Theproposed CMS rule is designed to create a new preferred tier forPart D plans for specialty drugs.

The Centers for Medicare & Medicaid Services (CMS) recentlyproposed a new payment rule for Medicare Advantage (MA)and Part D plans to spark competition and more rebates forspecialty drugs. These rules are significant for patients withchronic illness that require high-cost specialty drugs.

Under the new rules, specialty pharmacy benefitmanagers–pharmacy benefit managers providing prescription drugmanagement services specifically for those with chronic diseasesthat require specialty drugs–that offer transparency and launchinnovative treatment programs could use their existing tools tonegotiate favorable rebates, advocate for patients and reducecosts.

This is relevant for commercial plans in that one specialty PBMprogram for hemophilia patients generated a cost savings for onehospital that reduced its specialty spend by 30% in the first year.Other annual cost savings include multiple sclerosis ($26,000)hemophilia ($99,480), immune deficiency ($80,000), spinal musculardystrophy ($466,232) and hereditary angioedema ($708,000).

Benefits professionals know that the costs of managing chronicdisease is top of mind for employer clients and should discuss withthem the impact this proposed legislation could eventually have oncommercial plans and their bottom line.

Understanding the proposed CMS rule

The proposed CMS rule is designed to create a newpreferred tier for Part D plans for specialty drugs in an effort tolower prices for the elderly, giving plans more flexibility and twopotential tiers if it is decided that a specialty drug will drivemore competition and rebates.

At the moment, Part D plans put all specialty drugs, whichfrequently cost the most, into their own tier that has the samelevel of cost-sharing. The proposed second "preferred" tier wouldallow for a lower percentage of beneficiary cost-sharing for thesespecialty drugs. CMS is proposing that the maximum amount ofcost-sharing for either specialty tier is 25% or 33%, dependingupon whether the plan has a deductible.

While manufacturers would prefer a lower cost-sharing percentagefor their drug in order to enable greater access, they are morelikely to offer plans a higher rebate to secure lower cost-sharing.The idea behind the proposed rule is to give Part D sponsors"maximum flexibility" to get a brand-name drug that could cost lessafter a rebate than a generic or biosimilar.

Another provision of the rule would help Part D plans and PBMssave money by requiring plans to disclose pharmacy performancemeasurements, such as generic drug utilization. Without a core setof performance metrics across plans, a pharmacy could face aseparate set of metrics from one plan to the other. Ultimately,stakeholders should agree on one set of metrics that would make itless expensive to administer.

For commercial plans, it's important to understand the proposedrule because, typically, federal trends influence commercialstakeholders.

Commercial plans: True costs of specialty drugs

The top five specialty conditions under medical benefits areoncology (injectable rheumatoid arthritis), immune globulin,neutropenia and hemophilia. Together, these conditions represent74% of total medical benefit spend or $1 billion.

For example, while hemophilia is a rare disease, affectingapproximately 13 out of every 100,000 lives, it is still commonenough that most employer groups will eventually deal with itscosts and inherent challenges at some point. They can see howpotentially crippling costs can be, with many self-insuredemployers spending up to $1 million a year on patient care.

New technology and tools for addressing high-cost diseasesenable employers to adopt a comprehensive chronic diseasemanagement program that provides an unprecedented level of control,transparency and accountability for payers, physicians, specialtypharmacists and patients. For self-insured employers, this approachenables them to contain prescription costs, ensure appropriatemedication utilization and monitor physician and pharmacyperformance in real-time.

Data collection and analysis will be essential to determinebenchmarks and measure relevant outcomes. Just as important,there's a need to collaborate with local centers of excellenceunder pre-agreed upon standards of care and data sharingarrangements to prevent the need for prior authorization. Thismakes holistic care and coordination of care designed to considerthe whole patient critically important.

Finding the right specialty PBM

An effective all-encompassing specialty PBM should be designedto provide optimal levels of control, transparency andaccountability for all stakeholders, including payer, physician,specialty pharmacy and patient.

The best programs offer 100 percent control of the prescriptionthrough a network of reliable and transparent specialty pharmacies,prior authorization control and real-time benefits verification,prescription fill dates, refill alerts, pharmacy fulfillmentaccuracy and quick turnaround time.

The right program should also offer access to physician,specialty pharmacy and patient data and visibility into howprescribers are writing scripts. It should also provide doseoptimization, identify prescribers according to the label andprovide insight into which prescribers are driving the bestoutcomes.

For specialty pharmacy, the management program should compareall network pharmacies in real-time on a leaderboard, providevisibility into factor units prescribed vs. units dispensed, dropshipment/over shipment prevention and ensure appropriate shipmentof on-demand and bleed doses.

There should also be real-time visibility into medicationadherence, infusion adherence reporting, including prophylacticversus bleed/on-demand doses, in-home patient inventory, medicationhoarding prevention, outlier infusions (with or without bleeds)based on prescription and visibility into frequency of patientdosing. In addition, it should ensure compliance with label andclinical trial literature.

Example: Hemophiliac management program

For a patient with hemophilia A, the annual cost of treatmentranges from $59,101 for those with mild disease to $301,392 forpatients with severe disease receiving prophylaxis. For a patientwith hemophilia B, the cost of treatment ranges from $85,852 to$263,253. Factor replacement products represent up to 94 percent oftotal costs for patients with severe disease.

These costs can be attributed to a number of key challenges forpayers, including care fragmentation, lack of standardized careguidelines, high pharmacy and medical benefit utilization,potential stockpiling and product waste, as well as limited payerinsight into clinical data beyond factor product cost and productutilization, dispensed amounts and total health care resourceutilization. Payers also lack reinsurance programs for high-costmembers and robust and complex product selection. The mosteffective hemophiliac management programs offer specialty networksthat cover most limited distribution drugs (LDD) products.

Look for a hemophilia management program that is flexible andsustainable, with a guaranteed pharmacy performance product andtreatment cost containment, customized pharmacy network therapymanagement in real-time data and outcomes reporting. It's importantto find a program with a patient-centric approach that supportshemophiliac treatment center alignment.

A value-based program allows for greater transparency andaccountability for patient and pharmacy activity and is more likelyto provide utilization management and clinical interventions basedon active patient management that leads to contained costs andpredictability on usage and costs. In this way, an appropriateutilization management and pharmacy network design can containcosts by as much as 10 to 42%. These programs align with specialtypharmacy partners and have developed an innovative program around acustomized specialty pharmacy network that is tailored towardscalculated cost savings with customized clinical management andinnovative technology. All of this falls in line with the intentionof the latest proposed CMS rule.

For benefits professionals striving to relieve clients' concernsabout how to finance the high cost of new million-dollar drugtherapies, specialty PBMs can make an enormous difference. Theycombine a trusted and transparent network of specialty pharmacieswith the most up-to-date technology to contain prescription costs,ensure appropriate medication utilization and monitor physician andpharmacy performance in real-time.

Dea Belazi, President and CEO, AscellaHealth.