The specialty therapy landscape is becoming more complex than ever before — driven by multiple factors, including the rapidly evolving regulatory environment, the increasing number of specialty medications and the growth of the patient population.
The challenge of ensuring appropriate access to specialty medications, while managing costs, has become increasingly difficult and is causing significant disruption across the healthcare system. Addressing this issue, experts convened to discuss the challenges and opportunities that come with this ever-evolving landscape.
Monday’s recap, "Expectations and Policy Impacts for Specialty Therapies,” examined the robust specialty therapy pipeline in the coming year and how the industry can prepare for a shifting policy landscape — most notably, the Inflation Reduction Act.
Sign up for email updates to stay up to date on select sessions from AXS23.
Asembia 2023: Day 2, Session 1
“The Specialty Pharmacy Industry Update and Outlook”
Speakers: Adam Fein, CEO, Drug Channels Institute; Lisa Gill, head of J.P. Morgan’s healthcare services equity research team; Doug Long, vice president, industry relations, IQVIA
Summary: What was discussed
In this session, Fein, Gill and Long examined the key trends reshaping the specialty pharmacy industry, including value-based care and current pharmaceutical trends, such as the growth in biosimilars.
Fein discussed the continued vertical consolidation of insurers, pharmacy benefit managers (PBMs), specialty pharmacies and providers, along with the market access pressures created by such vertically aligned channels. Gill dove deep into ways value-based care can improve quality, cost and convenience of healthcare for payers, providers and patients.
Long presented market data, including how specialty growth outpaces traditional growth by more than 4%.
Being isomorphic to the market around you means thinking about how the market is organized around you. We have to adapt to where the world's going.Adam FeinCEO, Drug Channels Institute
Fein kicked off the session by reviewing how providers are the largest area of growth for specialty pharmacy. The fastest-growing category of specialty pharmacies are those owned by physical practice, hospitals and health systems. He also said the share of oncologists in practices with medically integrated dispensing has grown significantly since 2010, from 18% to 41%.
Fein presented six key themes for the upcoming year, some of which were also elaborated on by Gill and Long.
- Market Access Pressure from Vertically Aligned Channels
- Specialty Drug Price Competition
- Financial Support for Patients
- Deflating the Gross-to-Net Bubble
- Patient-Paid Prescriptions
- The Inflation Reduction Act Impact
During her opening remarks, Gill said specialty medications comprise a significant share of value-based care costs, and detailed how value-based care arrangements can incentivize adoption among providers and payers of biosimilars as a cost-containment measure. She also acknowledged the patient-facing services specialty pharmacies offer, including medication adherence and monitoring, and the significance of these services for improved patient outcomes.
“The biggest disrupter in healthcare will be the consumer,” Gill said.
Gill also discussed how shifting sites of care from those with high costs to those with lower costs, such as the patient’s home, is a continued focus of value-based care. She concluded that patient data that could be processed through the specialty pharmacy is the key for specialty pharmacies to participate in value-based care arrangements and to realize the potential of lower healthcare costs through improved outcomes.
Long built on the conversation of Specialty Drug Price Competition when he discussed how higher-cost, newly launched therapies place pressure on the rest of the market to contain costs.
According to IQVIA data, there have been around 120 drug launches costing over $200,000 per year in the past two decades. Long said the industry is on pace to double that in the next five years.
Long also called out another concern: How higher costs and greater cost-sharing affecting patients with deductibles and coinsurance corresponds to greater medication abandonment.
Financial support for patients was also a key focus for Long. According to IQVIA, specialty medications now account for 55% of net spending, which is up from 28% in 2011. Long said this growth is driven by autoimmune and oncology therapies.
As the frequency of high-cost treatment launches accelerates, Long said, pressure is on the rest of the market to help contain cost.
“The big issue in the market is (medication) abandonment,” Long said. “We know that the higher the copay gets, the higher abandonment gets. Abandonment is slightly less for specialty products than it is for traditional products, but it gets pretty abysmal when you are dealing with the higher-cost drugs, which is over $250. Getting on therapy is the hard part, but abandonment is a big issue in this marketplace.”
The industry call to action
Product launches in oncology, immunology and pain management are expected to drive growth through 2026, and high-priced drugs are becoming more common, raising industry concerns about affordability and access to care.
To offset access and affordability concerns, industry stakeholders, including pharma, pharmacies, payers and providers, can help serve patients by adopting technology solutions that support getting patients on medication faster via automated medication access verification, authorization processes and price transparency. Technology solutions can also help further reach patients through assistance programs and multichannel education opportunities.
Asembia 2023: Day 2, Keynote Session
“Keynote Session from Seema Verma”
Speaker: Seema Verma, consultant and former CMS administrator; Adam Fein, CEO, Drug Channels Institute
Summary: What was discussed
The second day of Asembia 2023 included an extended keynote session and industry outlook, hosted by Adam Fein, CEO of Drug Channels Institute.
Fein interviewed former CMS administrator Seema Verma about her time at CMS. Of note: Fein began the keynote session with the news that Verma will be joining Oracle Life Sciences as senior vice president and general manager of the company’s clinical trial business.
Patient-reported outcomes, or outcomes in general, without interoperability — how do we know we have actually achieved those outcomes?Seema VermaFormer CMS administrator
The Unsustainable Path of Medicare and Medicaid
According to Verma, the current trajectory of Medicare and Medicaid, with their increasing costs and growing patient populations, is unsustainable. This trajectory creates a challenge for the healthcare system and requires innovative solutions to ensure these programs can continue to provide care for those who need it, Verma said.
Verma explained how the United States’ aging baby boomer generation could impact healthcare costs. As boomers age, she said, there could simply be more of them to care for. “The math problem around Medicare does not work over the long term,” she said. “People do not appreciate how dire the situation is.”
Verma’s discussion focused on the importance of moving toward value-based care and utilizing technology to address workforce issues: “Technology can go a long way to help us address that; we may be able to be more efficient.”
Implementing Value-Based Care in Healthcare Can Improve Outcomes and Control Costs
Value-based care, defined by Verma as care in which providers are paid based on the outcomes they achieve, can help improve patient outcomes and control costs in the healthcare system. However, she said implementing value-based care can be challenging due to a lack of infrastructure and coordination needs among stakeholders.
“Validation here is super important,” Verma said. “That’s what changes the entire framework. It creates financial incentives for providers around producing outcomes, right? So, we are not focused on fee-for-service, where it is volume based, but we are saying we want to pay based on the outcomes you achieve and have some targets in terms of what this should potentially cost."
Verma also discussed the need for better technology and interoperability in the healthcare system.
“One area that I think is really important, is technology and interoperability, which is why we have got to get the system to work better and have that flow of data so that people have their information at the right time, at the right place.”
Addressing the Challenges of High-Priced Drugs and Value-Based Care in the Medicaid Program
The rising costs of high-priced drugs, such as gene therapies, pose significant challenges for the Medicaid program, which must balance providing access to these potentially life-saving treatments with managing limited budgets, Verma said. Value-based payment arrangements could offer a solution, she added, but the logistics and implementation of these arrangements can be difficult.
“I think the logistics behind it are difficult,” Verma said. “The reality is people are going to be on different payers, so maybe it works today and the payer of the day gets stuck with the bill, but then they get off of this program and move on to another insurance program. How do we deal with that?”
Verma said the need for innovation and collaboration among stakeholders to address the infrastructure challenges are needed: “I really like the concept of value-based care for that reason. However, I think the logistics behind it are difficult.”
The industry call to action
Verma said value-based care is seen as a potential solution to improving healthcare outcomes and controlling costs, but there are challenges in implementing it, such as the need for better data and infrastructure. Technology and interoperability can play a crucial role in improving the healthcare system, not just for patients and doctors, but also for continued innovation and reducing costs.
Asembia 2023: Day 2, Session 3
“Medical Pharmacy Trends and Pipeline Review”
Speakers: Courtney Booth, senior director, specialty clinical solutions, Magellan Rx Management; Laura Walters, director, specialty clinical solutions, Magellan Rx Management
Summary: What was discussed
This session focused on medical specialty and pharmacy trends, spends and pipeline highlights, as well as future developments in the field. The presentation data was based on the annual Medical Pharmacy Trend Report published by Magellan Rx Management.
The overall utilization increase was the primary driver of spend in 2021.Laura WaltersDirector, specialty clinical solutions, Magellan Rx Management
Medical Pharmacy Spending Trends Show Increasing Utilization and Costs in Multiple Therapy Categories
Walters discussed the recent trends in medical pharmacy spending, highlighting the increasing utilization and costs in various therapy categories such as oncology, autoimmune diseases and multiple sclerosis. She noted that the increase in utilization and costs can be attributed to new and expanding drug categories and indications.
“The overall utilization increase was the primary driver of spend in 2021," Walters said. “And non-oncology drug utilization had three drug categories that drove almost half the utilization increase."
In addition, Booth mentioned that pipeline products like gene therapies for hemophilia and Duchenne Muscular Dystrophy (DMD) are expected to contribute significantly to future medical pharmacy spending. Despite the high costs, Booth said these therapies have the potential to significantly improve the lives of patients affected by these rare diseases.
The industry call to action
Monitoring medical pharmacy trends and pipeline developments is crucial for healthcare stakeholders, including pharma, pharmacies, payers and providers, to make informed decisions and ensure optimal patient outcomes.
CoverMyMeds looks forward to sharing another update Thursday with a recap of select sessions from Wednesday. Sign up to stay up to date on AXS23.