A primer on brand-name prescription drug contracting.

Prescription drug contracting in the United States has evolved over decades from discounts provided to members of early health maintenance organization plans to rebate contracts to more complex value-based purchasing arrangements. This primer describes the history of contracting between pharmaceutical manufacturers and managed care pharmacy organizations and details the various contracting methods used today.

Guided therapy selection in rheumatoid arthritis using a molecular signature response classifier: an assessment of budget impact and clinical utility.

BACKGROUND: Patients with moderate to severe rheumatoid arthritis (RA) can be treated with a range of targeted therapies following inadequate response to conventional synthetic disease-modifying antirheumatic drugs such as methotrexate. Whereas clinical practice guidelines provide no formal recommendations for initial targeted therapies, the tumor necrosis factor alpha inhibitor (TNFi) class is the prevalent first-line selection based on clinician experience, its safety profile, and/or formulary requirements, while also being the costliest. Most patients do not achieve adequate clinical response with a first-line TNFi, however. A molecular signature response classifier (MSRC) test that assesses RA-related biomarkers can identify patients who are unlikely to achieve adequate response to TNFi-class therapies. OBJECTIVE: To model cost-effectiveness of MSRC-guided, first-line targeted therapy selection compared with current standard care. METHODS: This budget impact analysis used data sourced from August to September 2020. The prevalence of each first-line targeted therapy was obtained using market intelligence from Datamonitor/Informa PLC Rheumatology Dashboard Forecast 2020, and the average first-year cost of treatment for each class was calculated using wholesale acquisition costs from IBM Micromedex RED BOOK Online. Average effectiveness for each class was based on manufacturer-reported ACR50 response rates (American College of Rheumatology adequate response criteria of 50% improvement at 6 months after therapy initiation). The impact of MSRC testing on first therapy selection was predicted based on a third party-generated decision-impact study that analyzed potential alterations in rheumatologist prescribing patterns after receiving MSRC test reports. Sensitivity analysis evaluated potential impacts of variation in first-year medication cost, adherence to MSRC report, and test price on the first-year cost of treatment. Cost for response (first-year therapy cost therapy divided by probability of achieving ACR50) was compared between standard care and MSRC-guided care. RESULTS: The estimated cost for first-year, standard-care treatment was $65,117, with 80% of patients initiating treatment with a TNFi. Cost for achieving ACR50 response was $177,046. After applying MSRC-guided patient stratification and therapy selection, the first-year cost was $56,543, net of test price, with 49.0% of patients initiating with a TNFi. First-year MSRC-guided care cost, including test price, was estimated at $117,103, a 33.9% improvement over standard care. Sensitivity analysis showed a net cost improvement for guided care vs standard care across all scenarios. Patients predicted to be inadequate TNFi responders, when modeled with lower-priced alternatives, were predicted to show increased ACR50 response rates. Those with MSRC test results indicating a first-line TNFi were predicted to show an ACR50 response rate superior to that for any other class. In this model, if implemented clinically, MSRC-guided care might save the US health care system more than $850 million annually and improve ACR50 by up to 31.3%. CONCLUSIONS: Precision medicine using MSRC-guided patient stratification and therapy selection may both decrease cost and improve efficacy of targeted RA therapies. DISCLOSURES: This work was funded in full by Scipher Medicine Corporation, which participated in data analysis and interpretation and drafting, reviewing, and approving the publication. All authors contributed to data analysis and interpretation and publication preparation, maintaining control over the final content. Arnell, Withers, and Connolly-Strong are employees of and have stock ownership in Scipher Medicine Corporation. Bergman has received consulting fees from AbbVie, Gilead, GlaxoSmithKline, Novartis, Pfizer, Regeneron, Sanofi, and Scipher Medicine and owns stock or stock options in Johnson & Johnson. Kenney, Logan, and Lim-Harashima are consultants for Scipher Medicine Corporation. Basu has nothing to disclose.

An analysis of member retention patterns for adult rare disease cohorts to support evaluating multiyear payment arrangements for novel therapies.

BACKGROUND: Traditionally, treatment for chronic conditions addressed symptoms or was disease modifying and required lifelong periodic administration and recurring costs. Cell and gene therapies for rare diseases often require a short administration period relative to their expected long-term clinical benefit. Costs have historically been recognized when the service or treatment is administered, resulting in the potential for the cost associated with the possible long-term clinical benefit of cell and gene therapies being incurred during a short administration period. Innovative payment arrangements have been proposed to improve the synchronization of the payment and the emergence of the clinical benefit. Expected payments associated with a multiyear payment arrangement will depend on many factors, but key drivers of the payments include efficacy, durability of effect, mortality, and member retention. This research extends a previous study by analyzing member retention for adult patients with certain rare diseases. OBJECTIVE: To develop member retention estimates from a US commercial payer's perspective for adults diagnosed with certain rare diseases during a 10-year period. METHODS: Four population cohorts were examined: (1) self-insured - all subscribers, (2) self-insured - rare medical condition, (3) fully insured - all subscribers, and (4) fully insured - rare medical condition. Seven rare medical conditions were prospectively selected: cerebral palsy, cystic fibrosis, Gaucher disease, hemophilia, sickle cell disease, spina bifida, and thalassemia. We limited the study cohort to members who were either the subscriber or the subscriber's partner and were aged 18 years or older; dependent children were excluded from the analysis, regardless of age. The IBM MarketScan Commercial Claims and Encounters research database for the 10 years ending December 31, 2016, was used as the basis for the analysis. The analysis was completed using the lifetest procedure available in version 9.4 of the SAS Software System for Windows. The Kaplan-Meier method was used to produce retention rates. A log-rank test with chi-square statistic was used to determine statistically significant differences between pairs of curves. RESULTS: The study found that the subscriber retention for the rare medical condition cohort is significantly higher than the all-subscribers cohort by at least 12 points at each 1-year period. The finding was statistically significant (P < 0.0001) for the self-insured and fully insured cohorts. At year 5, approximately 20% more of the rare medical condition cohort was retained as compared with the all-subscribers cohort regardless of payer type. In addition, the study found that the probability of retention for adults with each rare medical condition in the rare disease cohort was also statistically significantly higher than all subscribers regardless of payer type. CONCLUSIONS: In multiyear payment arrangements, it may be important to set expectations for member retention based on studies specific to particular member cohorts. Health insurers and plan administrators may have inaccurate expectations if standard assumptions based on all member populations are used. This study found that adults diagnosed with 1 of 7 rare medical conditions are retained longer, on average, than all adult subscribers. DISCLOSURES: Milliman received funding from bluebird bio for the conduct of this study and fees from AveXis, outside the submitted work. Jackson, Runyan, and Metz are employed by Milliman. Jackson and Metz are members of the American Academy of Actuaries and meet the qualification standards for performing the analyses in this report. Kenney is an independent managed care consultant and received consulting fees from Milliman during the conduct of this study; Kenney also serves as preceptor for the Massachusetts College of Pharmacy and Health Sciences, is immediate past president of the Academy of Managed Care Pharmacy, and is a member of the Massachusetts Pharmacists Association Legislative Committee.

The Tiered Pharmacy Benefit: Challenges in Today's Health Care Market.

DISCLOSURES: No funding supported the writing of this reflection. The author has nothing to disclose.

Outcomes-Based Contracting for Disease-Modifying Therapies in Multiple Sclerosis: Necessary Conditions for Paradigm Adoption.

BACKGROUND: In therapeutic areas with uncertainty regarding clinical outcomes that are dependent on high-cost specialty medications, outcomes-based contracts can be a tool to reduce financial risk for payers and for drug manufacturers. With a high treatment cost, large number of therapy choices, and variability of responses to therapy across patients, multiple sclerosis is a compelling therapeutic area to support outcomes-based contracts. OBJECTIVE: To identify the necessary conditions to support the widespread adoption of outcomes-based contracts for high-cost drug therapy, with a focus on disease-modifying therapies for multiple sclerosis. METHODS: We conducted a series of in-depth, semi-structured phone interviews during fall 2018 with 17 healthcare stakeholders representing payers, manufacturers, and industry consultants, all of whom had some involvement in outcomes-based contract development or evaluation. The qualitative data management program from QSR International, N-VIVO 11, was used to store, organize, categorize, analyze, and produce visualization tools to explore, map ideas, and understand themes from the data. RESULTS: Overall, payers and manufacturers agreed that outcomes-based contracts are an effective vehicle to mitigate financial risk and deliver value for disease-modifying therapies for multiple sclerosis, but they noted that the widespread adoption of outcomes-based contracts was tempered by 5 broad categories of challenges, including data-related issues, outcome measurement and confounding factors, regulatory barriers, levels of risk mitigation, and patient adherence. The majority of participants were receptive to using blood-based clinical biomarkers as outcomes-based contract end points, as long as the biomarkers are validated, accurately predict clinical outcomes, are well-established in the therapeutic area, and are readily accessible to various stakeholders. CONCLUSION: Our findings indicate there is general support from payers and drug manufacturers to adopt outcomes-based contracts for disease-modifying therapies for multiple sclerosis. However, some conditions need to be met to allow their widespread adoption, including resolving data issues, ensuring patient adherence to therapy, having a level of risk mitigation that is significant for both parties to make the endeavor economically worthwhile, and fostering a supportive regulatory environment. Blood-based clinical biomarkers that meet certain criteria could be viable end points in outcomes-based contract for disease-modifying therapies for multiple sclerosis and can address many of the necessary conditions regarding data issues, including timeliness.

Primary Biliary Cholangitis: Medical and Specialty Pharmacy Management Update.

BACKGROUND: Chronic liver disease and cirrhosis are a leading cause of morbidity and mortality in the United States. Primary biliary cholangitis (PBC), previously known as primary biliary cirrhosis and which has been designated an orphan condition, is a chronic autoimmune disease resulting in the destruction of the small bile ducts in the liver. Without effective treatment, disease progression frequently leads to liver failure and death. Until May 2016, the only FDA-approved treatment for PBC was ursodiol (UDCA), an oral hydrophilic bile acid, which can slow progression of liver damage due to PBC. However, 1 out of 3 patients taking UDCA has an inadequate biochemical response, leading to increased risk of disease progression, liver transplantation, and mortality. Given this unmet clinical need, new therapies are in development for the treatment of PBC. To provide pharmacists with an overview of the latest research on the pathophysiology of PBC and potential new treatment options and to highlight medical and specialty pharmacy approaches to managing access to drugs to treat orphan diseases such as PBC, a 2-hour satellite symposium was presented in conjunction with the 2015 Academy of Managed Care Pharmacy (AMCP) Nexus meeting. Although obeticholic acid was approved by the FDA for the treatment of PBC in May 2016, this development occurred after the symposium presentation. The symposium was supported by an independent educational grant from Intercept Pharmaceuticals and was managed by Analysis Group. Robert Navarro, PharmD, moderated the CPE-accredited symposium titled "Medical and Specialty Pharmacy Management Update on Primary Biliary Cirrhosis." Expert panelists included Christopher L. Bowlus, MD; James T. Kenney, RPh, MBA; and Gary Rice, RPh, MS, MBA, CSP. OBJECTIVE: To summarize the educational satellite symposium presentations and discussions. SUMMARY: Autoimmune liver diseases, including PBC, are responsible for 15% of all liver transplants performed and an equal percentage of deaths related to liver disease. UDCA is the only FDA-approved therapy for treatment of PBC and is considered the standard of care. Nevertheless, many patients do not respond to UDCA, creating the need for new therapeutic options to improve clinical outcomes for PBC patients with inadequate response to treatment. While several agents are being studied in combination with UDCA, monotherapy with the novel agent obeticholic acid, a farnesoid X receptor agonist, has also shown promising results. Health plans are anticipated to assign any newly introduced therapy for the treatment of PBC to specialty pharmacy given its orphan disease status. This assignment enables the health plan to receive disease education, which is particularly important when new drugs are indicated for orphan diseases, and assistance with designing appropriate prior authorization criteria. The clinical value of any new therapeutic options that will inform formulary decisions and prior authorization criteria will be assessed based on evidence of efficacy, safety, and tolerability, among other factors, such as the potential to reduce or delay medical resource utilization (e.g., liver transplant). Key considerations for prior authorization of a new therapy will be determining which PBC patients are appropriate candidates for the new therapy and developing criteria for that determination. These are likely to include clinical diagnostic criteria and degree of response to prior treatment with UDCA. Initially, any new therapy would likely be positioned as noncovered until appropriate prior authorization criteria are established. CONCLUSIONS: PBC is a chronic liver disease with significant morbidity and mortality, as well as a significant burden on the health care system if the disease progresses to the point at which a liver transplant is needed. Although UDCA, the current standard of care, has improved outcomes for many patients, others have an inadequate response to this treatment. This symposium discussed these issues and also addressed the overall treatment paradigm for orphan drug therapies, key implications for patient management, and the role of specialty pharmacy management and any associated needs both in general and specifically for new therapeutic options for PBC.

Defining Value in Cancer Care: AVBCC 2013 Steering Committee Report.

The AVBCC Annual Meeting experiences exponential growth in attendance and participation as oncologists, payers, employers, managed care executives, patient advocates, and drug manufacturers convened in Hollywood, FL, on May 2-5, 2013, for the Third Annual Conference of the Association for Value-Based Cancer Care (AVBCC). The conference presented an all-inclusive open forum for stakeholder dialogue and integration across the cancer care continuum, facilitating an open dialogue among the various healthcare stakeholders to align their perspectives around the urgent need to address value in cancer care, costs, patient education, safety, outcomes, and quality. The AVBCC 2013 Steering Committee was held on the first day of the conference to define value in cancer care. The committee was divided into 7 groups, each representing a key stakeholder in oncology. The goal of the Steering Committee was to define value from the particular point of view of each of the stakeholder groups and to suggest how that particular perspective can contribute to the value proposition in oncology, by balancing cost, quality, and access to care to improve overall patient outcomes. The following summary highlights the major points addressed by each group.

Managing the evolving complexity of pharmacologic treatment: comparative effectiveness research, pharmacoeconomic data analyses, and other decision support tools.

Eleven classes of antidiabetic medicines are now available to help the 25.8 million Americans with type 2 diabetes control their blood sugar levels when diet and lifestyle modifications are not sufficient. Although patients benefit from the myriad of treatment options, there are little comparative data to effectively differentiate the products and predict their relative utility. In the absence of true comparative outcomes data, comparative effectiveness research (CER) provides a valuable tool to compare the safety and efficacy of agents and applies the results to heterogeneous patient populations, including patients ordinarily excluded from randomized controlled trials. Thus, CER provides more generalizable results that better reflect real-world situations faced by practitioners and patients. In addition to traditional CER approaches such as systematic reviews, meta-analyses, and retrospective claims analyses, Markov modeling and Bayesian analysis can be applied to predict patient outcomes in scenarios in which clinical trials are not feasible. CER may be the best way to consolidate and interpret data on the many agents involved and thereby guide rational treatment decisions.