Biotechnology Healthcare - July/August 2008 - (Page 20)

DM seems fixated primarily on “when to start a biologic,” says Molina’s James Howatt, MD. “Once these drugs get started, they rarely get stopped.” many insurers didn’t see coming. And so, a decade into the modern biologics era, payers are getting soaked but biologics management hasn’t moved much farther than signing up specialty pharmacies, fighting payments to physicians, and adding more tiers to formularies. What needs to happen before the well-chronicled onslaught of biologics in 2010? To answer that question, it might be useful to place current developments in the context of the Zitter Group’s 5-stage continuum.2 cellaneous,’ as in many legacy medical claims systems, there’s no way to manage them properly. And a lot of them are a retrospective way of evaluating medical necessity. By moving to the pharmacy side, payers will have the ability to capture every single transaction at the point of service,” Kwok says. J codes are a major problem, agrees Mark Rubino, MHA, chief pharmacy officer at Aetna. “Most biologics are covered under the medical benefit, so claims are processed on a J-code basis. But those codes were created to be general and they leave a big hole in our ability to manage them properly, especially when we don’t know what was administered,” Rubino says. “We would like to see all biologics managed with an NDC number.” But the NDC issue may be moot. “In the old days, there was no crosswalk between NDC codes and J codes, Q codes, and all the other codes. Now you have vendors that specialize in building crosswalks, and CMS already has a crosswalk,” says Kwok. “So it’s a matter of finding a better way to manage access and to ensure their adjudication systems can operationalize a NDCHCPCS crosswalk.” Aetna began moving some biologics, including self-injectables, to the pharmacy benefit three or four years ago. “The bigger challenge,” says Rubino, “is related to drugs that have to be infused.” Baker says that for the rest of 2008 and beyond, payers will continue to try to rein in claims for infusible drugs, because “Right now it’s more about cost control than about applicable outcomes or managing things appropriately.” Most of the dollars spent in oncology are for infusible products, so Baker expects that to become a major area of focus. As physician contracts expire, payers can renegotiate them on an average sales price basis, similar to what is done in Medicare. Although physicians aren’t altogether happy with those arrangements, Baker says the new contracts will significantly reduce nononcology costs that have a significant infusible component, such as rheumatoid arthritis, multiple sclerosis, and some even rare diseases. The distribution channel has changed, too, though Baker says the impact on biologics management appears to be small. The market has migrated toward hybrid SP/pharmacy benefit managers — some even with their own retail outlets, such as Caremark/CVS. The underlying business model of these organizations is to negotiate bulk discounts from manufacturers, which Baker says is “an important value driver for payers, but it’s not clear what else they are providing.” Baker hears from a lot of specialty vendors that want to show they can play a key role in benefit design and care coordination, “But we have found that, essentially, they are no better than the payers in integrating the medical side and pharmacy sides.” The evidence to support disease management as a means for controlling costs has long been questioned; in a 2007 analysis in the American Journal of Managed Care, Soeren Mattke, MD, DSc, noted that only three studies have evaluated large population-based interventions. Now, for patients who 2 Specialty pharmacy, self-administration, and reimbursement changes “I think the direction is well on its way,” says Kwok. “Payers want to consolidate utilization management opportunities, migrating toward a pharmacy-managed process to get involved at the point of sale to the extent that they can control it.” Payers jumped on the SP bandwagon because it was a business model that gave them a handle on basic contracting for biologics and to consolidate the delivery channel and reduce waste, Kwok says. Now, they have to get a handle on disease-specific intervention opportunities and learn to optimize outcomes. The first step, he says, is to capture all claims. “When 50 percent of drug claims are adjudicated as ‘mis2 Stage 1, buy and bill, largely has been addressed by CMS’s ASP+6 strategy. 20 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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