Payers Need Effective Management of Orphan Drugs, Industry Experts Tell AIS Newsletter

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As more drugs for orphan diseases launch in the U.S. market, payers should have policies in place to ensure appropriate use of these expensive therapies, industry experts tell Atlantic Information Services’s Specialty Pharmacy News.

Despite being used to treat very small populations, more and more orphan drugs launch in the United States every year. For the November issue of Atlantic Information Services, Inc.’s (AIS) Specialty Pharmacy News, the newsletter interviewed Stephen Cichy, founder and managing director for Monarch Specialty Group, and Bill Sullivan, principal with Specialty Pharmacy Solutions, on strategies payers can implement to effectively manage their cost.

According to Sullivan, management of orphan and non-orphan drugs begin the same way: a review by their pharmacy and therapeutic (P&T) committees. “Orphan drugs tend to go through the process a little faster, as they usually are in categories with no current competing therapy or old therapies that merely manage symptoms as opposed to modifying the disease process,” he says. And because many treatments for orphan diseases lack alternative or competing drugs, “it’s more than likely that an orphan drug obtains formulary status if FDA approved,” Cichy says.

When evaluating an orphan drug, “plans would first want to know how many members are diagnosed with that condition,” Sullivan tells SPN. “Many members with orphan conditions are already high-cost members...so a new — even costly — therapy may be a ‘net lower cost’ alternative, especially if the therapy reduces acute care costs. In cases like that, the plan may be very proactive in having network physicians prescribe the new medication.” Acute care includes office visits, ER, hospital admissions, home care and the like.

In situations where more than one therapy is available, plans may select one for preferred status, which could be motivated by manufacturer rebates, Sullivan asserts. “Lower [prior-authorization] barriers and lower patient out-of-pocket are the common methods to push selection of a preferred product on a plan formulary.”

Cichy notes another management trend: “I’d say it’s more towards higher patient cost sharing and more imposition of reimbursement,” he told SPN.

Visit http://aishealth.com/archive/nspn1114-02 to read the article in its entirety, which also includes a table ranking the 20 most expensive drugs in the U.S., most of which are orphan therapies.

About Specialty Pharmacy News
Specialty Pharmacy News is a monthly newsletter packed with business news and management strategies for containing costs and improving outcomes related to high-cost specialty products. Designed for health plans, specialty pharmacies, PBMs, pharma companies, providers and employers, the hard-hitting newsletter contains valuable insights into benefit design tactics, specialty markets for certain conditions, formulary decisions, merger and acquisition activity, payer-provider partnerships, patient adherence strategies, and new products. Visit http://aishealth.com/marketplace/specialty-pharmacy-news for more information.

About AIS
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at http://AISHealth.com.

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