispensing functions • Mail-order • Community pickup
Patient Dispensed to patient
Source: Schwartz RN, et al. NCCN Task Force Report: specialty pharmacy. J Natl Compr Canc Netw. 2010;8(Suppl 4):S1-S12. Reprinted with permission from JNCCN––Journal of the National Comprehensive Cancer Network.
Various organizations, including managed care plans and manufacturers, may enter into arrangements with specialty pharmacies to distribute oncology drugs. In 2015, more than 80% of managed care organizations reported contracting with specialty pharmacy providers for their oncology business, and 51.4% reported using a single, preferred specialty provider for all but limited-distribution drugs.10
Specialty Pharmacy Services
In the traditional community pharmacy distribution model, pharmacists dispense medications to patients after receiving paper or electronic prescriptions from a licensed prescriber.9 In the majority of cases, pharmacies receive payment directly from the patient (via copayments or coinsurance) and/or third-party payers (via predetermined reimbursement rates) through the patient’s insurer.9 In the specialty pharmacy model, the pharmacy acts as a center of care by interacting directly with the providers, patients, and payers on a routine basis (Figure).9 In addition to dispensing medications, specialty pharmacies offer a range of support services to patients, including the following8,9: • Patient- and caregiver-directed education regarding self-administration, potential side effects, and other informational resources • Medication therapy management, including evaluation of medication efficacy, side-effect management, and encouraging medication adherence through prescription refill reminders
• Collection of medical necessity information and other documentation required to obtain prior authorization from payers • Customer support call centers or hotlines for product-specific inquiries or reimbursement support services • Help in accessing patient support services • Coordination with providers regarding changes in treatment and dosing • Drug utilization data collection and analysis, and measurement of clinical and financial outcomes.
Management of Specialty Pharmacy Drugs
Reimbursement for specialty drugs can be challenging for practices and hospitals because of the high cost of therapies.8 A relatively small proportion of patients use specialty drugs, but the per-person costs can be high, ranging from several thousand dollars to more than $100,000 annually for the highest-cost drugs.3 Payers are closely monitoring their spending on specialty oncology drugs and are implementing multiple strategies designed to control utilization.4,11 Clinical pathways, prior authorization requirements, and the mandated use of certain specialty pharmacies are becoming more common, especially for oral cancer drugs.4 Among payers, the increasing popularity of formulary specialty tiers has resulted in increased cost-sharing for patients. Another strategy designed to eliminate waste and curb drug spending involves the
INNOVATIONS IN ONCOLOGY MANAGEMENT u 3
Table Leading Specialty Pharmacies and Parent Organizations, by Estimated Revenue, 2014 Specialty pharmacy Parent organization (type) CVS Caremark Specialty Pharmacy
CVS Health (national pharmacy chain)
Accredo
Express Scripts (pharmacy benefit manager)
Walgreens Specialty Pharmacy
Walgreens Boots Alliance (national pharmacy chain)
OptumRx
UnitedHealthcare (health plan)
BriovaRx
Catamaran (pharmacy benefit manager)
Prime Therapeutics Specialty Pharmacy
Prime Therapeutics (pharmacy benefit manager)
Advanced Care Scripts
Omnicare (senior care pharmacy)
RightSourceRx
Humana (health plan)
Aetna Specialty Pharmacy
Aetna (health plan)
Adapted with permission from Drug Channels. The top 10 specialty pharmacies of 2014. March 12, 2015. www.drugchannels.net/2015/03/the-top-10specialty-pharmacies-of-2014.html.
split-fill program, which fills only 50% of patients’ first 30-day fill to ensure that patients are adequately responding to and tolerating the drug before continuing treatment.4 Specialty pharmacies usually take on the assignment of benefits; that is, they bear the burden of obtaining reimbursement by billing the payer.4 Because specialty pharmacies are at risk for incurring pharmacy costs, they must verify insurance coverage and ensure that patients meet the payers’ formulary criteria before shipping the medications.4
Who Provides Specialty Pharmacy Services?
Medical practices, hospitals, and their patients are increasingly obtaining specialty drugs through specialty pharmacy providers. Many types of organizations provide specialty pharmacy services, often through subsidiaries of parent corporations.12,13 As a result, the relationships between commercial payers, pharmacy benefit managers (PBMs), drug wholesalers, and specialty pharmacies can be confusing to oncology providers who are accessing these services.12 Some specialty pharmacies, such as Diplomat and Avella, are independent providers.13 Other specialty pharmacies may be owned and operated by a managed care organization, large pharmacy chains, and/or PBMs. For example, CVS Caremark Specialty Pharmacy and Walgreens Specialty Pharmacy are business units of their respective parent pharmacy chain (Table).13 Accredo, the second largest specialty pharmacy provider by revenue in 2014, is owned by Express Scripts, a large PBM.13 Two other large specialty pharmacies, OptumRx and RightSourceRx, are owned and
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operated by UnitedHealthcare and Humana, respectively, national commercial payer organizations with members in all 50 states.13,14 Wholesalers such as McKesson (OncologyRx Care Advantage) and AmerisourceBergen (US Bioservices) also offer specialty pharmacy services through wholly owned subsidiaries.2 Hospitals and oncology practices may also dispense specialty drugs in the majority of US states; however, regulations vary from state to state, and some states require that each physician pay a licensing fee before they can dispense these drugs.15 A few states limit physician dispensing to a 72-hour or 7-day supply for patients with immediate needs who may not have easy access to a pharmacy.16
Specialty Pharmacy Distribution
Distribution of specialty drugs may vary based on how the drug is administered.9,12 For example, infused medications may be delivered via home infusion services or shipped directly to a provider or a provider’s pharmacy for administration to patients. Oral drugs and injectables for self-administration may be mail-ordered or distributed through retail pharmacy networks.9,12 Specialty pharmacy networks use several distribution models. Open networks offer a high level of accessibility and convenience to patients and providers but limited control to pharmaceutical manufacturers.4 Conversely, many specialty drugs are distributed through exclusive or limited distribution models, in which a manufacturer contracts with a single specialty pharmacy or a selected number of specialty pharmacies to oversee all drug distribution.2,4 Limited networks offer a high level of control to drug manufacturers and payers, ensuring that specialty drug distribution is restricted to appropriate patient populations; they also facilitate collection of patient use and distribution data, which is required by the US Food and Drug Administration for certain drugs.17 However, this process may be more time- and resource-intensive for practices, because they must call the specialty pharmacy provider, obtain precertification, and have the drug shipped, which can take several days, and may hinder timely patient access to therapy, particularly in urgent treatment situations.9 Some manufacturers set up specialty hubs to simplify distribution of drugs for patients and practices while maintaining a broad network of specialty pharmacy providers.4 In this model, the manufacturer’s hub determines the appropriate specialty pharmacy according to patients’ insurance carriers and directs the provider to that specialty pharmacy.4 To make informed decisions for their practices and patients, it is essential that oncology practice managers and physicians understand how specialty pharmacy providers work, as well as the advantages and disadvantages associated with their use. For drugs with limited or exclusive distribution, oncology practices must keep track of approved specialty pharmacies that are permitted to dispense each drug.18 If the practice or hospital has the capability to dispense specialty drugs in-house, they are required to follow individual state requirements regarding drug labeling, dispensing, inventory management, and record keeping.18 Depending on the situation, oncology practices may or may not have the option of using a specialty pharmacy provider. In some
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cases, the manufacturer will restrict drug access to a limited network of specialty providers.17 In other cases, commercial payers will mandate that a drug is obtained through a specialty pharmacy.12 If the payer or the PBM owns a specialty pharmacy, they may direct the practice to use their specialty pharmacy. Specialty pharmacy ownership may not be apparent to the practice, and can therefore be a source of confusion (Table).12 Voluntary versus mandatory use of a specialty pharmacy provider may vary by the patient’s benefit design.12 For example, for the same oral oncology drug, the use of a specialty pharmacy may be mandatory for patients with health maintenance organization coverage but voluntary for patients with preferred provider organization coverage.12 When oncology practices use specialty pharmacies, drugs may be shipped directly from the licensed pharmacy to a licensed physician, and patients can then pick up the oral or self-injectable drug or make an appointment to have the drug administered at the office; this practice is referred to as “white bagging.”19,20 However, this model presents several challenges for oncology providers, including proper storage, handling, and inventory control. In addition, liability issues may be associated with administering a drug that was not directly purchased by the practice or the institution.19,20 In other cases, the specialty drug is purchased through a specialty pharmacy but shipped directly to the patient, in a practice known as “brown bagging.”19,20 The patient is then responsible for self-administering the drug or bringing the drug to the provider for administration. Providers have raised concerns about patient safety with brown bagging, especially for office-administered drugs, because the pharmacist-to-clinician supply chain is broken. In addition, uncertainty remains about whether patients are complying with proper handling procedures.19,20 Regardless of the means of drug delivery, the use of specialty pharmacy providers must be coordinated through the patient’s health plan, and this process effectively removes providers from the responsibility of purchasing and billing for oncology drugs.12,20
Working with Specialty Pharmacies
Oncology practices and institutions may encounter numerous challenges in coordinating approval, dispensing, and drug delivery with specialty pharmacies.12 Typically, preauthorization or precertification is required for specialty drugs, and the provider must submit a medical order and supporting clinical information before the drug is dispensed. Because this information is not available to patients, practices must assume the onus of precertification and ordering.12 In addition, specialty pharmacy providers may arrange for a nurse or a home health aide to visit the patient’s home to administer the first dose of an injectable drug and provide training for subsequent self-injections; if the drug is not self-injectable, it may be administered at a physician’s office.12 Regardless of the specific situation, the practice or institution remains the hub of patient care and ultimately bears the responsibility for coordinating drug delivery and administration with specialty pharmacies and patients.12 As specialty pharmacy distribution becomes more commonplace—especially for oral oncology drugs—oncology practices,
clinics, and institutions will need to adapt. One way that oncology providers can offset the time and resource commitment and reduced revenue associated with specialty pharmacy distribution is to take advantage of the support services provided by these organizations.8,9 These services include patient education, reimbursement support, and financial assistance investigation, and are provided free of charge to providers. Although oncology providers may be reluctant to cede control and trust an outside organization to assist in providing these services, some practices have established good working relationships with a handful of specialty pharmacies and have successfully utilized their “value-added” support services. u
References
1. American Pharmacists Association. Specialty pharmacy. www.pharmacist.com/ specialty-pharmacy. Accessed May 6, 2015. 2. ONS:Edge. What do specialty pharmacies offer oncology nurses and their patients? 2014. www.onsedge.com/wordpress/wp-content/uploads/2014/08/ONSEdge-ACS-specialtypharmacy-white-paper.pdf. Accessed May 6, 2015. 3. UnitedHealth Group. The growth of specialty pharmacy: current trends and future opportunities. April 2014. UnitedHealth Center for Health Reform & Modernization. www.unitedhealthgroup.com/~/media/UHG/PDF/2014/UNH-The-Growth-OfSpecialty-Pharmacy.ashx. Accessed May 6, 2015. 4. Wang L, Tao T, Hamilton N, for Campbell Alliance. Turning tides: trends in oncology market access. www.campbellalliance.com/about/. Accessed May 6, 2015. 5. Goins RK. The oncology landscape: complexity, cost, care, and coordination. May 18, 2011. Pharmacy Times. www.pharmacytimes.com/publications/specialty-pt/2011/ May2011/The-Oncology-Landscape-Complexity-Cost-Care-and-Coordination. Accessed June 30, 2015. 6. Holcombe DG. Is oncology compatible with specialty pharmacy? Commun Oncol. 2005;2:173-181. 7. Suchanek D. The rise and role of specialty pharmacy. Biotechnol Healthc. 2005;2: 31-32, 34-35. 8. Steiber D, for Specialty Pharmacy Times. The new paradigm in specialty: payer formulary control? February 9, 2015. www.specialtypharmacytimes.com/publications/ specialty-pharmacy-times/2015/february-2015/The-New-Paradigm-in-Specialty-PayerFormulary-Control. Accessed May 6, 2015. 9. Schwartz RN, Eng KJ, Frieze DA, et al. NCCN Task Force Report: specialty pharmacy. J Natl Compr Canc Netw. 2010;8(Suppl 4):S1-S12. 10. Genentech. The 2015 Genentech Oncology Trend Report: Perspectives from Managed Care, Specialty Pharmacies, Oncologists, Practice Managers, and Employers. 7th ed. South San Francisco, CA: Genentech; 2015. 11. Daghlian M, for The Burrill Report. Payers target rising specialty drug spend. November 1, 2013. www.burrillreport.com/articlepayers_target_rising_specialty_drug_ spend.html. Accessed May 6, 2015. 12. Edwards AM. The oncology practice and specialty pharmacy providers: supporting patient and practice access for the future? Commun Oncol. 2010;7:309-313. 13. Drug Channels. The top 10 specialty pharmacies of 2014. March 12, 2015. www. drugchannels.net/2015/03/the-top-10-specialty-pharmacies-of-2014.html. Accessed May 6, 2015. 14. Namovicz-Peat S, Trompeter E. AIS’s Directory of Health Plans: 2015. Washington, DC: Atlantic Information Services, Inc; 2015. 15. Lederman L. Can practices successfully dispense oral anti-cancer agents in-house? Oncol Bus Rev. 2012;6. http://obroncology.com/obrgreen/print/Can-Practices-Success fully-Dispense-Oral-Anti-Cancer-Agents-In-House. Accessed May 7, 2015. 16. Munger MA. Emerging paradigms: physician dispensing. Oral presentation presented at: National Association of Boards of Pharmacy 110th Annual Meeting; May 17-20, 2014; Phoenix, AZ. 17. McCain J. Connecting patients with specialty products: part 2: the future of specialty drug distribution. Biotechnol Healthc. 2012;9:13-16. 18. Patton JF, Harwin WN, McCullough SW. Retail pharmacies within community oncology practices: a win-win for patients and practices. Commun Oncol. 2013;10:306308. 19. Pane FJ, for Pharmacy Practice News. White bagging: a new challenge for your hospital. December 2009. http://pharmacypracticenews.com/ViewArticle.aspx?d= Operations%2B%26amp%3B%2BManagement&d_id=53&i=December%2B2009 &i_id=587&a_id=14378. Accessed May 6, 2015. 20. The Advisory Board Company. The increasing role of specialty pharmacy in cancer care and how providers can respond. April 5, 2011. www.advisory.com/research/oncologyroundtable/oncology-rounds/2011/04/the-increasing-role-of-specialty-pharmacy-incancer-care-and-how-providers-can-respond. Accessed May 6, 2015.
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STAKEHOLDER PERSPECTIVE
Understanding Specialty Pharmacy Distribution: The Oncology Practice Perspective An Interview with Dawn Holcombe, MBA, FACMPE, ACHE, President, DGH Consulting, South Windsor, CT; Executive Director, Connecticut Oncology Association, South Windsor, CT
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o discuss the use of specialty pharmacy services, Innovations in Oncology Management™ recently spoke with Dawn Holcombe, President of DGH Consulting, and Executive Di- rector of the Connecticut Oncology Association, who brings 30 years of management experience in hospital, system, network, and physician practices. She is a former president of the Medical Group Management Association’s Administrators in Oncology/Hematology Assembly and a Fellow in the American College of Medical Practice Executives. In addition, she serves as the editor-inchief of Oncology Practice Management and is on the editorial advisory board for Value-Based Cancer Care.
Q
Q: During the past decade, we have seen a substantial increase in the number of oncology drugs distributed through specialty pharmacies. What has been the impact on practices and institutions that deliver cancer care? Dawn Holcombe (DH): Specialty pharmacy distribution has had a considerable impact on providers who deliver oncology care. Although there may be advantages for payers and manufacturers, specialty pharmacy distribution often creates an operational and financial burden for oncology practices. For example, in terms of distribution, there may be concerns about supply chain integrity, especially if the drug is dispensed and sent directly to the patient. Many oncology drugs are subject to very tight stability and temperature parameters. If an oncology drug is “brown bagged” to the patient or even “white bagged” to the office, the practice cannot be certain of how the drug was stored or handled when it was not in the practice’s possession. Regardless of the specific means of distribution, the practice remains accountable, safety concerns notwithstanding, and therefore assumes the risk for managing the patient. Oncology practices also have concerns about specialty pharmacies’ dispensing policies. Monetarily, specialty pharmacies are incentivized to dispense on a fixed schedule. However, sometimes patients do not tolerate their cancer therapies, and midstream adjustments may become necessary. Unfortunately, specialty pharmacies may not become aware of therapeutic changes until after the drug has been shipped. If the specialty pharmacy ships a 30-day supply of an expensive oral cancer drug that is poorly tolerated, then both the patient and the insurer are paying for drugs that ultimately are not used.
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Q: To what extent is limited specialty pharmacy distribution an issue for practices and institutions that deliver cancer care? DH: Although limited distribution may be advantageous for manufacturers, especially if their drugs are subject to stringent US Food and Drug Administration regulatory requirements (eg, Risk Evaluation and Mitigation Strategies), oncology practices may have a different perspective. When physicians and institutions are allowed to use their usual distribution channels to obtain specialty drugs, there is very little disruption. However, issues can arise when manufacturers decide to limit availability of specialty drugs to a few commercial specialty pharmacy vendors, because it may require that a whole new business relationship is set up between the practices and the dispensing vendors. In addition, limited specialty pharmacy distribution has led to several financial challenges, especially for hospitals that were forced to acquire oncology drugs outside of their typical processes, because they were no longer able to receive discounts that were offered by their usual distribution channels. As a result, the net cost of drugs rose substantially in some cases. From a broader perspective, oncology practices are concerned that payers may begin to financially incentivize patients to use preferred specialty pharmacy networks through higher copayments for using out-of-network pharmacies. This is already a common benefit design strategy for limiting access to certain medical providers, and it could be used to limit patient choices to pharmacy providers.
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Q: To what degree is in-office dispensing mitigating the impact of specialty pharmacy, especially in “any willing provider” states? DH: There is certainly a growing interest in in-office dispensing. The primary reason practices may prefer to dispense drugs is the ability it gives them to control all the aspects of the patient experience, including timely access to treatment, medication adherence monitoring, coordination of care, and patient satisfaction. Contrary to some beliefs, in-office dispensing is not a major revenue generator relative to overhead costs for many clinics and institutions; practices want to use in-office dispensing to improve the overall patient experience and the quality of care.
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Q
Q: From an oncology practice perspective, what are the advantages of choosing specialty pharmacy distribution for oncology drugs, when the option is available? DH: Oncology practices may be comfortable using certain specialty pharmacies with which they have developed a good working relationship. Practices seek a knowledgeable point of contact at the specialty pharmacy who can provide the answers they need in a timely manner. The specialty pharmacy must also demonstrate that they can dispense and ship oncology drugs reliably, accurately, and in a timely manner. Once a level of trust is established, it becomes much easier for the practice to work with a specialty pharmacy. In addition, there are cases when alternatives do not exist; in those cases, specialty pharmacy distribution may be the only viable option for patients to receive cancer drugs. There may also be circumstances where reimbursement policies in certain regions (from both public and private payers) have changed so significantly that the treating physician or cancer center cannot afford to buy the drug at the reimbursement level that has been set, and a specialty pharmacy may be the only option for patients getting the drug. Finally, because some specialty drugs are associated with considerable costs, ordering from a wholesaler and stocking the drug may put the practice in a financially precarious situation. In that case, the practice may rely on the specialty pharmacy to supply the drug.
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Q: Are practices taking advantage of the value-added services provided by specialty pharmacies? Why or why not? Which services are they using? DH: In my experience, there has been limited practice use of support services offered by specialty pharmacies. Some oncology practices are concerned about gaps in the continuity of care that may occur with the use of specialty pharmacy services. Specifically, practices are concerned about communication gaps that may take place when specialty pharmacies interact directly with patients without notifying the practice. If this occurs, it is nearly impossible for the practice to know whether its recommendations are aligned with what the specialty pharmacy is recommending to the patient. The lack of care coordination has been shown to result in avoidable complications, unnecessary inpatient admissions, and increased costs,1 and is a legitimate concern in oncology care and for the healthcare community at large. In order for practices to loosen the reins and use specialty phar-
macy services such as benefits investigation and prior authorization support, treating physicians must trust that the specialty pharmacy can perform these functions as reliably and efficiently as the practice or institution’s administrative staff. A specialty pharmacy that can effectively coordinate with practices and provide them with additional resources and education may provide considerable value to smaller practices with low margins and limited staff.
Q
Q: Do you have any other practical tips to offer colleagues about working with specialty pharmacies? DH: In my experience, successful, effective working relationships require a one-on-one relationship with a representative of the specialty pharmacy. The practice administrator or point person has vetted this person and knows who he or she is calling. Likewise, the specialty pharmacy knows who to call at the practice, and the relationship evolves over time.
Some oncology practices are concerned about gaps in the continuity of care that may occur with the use of specialty pharmacy services. The practice should be actively engaged in ensuring that there is 2-way communication between the physician and the specialty pharmacy about the patient, because problems tend to arise when the specialty pharmacy is a complete stranger to the treating physician. The bottom line is that the treating physician is the only one who has the patient’s medical records, and he or she is ultimately responsible for every aspect of the patient’s care. When patient care functions are delegated to external parties such as specialty pharmacies, it is still the practice’s responsibility to make certain that all parties are aligned through effective, coordinated communication, and we hope that this can be accomplished without an accompanying burden of resource utilization and additional costs to the payer, the patient, and the physician. u
Reference
1. Burton R, Coleman E. Health policy brief: improving care transitions. Health Affairs. September 13, 2012. www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=76. Accessed July 9, 2015.
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