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L O C K T O N C O M P A N I E S
Lessons Learned from Sovaldi -
The Future is NOW in Specialty PharmacyAugust, 2014Presented by Bob Kordella, Chief Clinical Officer of Excelsior Solutions
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Chief Clinical Officer
Robert Kordella, Chief Clinical Officer, has more than 27 years of diverse experience in the pharmacy industry. Bob has practiced in retail pharmacy, in a large academic medical center setting, and, for the last sixteen-plus years, has been an effective, widely known, and well-respected leader in the PBM industry. Over the course of his tenure with LDI Integrated Pharmacy Services, National Medical Health Card Systems, CVS PharmaCare, Eckerd Health Services, and TDI Managed Care Services, Bob has led clinical and PBM operations teams that successfully managed over $4 billion in annual drug spend while limiting per member per year spending growth to levels that have simultaneously drawn industry acclaim and consistently high levels of member and payer satisfaction.
Bob received his Bachelor of Science in Pharmacy from the University of Pittsburgh School of Pharmacy. He went on to receive his Masters in Business Administration from The University of Pittsburgh, Katz Graduate School of Business.
Meet Bob Kordella, RPh
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Past Performance is no Guarantee of Future Results
Never a good idea to drive down an interstate highway with your gaze fixed in the rear-view mirror
Sovaldi isn’t an exception, it represents the new rule
That “coming tsunami” in Specialty Pharmacy has arrived
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What Was Different About Sovaldi?
Seeming Surprise
Higher Unit Costs
Higher Utilization
Higher Visibility
Clear Link to Medical Management
Ethical Concerns – Is It For Everyone?
Government Role, Clinical
Government Role, Economic
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Will All New Specialty Pharmacy Drug Launches Have Impact Like Sovaldi’s?
That depends…
MAJOR: Treats what was previously untreatable, OR Treats what was previously treatable in such a superior way that old ways will no longer suffice
High incidence disease categories Rationale for high cost
MODERATE: Lower incidence disease categories, OR Lower cost premium, OR Less potential to unlock “pent-up demand”
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Did Sovaldi’s Launch Surprise You?
Clinically
Financially
“Ergonomically”
Lesson Learned: Pay attention to the wealth of information at your disposal
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Why Will Specialty Rx Unit Costs Be Higher?
Higher true costs to develop What is a true cost? Acthar HP example
Convenience premium
Lesson Learned: The market has shifted from costs being driven down by “small molecule” patent expirations to costs being driven up by “large molecule” innovation
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Why Will Specialty Pharmacy Utilization Be Higher?
Unleashed pent up demand as “watchful waiting” transforms to action driven by new oral dosage forms
Lesson Learned: Oral dosage forms will drive utilization and product adoption of new Specialty Rx products higher, faster than has historically been the case – old actuarial and underwriting models are obsolete if these changes aren’t reflected I’m going to prescribe something that
works like aspirin but costs a whole lot more.
-A. Bacall
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Why Will Visibility Be Greater?
Initiatives to support enhanced screenings will quietly support new Specialty Rx product launches
The early lessons of Pharma direct-to-consumer advertising will be migrated to Specialty Rx
It is in Pharma’s interests to make the pool of potential customers larger
Lesson Learned: Don’t lose control of screening initiatives
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Why Are Pharmacy & Medical Management Linked More Closely?
The questions surrounding new Specialty Rx drugs are not as simple as, “Formulary or Non-Formulary” or “Which tier to place it on?”
It’s evaluating 84 days of Rx at $1,000 per day vs. probability and cost of a subsequent liver transplant based on current clinical condition of patient
Lesson Learned: Your predictive analytics capabilities will be as important to your future success as your clinical capabilities, and they must work more closely together than ever
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Will Everyone Be Eligible to Receive the New Meds?...Who’s to Say?
This isn’t about rationing, per se, it’s about establishing reasonable and defensible unbiased patient characteristics that point to success from a $1,000 per day (or more), 84-day long (or longer) treatment
Lesson Learned: Ethical issues will also become more prominent as Specialty Rx costs rise
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What Role Will Government Play Clinically?
Many State Medicaid agencies have stepped in to work with plans to develop and implement regional or state-wide utilization management criteria
Lesson Learned: Avail yourselves of this opportunity if available in your state, or seek to lead such an initiative if one doesn’t exist
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What Role Will Government Play Financially?
Some State Medicaid agencies have stepped in to work with plans to develop and implement reinsurance initiatives to mitigate the financial ramifications of high-cost Specialty Rx products
Lesson Learned: Sustainability is a concern as more products launch
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What’s a Plan to do…
Watch out for combination therapies in Hepatitis C 2 separate pills/copays replaced with 1 pill/1 copay Therapies will be significantly more expensive
$84K for Sovaldi versus $100K - $150K for combination product Plans should not be covering all of these products for all
patients. Suggestions: Evaluate formulary status, add appropriate utilization management controls and screenings
Be alert for first-in-class products that now offer drug therapy in addition to or replacing medical treatments Anticipate increased costs due to drug regimen add-on.
Not all new specialty therapies replace prior options.
Consider appropriate Utilization Management criteria Not every drug has to be (or should be) available for all
patients. Qualify patients prior to approving
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Conclusion
Sovaldi has fundamentally transformed how payers must think about and deal with Specialty Pharmacy
Clinical, Economic, Ethical, Financial, and Regulatory minefields abound
The Specialty Rx pipeline is rich and more transformative products that share many of the characteristics of Sovaldi are queuing up to launch
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Appendix
The Specialty Drug Pipeline (as of August 2014)
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Specialty Pipeline – Hepatitis C
Drug Name
Disease Treated
Approx. Approval Date
Route of Admin
Projected Costs
Current Disease Treatments
Recommended Potential Action
ledipasvir / sofosbuvir*
Hepatitis C genotype 1
Oct. 2014
Oral$100 - $150K per tx course
Sovaldi, Olysio, Incivek, Victrelis
Evaluate formulary statusPA/UM and qualify appropriately (genotype 1)
ABT-450 / ritonavir/ ombitasvir / dasabuvir*
Hepatitis C, genotype 1
Dec. 2014 Oral$75 - $90K per tx course
Sovaldi, Olysio, Incivek, Victrelis
Evaluate formulary statusPA/UM and qualify appropriately (genotype 1)
MK-5172 / MK 8742*
Hepatitis C, genotype 1
2015 Oral$80 - $100K per tx course
Sovaldi, Olysio, Incivek, Victrelis
Evaluate formulary statusPA/UM and qualify appropriately (genotype 1)
daclatasvir / asunaprevir
Hepatitis C, genotype 1b
Dec. 2014 Oral$80 - $100K per tx course
Sovaldi, Olysio, Incivek, Victrelis
Evaluate formulary statusPA/UM and qualify appropriately (genotype 1b only)
The three genotype 1 products and the combination therapy of Sovaldi + Olysio are transforming the Hepatitis C class dramatically. The combination of two drugs in one tablet represents the next evolution of oral treatment in Hepatitis C.
*Combination therapies (such as the above three) will compete with Sovaldi/Olysio and continue to increase costs
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Specialty Pipeline – Cystic Fibrosis, Multiple Sclerosis & High Cholesterol
Drug Name
Disease Treated
Approx. Approval Date
Route of Admin
Projected Costs
Current Disease Treatments
Recommended Potential Action
LumacaftorCystic Fibrosis
June 2015 Oral$300K per year
First in classPA/UM for gene mutation; qualify appropriately
Lumacaftor is considered to be an orphan drug because it treats a very specific gene mutation in cystic fibrosis. Its use will be rare, but its costs will be material when required. *Screening test under development.
LemtradaRelapsing Multiple Sclerosis
Nov. 2014
IV$40K per year
Copaxone, Avonex
Not initial therapy; consider step or PA for trial of initial therapy drugs
Lemtrada will be a mixed bag of benefits and costs. In the short-term it will likely displace less expensive Rebif therapy, but in the long-run it will be more effective at preventing relapses leading to better outcomes and lower costs.
EvolocumabHypercholeste-rolemia
2015 Sub Q$10 - $18K per year
StatinsClose monitoring of FDA approval status
Currently slated for narrow (and rare disease state) approval. However, if approved for broader treatment, could replace or be adjunct therapy with statins for cholesterol treatment. If granted broad approval, expect significant treatment protocol and cost increases for cholesterol therapy.Evolocumab has potential to redefine clinical
management of high cholesterol with significant cost impacts against a mature (generic-heavy) statin
category
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Specialty Pipeline - Miscellaneous
Drug Name
Disease Treated
Approx. Approval Date
Route of Admin
Projected Costs
Current Disease Treatments
Recommended Potential Action
AlexionHypophosphatasia
2015 Sub-Q$200 - $300K per year
First in class
Examine medical claims for evidence of these patients; pharmacy data will not indicate
With the incidence of hypophosphatasia most recently estimated to be one in three hundred thousand, the need for this orphan drug will be rare, but the costs will be material when it is required. Alexion is considered to be a “breakthrough therapy” meaning that its mechanism of action is superior to any previous treatments.
RuconestHereditary Angioedema
July 2014 IV$200K per year
Berinert, Kalbitor,Firazyr
Consider allowing as first line therapy as HAE is life-threatening
Ruconest has the potential to displace Berinert, Kalbitor, and Firazyr in the treatment of acute attacks of Hereditary Angioedema with a single IV dose. Received final orphan drug designation in July. There are 6,000 to 10,000 patients in the US who seek treatment for acute HAE attacks annually.
CerdelgaGaucher Disease
Aug. 2014
Oral$240K per year
Cerezyme, Vpriv, Elelyso, Zavesca
Consider allowing as first line therapy for convenience and efficacy
Cerdelga, an oral therapy, has the potential to displace traditional infused treatments for Gaucher disease. Costs will offset somewhat as this therapy replaces other available treatments.
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Specialty Pipeline - Miscellaneous
Drug Name
Disease Treated
Approx. Approval Date
Route of Admin
Projected Costs
Current Disease Treatments
Recommended Potential Action
Amigal Fabry Disease June 2015 Oral$100 - $300K per year
FabrazymeKeep watching – could be approved as combo therapy ($$$)
Amigal, an oral therapy, has the potential to displace traditional Fabrazyme therapy in the treatment of rare Fabry disease, however it may also be approved to be used in combination with Fabrazyme, in which case cost impact will be more material, although the incidence of Fabry disease is low. **Screening test under development
EsbrietIdiopathic Pulmonary Fibrosis
Nov. 2014 Oral$100K per year
Oxygen, pulmonary rehab, lung transplant
Expect to cover; may help defer/prevent lung transplants
Esbriet would be the first drug treatment in this disease that currently affects between 100,000 and 200,000 patients in the US, and so has the potential to reduce lung transplant rates in advanced disease.
SynagevaLysosomal Acid Lipase (LAL) Deficiency
Jan. 2015 IV$250K per year
First in ClassRare occurrence disease; qualify appropriately
Synageva is considered an orphan drug drug due to low incidence of LAL deficiency, with only 8 cases of the early onset form per year, and approximately 4,000 patients with the late onset form in the US currently.
secukinumabModerate to Severe Plaque Psoriasis
Oct. 2014 Sub-Q$5K per month ($60K per year)
Methotrexate, Enbrel, Humira, Stelara, Remicade
“Me too” drug – no clear therapy advantage; consider costs for formulary placement
Secukinumab will compete primarily with well-known high cost therapies in the treatment of moderate to sever plaque psoriasis at similar costs
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Specialty Pipeline – Cancer Therapies
Drug Name Disease Treated
Approx. Approval Date
Route of Admin
Projected Costs
Current Disease Treatments
Recommended Potential Action
idelalisibIndolent non-Hodgkin’s Lymphoma
Aug. 2014 Oral $10 - $12K per month
Rituxan, Treanda, Arzerra
“Me too” – evaluate cost/appropriateness for formulary
pembrolizumab
Refractory melanoma & non-small cell lung cancer
Oct. 2014 IV$120K per year Yervoy
“Me too” – evaluate cost/appropriateness for formulary
palbociclibHormone sensitive advanced breast cancer
Jan. 2015 Oral$5 - $10K per month First in Class
Potential to be blockbuster. Hung up with FDA for data issues
nivolumabSquamous non-small cell lung cancer
June 2015 IV $150K per tx course
Yervoy“Me too” – evaluate cost/appropriateness for formulary
daratumumab Multiple Myeloma 2015 IV UnknownVelcade, Kyprolis, Pomalyst, Revlimid
Game changer for therapy options; expect to cover
panobinostat Multiple Myeloma Nov. 2014 Oral $54K per tx course
Velcade, Kyprolis, Pomalyst, Revlimid
To be given in combination with Velcade
olaparibBRCA mutation-positive ovarian cancer
Summer 2016
Oral $12 - $15K per month
First in Class Likely delays with FDA approval
Daratumumab has the potential to improve patient outcomes in multiple myeloma patients, but cost is yet unknown. Other oncology therapies are expected to have moderate impact at similar costs to existing therapies.
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Contact
Martha Allen, VP Business DevelopmentExcelsior Solutions7401 Metro Blvd, Suite 210Edina MN 55439
(o) (952) 562-5542 (m) (612) 325-7594
Please check out our team and client testimonials at: www.excelsiorsolutions.com
For questions or more information:
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Our Mission
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Our Goal
To be the best place to do business and to work
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