The pharmaceutical industry is one of the last to be transformed by the digital revolution. But companies like Roche and Novartis have been experimenting for a long while, and the fruits are finally ripening.
Medullan CEO Ahmed Albaiti is a digital health pioneer. In this episode of the HealthBiz podcast, he takes us on a trip down the memory lane of digital health, sharing pharma’s successes and failures. We discuss the shock brought on by COVID-19 and why software is often classified as a medical device. He also shares his vision for an integrated and harmonized future for pharma, payers, providers –and patients.
I’m proud to serve as chairman of Medullan’s advisory board.
Does anyone else find it ironic that the “America First” president has issued an Executive Order that says foreign countries will set drug prices for the US? President Trump has ordered Medicare to literally cede drug price decisions to France, Germany, Japan or New Zealand –where prices are dramatically lower than here. Yes, the idea is to take the lowest price that any of the other rich countries negotiate and use that as Medicare’s price.
What’s next? Will the EPA adopt France’s emission standards? Will the SEC let Italy set the rules for Wall Street? Will Medicare chip in to fund the cost of comparative effectiveness research and negotiations currently borne by foreign governments? Of course not.
So how do we understand this apparent transfer of power overseas? Two ways:
First, the president is trying to find any path he can to get an achievement on drug prices before the election. This one is simplistic, understandable and dramatic.
Second, it’s not really about following the lead of other countries. Rather it’s about forcing drug companies to raise prices in other countries in order to avoid losing out on the big US market. It is distinctly Trumpian in that it punishes our allies and blames them for “freeloading.”
It does make sense for US payers, including Medicare, to employ value based pricing mechanisms like those developed by the Institute for Clinical and Economic Review (ICER) and to negotiate prices. But we should reward true innovation and be willing to pay up for breakthroughs -yes, even paying hundreds of thousands or millions per patient for great products. I don’t want the US to leave those decisions to anyone else.
Russia –yes the Russia that exerts special influence on our president– has done a poor job of keeping the COVID-19 virus in check. But now they claim to have a safe and effective vaccine that’s ready to go.
Some suggest that the vaccine may not be safe – or effective.
“It’s obvious that the Russians are rushing the vaccine to market without adequate testing,” David Eugene Williams, president at Health Business Group, told International Business Times in an email. “It’s possible that the vaccine will work, but there hasn’t been enough time to verify that it’s both safe and effective. The Russians haven’t released any data that would support their claims.”
“I don’t think people will travel to Russia to receive the vaccine because, 1) they won’t trust that it will work, 2) they could get COVID-19 on their travels to Russia, and 3) the Russians may allocate it to their own citizens,” he said.
It would be great if the Russian vaccine works. But we’ll have to wait and see –which is something the developers haven’t done.
Thanks to COVID-19, the era of decentralized trials is now upon us. In this podcast interview, Adaptive Clinical Systems‘ Temitope Keyes and I discuss how trials are changing and what clinical data infrastructure is needed to make them flow smoothly.
Changes are underway in clinical trials right now as a result of COVID-19
The imperative for “frictionless clinical data.”
Ensure optimal performance in the new environment
New data sources and endpoints that will be employed
This is your second deal with Amgen. How did the first one go? What did you learn from it and how did that impact the Enbrel contract?
Abarca is in the process of implementing the outcomes-based agreement with Amgen for Repatha. Because of the innovative and complex nature of these agreements, implementation takes time both with the drug maker and the health plans.
All parties have learned a lot throughout this process, and we expect implementation to get faster with new agreements. We also know that each outcomes-based contract is different. What looks like success for a patient with high cholesterol–like those who take Repatha–might not be the same for someone who is taking Enbrel for rheumatoid arthritis.
The key to a successful outcomes-based contract is collaboration–so this process has allowed Abarca to build a solid working relationship with Amgen. Our organizations are very much aligned in our belief that these agreements have the potential to disrupt the entire healthcare reimbursement system.
The Enbrel arrangement is positioned as an outcomes based contract, but the outcome is just whether the patient stops using the drug. Why not something more advanced, like a clinical measure?
Although our agreement for Enbrel will initially measure discontinuation, we will also be collecting data that drills down further into why the patient stopped treatment–which could be related to side effects, adverse events, or failure to meet therapeutic outcomes.
Though we would like to see additional clinical measures become the determining factors for outcomes-based contracts, it’s important to remember that these agreements are still very much in their infancy. Manufacturers are proceeding very slowly and picking some basic pharmacy therapy outcome endpoints that are reliable and readily accessible—medication adherence and discontinuation, for example—as they build experience.
But, as payers and PBMs build frameworks that can connect disparate patient health data points, and report outcomes through robust analytical platforms, we believe that they will be in a better position to take these agreements to the next level. To help move the industry to this point, Abarca is developing a specialty quality pay-for-performance program to establish clinical, operational, and compliance efficiencies for health plans that will create a game changing experience for patients, pharmacies, and physicians while delivering competitive pricing. We plan to announce this initiative early next year.
What interventions, if any, are utilized to encourage patients to stay on Enbrel? Do you work with any vendors to help?
Our clinical teams work closely with our clients to track adherence across all therapy classes on an ongoing basis. We also have our award-winning Medication Therapy Management (MTM) initiative and programs in place, which look at adherence for high risk patients.
Additionally, we are in the process of ramping up our offerings around the management of specialty patients. Our multi-pronged approach will feature advanced technology, and the eventual development of a quality pay-for-performance program that relies heavily on adherence as a factor to determine success.
I’ve never heard of Abarca. How big are you? Who are your customers?
Abarca was built on the belief that with a smarter technology and a straightforward approach to business, it can provide a better experience and greater value for payers and consumers–and we’ve been delivering on that mission for more than a decade.
As a full-service PBM, Abarca’s clients include self-insured employers, Medicare and commercial plans, and large insurers across the US. We manage more than $2 billion in drug costs for 2.8 million members in commercial, self-insured, Medicare, and Medicaid plans. We also provide Darwin, our advanced technology platform that our team built in-house, to health plans and PBMs.
There have been a lot of companies claiming that they were going to disrupt or revolutionize the PBM industry. Often they use terms like “transparency” to try to differentiate themselves. But they haven’t been very successful. Why would Abarca succeed where others haven’t?
The largest players in the PBM space have found–and maintained–success by adhering to the status quo. Unfortunately, too often those practices favor the company, and not the clients and members they serve. And while some organizations may use the word transparency, we are building relationships with our clients to deliver transparency starting from day one.
For Abarca, transparency means is holding ourselves to a higher standard. It means to be able to look our clients in the eye and tell them “this is exactly what each of your drugs costs and why.” We don’t believe that transparency should be touted as a differentiator, it should be the industry standard.
Our company was founded to throw out the PBM playbook and find a better way in healthcare–and we have structured every aspect of our business in pursuit of that mission.
We have built industry-leading technology from scratch that makes PBM processes integrated, user-friendly, and modern–and has attracted the attention of some of the nation’s leading PBMs. Within a two year period, we will have doubled the size of our team to accommodate our ongoing growth. And, while many PBMs are in the process of debating outcomes based contracts, we’re executing them with some of the nation’s leading pharmaceutical manufacturers.
What other kinds of outcomes based contracts do you have in the pipeline? What kinds of drugs are good candidates?
Abarca will be focusing on high-cost, high-risk specialty medications for our future outcomes-based contracts. Specifically, we’re looking at treatments for multiple sclerosis, rheumatoid arthritis, hypercholesteremia, and breast cancer, among other disease states.
Do pharma companies want to do more of these deals? Why?
The adoption of innovative drug contracts has been slow and steady over the last few years. In fact, a recent report by PhRMA found that the list of publicly announced value-based contracts grew from 39% to 43% during 2018. But, there are several important trends that are emerging that could change healthcare significantly, including pay-for-performance, calls for transparency, and, potentially, moves away from existing rebate models.
Based on these factors, I believe that pharmaceutical companies are increasingly warming to these types of agreements. There is also the added bonus that outcomes-based agreements give drug makers critical, real-world insight into the performance of their products.
In general, pharmacy can be a very slow moving industry. But, those who are willing to innovate on their own accord–rather than industry mandate–will be in a better position for long-term success.
How about payers? What is their motivation?
Payers are really looking forward to the widespread adoption of these agreements, for a few reasons. First, it puts more accountability on manufacturers for the performance of their products. Additionally, it will help to facilitate better fact-based formulary decisions.
Today, there are a number of factors that contribute to whether or not a drug appears on a formulary but, in many cases, the process can be quite opaque. That’s not how important decisions that impact member health should be made. As outcomes-based agreements become commonplace, we will have the data necessary to manage formularies with more transparency, and objectivity. Specifically, the total impact of cost will be easier to manage and decisions can be made based on clinical outcomes, rather than pharmacy-based data points.
Do you expect these outcomes based plans to be emulated by other PBMs? Does Abarca provide technology to other PBMs that will help?
We would hope that these types of agreements become the standard in our market. However, we recognize that not every PBM has the technology necessary to support them.
Along with being a full-service PBM, Abarca provides the technology, analytics, and reporting capabilities for health plans and PBMs to support innovative drug contracting–and other clinical initiatives. It may seem a little counterintuitive to provide what some see as our “secret sauce” to the competition, but we believe that health plans, pharmacists, physicians, and, most importantly, patients deserve a better experience–no matter who their PBM is.