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ASCO in Action Podcast

Oct 9, 2018

Welcome to this ASCO in Action Podcast. This is ASCO's monthly podcast series where we explore policy and practice issues that impact oncologists, the entire cancer care delivery, and, most importantly, the individuals we care for-- people with cancer. My name is Cliff Hudis and I'm the CEO of ASCO, as well as the host of the ASCO in Action Podcast series.

For today's podcast, I am delighted to welcome Dr. Ray Page who's chair of ASCO's clinical practice committee as our guest today. Ray was recently awarded the prestigious ASCO Advocate of the Year Award for his exceptional efforts to shape health care policies to have a direct impact on our ability to provide high-quality cancer care for our patients. Our conversation today is going to focus on one of those policy-related issues that Ray has spent so much time on, and it's an area of growing concern to all oncology practices, that is, the emergence of pharmacy benefit managers in the cancer care delivery system.

Now some of you will know that ASCO recently released a position statement on pharmacy benefit managers, or PBMs, as they're known, specifically focusing on their impact on cancer care. And as a little bit of background on this, in terms of policy work, ASCO has a formal process for vetting and adopting the society's policy priorities. Typically, we will develop and release a position or policy statement when we learn about an issue or a development that is impacting, or may, in the future, have an impact, on the delivery of and access to cancer care.

We determined that a position statement was necessary on PBMs because serious concerns were being raised by our members through our state affiliate council, our clinical practice committee, and in direct conversation with other ASCO leaders. So as we often do, we analyze the issue carefully. We gather evidence, such as is available.

We describe the issue. And, then, most importantly, we identified steps that could be taken to at least begin to address the challenges. The result was the ASCO position statement on "Pharmacy Benefit Managers and Their Impact on Cancer Care." So with that as background, I want to turn and welcome Dr. Page. And thank you for joining me today to discuss this important topic. Welcome.

Thank you, Cliff, for having me here today.

Great. So I want to start off with a level set, Ray. Some who may be listening today may not be familiar with PBMs, what and who they are, or what purpose they serve. Can you give a general overview of pharmacy benefit managers? How do they work?

Sure, Cliff. In its simplest form, a pharmacy benefit manager, or PBM, is a middleman company that was originally utilized by payers as a third-party manager of prescription drug claims. Why did these companies ever come into being in the first place? Well, this largely developed out of the Medicare Modernization Act of 2003 and when the Medicare Part D program for oral drugs was implemented in 2006.

Cliff, I believe that they had good original intent, as their primary objective was the simplification of the transactions between pharmacies and health plan sponsors. However, over time, they have evolved to where they now include a variety of new business functions in an effort to better manage drug benefits and reduce the overall drug spending cost for plan sponsors. They claim that they're controllers of cost but, in reality, they have created huge and extremely complex business relationships to where they now have put personal profits before patients.

So how extensive is the PBM system? And has it increased in the last few years? And if so, why?

Yeah. Today, PBMs are ubiquitous. They were involved in the transaction of several hundred billion dollars of drugs across the United States. PBMs control the pharmacy benefits of over 253 million Americans. What is concerning is after numerous acquisitions and consolidations, and this is often called horizontal integration, there are now only three behemoth companies that control 85% of the prescription drug benefit transactions in this country.

These three companies are familiar to all of us. They are CVS Health, Express Scripts, and OptumRx. So one may ask, what's wrong with those guys? They're all reputable pharmacies that are managing and distributing drugs. Well, they've grown to be far more. CVS, for example, started out as a drugstore.

But now they are a PBM, specialty pharmacy, a mail-order pharmacy, an insurer, a benefit plan sponsor, and now they have medical clinics and own doctors. So part of the perversity that arises is when PBMs vertically integrate with the sponsors, the insurers, the pharmacies, and clinics all into one big package to now they have complete control of the patients and the flow of all their prescriptions.

Then may make transactional relationships between these entities and the drug manufacturers, distributors, and providers to where they generate enormous profits off the management of these drugs, yet none of these profits are ever passed on to the patients. Practicing oncologists and ASCO have concerns that some of these utilization management policies can have an adverse impact on our nation's most vulnerable patients, which are our cancer patients.

Well, last year, ASCO released a policy statement on utilization management strategies. And these are payer-imposed practices that may, in some cases, restrict access to, or deny coverage for, selected treatments. The major concern, at that time, was that certain payer practices, such as prior authorization, step therapy, specialty tiers, and restricted formularies, all of these could hinder access to high-quality cancer care.

The question we have, I think, with regard to PBMs is whether we share these same concerns when we turn to PBMs. And if that's so, can you explain some of the practices that PBMs might

use and what that might mean to the cancer patient, specifically with regard to access to most appropriate therapies?

Yeah, Cliff. There's several concerns that I have with the PBMs managing drugs that could adversely impact our cancer patients. And let me just describe a few. As cancer doctors, we always want to give what we think is the best personalized drug for that individual patient for the right diagnosis at the right time. I may prescribe a cancer drug that is not on a preferred formulary of the PBM because, perhaps, they have negotiated a better price with another manufacturer that gives them more profit.

So they recommend replacement with another drug. This is called a step edit. And, oftentimes, your preferred drug cannot be prescribed until there is a fail-first policy with an alternative drug. So for such things as nausea and vomiting control with highly emetogenic chemotherapy, I would prefer to have no vomiting with a preferred drug rather than dealing with nausea with a fail-first inferior drug.

Second, we have PBMs that want to deliver storage sensitive toxins, chemotherapy drugs, and injections to the patient's doorstep and then have them brown bag these drugs to our office for administration, although we have no record of the pedigree and the accountability of those dangerous drugs.

Third, we now have PBMs refusing to give such things as IVIg infusions in our office. And for some of our patients, they have to go to the street corner CVS box and get their IVIg at the CVS infusion center. Yet I am accountable for the outcomes of that patient.

Lastly, and worst, we're seeing cost shifting onto the patients. Based on their packaging and dispensing methods, the patients often have to pay multiple huge co-pays because of partial fills of oral chemotherapy drugs.

So if I understand you correctly, while PBMs did not end step therapy, specialty tiers, and restrictions and formularies, they're using these previously recognized tactics as a way of notionally controlling costs, but at least having a downstream effect of potentially restricting access to what is oncologist-driven best care. Is that a fair summary?

That is correct. So it is those utilization management techniques that create significant administrative burdens and impairments on getting patients appropriate, and timely, and affordable access to care.

Well, you must see this firsthand, right? You're in private oncology practice at the Center for Cancer and Blood Disorders in Aledo, Texas. And I know that you have an active practice and you see a large number of patients. I'm wondering if you've had, yourself, firsthand experience of PBMs and what you've seen it has meant for your patients to have their care influence that way. And what it's meant for you and your colleagues as you work to provide highest quality care. Are there vignettes or aspects of this that come to mind?

Yes. In my private practice in Fort Worth, Texas, I have firsthand experience with PBMs every day. What it means for our patients is an interference in the physician-patient relationship, pushing of care outside our Cancer Center, creating an impact on our ability to provide value-based care in an oncology medical home, causing delays in care, alterations in treatment plans, potential increases in toxicities, and more out-of-pocket costs for the patients.

So let me give you a quick case of a patient that I have. Tom was diagnosed with a stage 3 rectal cancer and I recommended capecitabine and radiation therapy. I prescribed, for him, capecitabine 500 milligrams, three tablets BID, on the days of radiation therapy, which would be 180 pills, which he went down to my pharmacy to get. At my pharmacy, he was told that he was out-of-network and he would have to get this through CVS Caremark.

So I saw the patient in his third week of treatment. And I found out that they had filled 120 of the 180 pills. And they told the patient that they only packaged the capecitabine in 120-pill bottles. So his first co-pay, for that first three weeks, was $400. So then he got a second bottle of 120 pills and paid a second co-pay of $400.

And that was a prescription of excess pills. And so CVS, they told him just to throw away the extra 60 pills that he did not use. Now this was financially impactful for both the patient and my practice. The drug cost, if a single script was given through my practice, would have been $3,900.

The drug cost for the two scripts with the extra unused pills was $7,200 through the PBM. Now under the new MACRA, MIPS payment model that we're all subject to, or under the Oncology Care Model, which is an alternative payment model, this kind of thing negatively impacts our resource use. So this process is completely out of my control, yet I get peened for not being a good steward of drug utilization.

Well, that's a pretty compelling example. And I assume there are others, right?

Yes, there is. There's many.

Well, I think if we turn a little bit to one of the points you raised already, it was about the in-office pharmacy in your practice. Can you, for people who might not be familiar with this, can you briefly describe how it works to have an in-office pharmacy? Is this something that all oncology practices have? And how have the PBMs impacted its operation in your experience?

Yes, Cliff. Most all cancer centers across the country have their own retail pharmacy, regardless of whether they're an academic center, a hospital-based practice, or an independent community practice. The impact of the PBMs affects the delivery of cancer care no matter how small or great your cancer center is. More and more cancer centers, as well as large hospital systems, are trying to get specialty pharmacy status to be able to combat some of the PBM tactics of being out-of-network, or having direct and indirect remuneration DIR fees, rebate clawbacks, and gag clauses.

So let me just say that PBMs may be a place for managing common drugs for diabetes, and heart, and thyroid, and infectious diseases. But there are reasons that cancer centers prefer to have complete control of the cancer therapies that we prescribe. In general, cancer drugs not only have the risk of substantial physical toxicities that need close pharmacy management, but they also have tremendous financial toxicities for the patient that we help manage with our pharmacy staff and in which those resources do not exist within the PBMs.

So it's highly preferable that cancer patients get their prescriptions through a highly-trained oncologic pharmacist at the Cancer Center who has access to their full electronic health records and drug lists and who knows them, personally, by name. Our pharmacy staff has resources to educate the patients, to work on foundation and financial assistance, and to be immediately available, by name, to triage further questions or symptoms. It is what is best for the patient.

Unfortunately, PBMs are redirecting our treatments from our pharmacies to theirs, and they are trolling for other drugs that we have historically prescribed to our patients. So this loss of prescription authority and drugs to the PBMs is at a rate that's increasing at about 10% a year to where, currently, 60% of our prescriptions go outside our pharmacy to the PBM.

I see. And, presumably, that has not only concerns raised for you in terms of business, but quality of care. Is that right?

That's exactly right. So there's always a business aspect to the management and control of the drugs. But, most importantly, is that value-based quality care that we feel provides the safest, highest quality, most affordable care to our patients when they have access through our own individual pharmacies at the cancer centers.

Well, at ASCO, as you know, we, last year, spent some time and, ultimately, we declared core values-- evidence, care, and impact. And what derives from that, for us, is we do not write papers or issue statements simply to check a box and say we did that. Instead, what we want to do is go beyond identifying, and analyzing, and reporting on a problem to, in fact, contributing to solutions.

And so, to that end, what we frequently have to do is initiate conversations with stakeholders, propose ideas that might affect real change, and have a positive impact on cancer care and our patients. ASCO's recommendations on health care system changes are often sent directly to Congress. We present them to government agencies.

We speak to payers, certifying bodies, and, really, everybody across the entire health policy environment and health care spectrum. So given that our desire is to make a difference, to have an impact, to effect change, can you, Dr. Page, can you outline some of the recommendations that ASCO has described as a path forward and a way to address the issues that our discussion has raised?

Sure. ASCO has several suggestions. And these can get very complex and have nuances, but I'll just try to make these suggestions as simple as possible. But several things that ASCO has recommended is that PBMs and the payers, in order to address quality of care concerns related to

cancer patients that they serve, they should assure that changes to prescribe therapies for the patients with cancer are made only in the context of prior consultation and approval of their physician.

So, in other words, if I write a prescription for a set number, and duration, and dosing schedule for a patient, it should be given that way. And the PBM should not be making alterations in my prescription, like I gave in my example. Pharmacies should not be prevented from sharing, with the patients, their most cost effective options for purchasing needs of medications.

So in other words, there's gag causes that PBMs have to where there could be a drug that the PBM is going to charge the patient $180 a month for, but the local pharmacy can prescribe that same drug for $30. But they are prohibited from disclosing that they can actually distribute that drug to them cheaper outside the PBM. CVS should leverage its regulatory authority to number one, require that PBMs provide detailed accounting of these DIR fees and instruct contractors and PBMs to use measures and standards that are more appropriate to the specialty.

CMS should also enforce its any willing provider provisions in Medicare Part D preventing PBMs from excluding qualified provider-led pharmacies from its networks. So we, at ASCO, really desire that any cancer center that has a pharmacy would have the opportunity to be included in the PBM network and be able to prescribe the drugs within that network on site. And then, CMS should maximize the accountability of drug waste through the PBMs. Lastly, pharmacy and therapeutic committees of the PBMs should include full and meaningful participation by oncology specialists.

So one issue that was raised in the ASCO statement, and we haven't directly touched on it yet, is simply the lack of transparency, that is, the opaque nature of PBM practices and their policies. How do you think that issue, specifically, can be addressed?

Yeah, Cliff, the transparency issues are being addressed nationally at several legislative levels. There are several federal bills that are in support of the Trump blueprint to address drug costs. And they have to do with safe harbor laws that the PBMs are taking advantage of. They have to do with undoing the gag causes that I previously mentioned. And, also, to examine the fiduciary status of the PBMs. At the state level, there's dozens of bills going after the PBMs, state by state, on all fronts.

And, lastly, as an ASCO delegate to the AMA, a few months ago, we submitted a resolution that we got accepted into AMA policy that requests that our AMA gather more data on the erosion of the physician-led medication therapy management in order to assess the impact of the pharmacy benefit manager tactics that they may have on the patients' timely access to medications, patient outcomes, and the physician-patient relationship, and that the AMA examine issues related to PBM-related clawbacks and those DIR fees to better inform existing advocacy efforts. And so I think it's always good to have the weight of the AMA behind our ASCO advocacy efforts to assure that our cancer patients can continue to get the best, affordable access to care.

Well, that's really great to hear. You've covered a lot, both in terms of background and explanations, the history of the development of the PBMs, and what challenges have now

emerged. Are there any additional steps ahead that ASCO should be taking that you know about? Is there anything else, for example, that listeners should know about pharmacy benefit managers that we've not yet touched on?

Yeah. I think I just want to emphasize that this is really a David and Goliath scenario. It is very difficult to control a rapidly growing, unregulated, complexly integrated $300 billion industry that is benefiting three gargantuan companies more than our patients. And ASCO will continue to partner with fellow like-minded advocates to optimize the affordable delivery of cancer care and conquer cancer.

Well, that's certainly an upbeat-sounding ending. And I'm sure with you fighting the good fight, this effort will go on and will make good progress. That seems clear. I want to thank you, Dr. Page, for joining me today for this ASCO in Action Podcast. I want to remind everybody that at ASCO, we are committed to preserving and enhancing access to high-quality cancer care for everybody with cancer.

This statement on PBMs is just one of many in which ASCO's voice, and the collective voice of our members, is helping to shape the future of cancer care for everybody and refine the delivery system. I encourage our listeners to read the statement, and other policy and position statements, all of which are available on the policy and advocacy pages of our website at And until next time, again, thanking Dr. Page for joining all of us, I want to thank all of you for listening to this ASCO in Action Podcast.