Simply put, hepatitis means inflammation of the liver. Chronic hepatitis C virus (HCV), a blood-borne disease of the liver, is a global health concern. In the United States (U.S.), it affects an estimated 3.9 million people, up to 30 percent of whom will develop cirrhosis and 1 percent to 3 percent of whom will develop liver cancer. There are six genotypes, with genotype 1 being the most common genotype in the U.S., accounting for over 75 percent of HCV cases. Approximately 12 percent of U.S. patients have genotype 2 and 10 percent comprise genotype 3. Genotypes 4, 5, and 6 make up less than 2 percent combined in the U.S.

Historically, treatment for chronic HCV was agonizing, as it involved injectable interferon and oral ribavirin, associated with very low cure rates, undesirable safety profile, poor tolerability and a long duration of therapy. Over the last four years, HCV treatment has undergone a paradigm shift, with the approval of once-daily oral direct-acting antiviral (DAA) regimens, providing sustained virologic response (SVR) of over 95 percent, which is synonymous with cure. The approval of sofosbuvir/velpatasvir (Epclusa^®) in 2016 marked the first pangenotypic agent, as a 12-week regimen. Pangenotypic drugs work against all genotypes. These major advancements have led to a trending down in utilization of HCV treatments with fewer patients needing retreatment and have sparked the possibility of eliminating HCV at a national and even global level. Yet, there is still an unmet need. The Holy Grail of HCV research is focused on all-oral, ribavirin-free regimens, shorter duration of therapy and options for DAA treatment failures.

Two next-generation pangenotypic HCV agents are expected to be approved in August. Gilead’s investigational sofosbuvir/velpatasvir/voxilaprevir is seeking to become a salvage therapy for prior DAA failures as a 12-week regimen, pangenotypic drug for patients without cirrhosis or with compensated cirrhosis. This agent has received FDA’s Breakthrough Therapy designation for patients with genotype 1 who have failed prior DAA therapy, specifically containing NS5A inhibitors. Breakthrough Therapy designation is given to drugs that can treat a serious or life-threatening condition and preliminary evidence suggests that the drugs may demonstrate substantial improvement over available therapy on a clinically significant endpoint. This designation helps expedite the development and review process. The Gilead product is taken as one tablet once-daily.

Glecaprevir/pibrentasvir, Abbvie’s emerging HCV pipeline drug, may be approved as a shorter eight-week regimen across all genotypes, in non-cirrhotic patients. For patients with genotype 1, it has received Breakthrough Therapy designation for those not cured with prior DAA therapy. This Priority Review product has also been studied in difficult-to-treat populations with high efficacy. An FDA Priority Review designation is given to drugs that offer major advances in treatment, or provide a treatment where none existed. The FDA goal for completing a Priority Review is six months, compared to 10 months for a standard review. Abbvie’s regimen is taken as three tablets once-daily.

This August wave of pangenotypic options for HCV should further drive competition and access in the marketplace. They can lead to a cure in larger populations with shortened durations and treating difficult-to-treat patients, including prior DAA failures. These continued advancements in turn make the quest to achieve national elimination goals a viable possibility against this national epidemic.

Magellan understands that the market looks at pharmacy trends as a gauge to measure pharmacy benefits manager (PBM) success. However, you really can’t compare one trend number to another as every PBM uses different methodologies, different data sets and different calculations to arrive at their trend number, and often adjustments are made to these calculations year-over-year. This is something Magellan likes to call little ‘t’ trend.

Do you know what most of these trend numbers are missing? One of the largest cost drivers today – prescriptions drugs dispensed through the medical benefit – when you combine pharmacy benefit with medical benefit spend, you get what we like to call big ‘T’ Trend. In fact, you need to combine both to see that there is as much, if not more specialty spend going through the medical benefit today that is going unmanaged.

As specialty costs continue to soar the need to leverage effective management and thought-leading expertise is essential.  As pioneers in this complex specialty environment, we have dedicated ourselves to solving the challenges and creating solutions that resolve what’s truly driving big ‘T’ Trend.

Watch our video to learn more.

A major trend in the pharmacy space continues to be increasing specialty drug spend, which is expected to continue with the introduction of new specialty agents for oncology, autoimmune disorders and rare diseases. In this year’s Medical Pharmacy Trend Report Employer Group Supplement, we found that 88 percent of employers reported a medical benefit spend of less than $10 million, and a year-over-year drug trend between 1-20 percent. For the few employer groups with spend above $10 million, it was due to a higher number of lives, and may be assumed that the employee mix for these groups may have included those with more costly health expenditures.

The Employer Group Supplement assists employer groups and third-party administrators in determining specialty drug trends and strategies to solve complex challenges impacting the medical benefit drug landscape. Our goal is to expand the information shared with employer groups to create a more dynamic picture of specialty drug management and help employers make more effective healthcare decisions. Building an effective medical benefit drug management strategy requires an in-depth knowledge of and expertise in this complex area, but it’s essential to help employers rein in costs and improve the quality of care for members. It is our hope that the survey data presented in this report helps employer groups begin to think about and investigate escalating medical pharmacy costs.

Download the full report or listen to our webinar to learn more.

Learn more about ways to keep specialty spend, an important — and quickly growing — area of pharmacy spend, from Matt Ward, Magellan Rx Management’s general manager of the employer segment. Ward’s op-ed on the subject was recently published in WorldatWork’s magazine. WorldatWork is a nonprofit human resources association and compensation authority for professionals and organizations focused on compensation, benefits and total rewards.

Read more here: Six Ways to Keep Specialty Spend Under Control 

Medicine continues to evolve quickly, with new treatments and trials coming to market every month. As a doctor in practice, staying up-to-date on the newest innovations and school of thought can be overwhelming, particularly for rare diseases such as Duchenne muscular dystrophy or spinal muscular atrophy. What’s the role of a pharmacy benefit manager in cases like these?

As part of its value-based approach to pharmacy benefit management (PBM), Magellan Rx Management sees itself as an idea connector and conversation starter. Recently, a discussion forum connected doctors with two key opinion leaders to discuss the complexities and effective management strategies for Duchenne muscular dystrophy (DMD) and Spinal muscular atrophy (SMA).

• Duchenne muscular dystrophy is a genetic disorder characterized by progressive muscle degeneration and weakness. It is one of nine types of muscular dystrophy. DMD is caused by an absence of dystrophin, a protein that helps keep muscle cells intact. Symptom onset is in early childhood, usually between ages three to five. The disease primarily affects boys, but in rare cases it can affect girls.* According to the UCLA Duchenne Muscular Dystrophy Research Center, DMD affects one in every 3,500 male births.

• Spinal muscular atrophy is a genetic disease affecting the part of the nervous system that controls voluntary muscle movement. SMA involves the loss of nerve cells called motor neuronsin the spinal cord and is classified as a motor neuron disease. The age at which SMA symptoms begin roughly correlates with the degree to which motor function is affected: The earlier the age of onset, the greater the impact on motor function.* For SMA, the disease affects one in every 6,000-10,000 births, according to the Orphanet Journal of Rare Diseases.

The physician KOLs provided their expertise and insight on a wide range of topics including review of the clinical evidence, appropriate patient selection, and a discussion of the treatment landscape.  Additionally, effective clinical polices, practical dosing considerations, and emerging therapeutics were explored in this robust webinar. Importantly, doctors who took part in this discussion were given the opportunity to ask the KOLs questions about DMD and SMA – providing an opportunity for open dialogue and discussion about these complex issues.

*Information supplied by www.mda.org

In late January, Magellan held its second annual Magellan Open Vision Exchange (MOVE) conference in Scottsdale, Ariz. MOVE brings together a large cast of voices from the healthcare industry to discuss the future of healthcare for patients, plans and providers. Over two days, we heard from private industry experts, government leaders, as well as other subject matter experts and thought leaders both from inside and outside the healthcare industry.

The Future of Healthcare Beyond the Affordable Care Act

Obviously, the continuing debate over the future of healthcare and the Affordable Care Act were a central topic of the conversation at this year’s MOVE. A number of speakers talked about the impact of the Trump Administration’s efforts to repeal the Affordable Care Act. Former Utah Governor Michael Leavitt, who also served as the secretary of the Department of Health and Human Services, said that while he expects repeal and replace legislation will pass, significant parts will be deferred for three or four years. Brian Coyne, VP of federal affairs at Magellan Health, said that he feared gridlock over the next couple of years.

Managing Transformation in the Healthcare World

One of the key topics discussed at this year’s event was the immediate future of the healthcare industry. After a long period of explosive innovation, there was consensus that disruptive change will continue. Magellan Healthcare CEO Sam Srivastava posited that we are currently in a tech-bubble that is about to burst. The industry is waiting to see which of the early healthcare technology entrants will survive and how technology and healthcare will continue to interface with each other.
Leavitt spoke extensively of the need to manage transformation, especially in healthcare. Leavitt stressed that systematic healthcare change takes hold over three to four decade cycle, and he believes we are less than mid-way through the current transformation. Using an analogy of a cattle herd, Leavitt made the point that you can’t drive a herd too quickly, or you risk a stampede. You also can’t push the herd too slowly or it will meander. Applied to healthcare, the idea is simple but true: If we push change too quickly there will be chaos, but if we fail to adapt and change, we will stagnate. Allowing ourselves to be “lulled into inaction” is a recipe for disaster.

Value-Based Healthcare

A critical area of discussion was the expansion of value-based care. Speakers agreed that demand for value-based care is accelerating. Leavitt said he believed this was true regardless of the Trump Administration’s plans for healthcare. Billy Millwee, President and CEO of BM&A Public Policy, cited broad bipartisan support for the value-based model and agreed that it was here to stay.

Chet Burrell, president and CEO of CareFirst BlueCross BlueShield, spoke clearly on the approach that his company was taking: “We started and ended with common sense.” He went on to explain that they had built their model with the primary care physician at the center (PCP). The PCP knows the patient best and is therefore in the best position to make decisions regarding who to refer and to whom. By taking this approach, Burrell relayed, CareFirst was able to build a patient centered medical home model that improved care while reducing costs.

Despite the level of change being experienced throughout healthcare, a common theme was one of our industry being grounded in helping people get the high-quality care they need, affordably. This is the essence of why healthcare is our chosen industry and why we are driven to innovate.

An interesting takeaway was that across the conference and speakers, there was a clear common theme: while the ultimate structure of the pay-for-value transformation is uncertain, the movement will continue. Experimentation, promoted by both public and private payer initiatives, will drive innovation and change. Some will be better prepared than others to handle this paradigm shift.

You’re buying a car. Before you hit the lot, you do your planning and research, establish a budget, figure out what features you want and what style you’re looking for. You probably search online for car and dealer reviews, prices and sales. Based on all of that work, you make a decision, negotiate and pay for your new car.

Your car research was relatively easy. But finding a healthcare provider? Not so much.

While you may know what you want in a provider, very little information is available about the services they provide, appointment costs, reviews and other important details to help you make an informed choice about your care. And if you ARE lucky enough to find someone who seems to fit your needs, you’re often still left wondering what kind of quality you can expect from your treatment experience.

The bottom line is that it’s easier to buy a car than it is to find a healthcare provider. Silly, right? We think so, too – which is why Magellan is bridging these information and quality gaps by employing value-based purchasing models.

Rewarding quality care yields informed choices

Value-based purchasing takes various forms. But it generally operates on the premise that aligning providers’ incentives and reimbursement with organizational and individual goals incents behavior and drives positive outcomes, ultimately benefiting all involved in the healthcare continuum. This includes consumers, customers and payers, in addition to the providers themselves, who also enjoy improved reputations through public reporting.

In fact, one of the key tenets of Magellan’s value-based collaboration and purchasing models is to ensure stakeholders become more informed as a result of these initiatives:

• Customers benefit by knowing whom to partner with for network management;
• Payers benefit by knowing whom to pay for value; and
• Consumers, of course, benefit by having those online provider reviews become a lot less elusive, enabling them to make an informed decision about whom to choose for their care.

Magellan’s models also center on:

• Engaging and empowering providers in compensation model evolution. We partner with provider leaders around compensation design, employ transparency to ease the compensation shift and create meaningful incentives for providers to encourage active engagement. (1)

• Building provider compensation for an evolving healthcare market. Our priorities center on population management, team-based care and member access. We integrate new quality and efficiency standards into compensation, and remove compensation barriers to population goals. (1)

Why do we give value-based purchasing strategies the green light?

Take our Assertive Community Treatment (ACT) program as just one example. Through program data analysis and close collaboration with our ACT provider teams, we developed a three-tiered rate structure based on overall program goals to support recovery, wellness, and to improve community tenure. As a result, we saw a 21 percent decrease in inpatient admissions and a 24 percent decrease in the inpatient readmission rate.

Our drive for engagement continues

Providers nationwide are in different phases of readiness, so we keep our wheels in motion by providing a graduated maturity model to move them from the most basic stage—learning the behavior through activity incentives—to the most complex arrangements, which transform care delivery through outcomes-based incentives or other payment structures (2). We look forward to working with stakeholders, providers and consumers as we continue to expand this innovative and exciting model.

(1) Medical Strategy Group Council: “Next-Generation Physician Composition,” The Advisory Board Company

(2) Physician Quality Reporting Initiative: The Advisory Board Company

Uncertainty is the name of the game for many industries today, including healthcare. With rapidly emerging technologies, regulations and changing consumer demands, companies must manage differently in order to keep up. Jeff Dyer, innovation visionary and co-author of the highly acclaimed, The Innovator’s DNA and its follow-on publication, The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators highlighted the threat to many companies today – predicting that 50 percent of the S&P 500 will be replaced over the next 10 years.

Human-Centered Innovation

As consumer experiences across nearly every industry become more personalized, on-demand and targeted, he encouraged pushing our thinking beyond meeting functional needs by looking at social and emotional ones as well. By doing so, companies are able to identify unmet needs that can be catalysts for more useful solutions that ultimately win in the market.

The GE Adventure Series Scanner, an MRI scanner designed for children to make scanning a less frightening experience, was a prime example shared of human-centered innovation. While advanced in functional features, what was discovered through observing young patients getting a scan was that the former machine was intimidating – the designer learning that as many as 80 percent of pediatric patients had to be sedated in order to sit still long enough for the scan.  Witnessing this, a new approach was taken, ultimately applying human-centered design methods to redesign the experience as a series of “adventures” for children, delighting and no longer scaring its young users.

The Big Picture in Quality Care

While human-centered innovation can be applied product by product and interaction by interaction, we heard another thought-provoking point from the day’s presentations – that it’s really hard to detect poor quality care through one interaction. The path to a poor outcome most likely includes bouncing from doctor to doctor and breakdowns in coordination and communication between interactions. Often, the big picture reveals the flaws.

The reality today is that many people still get prescriptions from multiple, independent physicians, and many hospital admissions come with undiagnosed behavioral health concerns. The healthcare system has an immense opportunity to come together around the whole patient and to better identify needs at a population level to deliver on value-based care that leads to healthier outcomes.

Physician Collaboration

Our physician panel sparked further ideas in how to collaborate with PCP’s, nurses and other care workers to better meet patients’ needs. Often at the front lines of the patient experience, creativity in finding unidentified needs was discussed as pivotal to creating an effective healthcare experience. While concepts of self-directed, consumer-focused healthcare and increasing consumer participation in healthcare decisions have become popular, the role of physicians is also being transformed. Their responsibility is increasingly to supplement and put into perspective available information, manage expectations, and instill confidence. The discussion thus encouraged leveraging physicians as “natural, trained problems solvers”, bringing them into the ideation for a better patient experience, and empowering them with action-oriented data and decision support along the way.

We thank all of our leaders, clients and partners for joining us in a memorable and energizing event. We look forward to our next gathering in January 2017.