My goals for today

Specialty Pharmacy: Neglect is not an option for employers

Tim Thomas, R.PhPresident, Crystal Clear Rx

Specialty Pharmacy$ on Specialty Pharmacy% of Pharmacy Spend on SpecialtyCVS Health Dec 2014

Billions

Predictions "We don't like their sound, and guitar music is on the way out." Decca Recording Company on declining to sign the Beatles, 1962

"I think there is a world market for maybe five computers." Thomas Watson, chairman of IBM, 1943

Predictions

Specialty Pharmacy will be 50 % of the pharmacy spend by 2018 ?????

Predictions

We all know Specialty Pharmacy is the coming Tsunami50 % of your cost by 2018?MAYBE

We all know Specialty Pharmacy is the coming Tsunami50 % of your cost by 2018?MAYBEMore 100,000 plus therapiesDEFINITELY

We all know Specialty Pharmacy is the coming Tsunami50 % of your cost by 2018?MAYBEMore 100,000 plus therapies?DEFINITELYIs there anything that can be done?ABSOLUTELY

Specialty Pharmacy versus Traditional Lets assume that Specialty pharmacy will be a large portion of the spend (40 to 50 %)40 to 50 % of the drug spend on less than 1 % of the population compared to50 to 60 % of the drug spend on around 30 to 40 % of the populationShould it be managed the same way that traditional pharmacy has been managed?

Specialty Pharmacy differencesPatient management and review is different than traditionalMore side effect potentialObviously more costly therapiesRebates are much bigger but caution is warranted

Specialty costs can be mitigatedIntegrating medical and pharmacy claims for analysis can show opportunity for savings

Specialty costs can be mitigatedSite of care/appropriate useProper dosingEvaluate cost plus pricing compared to any AWP discount

Pricing example: HarvoniAWP...................................$37,800

AWP14%..............................$32,508

AWP16%..............................$31,752

Cost Plus model$30,630Savings between $1,122 and $1,878 each month by using cost plus model

PBM or not to PBM Specialty

PBMs can handle Specialty pharmacy but should they?An alternative is to carve out to another vendor that specializes in Specialty PharmacyAnother thought is to engage a company for prior authorizations and clinical review

In closing.Specialty Pharmacy may not go to 50 % of the cost, but it will still be a major factor in pharmacy cost for the foreseeable future.It needs to be managed differently than traditional pharmacy

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