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1/6/2004

National Specialty Pharmacies Focus on Rare, Chronic Diseases

Cheryl A. Thompson

From an initial focus on growth hormone products and antihemophilic factor, national specialty pharmacies have expanded in the past few years with the increase in biotechnological manufacturing and drug makers’ success at making treatments for rare, chronic diseases.

Health plans, wary of the high price tags for long-term treatment with biotechnology-produced pharmaceuticals, have partly driven the expansion of national specialty pharmacies. So, too, have the manufacturers of these products, concerned about spreading precious wares too thinly to reach patients in need and worried that health plans may not pay some of the costs of treatment.

About a dozen specialty pharmacies claim to provide services nationwide, including Tennessee-based Accredo Health Inc. and Caremark Rx Inc., the latter of which is in the process of buying AdvancePCS; U.S. Bioservices Corp., recently acquired by Pennsylvania-based AmerisourceBergen Corp.; Illinois-based Option Care Inc.; Florida-based Priority Healthcare Corporation and CuraScript Pharmacy Inc.; and CVS ProCare, a subsidiary of Massachusetts-based CVS Corporation.

The pharmacies specialize in therapies for patients with such rare, chronic diseases as alpha-1antitrypsin deficiency, chronic granulomatous disease, Fabry’s disease, Gaucher’s disease, tyrosinemia type 1, pulmonary arterial hypertension, and severe combined immunodeficiency disease. Other special injectable treatments, such as those for multiple sclerosis, rheumatoid arthritis, and moderate to severe asthma, have also come under the umbrella of services provided by specialty pharmacies.

Manufacturer versus health plan as customer. “We focus on manufacturer relationships—products where we feel like we can have the most impact on patient compliance and outcomes,” said Susan Zasoski, vice president of business development at Nova Factor Inc., one of the specialty pharmacy services owned by Memphis-based Accredo Health Inc.

Zasoski started her 11-year career at Nova Factor as the sole pharmacist on the company’s staff. She said she typically does not seek contracts with the large pharmaceutical companies “because their products aren’t the ones that are the real expensive” ones—the ones for which patients need a lot of handholding to negotiate the reimbursement process.

David Golding, vice president of Caremark’s specialty pharmacy service, said he focuses on products that carry a high price tag, treat a condition with a fairly low prevalence in the U.S. population, and have “reimbursement challenges.”

At Caremark since 1987, Golding initially worked in the company’s home infusion business after three years in hospital practice.

The reimbursement challenges to which Golding referred include health plans’ requirement of prior authorization—that patients not respond to lower-cost therapies before the payer agrees to cover treatment with the expensive agent. Also, health plans may require the patient to obtain a physician’s signed statement attesting to the medical necessity of the treatment and to undergo periodic laboratory testing to continue treatment.

Tangled web of reimbursement. “A good portion of our [reimbursement] business today resides within the medical benefit, versus the pharmacy benefit,” Golding said.

The medical benefit, he explained, involves higher copayments than is typical with a pharmacy benefit, a ceiling on out-of-pocket expenses for patients, sometimes the coordination of benefits from third-party payers, and filing of the government-designed health insurance claim form known as CMS-1500 (formerly HCFA 1500).

This trend in benefit design may be changing, however. According to Health Industries Research Companies, major insurers and health plans are “rapidly shifting” their coverage of injectable drugs from the medical benefit to the pharmacy benefit.

Golding said he maintains a “fairly large reimbursement staff” to help patients negotiate each health plan’s rules and requirements.

“We feel pretty strongly that before someone commits to going on one of these products, they better understand what they’re going to be asked to contribute” toward a pharmacotherapy whose costs range from $10,000 to $100,000 a year, he said.

In addition to helping patients gather the material required by their health plan, specialty pharmacies assist health plans in controlling costs.

Golding said health plans are more aware now than three or four years ago of the need to appropriately manage high-cost injectables in the outpatient setting.

The question arises, “Are the right patients getting these products at the right time?” he said, and health plans seek specialty pharmacies’ assistance.

Also a concern of health plans is ensuring that patients who are not candidates for expensive medications do not receive them.

Golding said Caremark is often asked by health plans to administer an “access management program.” For example, he said, the company is asked to verify that patients about to start growth hormone injections have undergone a growth hormone stimulation test and have a documented case of pituitary deficiency of the hormone. If Caremark finds that the criteria have not been met, it informs the health plan, which then must decide whether it will grant an exception or deny coverage.

Clinical management by pharmacists. Zasoski and Golding said most of their pharmacists manage the clinical part of patients’ care, stepping in after the reimbursement specialists have completed their company’s enrollment process.

A Nova Factor pharmacist initially spends “about 20 minutes with the patient, talking them through the product—what it’s used for, what they can expect,” Zasoski said. “The whole goal is to set a realistic expectation of this therapy.”

Many patients, she said, hear that their new therapy is expensive and injectable and jump to the conclusion that “it’s bound to be a cure.”

But the therapy comes with adverse effects, and the pharmacist must instruct patients how to manage the undesirable effects of the new medication, Zasoski said.

A pharmacist contacts each patient once a month to see how he or she is doing and check on the at-home supply of medication about a week or so before it is supposed to run out, Zasoski and Golding said.

“If they have more than they should have,” Zasoski said, “then they may not have been using it appropriately or skipped a few days, so we’ll start asking questions.”

Said Golding: “The studies have shown pretty strongly, you get to the nine-month point, your chance for drop-offs on these types of therapies is very, very strong.”

The monthly phone call also provides the specialty pharmacy the opportunity to verify that patients have undergone the testing required of their therapy.

Depending on the therapy, Zasoski said, the pharmacist may ask whether the patient recently had a liver function test and remind a female patient to take adequate measures to prevent pregnancy. Nova Factor then forwards this information to the manufacturer.

Golding said Caremark pharmacists use a “pharmacy care management algorithm” to monitor patients on the company’s eight medications that have checkpoints at which progress must be evaluated before treatment continues.

For example, patients starting interferon alfa injections for treatment of hepatitis C usually first have their viral load and genotype determined, Golding said. The algorithm tells the pharmacist to check “at the three-month point to look at what [the patient’s] viral load is to determine whether they are likely to be a responder . . . and therefore likely to derive benefit from ongoing” interferon alfa therapy, he said. If the test result suggests the patient will not respond to interferon alfa therapy, the pharmacist informs the health plan or the physician, who then must decide what to do next.

Specialty pharmacies for limited distribution. Bosentan, a treatment for pulmonary arterial hypertension that requires the monthly monitoring described by Zasoski, is a drug whose approval by FDA hinged partly on the manufacturer establishing a restricted distribution program to lessen patients’ risks of dangerous adverse effects. The manufacturer selected Nova Factor, Caremark, and CVS ProCare as the only pharmacies authorized to dispense bosentan to patients.

But many of the medications handled by specialty pharmacies are in limited distribution because of a decision by the manufacturer, not FDA.

While limiting a pharmaceutical’s distribution might seem unfair to the vast majority of pharmacies, Golding said he understands why manufacturers pursue that course.

“I think one of the reasons they like to restrict [distribution] is it makes it simpler for them,” he explained, pointing to the advantages of working with just a few pharmacies.

“When you spread out a relatively small product—several hundred million dollars [a year in sales] is relatively small, I think—across 60,000 pharmacies, I think it becomes much more difficult for [manufacturers] to distribute the product” and gather the data to ensure that they understand their brand, how it is being used, and how they can change their business arrangements, Golding said.

Assurance of product stability. The “pick, pack, and ship” part of the specialty pharmacy business, he said, is not unique, but “it’s something you can’t take for granted,” given most of the products’ need for refrigeration.

“You have to make sure that you receive [products] within the proper storage conditions, store them within the proper storage conditions, ship them to get them to the ultimate consumer in the proper conditions, and make sure you train them appropriately to store them within their home,” he said.

The terrorist attacks in September 2001 posed a challenge for specialty pharmacies because air traffic—an essential part of the delivery process—ground to a halt for a day and then gradually resumed. Zasoski said her courier, FedEx, which uses the Memphis International Airport as the company’s U.S. hub, “worked with us real closely when the 9/11 disaster happened because we had shipments out. And they were able to find our packages and get them back to us so that we could get them refrigerated to maintain the product.”

Golding, whose company uses FedEx and other express couriers, said the national shutdown of air traffic caused some problems because not all packages of temperature-sensitive medications could reach their destination in time to maintain their stability. No patient, however, went without medication because Caremark routinely plans for shipments to arrive at their destination when patients have a five- to seven-day supply remaining.

Possible expansion through Medicare. The recently enacted federal law that adds an outpatient prescription benefit to Medicare will eventually increase the amount of Medicare-related business for Accredo Health, Zasoski said.

Golding agreed that “more people will have some health coverage for the products that we offer,” but he expressed concern as to whether the coverage will make the products affordable to senior citizens. Even with Medicare coverage, he said, beneficiaries will still have to pay a lot out-of-pocket for the medications. “We’re not talking about $100- or $200-a-year products,” Golding said.