The report is packed with useful data. Given the large pipeline of oral oncolytics, I want to highlight some intriguing stats on the channels for these products.
- Today, about half of all oral oncology volume goes through specialty pharmacy and almost one-third goes through traditional retail. The balance is split between other channels such as traditional mail-order and provider dispensing.
- Payers would prefer that a lot more volume goes through the specialty pharmacy channel. In contrast, oncology practice managers would prefer that more volume go through on-site provider dispensing.
B-4: THE DATA
The data in the chart below comes from pages 165 and 166 of the The Managed Care Oncology Index: Winter 2012. The payer perspective is represented by Pharmacy Directors, CMOs/Medical Directors, and others at plans representing 154 million covered lives. The practice manager perspective comes from Office Managers, Practice Managers, Head Nurse/Nurse Manager/Nurse Practitioner, and others at oncology practices.
The good folks at TZG provided me with the full report, but it is not readily available for purchase or download. For more information about the report, email Lee Goldberg, Director, Syndicated Research. Tell him that Drug Channels sent you!
IT’S A MISS!
Last year, I featured the Zitter Group's infused therapy channel data in The Future of Buy-and-Bill According to Payers and Oncology Practices.
But what about oral chemotherapy products? Oral medications make up almost one-third of cancer drugs in Phase III clinical development. The shift from infused to oral products will make these products more convenient to dispense at a store-based pharmacy, because the handling and temperature storage requirements will be easier than those for products requiring cold chain distribution.
In the chart below, the orange bars shows the payers’ answer to the following question: “What percentage of your organization’s oral oncology therapy volume goes through each of the following distribution channels?” (Click the chart to enlarge.)
- Payers have a strong preference for specialty pharmacies to become oral oncology products’ primary channel, with 77% preferred share (vs. 47% actual share today). Payers also want today’s minimal volume of on-site provider dispensing to shrink to only 1% of total volume. As I argue in The Battle for Control of Specialty Drugs, third-party payers are increasingly dissatisfied with the buy-and-bill process for specialty pharmaceuticals covered under a patient’s medical benefit.
- In sharp contrast, oncology practice managers want specialty pharmacy’s share to remain about the same, while physician dispensing (“on-site retail”) grows from 5% to 17% of volume.
- Both payers and oncology practice managers agree oral oncology drugs should not reimbursed as buy-and-bill products, although that channel is 8% of current volume. They also agree that traditional retail pharmacy should retain some share of volume, but be below current levels.
Combined with the coming boom in oral oncology products, these data highlight many key commercial and channel strategy issues associated with specialty drugs.
Patient care. Which channel—specialty pharmacy vs. physician dispensing—is best for patient care, including adherence and compliance? Unsurprisingly, where you stand on this issue depends on where you sit. Two examples:
- Many physician practices are expanding dispensing operations. For example, the President and Medical Director of Physicians Total Care (Tulsa, OK) argue forcefully: “Dispensing oral medications in your clinic presents a significant opportunity to better serve your patients and your practice.” (source)
- PBMs such as Express Scripts see an opportunity to expand services to payers, regardless of care setting. This includes specialty pharmacy dispensing of oral oncology drugs, “white bagging” of provider-administered drugs, and medical benefit management. See Decoding the Clues to Express Scripts' Strategy.
Medical vs. Pharmacy Benefit. The transition from IV to oral also corresponds to a shift from medical to pharmacy benefit coverage. For IV anti-cancer therapies, this trend has been growing via the white bagging phenomenon described in New Data on Specialty Pharmacy’s Challenge to Buy-and-Bill. But oral products are generally covered under the pharmacy benefit, making the switch very easy. I’ll have more to say on this topic next week. But, if you have the 2011-12 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors, see Chapter 3.
Co-pay equality. Payers and health plans were slow to harmonize co-pays/co-insurance for specialty drugs, leading 19 states and the District of Columbia to enact oral chemotherapy access/parity laws. View the map, from the National Patient Advocate Foundation. Here’s a good overview of the debate: Some States Mandate Better Coverage Of Oral Cancer Drugs.
P.S. The movie Battleship lost last weekend's box office to The Avengers. Movie geeks may wonder if anyone says: "You sunk my battleship?" In fact, Peter Berg said it to Joss Whedon on Monday.