Have you heard that the world of cervical cancer therapy is evolving? There are two players who recently stepped onto the field of oncology for the treatment of recurrent, metastatic, or persistent disease. In 2021, FDA approval moved Keytruda® (pembrolizumab) from second-line to first-line therapy in PD-1 positive patients. Tivdak™ (tisotumab vedotin-tftv) also obtained FDA approval as second-line and subsequent therapy in the same space.

Why is the approval of two therapies in the same year significant? Since the 2014 approval of bevacizumab, no new first-line therapy for cervical cancer has hit the oncology market, and prior to bevacizumab, the last new approval in the category was the combination therapy with topotecan and cisplatin in 2006. So Keytruda and Tivdak are possible game-changers for patients!

From 1975-2010, new diagnoses of cervical cancer have decreased by more than 50% due to screening. With the introduction of the HPV vaccine in 2006, there was hope that HPV infection prevention would lead to decreased cervical cancer cases. In 2020, a Swedish study published in the New England Journal of Medicine found that the quadrivalent HPV vaccination was associated with a significant reduction in the risk of invasive cervical cancer. In 2018, there were 293,394 women living with cervical cancer in the U.S. As cervical cancer cases decline, according to SEER data, there were an estimated 14,480 new cases and 4,290 deaths reported in 2021. The total annual medical cost of cervical cancer care is estimated to be $1.6 billion. Due to its move from second to first-line, Keytruda will likely demonstrate a net neutral effect on the budget. A forecasted cost impact model for Tivdak is demonstrated below:

“These [medical pharmacy] trends continue to be a challenge for all stakeholders involved in the care of patients with complex specialty conditions, making it vital for them to stay current and informed for better decision-making,” said Kristen Reimers, RPh, senior vice president, specialty clinical solutions, Magellan Rx Management.

Medical benefit drug spend, or what we call medical pharmacy, continues to be one of the largest cost drivers when it comes to overall specialty drug trends. At Magellan Rx, we have nearly 20 years of experience in managing this high-cost and complex portion of medical pharmacy spend and have published the industry’s only detailed source for trends related to medical pharmacy for the last 11 years.

Here are the trends you need to know from the eleventh edition of the Medical Pharmacy Trend Report:¹

1. Commercial per-member-per-month (PMPM) spend has increased 89% from 2009 to 2019.
2. Medicare remains the highest spend and utilization line of business (LOB) with 10% of members having a medical drug claim.
3. The average annual cost per member for the top 10 drugs is almost $45,000 for Commercial members.
4. For medical specialty drugs 30% of members are driving 96% of the spend.
5. Gene therapy is the top concern for payers in medical pharmacy.
6. Oncology remains #1 highest-spend category across all LOBs.
7. The oncology pipeline is forecasted to increase 105% in PMPM spend from $52 in 2019 to $106 in 2024.
8. There’s a new top five drug list for commercial: Remicade, Neulasta, Ocrevus, Herceptin, Avastin, with Ocrevus entering the top 5 and having an 85% trend.
9. The highest-cost medical benefit drugs exceed $1M per patient per year.
10. Biosimilars Renflexis and Inflectra (in the BDAIDs category) market share increased 4-6 percentage points for commercial and Medicare and a substantial 24 percentage points for Medicaid.

Want to dig into these trends and more, including the latest in management strategies to combat rising pharmacy trend? Download your copy of the report.

1. Unlock the Latest Trends and Emerging Strategies to Manage Rising Medical Benefit Specialty Drug Spend.” Magellan Rx Management Press Release, 20 May 2021. Accessed May 20, 2021.
2. 2020 Magellan Rx Management Medical Pharmacy Trend Report™, © 2021.

The Role of Precision Medicine in Oncology Care

The approach to cancer treatment has been transformed dramatically over the last decade. The use of medications to treat cancer is shifting from a “one size fits all” approach to more personalized therapies. The individual patient’s specific tumor characteristics may now drive the selection of the best treatment option. Identification of these tumor characteristics is often accomplished through genomic testing. Because clinical data regarding genomic testing is being published at an unprecedented pace, both providers and payers may struggle to keep up and need access to a shared, unbiased decision-support technology to ensure patients are receiving optimal treatment options.

How can you accurately approve tests and treatments while at the same time streamlining the prior authorization processes?  Here are four ways:

1. Follow evidence-based standards – there are many different lab companies who offer genomic testing as well as variations in the testing products offered by many labs. Clinical decision support for genomic testing assures that that each molecular test ordered meets clinical, evidence-supported standards and also ensures the use of cost-efficient testing. When physicians utilize this clinical decision support to order genomic testing, it streamlines and optimizes prior authorization and reimbursement arrangements with health plans
2. Enable transparency – provide a real-time window into the precision medicine decision-making process. Currently, it is difficult to ensure that all patients who could benefit genomic testing are receiving appropriate testing. When health plans have access to real-time genomic testing results, quality initiatives can be designed to track appropriate care interventions.
3. Take a patient-centered approach – ensure patients get the most appropriate tests from preferred labs at the right time in their treatment journey. Patients are understandably anxious awaiting test results and a system that streamlines workflow for practices and expedites the delivery of test results ensures appropriate, quality care for patients when time matters most.
4. Promote collaboration – ensuring scalable, appropriate use of precision medicine for cancer means working collaboratively with oncologists and molecular testing labs. Cancer care is often fragmented and solutions are needed that align all stakeholders while keeping the patient at the center of the solution. Providing clinical decision support for genomic testing as well as corresponding drug selection allows for all parties to work quickly and efficiently in order to maximize coordinated, quality cancer care.

To learn more about Magellan Rx Management’s approach to precision medicine in collaboration with Trapelo Health, click here.

The costs associated with cancer care continue to rise, and many new therapy developments are on the horizon. When looking specifically at medical benefit drug spend, which has historically gone unmanaged, oncology medications make up one-third of total per-member-per-month spend, with an average cost per claim of over $2,300 for commercial plans.¹  With estimates that overall oncology spending will reach $220-$250 billion dollars over the next five years², there is a critical need to provide better management for this spend category.

We asked Rebecca Borgert, Pharm.D., Senior Director of Clinical Oncology Product Development at Magellan Rx Management, for her thoughts on what strategies payers should consider for patient-focused, holistic oncology management.

When it comes to tried-and-true cost containment strategies, like utilization management guidelines, what innovations do you see in the oncology space that are making an impact for payers and their members?

The need to ensure patients are receiving evidence-based cancer treatment continues to be of paramount importance. In the era of precision medicine , treatments are often personalized and based on the patient’s specific genomic profile; payers want to ensure their members are receiving the best treatment for their particular cancer. Due to the extremely high cost of most cancer medications, interventions aimed at unit cost savings can improve value and decrease waste. For example, waste often occurs as part of the drug compounding process due to limited vial size availability. Compendia guidelines endorse rounding doses to within 10% of the calculated dose in order to optimize vial utilization and decrease waste. Additionally, other classes of drugs may be candidates for dose optimization strategies. These increased efficiencies can account for thousands of dollars of savings per dose while decreasing overall waste in healthcare.

While a focus on the patient is critical, there’s also the need to engage providers and provide solutions that allow for cohesive workflow. Enhanced claim edits and appropriate network/fee schedules can also be effective management strategies. At Magellan Rx, we stay up to date on the latest trends and have more than 15 years of experience in providing our customers with flexible interventions, like the ones just discussed, to manage both medical and pharmacy oncology spend. It’s important to understand that a one-size-fits-all approach will not work in today’s dynamic healthcare environment.

In 2018, the U.S. Food and Drug Administration set an all-time record with the highest number of drug approvals in the last 23 years (59 total). Several new medical pharmacy drugs were approved for oncology, including 6 biosimilars. How can payers and providers be better prepared for this evolution and ever-expanding pipeline?  

Unlike the pharmacy benefit where formulary management is an industry standard practice, formulary management under the medical benefit is a relatively underused strategy. The introduction of multiple oncology biosimilars presents a perfect opportunity to execute a medical pharmacy formulary strategy in this space.

Currently there are a number of oncology supportive care biosimilars already in the market and, most recently, we have seen the launch of two oncology therapeutic biosimilars. In late 2019 and early 2020, we anticipate the launch of several more of these FDA-approved oncology biosimilars which will create true competition in the marketplace. While discounts for biosimilars compared to their reference products are in generally only in the range of 10%-15%, due to the high cost of these therapies and their prevalent utilization, it is possible for payers to achieve large cost savings with these agents by adopting a thoughtful biosimilar formulary strategy.

At the center, we have patients and their caregivers who are trying to navigate the complex journey from diagnosis to treatment through survivorship. Is this an area of focus that can have a positive effect on outcomes and mitigate rising oncology spend?

Receiving a diagnosis of cancer often results in a total upheaval of the patient’s life as well as the lives of their family members. Providing patients with consistent support and personalized assistance can help to ensure they are able to be compliant with their prescribed treatment. This also helps patients understand the anticipated side effects of treatment and how to proactively manage those side effects, avoiding the need for unplanned acute care.

1. IQVIA. 30 May 2019. Global Oncology Trend Report 2019. https://www.iqvia.com/insights/the-iqvia-institute/reports/global-oncology-trends-2019. Accessed October 15, 2019.

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 

**The following blog post was co-authored by Dr. Maria Lopes, chief medical officer of Magellan Rx Management, and Dr. Karen Amstutz, chief medical officer of Magellan Health.

Value is more than a buzz word among health care stakeholders, but stakeholders – payers, providers, patients and pharmaceutical manufacturers — define value differently, based on their needs, obligations and roles within the evolving healthcare and managed care paradigm. Each stakeholder, while looking out for its unique interests, must also consider how its priorities, perspectives and business model affect the others — their counterparts, and in some cases, partners. Payers are a common thread intertwined within this continuum of healthcare services, interfacing with each stakeholder in a significant, although different manner. As they navigate the changing managed healthcare marketplace, payers must proceed in a manner that protects their interests, even as they give consideration to the impact their strategies and initiatives may have internally and upon other healthcare stakeholders. One unique opportunity for payers exists within the management of prescription drug utilization, specifically in assessing and refining expectations surrounding their pharmacy benefit management (PBM) services and relationships, and how these translate into value for payers and ultimately, all healthcare stakeholders.

Historically, measures of success in the PBM industry focused on leveraging volume as a means of managing drug costs. PBMs demonstrated value by offering what are now considered standard, or core services. Typically these offerings consist of claim adjudication, utilization management, mail order, customer service, some clinical support services, and of course, financial support in the form of volume-driven rebates and discounts. Times have changed as the Affordable Care Act (ACA), increasing government regulation, rising drug prices, and growing availability and demand for specialty pharmacy drug products have profoundly impacted the use, costs, and management of prescription drug therapies within the managed healthcare marketplace.

Accordingly, expectations surrounding prescription drug benefit management among stakeholders have been, and will continue to be, profoundly impacted by the shifting healthcare environment. Specifically, as payers seek to provide patient or member support, access to care and expanded services, while maintaining profitability, they are reassessing business models and relationships. For payers, this includes taking a close look at the manner in which prescription drugs are managed, giving consideration to the clinical and financial impact of specialty drug spending, in particular. In response, payers are increasingly looking to PBMs to refine their services, with an eye toward driving outcomes. It is no longer sufficient for a PBM to provide products at a discounted price. Essentially, payers are looking for PBMs to provide “value over volume.”

Challenges Facing PBMs

This evolution in payer expectations of PBMs is highly driven by the pressures of rising prescription drug costs — particularly specialty drug spending. Make no mistake about it, volume-based savings remain a significant facet of PBM and payer relationships, but they are no longer the key financial objective of payer- PBM agreements, as they once were.

PBMs are now challenged to stretch beyond their traditional scope of offerings to provide the services payers expect — they are tasked with providing and demonstrating value. What is value and how is it defined in the PBM-payer relationship? First and foremost, PBM-payer relationships moving forward must be partnerships in order to successfully navigate these formerly uncharted waters. It’s not sufficient for a PBM to provide expanded services, such as clinical programs, in name only. Successful implementation of these initiatives will require tomorrow’s successful value based PBMs to have an innovative culture, a modular and flexible service model, and a platform utilizing leading edge technology. PBMs capable of providing adequate support to payer partners must actively integrate and apply clinical expertise into programs that support improved patient outcomes and consider patients comprehensively, while giving appropriate consideration of unique patient needs — and offering comprehensive solutions, which may include unique program components, such as integrating behavioral health support as warranted.

Clearly, the PBM of the future must have a new orientation – no longer focused exclusively on volume-based strategies. Tomorrow’s value-based PBM must provide value by looking beyond the current silos that commonly focus upon pharmacy drug benefit approaches that apply “traditional“ utilization management strategies (step therapy, prior authorization, etc.) to maximize rebates and manage prescription drug spending. Effective management of the future must bridge the management of prescription therapies, particularly specialty drugs, via either the medical or pharmacy benefit. Applying innovative strategies to optimize management of the use of and administration of prescription drugs through whichever benefit, medical or pharmacy, the therapy is processed will be an essential attribute of PBMs’ demonstrating value to payer partners. Focus upon coordination of specialty drug management through both the pharmacy and medical pharmacy benefits will only gain importance as the availability, costs, and utilization of expensive specialty therapies rises, as acceleration of specialty drug utilization is projected.

These current and anticipated shifts in the clinical and economic landscape will drive the challenges and amplify the financial importance of managing medical pharmacy spend. PBMs providing value will do so by offering comprehensive prescription drug management support for payers, across the benefit design, with particular attention to effectively managing drug utilization and spending within the medical benefit arm of the organization. As an example, Magellan Rx Management has focused on developing patient and provider engagement strategies, and employing advanced analytics and comprehensive specialty drug management programs for both the medical and pharmacy benefit.

Interpreting Data is Key

This application of advanced analytics is integral to the service and offerings of the value-based PBM of the future. It is insufficient to simply capture and possess data. Going to the next level, the ability to analyze and report data, while beneficial, falls short of having a demonstrable clinical and economic impact. Data capture and reporting alone are inadequate as a means of providing value to payers if this data is not properly evaluated, interpreted, and then integrated into effective clinical management strategies. These identified strategies must be capable of serving as a platform for significant clinical improvement and development of cutting edge programs that enhance care and manage costs, across both the medical and pharmacy components of the benefit. PBMs with an eye to the future are those capable of:

• Providing rigorous analytical support to payer data in order to help payers identify opportunities to improve outcomes, while realizing savings
• Collaboration to ensure providers have information needed to optimize treatment –promoting access to and use of the most efficacious and cost-effective drugs
• Enhanced customer-facing strategies to increase member understanding and effective utilization of pharmacy and medical benefit therapies

With data management capabilities as a cornerstone, the value-based PBM is poised to assess payer data, applying predictive analytics as appropriate to conduct a robust and meaningful cross-functional analysis of costs, utilization of therapies, and outcomes. A well-constructed and executed analysis supports both the financial and clinical objectives of the payer – financially supporting cost management while simultaneously creating an opportunity to identify and address existing or emerging gaps in care. As a result of these analyses, payers will be poised to support providers, provider groups, hospitals, outpatient treatment facilities and other partners such as accountable care organizations

(ACOs) by providing feedback regarding current clinical and economic opportunities to improve outcomes and manage costs – ultimately benefiting the patient. As one dimension of these analyses, value-based PBMs can support payers in developing targeted initiatives that address identified gaps in care. For example, programs may be developed to improve member adherence with therapy and the selection of the most clinically appropriate treatment, as they simultaneously support payer objectives such as improving the identification, recognition, and understanding of opportunities for managing trend drivers and helping to identify other areas of concern or opportunities to improve care.

With the support of value-based PBM, payers have the opportunity to expand specialty drug management capabilities, developing new clinical programs for specific disease states, with the ability to target diseases that are highly significant for each organization, either due to cost, clinical relevance, prevalence, or demonstrated gaps in care. Some examples of programs with such experience that exist within Magellan Rx Management include the clinical programs to guide the treatment of age-related macular degeneration, hepatitis C, and chronic myelogenous leukemia (CML). These programs might include clinical interventions, product preferencing and targeted clinical patient and provider support programs.

A Case in Point

For a large regional health plan, representing about 1 million commercial lives, Magellan Rx Management partnered to offer medical formulary management programs in the following areas:

• Viscosupplementation
• Botulinum Toxins
• Contraceptives
• Gaucher’s Disease

Magellan Rx also worked with this payer to implement a variable reimbursement fee schedule, with a maximum allowable cost (MAC) / least cost alternative (LCA) product selection strategy. A proprietary methodology was applied to promote generic utilization and equalize margins on products within several therapeutic classes, including intravenous immunoglobulin (IVIG), taxanes, folinic acids, ophthalmic injections, viscosupplementation, and antiemetics. Savings in the antiemetic category alone have exceeded $3.5 million since the program’s inception in 2010, by removing incentives for physicians to prescribe higher-cost, branded antiemetics, rather than the low-cost preferred alternatives.

Additionally, value-based PBMs are equipped to support payers in the development and implementation of unique initiatives, such as site of care management programs. These programs create an opportunity to administer initiatives focused on oversight and management of the treatment and administration location for certain high-cost therapies, typically administered at either a provider office or an alternative administration site such as a hospital outpatient administration facility. By encouraging the use of the most clinically, therapeutically and financially cost-effective therapy, site of care management programs offer a means of assuring treatment is administered in the most clinically and financially appropriate setting. As an example of success in this area, Magellan Rx’s site of service netted over a million dollars in savings for two regional health plans in a six-month period. The program, which also received positive feedback from patients, demonstrated the possibilities such programs have to generate savings, while improving patient access to care. Characterized as a solution which places the patient first, the program was overseen by a collaborative team of healthcare professionals, including nurses, pharmacists and physicians.

Innovative strategies, such as outcomes-based contracting, are another means by which value-based PBMs further support payer objectives. Outcomes-based contracts are a unique and customized partnership opportunity that considers stakeholder interests by giving consideration to payer-specific data, supported by robust analytics to define opportunities for optimizing clinical and economic outcomes in the best interest of all stakeholders.

Additionally, value-based PBMs can assist payers in the identification of gaps, and the development and implementation of cutting edge and customized clinical programs designed to improve STAR ratings and HEDIS measures. Such programs are relevant and valuable to payers, as they support clinical initiatives, assisting payers in meeting objectives that translate into financial benefits for the organization.

In light of specialty drug trends, such as a burgeoning pharmaceutical pipeline — dominated by specialty drugs that are estimated to comprise 50 percent of overall drug spend by 2018, payers are changing their view of essential PBM support services. Forward-thinking payers are seeking the support of a value-based PBM with expertise in management of complex and costly therapies, including specialty drugs administered within the medical benefit. With a decade of experience in this arena, Magellan Rx is one example of a full-service PBM, with the distinction of having significant expertise in managing specialty drugs, including those covered under the medical benefit. The additional benefit of clinical expertise and robust analytical support are critical in the development of cutting edge clinical programs that simultaneously support the objectives of payers and consider the interests of other stakeholders in the managed care marketplace. These are critical strengths that value-based PBMs of the future must possesses in order to effectively support payers in meeting the demands of tomorrow’s health care marketplace; providing tailor-made, disease-specific services that provide value and drive healthier outcomes for members.