Episode 2 – Specialty Pharmacy, Private Exchange & More 

Mike Stull (0:00) 

All right, we are ready to go. Hello and welcome to the August edition of the monthly Employers Health Member Podcast. This is Mike Stull, Chief Marketing Officer, and I’d like to thank each of you who took the time to listen to last month’s podcast covering our PBM market check. 

We want these podcasts to be relevant to you and your organization. Therefore, I invite you to submit questions or topics of interest that you’d like me to cover in future editions of the podcast. We’d like to congratulate last month’s gift card giveaway winner, Joe Lipinski of Sisters of Charity Health. 

Joe submitted the code word of “Pharmacy” for the July podcast and is the winner of a $50 Visa gift card. So congratulations, Joe.  

At the end of this update, I’ll give you more information about how to both submit your questions and also how to enter a drawing for a $50 Visa gift card simply for listening. 

You’ll need the special code word to enter to win, so you’ll want to listen all the way to the end.  

Additionally, in each podcast, I want to make sure that I let you know about upcoming learning or networking opportunities that we have and also highlight one of our many best-in-class vendor partners, which this month, we’re going to talk a little bit about Delta Dental. But to get started, let’s talk about some of the questions that were submitted and some questions that I hear being discussed in the employee benefits world. 

All right, so one of the questions that we get asked often is about specialty pharmacy. And with me today is Matt Harmon, our Director of Clinical Pharmacy Strategies. Welcome to the program, Matt. 

Matt Harmon (2:01) 

Good afternoon, Mike.  

Mike Stull (2:02) 

Before we get into specialty pharmacy and ways to manage them, maybe tell us a little bit about your background. Where’d you grow up? Where’d you go to school? Tell us a little bit about where you did your residency. 

Matt Harmon (2:16) 

Okay. So I’m a Bluegrass boy from the state of Kentucky, born and raised in Louisville. And I went to the University of Kentucky for my undergraduate and pharmacy degrees during pharmacy school. 

I did a dual degree at the College of Public Health, and so I got my master’s in public health there. And that led me to Ohio State Health Plan, which is where I did my residency, and that’s what brought me to Columbus, Ohio. And really the side of managed care that interests me is because I felt that had the complete picture of a drug. 

A lot of pharmacy schools focus on the efficacy and safety, but I think you really need to throw in cost there to get the full picture, and that’s what drew me to managed care.  

Mike Stull (2:56) 

Great. And Matt, how long have you been with Employers Health?  

Matt Harmon (3:00) 

Three years and a couple weeks. 

So, it’s been fun, you know, really seeing my position grow over the last few years and just kind of become more comfortable in the role, and it’s great working with the staff we have here.  

Mike Stull (3:12) 

Excellent. So, specialty drugs are definitely dominating the headlines as it relates to how to address rising pharmacy costs. 

From your perspective, what’s step one in terms of managing these drugs, and what else should employers be thinking about as it relates to the specialty medications?  

Matt Harmon (3:35) 

Well step one, I would say make sure you’re managing the traditional side. So I know specialty drugs have been a lot of the drivers of trend, but that’s still about 30% of the cost. You have 70% on that traditional side, so making sure you’re managing that effectively through generic step therapies, coverage or non-coverage of compounds, drugs, and those are important. 

And then as for specifically for specialty, prior authorizations are really the main tool I think we have as a drug to make sure that it’s the right drug for the right patient at the right time. There are a lot of off-label uses for these medications that really don’t have the clinical data to show they’re effective, so really making sure that that drug is right for the patient and appropriate for the plan to pay for. You have, for example, Botox. 

There’s legit usage for that if you have chronic migraines, more than 15 migraines a month, but not everybody wants to use Botox for that reason. It has the cosmetic usage, so making sure you have those prior auths in places is critical. That’s number one, and I think contracting, look at it from a group purchasing perspective, that’s really huge since the discounts are major. 

When you’re talking about $10,000 drugs, a percentage extra discount you might be able to get or two from joining a group purchasing coalition, such as Employers Health, that’s a couple thousand dollars per prescription that you could save, and I think that’s really key.  

Mike Stull (5:07) 

One of the things that I’ve seen on the prior authorization side is not just making sure that the right people are getting the right drug up front, but also making sure that the drugs are working after a certain period of time. I know that one of the things that you do is look at the criteria that the PBMs are putting out to make sure that not only do we think that it’s the right criteria for the patient who’s starting on therapy, but also that the PBMs are following up based on literature, based on some of the clinical studies that were done on the drug.

Matt Harmon (5:50) 

Absolutely. There are a lot of drugs that when you look at specialty, they might only work for 30% to 50% of the population that they’re supposed to treat. If you’re going to pay for a drug, you want to make sure it’s working for you, so really having that reevaluation is key, not just to have unlimited approval once it’s tried for the first time. 

I mean, even for cancer drugs, some of those have effectiveness of 20%. Really, there’s a new movement to include genetic biomarkers for these medications, which may only cost a few hundred dollars for that test, but it’ll save you $100,000 down the road. I think that’s a good piece. 

One of the biggest things to understand about specialty medications is that it’s not all under the pharmacy benefit. It’s really 50-50 in terms of spend for specialty drugs under the medical versus the pharmacy benefit. I think the PBMs are doing a pretty good job in managing the drugs under the pharmacy benefit, but there’s still a lot of questions about how they are under the medical side. 

When talking with your health plans as an employer, I really stress there are about 80 or so drugs that can have some sort of clinical management under the medical benefit, and we’re really trying to push back harder and looking at those different strategies. The biggest one is side of care. That’s really the big program that’s being pushed now. 

Since there’s a huge variability in cost just based on how the drugs are purchased, greatest terms of cost would be the outpatient hospital. There might be a legitimate reason why that drug was dispensed there, but typically, it can be dispensed at a physician’s office for about half the price. Also, looking at those dosing edits, there’s a wide range in the amount of drug that might be dispensed that’s unnecessary. 

You might pay for a vial that has 10 milliliters in it, but that patient only needed six. On the outpatient hospital side, you might be charged for that full 10 milliliters, and that’s a product that you’re not actually being used for your patient, but you’re getting charged for. Really talking with your health plan on how they’re managing specialty drugs is huge. 

Mike Stull (8:06) 

Yeah, absolutely. You mentioned earlier contracting, and one of the big pieces of contracting outside of just discounts are rebates. Rebates being driven by formulary decisions that the PBMs are making. 

It’s that time of year. Just this past week, both Express Scripts and CVS announced their respective changes to the formularies. Obviously, it includes some new drugs being excluded from the formulary. 

That’s something that you obviously look forward to seeing every year. On behalf of our membership, maybe just talk about some of the things that you’re looking for when these new formularies come out.  

Matt Harmon (9:02) 

Sure. 

First thing I look for is what drugs are going to cause the most noise in terms of utilization, or maybe they’re a niche drug that might not have competition that’s class, and they’re trying to steer you towards a drug that doesn’t work exactly the same. Luckily for the exclusions this year, I didn’t see any that fall into that ladder bucket, but we see some drugs that are in our top 10. We have an insulin product that is now being excluded, and I think that is something that might cause some initial disruption, but now it’s being excluded in favor of a biosimilar insulin. 

That is still technically not out on the market, but I think that it’s the same active ingredient. Really looking for those things that, okay, yeah, you might have some initial noise because, hey, you’re taking a patient off a drug that they might be controlled on, but really trying to explain the story of how this drug works about the same way in the body. It’s a similar dosage that the patient’s going to be using. 

Getting over that initial hurdle generally is key, and then I think that don’t see as much noise after the patient has actually tried the therapy that is the preferred alternative. Really, that’s key in maximizing the rebates for exclusion because as the trend keeps going up and up, we have to look at these classes that have multiple products. That’s the purpose of the PBM to go to the manufacturers and say, hey, there’s three drugs in this class. 

Which one of you can give me the best price, the best net cost after rebates, and it could be the preferred product on the formulary. I guess the main thing that I look for are those exclusions and also maybe some new classes that are targeted so we actually, for the first time, are seeing cancer drugs being excluded. It’s something I’ve been wondering when it was going to hit. 

Since in pharmacy school, you notice there’s eight drugs to treat prostate cancer. Do we need to have all those on the formulary? I know cancer is a touchy subject, and as these budgets get tighter and tighter due to the increased in spend and trend, we have to really might have to exclude these certain drugs, but the ability of a patient to still get those excluded products is key. Most PBMs, they offer the exclusionary formularies, but that you have the option to have prior auth for medical necessity. 

There might be a reason, say, one of the excluded drugs might work better for a patient that has a severe liver failure where the preferred product does not. Those kind of instances, the prescriber fills out the prior auth, shows that the patient has that severe liver damage, and then the excluded product can get approved, and the patient can pay the normal copay, and everybody’s happy. Those are some of the things I like to look for, and also excluding certain drugs that are hyperinflated. 

That’s a new addition this year that I think should be a standard for all PBMs. We’ve seen a lot of manufacturers that are trying to take advantage of the system and inflate drug prices by 500 percent, which is ridiculous in my opinion. There needs to be ways that we update the formulary on a regular basis to exclude those type of products and prefer the cheaper alternatives. 

Mike Stull (12:35) 

I think that hits on a good wrap-up point, which is the marketplace is changing so rapidly. And whether it’s compounds or whether it’s dermatological creams that are being now sold in the marketplace for exorbitant costs, or even as new specialty options come to market, we have to think about managing a plan as more of a continuous process versus something that we do maybe once a year.  

Matt Harmon (13:11) 

Absolutely. 

The one-one plan changes only should be dead. You have to be on top of it. It’s a rapidly evolving market, so we need rapid strategies. 

That’s what we try to do. I’m always happy to chat with any of our employers. If we come up with a strategy and you’re still not sure about it, give me a call or send me an email, and I’m always happy to talk with you guys. 

Mike Stull (13:54) 

I think that’s one of the advantages of participating in the program like with Employers Health is that we have resources that are here to help you sift through all the changes and to make sure that they are in your best interest and in your participants’ best interest, both from a financial perspective as well as a clinical perspective. Matt certainly does a nice job of helping our members make wise decisions based on those two things. Thank you, Matt. 

If you have any additional questions, as Matt said, you can reach out to him directly either by phone or email. Thanks for joining us.  

Matt Harmon (14:18) 

Thanks for having me, Mike. 

Appreciate it.  

Mike Stull (14:20) 

Obviously, we can talk for hours or even days on specialty pharmacy, but hopefully this gave you some information at a baseline level that you can take back and utilize within your own plans. Let’s move on to another question that we received. 

It is what’s going on with private exchanges. I think the first thing to understand about private exchanges, at least in my view, is that there are three different models for private exchanges. There’s a pre-built model, which is what most of the large consulting houses were marketing. There’s a carrier model, where the health plans were designing their own private exchanges. Then there was a technology model, what I like to call a do-it-yourself model. You like your vendors that you have, and you have the technology to create ease of administration and put some decision support tools around your plans as they exist today, then you can do it yourself with the right technology. 

Where I think we are, we’re at a plateau as it relates to some of the pre-built models. The consulting houses, I don’t hear about private exchanges near as much. I think a lot of employers have kicked the tires on those and, for the most part, have decided that they’re not something that they want to utilize, at least right now. 

What we are seeing more of are the benefit administration technology providers stepping up and putting some decision support tools within their technology platforms, making it easier for employers to really take the plans that they have and take the vendors that they have and basically create more choice while making the administration of creating more choice more bearable. I think that’s where we’re seeing more of the action is in what I referred to earlier as the do-it-yourself model. I think that’s where we’ll continue to see a lot of future interest is in these types of models. 

(16:42) 

Certainly, I think choice and creating unique offerings for individuals within a plan is a place where a lot of employers are thinking that benefits should go. If the current technology providers can make it easy for them to get there, then that’s the route that they’ll probably end up taking.  

If you’re interested in looking at which private exchange or if a private exchange would make sense at all for your organization, we have resources on the team that can help you out. 

Contact your account management representative from Employers Health and we will get you in touch with the right members of our team.  

The next question has to do with wellness and wants to know what’s going on with wellness strategies. Tracy Berry is our Senior Director of Strategic Health Initiatives and really our on-site expert as it relates to all things wellness and well-being. 

Tracy recently finished two projects related to well-being. The first was a survey to our membership as it related to their respective strategies around well-being. It looked at things like participation, who’s eligible to participate, who isn’t, what types of programs do they offer, what types of incentives are offered, and really how does well-being fit within the overall health care strategy that the employer has. 

She presented the results of that survey in a webinar this past week, so if you are interested in hearing a recording of that webinar, again, please contact your account manager and he or she can get you the link for that recording. The other project that Tracy’s been working on is around credentialing vendors for well-being services. Tracy released an RFI. 

It had somewhere around 140 questions in it. She was able to get 32 solutions providers to respond to that RFI. Tracy has utilized the responses and organized the responses in a way that if one of our member organizations is interested in looking at different wellness solutions or well-being solutions, this should hopefully streamline the process of doing that type of an evaluation. 

(19:20) 

I think the ultimate goal here is for organizations to create a positive environment or a positive culture where individuals can make healthy decisions, can increase their energy, can feel good about the investments in time that they’re making, and overall, yeah, if we increase health, it will eventually lead to lower health care costs, but ultimately, that positive environment also has a more direct connection to the contributions that those individuals are making on a daily basis in the short term. 

Again, I see well-being really becoming a part of overall organizational culture and efforts to improve those cultures.  

Thank you to those who submitted questions for this podcast, and again, I would encourage you to submit your questions for topics that you would like to hear on future episodes. 

You can do this by completing the field on the landing page or clicking the link titled “Submit Your Questions Here,” and then be sure to tune in next month to hear your questions get answered.  

Also, as you’re looking for ways to broaden your knowledge, don’t forget about the many opportunities you have as members of Employers Health to attend both in-person and virtual learning events. Upcoming opportunities include a new opportunity this year, and it will occur on August 31st. 

It is a Health and Wealth Administrator Workshop. It’s a full-day program that will run from 8 30 to 4 30, and it’ll be held at the Hilton Hotel in Columbus at Easton Town Center. This is an Employer’s Only event, and we’re limited to 100 attendees, so if you haven’t registered for the event, please do so.  

You can also find more information about the day’s agenda and more information about all of our events on our website at www.employershealthco.com.  

You can also be sure to follow us on LinkedIn and Twitter to stay up to date on all upcoming Employers Health events.  

Finally, with this podcast, I want to take a minute to share with you one of our valued vendor partners. For this edition, our vendor partner is Delta Dental. 

Delta has been the preferred dental provider for Employer’s Health members in Ohio since 2011. Delta Dental is one of the largest dental plan administrators in the United States, covering more than 13 million people, with an impressive renewal rate ranging from 98 to 99 percent each year. We know Delta has broad networks. 

In fact, three out of four dentists participate in one of their networks, while 395 of the Fortune 1000 companies are clients of Delta Dental. In 2015, they processed 97 million claims at 99.7 percent accuracy, so pretty impressive. 

In Ohio specifically, Delta is the largest dental benefits administrator and contracts with 84 percent of all Ohio dentists and covers 1.76 million members throughout the state. 

When working with Delta Dental, employer groups and union sponsors can build plans based on their specific needs and choose from a PPO, EPO, or Delta Dental Premier Model.  

To learn more about Delta Dental and its resources, you can contact your Employer’s Health account representative. I know we have a number of clients that participate with Delta Dental and always hear good things from them about the quality of service that they and their participants are getting. 

So that’ll conclude this month’s podcast. Thank you again for taking the time to listen. More importantly, thank you as always for your continued membership with Employers Health. 

Make sure to submit your questions so that we can get them answered in our upcoming editions. Also, if you would like to be considered for the $50 Visa gift card, the code word is “HEALTH”. Again, if you want to be considered for the $50 Visa gift card, the code word that you need to submit is “HEALTH”. Please do that along with your name and email address.  

So thanks again for listening. Enjoy the rest of your summer. 

Be well and we’ll see you real soon.