1
Ron Harrison, Pharmacy
Account Management
Director
Michael Kaplan, PharmD
Pharmacy Director
LACERS
Annual Pharmacy Review
Top Line Performance Metrics
2
Description 1-15 - 12-15 1-14 - 12-14 Change
Avg Subscribers per Month 1,364 1,408 -3.1%
Avg Members per Month 1,858 1,883 -1.3%
Number of Unique Patients 1,639 1,635 0.2%
Pct Members Utilizing Benefit 88.2% 86.8% 1.4
Total Plan Cost $5,142,343 $4,096,852 25.5%
Total Days 1,471,622 1,471,665 0.0%
Total Rxs 45,894 45,748 0.3%
Average Member Age 58.8 59.2 -0.6%
Plan Cost PMPM $230.64 $181.31 27.2%
Plan Cost/Day $3.49 $2.78 25.5%
Plan Cost per Rx $112.05 $89.55 25.1%
Nbr Rxs PMPM 2.06 2.02 1.7%
Generic Fill Rate 82.7% 81.1% 1.6
Home Delivery Utilization 7.3% 7.2% 0.1
Member Cost % 7.7% 9.8% -2.1
Specialty Percent of Plan Cost 39.8% 30.1% 9.7
Specialty Plan Cost PMPM $91.86 $54.64 68.1%
Formulary Compliance Rate 96.0% 96.2% -0.2
WLH- LACERS
• Plan Cost PMPM is $230.64, a 27.2% trend over the previous period
• Generic Fill Rate (GFR) increased 1.6 percentage points to 82.7%
• Specialty Plan Cost PMPM is $91.86, a 68.1% trend over the previous period
Top 10 Indications
1 1 DIABETES 3,610 302 $612,822 56.4% 50.8% $27.49 1 3,596 300 59.9% $20.01 37.4%
2 37 PULMONARY HYPERTENSION 59 1 $458,537 0.0% 30.4% $20.57 14 11 1 0.0% $4.23 386.1%
3 5 CANCER 337 43 $414,711 85.8% 89.2% $18.60 2 302 44 87.4% $14.94 24.5%
4 3 MULTIPLE SCLEROSIS 57 7 $330,406 0.0% 1.5% $14.82 3 43 6 0.0% $13.33 11.2%
5 7 HEPATITIS C 13 4 $309,659 23.1% 35.2% $13.89 77 0 1 0.0% $0.00
6 10 HIV 225 12 $294,999 17.3% 5.3% $13.23 5 251 10 12.7% $11.38 16.3%
7 6 PAIN/INFLAMMATION 3,937 707 $268,440 91.8% 94.0% $12.04 4 3,792 719 90.6% $11.42 5.4%
8 4 HIGH BLOOD CHOLESTEROL 4,782 649 $237,506 85.0% 82.4% $10.65 6 4,965 658 83.0% $11.17 -4.7%
9 9 HIGH BLOOD PRESS/HEART DISEASE 9,626 827 $179,719 96.9% 95.2% $8.06 7 9,647 826 94.9% $9.32 -13.5%
10 14 DEPRESSION 2,611 312 $139,967 94.2% 95.7% $6.28 9 2,343 306 93.1% $5.72 9.8%
Total Top 10: 25,257 $3,246,767 86.5% $145.62 24,950 85.5% $101.51 43.4%
Differences Between Periods: 307 $952,935 0.9% $44.11
Generic
Fill
Rate
Plan
Cost
PMPM
Plan
Cost
PMPM
Generic
Fill
Rate
Peer
Generic
Fill
Rate
Plan
Cost
PMPM Rank Rxs PatientsRank
Peer
Rank Indication Rxs Patients Plan Cost
Top Indications by Plan Cost
01-15 - 12-15 1-14 - 12-14
%
Change
REPRESENT
63.1% OF YOUR TOTAL
PLAN COST
• The largest trend is in Pulmonary Hypertension at 386.1%
Top 25 Drugs
0 % Change
1 5 HARVONI* HEPATITIS C 7 3 $223,755 $10.04
2 644 TYVASO REFILL KIT* PULMONARY HYPERTENSION 13 1 $208,031 $9.33 10 4 1 $2.69 246.6%
3 800 ORENITRAM ER* PULMONARY HYPERTENSION 36 1 $175,521 $7.87 25 7 1 $1.54 411.8%
4 24 GLEEVEC* CANCER 3 1 $148,837 $6.68 1 4 1 $7.01 -4.8%
5 8 COPAXONE* MULTIPLE SCLEROSIS 15 2 $115,786 $5.19 2 9 2 $5.48 -5.2%
6 21 ATRIPLA* HIV 41 5 $104,881 $4.70 15 25 3 $2.28 106.1%
7 3 CRESTOR HIGH BLOOD CHOLESTEROL 474 75 $103,958 $4.66 3 453 61 $3.86 20.7%
8 68 AFINITOR* CANCER 8 1 $91,708 $4.11 4 8 2 $3.30 24.7%
9 119 IBRANCE* CANCER 9 2 $90,317 $4.05
10 10 TECFIDERA* MULTIPLE SCLEROSIS 16 2 $90,155 $4.04 150 2 1 $0.27 1415.4%
11 4 VIEKIRA PAK* HEPATITIS C 3 1 $84,835 $3.80
12 36 OXYCONTIN PAIN/INFLAMMATION 123 16 $78,464 $3.52 13 69 15 $2.31 52.4%
13 260 OPSUMIT* PULMONARY HYPERTENSION 9 1 $65,896 $2.96
14 9 LANTUS SOLOSTAR DIABETES 153 32 $62,634 $2.81 11 139 25 $2.61 7.5%
15 56 AVONEX PEN* MULTIPLE SCLEROSIS 12 1 $60,994 $2.74 27 3 1 $1.44 89.8%
16 38 GLUMETZA DIABETES 15 2 $60,454 $2.71
17 2 ENBREL* INFLAMMATORY CONDITIONS 14 2 $58,765 $2.64 5 21 4 $3.14 -16.0%
18 13 JANUVIA DIABETES 142 29 $58,616 $2.63 9 170 28 $2.75 -4.3%
19 20 ANDROGEL HORMONAL SUPPLEMENTATION 96 19 $57,407 $2.57 12 137 30 $2.46 4.5%
20 138 ISENTRESS* HIV 41 4 $57,012 $2.56 17 44 4 $2.21 15.8%
21 71 VICTOZA 3-PAK DIABETES 65 12 $54,404 $2.44 30 37 9 $1.26 93.2%
22 44 ADVAIR DISKUS ASTHMA 149 39 $52,147 $2.34 14 155 40 $2.28 2.4%
23 1 HUMIRA PEN* INFLAMMATORY CONDITIONS 15 2 $47,936 $2.15 29 9 2 $1.32 62.8%
24 1215 TOBI* CYSTIC FIBROSIS 6 1 $44,280 $1.99 16 7 1 $2.21 -10.2%
25 45 RESTASIS OPHTHALMIC CONDITIONS 119 27 $42,615 $1.91 34 76 23 $1.17 63.2%
Total Top 25: 1,584 $2,239,409 $100.44 1,379 $51.60 94.7%
Differences Between Periods: 205 $1,073,469 $48.84
*Specialty Drugs
Plan
Cost
PMPM
Top Drugs by Plan Cost
1-15 - 12-15 1-14 - 12-14
Rank
Peer
Rank Brand Name Indication Rxs Pts.
Plan
Cost
Plan
Cost
PMPM Rank Rxs Pts.
Plan
Cost
PMPM
• Represent 43.5% of your total Plan Cost and comprise 13 indications
16 of your top 25 are specialty drugs
Clinical management
• Clinical edits
• Clinical pathways
• Medication adherence
• Specialty Split Fill
• Specialty IVR
Steering benefits and
lower-cost sites of care
• Site of Care Redirection
• Right Drug Right Channel
Managing cost and
negotiating discounts
• Preferred product
• Reimbursement
• Network managementCoordinating patient care
• Specialty Pharmacy
• Health plan
• Coordination of care Integrated reporting and analytics
Our Comprehensive Approach
Managing specialty drugs
Our proven, Integrated Strategy
to Manage Hepatitis C
• Assuring clinically appropriate use:
o Harvoni is preferred treatment for Genotype 1, 4, 5 and 6 HCV
o Prior Authorization criteria aligns with most current treatment
guidelines
o Harvoni, Sovaldi, Olysio, Daklinza, Viekira Pak, and Technivie
will be covered for all stages of fibrosis, with a few clinical
conditions.
• Quantity limits to prevent misuse
• Access to specialty pharmacy programs
• Carefully monitor drug use patterns and cost
• Adherence support and disease education
Medication adherence and completing
therapy are essential for best possibility
of a cure.
Managing high cholesterol
High Cholesterol in the
United States
• 73.5 million adults (31.7%)
have high cholesterol.
o Fewer than 1 out of every
3 adults has it under control
o Less than half get treatment
• People with high total
cholesterol have nearly twice
the risk for heart disease as people
with ideal levels.
Source: Centers for Disease Control and Prevention; High Cholesterol
Facts; accessed June 4, 2015; page last updated: March 17, 2015.
http://www.cdc.gov/cholesterol/facts.htm 7
Anticipated initial impact
PCSK9 inhibitors could
• Estimated cost = $10,000
per member each year
• Self injected once or twice a month
• Well tolerated
• Mid-2015 approval
dramatically impact cost and
treatment.
New Cholesterol Lowering Drug Class -
PCSK9 Inhibitors
• The PCSK9 inhibitors are a new class of cholesterol lowering agents. The first PCSK9 inhibitor was
FDA-approved in July of 2015. The two agents currently available are Praluent (alirocumab) and
Repatha (evolocumab).
• The PCSK9 inhibitors are prescribed when patients are either statin intolerant or they still have
elevated LDL levels despite statin therapy. Early prescribing of these medications is expected to come
primarily from specialists and utilization should ramp up over several years.
• LACERS currently has Anthem’s prior authorization and Exclusive Specialty programs implemented,
which will manage costs and appropriate use for this new drug class.
• Currently LACERS has 649 members that are on cholesterol lowering agents.
• Our modeling projects a low estimate of 3.4 members that could potentially utilize a PCSK9 Inhibitor
in 2016, resulting in a $49,746 increase in drug spend; and a high estimate of 5.0 members that could
potentially utilize a PCSK9 Inhibitor in 2016, resulting in a $73,434 increase in drug spend.
• The average plan cost for cholesterol lowering agents is $49.66 per month. The average plan cost for
the new PCSK9 inhibitors is $1,217 per month.
Group's Projected Number of PCSK9 Inhibitor Users
Low High
2016 3.4 5.0
Group's Projected Yearly PCSK9 Inhibitor Financial Impact
Low High
2016 $49,746 $73,434
New Cholesterol Lowering Drug Class -
PCSK9 Inhibitors – All Business
$49,746
$90,016
$203,721
$355,328
$73,434
$142,131
$350,590
$639,590
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
2016 2017 2018 2019
Ye
arl
y C
os
t
Group's Projected Yearly PCSK9 Financial Impactbased on Pharmaceutical Industry Guidance
Upcoming Patent Expirations
1%
plan cost
For every
increase in Generic Fill Rate
the plan could
save approximately
2.2% of total
GLEEVEC CANCER 2016 4 $6.68 $49,612.32
CRESTOR HIGH BLOOD CHOLESTEROL 2016 7 $4.66 $219.32
AFINITOR CANCER 2020 8 $4.11 $11,463.48
GLUMETZA DIABETES 2016 16 $2.71 $4,030.26
COPAXONE MULTIPLE SCLEROSIS 2017 5 $2.70 $5,020.90
HUMIRA PEN INFLAMMATORY CONDITIONS 2016 23 $2.15 $3,195.71
EXJADE IRON TOXICITY 2019 36 $1.26 $7,004.18
EPZICOM HIV 2016 47 $1.06 $1,181.12
REYATAZ HIV 2017 49 $1.03 $1,273.50
SEROQUEL XR MENTAL/NEURO DISORDERS 2016 50 $1.01 $896.31
0
Top Drugs Scheduled to Lose Patent Protection through 2020
Drug Name Indication
Scheduled
Release
Year
Plan Cost
Rank
Plan Cost
PMPMPlan Cost / Rx
$477,817
$146,243
$52,587$84,742
$135,238
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Spend on Brand Drugs Losing Patent Protection
2016 2018 202020192017
Expiration dates based on current status and may change due to litigation, patent challenges, etc.
• Based on your current
utilization, $896,627 in brand
drugs are losing patent
protection by 2020
Benefits Magazine Article –
Six Marketplace Challenges
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1. Many drug prices are increasing exponentially by 100% or more in periods of less
than a year.
2. The FDA is approving dozens of new drugs annually, including many high-cost
specialty drugs costing more than $100,000 per treatment per patient.
3. Patients and their doctors are resorting for convenience to “combination drugs” that
often combine two low-cost drugs into a single, far more costly product.
4. Compounding and specialty pharmacies are creating and marketing high-cost
products that haven’t been approved by the FDA.
5. Over-the-counter drugs are entering the market as low-cost alternatives to much
higher cost prescription products, but few Pharmacy Benefit Managers (PBM) are
advising plans to stop covering prescription drugs.
6. When brand drugs lose their patents, new generics are available at far lower costs,
but PBMs frequently are slow to adjust their prices and pass through the lower costs
to plans.
Benefits Magazine Article –
New Generics
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• PBMs fail to track falling prices, for new generic drugs, and continue to invoice clients
at higher prices. A study was conducted for generic Lipitor, Zyprexa and Seroquel
and showed that several PBMs were still dramatically overcharging their clients for
these drugs several months after generic prices had taken a nosedive.
• To ensure a plan maximizes savings from new low-cost generics, a PBM contract with
a plan must allow the plan to:
• Obtain a complete set of claims data at least monthly.
• Review the data to determine the prices the plan is being invoiced for newly
available generic drugs.
• Require that the PBM, if the plan discovers its PBM is ignoring falling prices and
failing to reduce invoice costs, provide the plan with a “right to negotiate
discounts” for these drugs.
Audit Process
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• For Fully Insured accounts, only internal audits are conducted.
• Our internal pharmacy audit department conducts audits of the participating
pharmacies as part of a regular internal review process. These audits include the
following:
• Pharmacy claims adjudication activities
• Home delivery/specialty
• Fraud and abuse
• Anthem utilizes the Reliability Program and the Business Improvement Program to
ensure measurable results.
• Reliability Program ensures consistent communication and leadership review of
all operational issues with a focus on detailed root cause analysis and prevention
of future recurrence.
• The Business Improvement Program focuses on execution and enforcement of
identified improvements through three-hour-weekly and two-day monthly review
sessions.