Chattanooga Times Free Press (TN) January 22, 2020
Jan.
22--Providers and state legislators continue to clash with BlueCross BlueShield
of Tennessee over the insurer's plan to lower costs for some self-funded
employer groups by targeting provider-administered specialty drugs -- the most
expensive of all pharmaceuticals.
Traditionally,
providers buy these infusion or injection drugs directly from a wholesaler,
then bill the insurer and the patient for the cost of the medication plus a
small mark-up to cover their overhead. But BlueCross' new plan stops
reimbursing providers for those drugs for some of its members and instead
requires them to be obtained through a specialty pharmacy in the insurer's
preferred network.
The
move has caused an uproar among some powerful physician groups who believe it
will cause major workflow changes, lead to more medication waste and place an
excessive burden on seriously ill patients. But BlueCross officials contend
those fears are alarmist, and that the move to control skyrocketing drug costs
is a response to pleas from employer groups -- BlueCross' customers -- that
foot the bulk of the bills for these high-cost treatments.
"It's
not savings for us, it's for the groups. We've had employer groups say to us
that they don't even want to cover these drugs. We strongly advise against
that," said Natalie Tate, vice president of pharmacy for BlueCross
BlueShield of Tennessee.
Bruno
Delagneau, a pharmaceutical company consultant, said specialty drug prices are
going to be higher, not just because the cost of getting these products to
market is high, but also because the benefit for the patient and society is
high.
"There's
an argument that products should be priced based on their benefit, not
necessarily other factors such as the cost of manufacturing or the cost of research
and development, or competitors' price, so that's going to drive the price of
specialty pharmaceuticals, as well," Delagneau said.
Specialty
drugs play an increasingly important role in treating chronic conditions such
as cancer, rheumatoid arthritis, psoriasis, inflammatory bowel disease and
multiple sclerosis, as well as rare diseases. In total, there are about 400
drugs that BlueCross considers specialty, with a 60/40 split between
self-administered and provider-administered drugs, Tate said. The new policy
doesn't affect drugs patients inject or take on their own, which are typically
already obtained through specialty pharmacies.
"Every
day it seems like there's more [specialty drugs] coming to market," Tate
said. "As we look at the pipeline, the vast majority of research and
development is focused on provider-administered drugs."
One of
those drugs, Zolgensma, became available in May 2019 and carries a $2.1 million
price tag. The one-time injected gene therapy is a breakthrough for young
pediatric patients with the rare disease spinal muscular atrophy, a leading
cause of infant death. Tate said a couple of BlueCross members have already
been treated with the drug.
BlueCross
is not alone in its attempts to rein in these costs. A 2019 survey from the National
Business Group on Health found 85% of employer respondents rated the high cost
of drugs as the No. 1 or No. 2 most concerning pharmacy issue. Other payers are
working to move people to different sites of care, tightening prior
authorization requirements or requiring a similar, cheaper drug be used first.
"Employers
are very concerned about how to finance the high cost of new million-dollar
drug therapies. Some of these therapies will cost more than what an employee
will earn in a lifetime," Brian Marcotte, president and CEO of the
National Business Group on Health, said in a news release.
For
now, the new policy applies only to BlueCross BlueShield of Tennessee members
in 100 self-funded employer groups, including the state health plan. Within
these groups, there are about 5,500 employees and dependents who require
specialty pharmaceuticals, according to BlueCross officials.
The
state health plan covers the state's government employees, including teachers
and local government employees, and their beneficiaries. About 3,500
participants in that plan use provider-administered specialty drugs, according
to documents obtained through an open records request. Joan Williams, public
information officer for the state benefits administration that oversees the plan,
said the state spent more than $1.63 billion on all drugs in 2018 -- more than
26% of total plan expenses and higher than any other category of health care.
"Pharmaceutical
spend is rising at the highest rate [increasing 35% between 2015 and 2018], with
specialty drugs driving this increase [48% increase during the same time
period]. Specialty drugs now account for 44% [$259.3 million] of the $586.6
million total plan gross pharmacy spend," she said.
BlueCross
told the state it could cover the same drugs while saving Tennessee between $9
million and $12 million in taxpayer dollars through the new program. That's
because there's a mark-up when providers buy the drug themselves and then bill
for them. BlueCross officials said this old system wasn't problematic when
drugs were cheaper, but this new method will help rein in costs by eliminating
a middleman, and because the specialty pharmacies are giving BlueCross
discounts on the drugs.
Dr.
Jack Erter, a medical oncologist with Tennessee Oncology and the president of
the Tennessee Oncology Practice Society, said that seemingly minor change will
have a major impact on his group and patients. That's because when a provider
obtains a drug it's billed as a medical benefit -- which is "a more open
system" -- but when it comes through a pharmacy, it becomes a pharmacy
benefit -- which comes with strict rules. Although that's not problematic for
basic retail drugs, it's a concern for specialty drugs that are more complex
and given to sicker patients, Erter said.
One of
those rules is that drugs are dispensed to specific patients and can't be
returned or used for anyone else. Erter said that causes a workflow and
inventory nightmare for medical groups. Each patient needs lab work done to
make sure they're well enough to receive the infusion drug. Often, they're too
sick at the time and will need to return for follow-up appointments, he said.
Meanwhile, the drugs will have to be stored under the patient's name in the
office, and some have a short shelf life.
"That's
a major source of waste and economic cost in itself; some of these drugs are
given weekly," he said.
Drugs
also must be paid for in advance rather than billed for after the fact as part
of the office visit. Erter said that shifts more of the cost burden to patients
and means those who can't afford to pay for their medicine up-front may miss
their treatment. It also limits access to discount programs available to
doctors under the medical benefit, he said.
"With
the pharmacy benefit, all of the pharmacy benefits are going to be tightly
managed by BlueCross, and there's no way to access these point-of-care
discounts," Erter said.
BlueCross
officials said specialty pharmacies also can obtain patient assistance, and
that freedom providers have under the medical benefit is the reason why the new
program is necessary. As it is now, providers buy the drugs at a discount and
mark up the price for reimbursement. Although the markup is needed to cover
their overhead, BlueCross officials said some providers take advantage of the
situation.
"We
still believe many providers objecting to this new process are motivated by
their potential loss of revenue," BlueCross officials said in an emailed
statement, adding that fears over increased waste are overblown.
"Waste
can happen in the system today. We're not suggesting this process will
completely eliminate waste. We don't believe it will substantially increase
waste, and financially, we still believe in the value of this program,"
officials said.
The new
policy was also set to apply to some TennCare beneficiaries within BlueCross'
managed care organization starting Jan. 1. However, that process was delayed
once legislators got wind of the provider concerns.
State
Rep. Robin Smith, R-Hixson, a former nurse and chairwoman of the House
Insurance Committee, called the new policy "a classic example of where
insurance can have an impact on an outcome, and they're looking at efficiencies
and savings -- not at patients.
"It's
very important to make sure that we're spending money carefully and wisely, but
we're not going to save the taxpayers money on the backs of the most medically
fragile," Smith said. "The state legislature is very concerned that,
A, this is going to cause a material change to the benefits of some of the more
medically fragile, and B, the power of insurance companies is showing that they
do things with memorandum and not through developing some type of collaboration
to make sure things are going to work."
BlueCross
officials said they "strongly disagree" with those concerns.
"We're
still covering the same list of drugs. We're still covering the services of
providers to administer the drugs, at the same rates we do today. And we're not
asking members to receive their treatments at different facilities," officials
said.
Pharmaceutical
consultant Delagneau said the drug supply chain and market in the United States
makes any attempt to control costs a challenge.
"The
issue with pharmaceutical prices is you never know the real story, because
there's no transparency. It's very opaque," he said. "The
pharmaceutical drug market in the U.S. is very complex, because we have many
layers, and all of these layers of people, all these businesses, are trying to
make money, and we made the market free. If you can launch a product that's
$100,000 per year for a quality treatment, and people are ready to pay for it,
why wouldn't you do it?"
Contact
Elizabeth Fite at efite@timesfreepress.com or 423-757-6673.
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(Chattanooga, Tenn.)
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