Pharmacies Are Wary of Risking Revenues to Promote Value-Based Care

Meir Rinde
Published: Thursday, Jun 08, 2017
Matthew Farber

Matthew Farber

Major pharmacy companies are paying attention to the movement toward value-based care in oncology, but recent comments from representatives of 2 top firms suggest this sector is wary of risking capital to lower costs and improve patient outcomes. The representatives questioned how such risk-bearing mechanisms could even be structured, and would not speculate on how to reform the costly 340B Drug Discount Program, which has boosted revenues in specialty pharmacy while contributing to the soaring cost of cancer care.

Speaking on a panel at the World Congress Oncology Access Summit in March, executives from Walgreens and Accredo-Express Scripts said they do take measures to keep costs down for the payers they have contracts with, such as creating custom drug formularies and participating in limited pharmacy networks. While physicians and nurses often express frustration over the requirement to send patients to specialty pharmacies that do little to ensure adherence or monitor for side effects, the pharmacy company representatives said their pharmacists do work to educate patients and make sure they take their medications as prescribed.

Yet the speakers said it is unlikely their companies will accept risk in the near future for making sure such interventions actually help patients or save money. Matthew Farber, senior director for oncology disease state management at Walgreens, said it was unclear how his company could participate in an alternative payment model (APM) such as CMS’ Oncology Care Model (OCM), which rewards doctors financially for meeting performance measures and potentially sanctions them for falling short. Farber said pharmacy issues are not a prominent part of the OCM, although the model does mention the importance of medication therapy management (MTM). “So, it kind of goes back to the question, what’s our role in all of it? How do these practices track MTM when it has to go to an external specialty pharmacy?” he asked.

He was similarly skeptical about pharmacies participating in some version of a clinical pathway. Payer pathways discourage doctors from prescribing more expensive drugs and often reward them for choosing less-costly alternatives. Farber said involving pharmacies doesn’t “necessarily make sense” because any new pathways would also have to be adopted by practices, which are already struggling with excessive administrative burdens.

He did say the growth of APMs and costly oral therapies will eventually make pay-for-performance contracts “something that we need to start looking at” in the pharmacy business, but he questioned how they would work. “How do you measure that? At what point does it start becoming my doing, and not the doctor’s doing?” Farber asked. In addition, “if patients are staying out of the emergency room or they’re staying on their therapy, it’s not the easiest thing to measure.” If a practice and a payer together decided they wanted a pharmacy to engage in more patient outreach, the pharmacy company would have to ask, “Are we able to affect patient care that way?” Farber said.

Bill Martin, a vice president and general manager at Accredo-Express Scripts, a mail-order pharmacy and the nation’s largest pharmacy benefit manager (PBM), had a similar message. When asked about the prospect of pay-for-performance models for pharmacy companies, he said his company is in a number of “innovative contract structures” with payers but is not being held financially accountable for patient outcomes. The risk for “the provider making good decisions…is still not being transferred to the pharmacy,” Martin said. “We haven’t hit that point.” He did not describe the existing contracts in detail but said the structures relate to reporting data on prescriptions and support provided to patients.

Express Scripts does have some value-based partnerships with drug manufacturers, including the Oncology Care Value (OCV) program it launched last year. Under the OCV, Express Scripts steers patients toward preferred medications for multiple myeloma, non–small cell lung cancer, prostate cancer, and renal cell carcinoma in exchange for discounts from the drug makers.1 For certain drugs, the company varies the cost it charges payers according to the drug’s efficacy and the patient’s disease, and refunds payers if patients stop taking their medicine. Express Scripts also says its therapeutic resource center boosts patient adherence rates by 5% compared with other pharmacies.2


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