Biotechnology Healthcare - July/August 2008 - (Page 18)

BENEFIT DESIGN 10 Years, Still Shifting Gears J CARE published “The 5 Stages of Biotechnology Management,” by Senior Contributing Editor Thomas Baker, MPA, partner and senior vice president of strategy and ames Howatt, MD, chief medianalytics at The Zitter Group. At cal director at Molina Healththe time, Baker projected that comcare, tells the true story about a mercial payers would have to navilittle upstate New York HMO that gate a five-stage management conhad upward of 30 members with tinuum to achieve effective control Gaucher disease, all under palliaover biotechnology expenditures. tive care with a neurologist. “And As payers moved along this continthen imiglucerase [Cerezyme] came uum, they would have to out, and virtually over Geared for change: the 5 stages develop sophisticated econight that little HMO went nomic models and a combankrupt, because now it prehensive approach to had 30 members whom tobenefit design and cost gether represented a $10 sharing. million drug spin. That, he Buy and bill Preferred Genomic “What was interesting says, “certainly points out products diagnostics three or four years ago,” the threat to health plans as and narrowed and genetic Baker now says, “was the we address a pipeline that categories risk manageinsistency with which inis reputed to have some ment surers told us they were 800 new drugs.” going to introduce sophisWonder drugs, targeted ticated benefit design drugs, break-the-bank structures — coinsurance, drugs — call them what four and five tiers, things you will. But, increasingly, Specialty Benefit design like that — to deal with they are becoming the pharmacy, selfinnovations administration, and cost biologics.” By and large, drugs of choice. And the and reimburseshifting though, that didn’t happen; threat that Howatt talks ment changes about, as more physicians for one thing, those plans 5 Stages of Biotechnology Management © 2004 The Zitter Group and patients request bioproved difficult to sell on logic therapies, is the burden on mab (Herceptin), and palivizumab the market. “A lot of employers said, payers and employers to accommo- (Synagis). It took payers a few years ‘My employees will go bananas if I date their wishes while trying to after that to realize that biotechnol- introduce something like that.’” maintain fiscal sanity. ogy therapies were going main“Remember, the whole purpose of stream and to do something about it. 1 Prior to 1998, most of the biologics that had been approved had narrow indicabenefit design is not to withhold treat- Now, 10 years into the modern biotions and were used in small popula1 payers really aren’t as far ment,” says Peter Kwok, PharmD, a logic era, tions: growth hormones, infertility treatone-time health plan pharmacy ex- along as you might have expected, ments, red blood cell growth factors. Rituximab (Rituxan) was approved in ecutive who now directs pharmacy but in their defense, biologics man1997 for non-Hodgkin’s lymphoma, but programs at Lumetra, a quality im- agement has proven to be anything it would take a decade of research before provement organization. “You may but a linear process. its utility for other conditions would bewin the battle but lose the war if you In 2005, BIOTECHNOLOGY HEALTHcome apparent. BY KATHERINE T. ADAMS don’t manage a patient’s care appropriately. The challenge is to optimize therapeutic options and to balance quality, affordable healthcare.” In 1998, the U.S. Food and Drug Administration approved the first wave of biologics that would change medical practice — some of which would later be approved for multiple indications: etanercept (Enbrel), infliximab (Remicade), trastuzu- 1 3 4 5 2 18 BIOTECHNOLOGY HEALTHCARE · JULY/AUGUST 2008

Table of Contents Feed for the Digital Edition of Biotechnology Healthcare - July/August 2008

Biotechnology Healthcare - July/August 2008 Openers Contents Editorial/David B. Nash, MD, MBA Drug Track Health Plan Confidential Rheumatoid Arthritis A Decade of Trial, Error, False Starts, and Hope What Path Will Comparative Effectiveness Research Take? RA Therapies in Development: A New Generation of Relief Assessing the Full Impact of RA on Employers and Payers Stem Cells: Health Insurance You Can Bank On Specialty Pharmacy Employer to Employer Personalized Medicine Trends Clinical Briefs

Biotechnology Healthcare - July/August 2008

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