Trend Drivers & Innovation in Pharmacy Benefit Management

Marly ArbuckleSpecialty Products & Affairs DirectorMedTrakRx

Today’s presenters

Kelly ChillingworthSenior Vice PresidentPharmacy Practice LeaderLockton

Sherry PateDirector - Human Resources Total Comp & HRISINTRUST Bank

What is a “carve-out”?Drug Companies –

Rx Rebates MTM VendorPharmacy Network

PBM Vendor-Carved Out

Client- ASO Employer Group

Member

Other insurance products

Medical Carrier (no Rx)

Homecare Vendor(s)

Drug Companies –Medical Rebates

MD / Provider Network

Why did INTRUST consider an Rx carve-out?

$1,138,214$1,186,350

$1,373,468

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

2015 2016 2017

Rx Expenses

Avg Members: 1,330 1,336 1,334Paid PMPM: $71.32 $73.99 $85.80

How did we get started?

• Turned to our consulting team• Clearly laid out our wish list, which included:

• Access to data• Transparency in terms of costs and rebates• Better understanding of rebates and the financial impact• Pro’s and Con’s of carving in vs. carving out• Disruption analysis• Cost management• Choosing a PBM that fits my needs

Benefits of Unbiased RFP Modeling

• Wide selection of PBM options, formularies, benefit designs• PBM Summit allows for face-to-face evaluation and trust building• Pros and cons of each vendor partner to accompany financials• Evaluate 100% historical claims to capture drug mix, channel and brand/generic

distribution• Apples-to-apples comparison of line items including:

• Rebate guarantees by channel (retail, mail, specialty)• Network discounts by channel• Administrative, dispensing, other fees by type• Implementation credits• Clinical savings guarantees

Cost vs. Value• Cost was very different from traditional drugs and “value” was the sales angle• Targeted therapies emerged with fewer side effects• Attention to rare and formerly underserved populations• Genetic testing to diagnose disease and treat “the right” patients• Cost of the drug can offset future medical costs• Gene therapies – are they truly curative? palliative?• Are the costs and payments sustainable?• Is the benefit exclusion of specialty or gene therapy drugs discriminatory?

• Helpful article: https://www.specialtypharmacytimes.com/news/something-has-to-give-balancing-specialty-drug-cost-with-value/P-1

7

Utilization and Cost Drivers

• Manufacturer drug pricing increases that potentially offset an increasing demand for rebates

• DTC (direct to consumer advertising) for specialty and non-specialty drugs

• An aging population• Drug innovation for rare

diseases• Improved diagnostics including

genetic testing for specific mutations

8

Source: 2018 PBMI Research Report

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

9

Member Cost Sharing

10

Source: 2018 PBMI Research Report

Member Impact - High Cost Drugs

11

• Increased member portion can result in non-adherence & treatment avoidance

• Fear of side effects & not understanding proper dosing and administration can compound non-adherence.

Coinsurance and Copay Cards

12

Source: 2018 PBMI Research Report

Application of appropriate utilization management strategies

Execution of specialty tiering & accumulator programs

Development of strategic programs

Focus on member & provider education

Successful execution of site-of-care management

Prior authorization & specialty pharmacy management

Case management through specialty pharmacy

Focus on member experience

Look for a PBM that understands the “Pain Points” of Plan Sponsors …..and provides solutions for them.

PBM SolutionsPossible Pain Points

Complex drug landscape

Costly medications

Disincentivizing tactics

Lack of education on new therapies

Inconsistent payment models

Waste and inappropriate use

Barriers to adherence

Poor customer service

Challenge: Complexities of Specialty Drug Space

Pipeline01• Targeted therapies• Gene therapies• Rare, orphan and ultra-orphan conditions• Oncology• Peanut allergy• $$$$$

Medical Drug Channel Management02• Reimbursement varies by site of care• Benchmark billing models vs. ambiguous “percent of charges”• Disparities that are 3-4x cost of the drug• Unnecessary spend under medical benefit• Lack of proper precertification

Copay Assistance Programs03• Members artificially meet deductibles and OOPs• Plans pay more earlier in plan year• Members don’t understand true cost of therapy

Biosimilars & Specialty Generics04• Patent protection• Lack of interchangeability• Perceived lack of efficacy• Brand loyalty• High-cost and lack of copay cards for specialty generics• Benefit design lack proper incentives

“How do I know if the therapy is

actually working?”

“How aremy members

doing?”

“Are they staying out of the hospital?”

“Can you show

savings?”

Challenge: Getting Basic Questions Answered

CLINICAL EFFECTIVENESS

ECONOMIC IMPACT

MEMBER EXPERIENCE

Across the industry, plan sponsors are adopting more clinical controls and Utilization Management (UM) tactics, but should be careful as not all approaches are created equal.

Designing with Customization – Finding the Balance

Maximizing, tracking & reporting copay assistance to reflect TROOP

& reduce overall plan costs

Copay Management

BIC Quarterly Reporting- Utilization & trends- Clinical management & outcomes- Patient-level, group-level reporting- Cost-avoidance interventions- Individual member success stories

Strategic selection vs. global adoption

Biosimilars & Specialty Generic Planning

- New-to-Market Hold- Precision PA- Program Development- Formulary

BIC SpecialtyRx

Infusion Channel Management program with site of care neutral payment

model

Medical & Rx Alignment

Proactive Approach: Sometimes your best defense is a strong offense

Internal Strategies External StrategiesSpecialty Drug Mgmt.

Hand-selected network to drive cost efficiences and improve

health outcomes

BIC Specialty Network

Specialized Patient centric Cost conscience Innovative Competitive Trustworthy Responsive Proactive Collaborative Holistic

EXTENSION OF THE BENEFIT

DEDICATION TO PLAN SAVINGS & COST-

AVOIDANCE

FOCUS ON MEMBER OUTCOMES

Best-in-Class SpecialtyRx Network

RFP Process Every 2 years

Review of Clinical Processes and Programs

Analysis of Discounts

Rigorous Interview Process

Member out-of-pocket costs are reduced

Copay assistance is tracked and reported

Plan pay amount per claim is reduced

Amounts vary, but plans can save an average of 20% per claim

Program is designed for non-HDHP plans with lower specialty tier copays

MedTrakRx manages drug list

MedTrakRx monitors available copay assistance

MedTrakRx has pre-designed specialty copay tiers

BIC Align Program

Specialty drugs are only utilized by less than 1% of members but contribute to nearly 45% of overall spend

Manufacturer copay assistance is available for most of the top-utilized specialty drugs (Hepatitis C, Inflammatory Conditions, MS, Oncology, etc.)

BIC Align maximizes available manufacturer copay assistance

Tracking Copay Assistance

Manufacturers offer approved patient

assistance programs

BIC SpecialtyRxNetwork pharmacies have

access to manufacturer assistance programs

Pharmacies connect members to programs that

reduce member OOP costs

Pharmacies track and report assistance to reduce overall plan

costs.

Result: Cost-Effective Specialty Drug Benefit

• Disease and drug specific• Balanced UM and formulary • Care Management best practices

• New patient assessments• Patient specific care pathways• Right Med at Right Time

• More efficient PA management• Dynamic plan design• SOP Customizations

• Auditable reporting• Risk profiling and gap closure• Specialty business reviews

The BIC SpecialtyRx Program expands beyond the clinical strategies within the PBM and leverages integration with the BIC SpecialtyRx Network to provide a cost-effect specialty drug benefit.

Condition-FocusedClinical Controls Individualized Care True Integration Meaningful Data

Focus on Member Experience

8secondsAverage Speed

of Answer

97%Member

Satisfaction for 6+ years

PBA Help Desk has direct and immediate access to all functional SME’s (including Clinical) to

quickly and accurately resolve issues.

Keys to Success:• No voice response unit (VRU)• CallTrakSM call monitoring system• In-depth hiring & training processes – initial

and ongoing• Proactive and empowered PBA’s provide

timely issue resolution• Low turnover and several tenured employees

promoted to management positions

89%First Call

Resolution

Best-in-Class: Care that Goes Beyond the Patient

Multiple Sclerosis Patient is taking Glatopa and reported flushing and injection site reactions. The pharmacist provided injection training and a new injection device to alleviate the issues.

Patient no longer reports injection issues and states flushing is under control. As a result, patient is able to remain adherent to her MS therapy. Studies have shown that adherence can result in nearly 20% cost reduction to plans for fewer hospital stays, exams, and physician visits.

HemophiliaPatient is 15 years old and a new patient with the insurance and the pharmacy. Parents are Spanish-speaking only, divorced, and patient lives with his mother. Neither parent is trained to infuse, and the mother is planning a 2 week trip with no infusion support identified.

MedTrakRx worked alongside specialty infusion pharmacy partner to create a plan for home infusion and self-infusion training. A bilingual nurse was flown out to introduce the new care team, identify areas of opportunity, and train the patient and family on self-infusion. Patient is now trained on self-infusion and remains adherent to therapy.

Adherence RatesBIC Specialty Pharmacy adherence across top disease states:

95.7%Industry average ~ 80%

Medical Drug Channel Management 2019 Estimated Savings:

$3 million

Prior Authorization Approval/Denial Rates:~20% denial rate

Internal & External Educational Initiatives• Lunch and Learns• C4 Flash• BIC Bites• Ad hoc new program rollout and training• Webinars and in-services

Cost Avoidance Reporting:Requests for specialty drugs that were denied for inappropriate use~$6.6M cost avoidance 2019

Total Co-Pay Trakker Savings (2019)$21.8 M

The Value of Specialty Pharmacy Management

RFP Results and Next Steps

• Reviewed and compared responses to our RFP• Dug in to the disruption analysis

• Application of formulary lists• Knew the advantages and disadvantages

• Cost comparisons of admin discounts vs. rebates• Challenges of carving out• Advantages of carving out

Implementation & Plan Design Success

• Partnership with MTRx and Lockton was critical• Formulary list• Diabetes management program• Covering compounds• Non-essential drugs• Pre-authorization requirements

Managing Employee Expectations

• Identified disruption vs. avoidance of disruption• Communications - what’s the “so what” factor?• Help members make educated decisions • Customer service teams are enabled to solve problems

Did we make the right decision?

Avg Members: 1,330 1,336 1,334 1,341 1,382

$1,138,214 $1,186,350

$1,373,468

$1,175,501$1,068,656

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

2015 2016 2017 2018 2019

Rx Expenses

PMPM: $71.32 $73.99 $85.80 $73.05 $64.44

Questions?