Patients First: Is Specialty Pharmacy in the Blueprint?

Ups and Downs

The meteoric rise in drug spending over the past 10 years has been driven by specialty therapeutics, while spending on traditional therapies has decreased (Figure). These trends are driven by access to less expensive generics countered by tremendous advances in new therapies for disease states with previously unavailable solutions. These advances have come at a price and the industry has made the decision to largely focus research and development spend on therapies that often include smaller populations of patients and spread the cost of development across fewer individuals. The result of this focus has fueled the growth of specialty pharmacy, as these products require a higher standard of pharmaceutical care than traditional therapies.

The Blueprint

In May, President Donald Trump and Department of Health and Human Services (HHS) Secretary Alex Azar presented their plan to address the entire spectrum of drug pricing in America, titled, “American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.”

The plan takes a holistic approach to drug spend with a primary focus on payer and patient access to achieve 4 goals:

1. Increased competition for generic and biosimilar drugs.
2. Improved drug price negotiation in Medicare Part B and Part D.
3. Incentivizing drug manufacturers to lower list prices.
4. Reduced consumer out-of-pocket spending.

Impact on Specialty

It has been estimated that 95% of all drug dispensing volume is in traditional products. As such, the systems in place to manage costs have largely been more focused on traditional therapies, in which multiple therapeutic options may be available to treat a specific disease state, such as hypertension and cholesterol. Through formularies, payers have leveraged products against each other. Specialty therapies, given the profile of the diseases they treat, have been less tightly managed, in some respects, given the fact there is less competition. Exceptions to this have emerged the last few years, demonstrated by the tactics used by payers with PCSK9 inhibitors and hepatitis C antiviral drugs. No doubt the administration is looking at these as examples of what might be done in the future, therefore, it raises the questions of how is this all going to get done and how long will it take?

We have seen how the political process affects our daily professional lives. The administration’s plan proposes ideas for finding savings in several key areas in which they have influence, such as in Medicare Part D. Here, the administration proposes to modify the protected classes policy. Part D plans have been largely unable to negotiate lower prices for high-cost drugs without competition. The document states, “This change could allow Part D plans to use the tools available to private payers outside of the Medicare program to better negotiate for these drugs.”

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