LAS VEGAS Specialty pharmacy has emerged as a separate and distinct trade class, Armada Health Care CEO Larry Irene told attendees of the sixth annual Armada Specialty Pharmacy Summit Tuesday at the Wynn resort and casino here.
It was estimated that well more than 1,000 executives, including specialty pharmacy providers, pharmaceutical and biotech manufacturers, payers, managed care companies and various other affiliated healthcare organizations were on hand for the three-day meeting. The conference kicked off in earnest Wednesday morning with opening remarks from Irene and presentations from CVS Caremark VP biotech and specialty industry relations Albert Thigpen, who discussed the state of the specialty pharmacy business — where the market is today and where it’s going in the future — and a presentation by Christopher Goff, CEP and general counsel, Employers Health Coalition of Ohio, on current trends in large employer benefit strategies for managing specialty pharmacy.
Goff, who also oversees the organization’s subsidiary, Employers Health Purchasing Corp. — which includes employers in Ohio as well as 11 other states, representing more than 2 million covered lives in all — talked about the chief concerns that employers have as it relates to managing specialty pharmacy spending. Chief among those concerns, Goff noted:
What are big employers doing to mitigate those costs? According to data compiled by Goff’s organization, among other methods:
As for the state of the specialty pharmacy/biotech market, CVS Caremark’s Thigpen shared growth estimates in excess of $112 billion by 2014, with a robust pipeline of approximately 145 to 150 biocompounds in phase-3 development. Yet despite the meteoric growth, Thigpen believes the specialty pharmacy market “is not well-defined or organized,” he said, with a message to all attendees: “If you don’t create change, change will create you.” Among the key trends Thigpen believes will continue in the near future, is the continued merger and acquisition activity between large pharmaceutical companies and small biotech companies with rich R&D pipelines; the continued shift in reimbursement models including a shift to more fee for service — fee for service contracts increased more than 50% over the last three years, he said; and the continued contraction of specialty pharmacy networks — since 2005 the number of plans that use just one specialty pharmacy provider has increased significantly while the number of plans using three or more has decreased, he said.
Certainly, a major highlight of the day one program was keynote speaker Mitt Romney. The former Massachusetts governor focused his remarks on the qualities he believes define American greatness — such as the work ethic that helped build the country and the drive to become educated, which for decades had separated Americans from the rest of the world — and how government in recent years has created policies that discourage Americans from aspiring to those qualities. Using the examples of the desires to work and become educated, Romney pointed to two specific data points that illustrate how policy makers are undermining America’s greatness: in Massachusetts, the former governor was shocked to learn that 85% of the commonwealth’s welfare recipients had absolutely no work requirement to receive the benefit; and today, American students in grades K-12 score in the bottom quartile among children in developed countries around the world.
Similarly, health care is another area, where the U.S. is trailing its peer nations across the globe. Here in the U.S., healthcare spending represents about 18% of the nation’s total gross domestic product vs. 12%, which is the average among modern industrialized nations. By comparison, defense spending represents just 3.6% of U.S. GDP. Romney also discussed key differences between President Obama’s 2,400-plus-page health-reform plan and the 70-page plan Massachusetts universal healthcare plan created under Romney’s administration. While the federal plan Congress recently approved will fall dramatically short of covering all of the country’s 40 million uninsured, and at considerable costs approaching nearly $1 trillion, the Massachusetts plan managed to cover 98% of all state residents at a cost of roughly 1.5% of the total budget for the state — which was within the original scope of the plan.
One key worry that Romney fears about the country’s current healthcare system is what many have called the misalignment of incentives both for patients and providers. “One decision maker, the physician, wants to do provide more and more services,” because they are billing for each, and the other, the patient, “doesn’t care what the cost is,” beyond their copay, Romney said. The solution, he believes is a consumer-directed model, where patients have more stake in holding down the total costs of care, versus Obamacare, which he believes has created a mechanism for government to manage rising costs by controlling it at the federal level.
One special addition to the program was a presentation from Armada to the 24 original specialty pharmacy providers that attended the first Summit five years ago. Executives from each of the companies, including, MOMS, Amber, Axium, CVS Caremark, Walgreens Specialty Pharmacy, CommCare, Bioscrip and others, were called up on stage and were presented with special commemorative crystal plaques by Larry and brother Robert Irene, Armada Health Care president, and Thomas Cohn, Armada’s chief strategy officer.