The pharmacy industry has been working together since 2017 on the Mediledger blockchain network, which started with the Drug Supply Chain Security Act (DSCSA).  The future potential use cases should have the entire Pharmacy industry excited about the possibilities.  First, let’s start with “what is blockchain?”

“Blockchain is a distributed database that maintains a continuously growing list of ordered records, called blocks. These blocks are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. A blockchain is a decentralized, distributed, and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.”¹

DSCSA is an ideal use case, as the custody of drugs pass amongst multiple partners where there is incremental value in documenting each exchange amongst trading partners. With blockchain, you will have a historical record, that cannot be altered, of when the possession was transferred from one trading partner to another for the entirety of that product’s life cycle.

The next use case the workgroup looked to address was rostering.  The price paid for drugs depends on the location and the class of trade of that location.  This data is typically housed on the health system’s roster with their group purchasing organization (GPO) and includes, but is not limited to, legal name, address, DEA, HIN, NPI, NCPDP, GPO ID, and 340B ID. The manufacturers maintain a separate roster when communicating pricing to the wholesalers, and the wholesalers have yet another roster of accounts, which needs to match what the manufacturers and GPOs have in their database.  So, if you are keeping track, we have three rosters: a GPO/Health System roster, a wholesaler roster, and a manufacturer roster that need to match to ensure the correct price of one given product.  Then the pricing being sent by manufacturers to wholesalers are either EDI feeds or emails with Excel files to instruct the price to be given by the wholesaler to each health system location.

The current process is antiquated, repetitive, and is the cause of contract misalignment, which leads to errors in the price paid for pharmaceuticals.  There is a white paper that states 4% of all pharmaceutical purchases through a wholesaler result in a pricing dispute.²  My health system is disputing successfully ~0.25%, which is ~9,000 invoices per year resulting in ~$1 million in credits from overpayments.  The length of time in resolving pricing disputes creates a cash flow issue, and the discrepancies being identified are all manual so there are overpayments being missed. It would be challenging to determine the financial impact of when a product should have been ordered because it is cheaper, but the contract was not loaded correctly at the time of purchase.

When the purchase price of a product is disputed, the manufacturer is the source of truth for the price that should be paid. So, the wholesaler reaches out to the manufacturer eligibility point of contact, which is typically a different contact at the manufacturer than the contact the GPO or health system worked with to define the contracted price.  Then the manufacturer and GPO have no visibility into the wholesaler ordering platform to determine when the price has been corrected. So, it is a triangle of communication where all parties should have visibility to specific information around the contracts, but do not in today’s ecosystem.  This “credit and rebill” process is cumbersome, lengthy, and provides no value to any party involved.

In the future blockchain state, the rostering and contracts would be loaded onto the network and each participating member would be permissioned by the owner of that data (the manufacturer in this example) to see the data elements they should have access to.  For example, the health system should have access to the price being communicated to the wholesaler for their locations, but not other health systems or the distributor fees being charged to the manufacturers.  The manufacturer should have visibility to their prices that are loaded at the wholesaler, but not other competitive manufacturer products.

Once you have real-time data visibility across trading partners, you can implement “smart contracts.” Smart contracts are where you can set parameters that can automatically be implemented. For example, you can set tiers where prices change based on purchase volume, or rebates could be triggered for payment once thresholds are met. Today, rebates are a cumbersome and delayed process, which is ripe for automating.  Tiered pricing and rebates are just some of the use cases available. Health systems, group purchasing organizations, manufacturers, and distributors should look internally at their processes to see if there is value implementing this technology.  As a pharmacy industry, we need to be partnering together with our data to stop duplicating processes and improve efficiencies for all parties involved in the Pharmacy Supply Chain. Blockchain is a solution for contract alignment that can be implemented today, and it will provide more opportunities for streamlined workflows in the years to come.

Last month, Pharmacy Angle published a great article on four cost containment strategies your pharmacy can implement. Excellent strategies that can be achieved with clinical programming and committee approval. These initiatives are key to every successful pharmacy, although can take a long time to implement and even longer to yield results. So, what can you do in tandem to get as fiscally lean as possible in the meantime while you await approval?

While you are looking for change in the sofa cushions, start by examining all the ways you’re currently spending, perhaps and most likely on non-reimbursable money, so explore where you can make redundant change. It’s possible you are leaving money on the table by not leaning into your contracting with revenue streams/drains with your GPO, distributor, direct ships, technology, and consignment for example as fully as possible.

If you haven’t seen them already, ask for a copy of your supplier/partner contracts and take note of key milestones in the terms. You can take some simple steps to mix and match results that can make all the difference in truly maximizing your unrealized opportunities, or simply to point out areas where the contracts could be better suited to your practice.

Look at the cost minus structure of your distribution contract. Observe the milestones you need to reach to realize the maximum savings, and where you can bundle to take advantage of direct shipments or alternative delivery options such as consignment cabinetry that does not interfere with the purchase requirements of your primary distribution contract. There is always a little wiggle room in the contract. Use it to your advantage. You know how we Starbucks fans chase after those coveted stars for buying stuff? Sometime it’s best to forego the stars by not spending the money at all.

That said, use one primary distributor and stay loyal to the contract. Distribution partners will pay for that loyalty and contract compliance, and that brings more money back to your hospital in the long run.

Reduce delivery fees by voluntarily reducing your delivery days. Use a daily budget to give your purchaser guidelines to meet, and base that on the days that you get free delivery, eliminating weekends if there is an extra charge for example. You will reduce fees which can really add up, and the budget will give your pharmacy a way to anticipate costs while spreading out necessary purchases if you plan it well.

Make full use of the failure to supply clauses. It can be a pain to keep up with it, but it is lucrative and often an untapped portion of the overall agreement. Make it part of your daily activities, and you will secure contract pricing when you can’t get a contracted product.

Be as close to contract compliant as you can get. You will most likely reach milestones by simply making sure you are buying on contract, and this in turn brings more money back to your hospital. The distributor makes money when they move contracted items first, and they will share that wealth if you ask nicely.

Lean into any technology that your distributor offers. Let them help you make the most of your inventory turns, automatic conversions from non-contract to contract items, and have a plan in place for any overrides that may need to occur. Have them reviewed before the daily order is approved.

Analyze your spend and avail yourself of quarterly reviews. Your account manager can help you identify where you are not maximizing opportunities, which opportunities have changed with contract rolls for example, and what changes need to happen. Look towards this as it can be very helpful. This spend will also help you understand which clinical programming is working, what needs to be revisited and what is driving your budget. This gives you a good place to further analyze spend to pinpoint problem areas.

Just a few ideas on distribution. Next time we meet let’s talk GPO and technology. Applying some of the same principles to other contracting helps to create the full picture of how to make the most of the agreements you have in place, and where you can make changes that will be specific to your strengths. 

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Craig Wright, Vice President of Pharmacy Services at Advantus Health Partners, says the one of the biggest obstacles our industry faces today is the national drug shortage crisis.

“There’s a lot of disruption that’s happening and it's indiscriminate of the continuum of healthcare,” Wright says. “We've seen shortages in the physician office space, retail pharmacy, specialty pharmacy and home health. There are drug shortages in every therapy class — medications used for anesthesia, oncology and pediatrics, for example.”

What concerns Wright the most is the randomness of it.

“One day, it might be a shortage in one therapy class and another day, it could be another class,” Wright says. “It’s difficult to forecast exactly what shortage is next.”

But even though it seems random, drug shortages are historic, Wright says.

“Shortages were here before the pandemic,” Wright says. “But that has continued, post-pandemic. Add the labor shortage issue to the supply chain disruption — it’s no wonder why drug shortages are at the worst levels we’ve ever seen.”

In August 2022, the Inflation Reduction Act of 2022 (IRA) was passed by Congress and signed into law by President Joe Biden. Biden touted the $739 billion bill as “one of the most significant laws in our history.” It is arguably the most impactful health legislation since the Patient Protection and Affordable Care Act of 2010.

As the centerpiece of the IRA’s various drug pricing reforms, Medicare is allowed to “negotiate” what it will pay for many single-source branded drugs that account for the highest total expenditures for Medicare. In practice, Medicare will be able to dictate those prices. This year and next Medicare will negotiate directly with pharmaceutical companies to set the maximum fair price (MFP) for the following 10 prescription drugs from Part D:

• Eliquis
• Jardiance
• Xarelto
• Januvia
• Farxiga
• Entresto
• Enbrel
• Imbruvica
• Stelara
• Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill

Medicare enrollees taking these 10 drugs paid a total of $3.4 billion in out-of-pocket costs in 2022 for these drugs, and those out-of-pocket costs will decrease starting in 2026.

The number of drugs with MFPs set will increase by 15 in 2027 (all from Part D) to 25 in total. In 2028, 15 drugs from Part D or Part B (combined) will be added, resulting in a total of 40 drugs with MFPs set. In 2029 and each year after, 20 drugs from Part D or Part B will be added. By 2031, the total will reach 100 drugs, which means that, ultimately, all successful drugs (excluding certain categories specified in the law) will have their prices set by Medicare.

The minimum discounts that Medicare could demand vary based on the age of the drug: 25% for drugs on the market for more than nine years; 35% for drugs on the market for more than 12 years; and 60% for drugs on the market for more than 16 years. Those are all starting points, and it’s important to bear in mind that there is no price floor, so Medicare could impose steep discounts.

New Information Intermediary

Although the IRA requires manufacturers of selected drugs to ensure access to the MFP by all eligible individuals and providers, the Centers for Medicare and Medicaid Services (CMS) intends to contract with a so-called “Medicare Transaction Facilitator” to help with the exchange of information between different entities in the prescription drug supply chain to enable manufacturers to pass through the MFP to dispensers of selected drugs for eligible individuals. Under the IRA, manufacturers that do not ensure access to the MFP for selected drugs to eligible individuals and dispensers may be subject to civil monetary penalties.

340B Issues

Medicare negotiation of prescription drug prices also has the unintended consequence of adversely impacting the economics of the 340B program. The program requires pharmaceutical companies participating in Medicaid to sell outpatient drugs at discounted prices to healthcare organizations known as covered entities (CEs) that care for many uninsured and low-income patients. While 340B CEs will be able to purchase drugs at the lower of the 340B price or MFP, since the prices of some of the most costly drugs will decrease significantly, the absolute value of the 340B spread (savings margin) will in turn decrease, and this negative impact will grow as more drugs will be subject to price negotiation.

Although the 10 drugs that will be negotiated for implementation in 2026 are known, the prices that will be dictated by Medicare have not been set, so modeling the impact on the 340B Program is not feasible. In addition, the impact on 340B CEs will vary significantly, depending on numerous factors, including their mixes of patients, drugs, and payers.

In addition, currently there is a scenario in which a manufacturer retrospectively offers an MFP rebate to the dispenser (pharmacy) for a given drug, and the 340B third-party administrator (TPA) also claims that drug as 340B eligible, resulting in a duplicate discount. To date, CMS has not yet proposed a method to prevent this from occurring.

Before Western Carolina University students Madeline Tyson and Lisbet Alvarez had even thought about applying to college, they knew they wanted to be pharmacists.

“I knew I wanted to go to an in-state institution, not only because of scholarship requirements, but I wanted somewhere near the mountains and a small community to be part of,” Tyson said. “Western has been the perfect fit for me, especially with the Early Assurance Program that has allowed me to apply and be accepted into pharmacy school.”

The Early Assurance Program is a partnership between WCU and UNC – Chapel Hill that will run through 2027, with an option to renew. The program is not only a means for WCU to increase its undergraduate enrollment, but it will also allow UNC’s Eshelman School of Pharmacy to attract students from Western North Carolina.

WCU is the fourth UNC System school to partner with the Eshelman School of Pharmacy, joining Appalachian State University, University of North Carolina at Wilmington and UNC Pembroke. 

Tyson, a junior majoring in biology from Pinehurst, grew up around health care with her mother being a nurse.

“I knew I wanted to go into the medical field very early on,” Tyson said. “But the event that made me decide for sure I wanted to be a pharmacist was almost losing my grandmother.”

Tyson’s grandmother had gone to the emergency room for stomach pain and was admitted to the hospital and prescribed a medication that dialysis patients like her could not take because of life-threatening complications it could cause.

“When she got home, the complications began and she went into a coma,” Tyson said. “After she went back to the hospital, we found out about the medication error. When the medicine is prescribed, it goes to the hospital’s pharmacy and they are supposed to check the safety of medicines and any interferences that may happen when combined with other medications or treatments. My grandmother survived, but never fully recovered.”

At that moment Tyson knew she wanted to be a pharmacist and ensure patients and their families did not experience what her family had been through. 

Already knowing what career field she wanted to pursue, Tyson’s college decision was almost as easy, because the mountains of Western North Carolina were calling and Tyson answered with her decision to come to Cullowhee.

After Tyson graduates from WCU, she will begin her classes at the Eshelman School of Pharmacy in the fall of 2025.

Tyson credits Darby Harris, adviser and associate instructor for molecular physiology and genetics, for helping her on her journey to becoming a pharmacist.

“Darby Harris has been so supportive and has really helped guide me through my educational journey at WCU and the application process of pharmacy school,” Tyson said. “I am very appreciative of his support as well as the rest of the WCU faculty.”

For Alvarez, it was not a medical emergency, but a passion for advocacy against health disparities in the Hispanic community that led her, a senior from Hendersonville majoring in integrated health sciences, to purse pharmacy school.

Alvarez and her family are of Mexican American descent and she wanted to be an advocate for her family and community and address the healthcare issues they face. 

Alvarez was introduced to the pharmacy field during a high school internship at a local compounding pharmacy.

“The internship was an amazing opportunity to dive into the field,” Alvarez said. “I did not expect to like it as much as I did, but I loved it. I went to Henderson County Early College and realized during my internship that I wanted to pursue a degree in the health care field, specifically pharmaceuticals. I also love chemistry and to combine those two interests was great for me.”

Alvarez earned her high school diploma and associate’s degree by graduating from the early college and came to WCU in the fall of 2022.

“I have been involved in the Latinx Appreciation Student Organization during my short time at WCU and I've met a lot of people in my community,” Alvarez said. “It's pretty cool to see how people from different backgrounds have so much in common.”  

As for her plans after graduation, Alvarez, a first-generation college student, wants to make a difference through the opportunities her education has given her.

“I just want to be part of the solution and bring change,” Alvarez said. “My advisors and professors in the integrated health sciences program were very encouraging of me pursing this path.”

As for imparting words of wisdom to her fellow Catamounts and incoming students, Alvarez had a few thoughts to share.

“Being the first one in my family to go to college, I would say to these students and future students to not let the fear of failure keep them from pursuing something great,” she said. “I want to pave the way for my nieces and nephews to do something great also.”

Jamie Wallen, associate professor and chemistry and physics department head is leading the project.

“The new agreement between WCU and the UNC Eshelman School of Pharmacy provides an amazing opportunity for our students to pursue a career in pharmacy,” said Wallen. “We are very excited that both Lisbet and Madeline were accepted as our first cohort and we look forward to more WCU students entering into this program. I encourage any student that might be interested in pharmacy to reach out to learn more about this outstanding opportunity.”  

This story was originally published by Western Carolina University.

Biosimilars can provide significant savings and revenue for health systems, but how do you operationalize a streamlined workflow for providers and pharmacy to best support your patients?  Baptist Health found success by dedicating a resource to lead a cross-functional workgroup consisting of Providers, Nursing, Data Analysts, Prior-Auth, Patient Assistance, and Pharmacy to build out an automated strategy for biosimilars within their Electronic Medical Record, which is Epic.

While biosimilars are highly similar to their FDA‐approved biologic reference product, there are very few that are considered therapeutically equivalent.  Therefore, each biosimilar has its own billing code and reimbursement, which would necessitate a new prior authorization with the patient’s insurance if you want to switch a patient across products. For this reason, the scope of this initiative was limited to new patients initiating therapy.

One of the first challenges you face is insurance dictating what products you can use on a patient. The dedicated resource was able to pull the top 80% of insurance plans for patients that received the biosimilar reference product and identified which biosimilar(s) and/or reference products were covered by each insurance company.

Next a Request-for-Proposal (RFP) went out to manufacturers for sub-340B, sub-WAC, and discounted GPO pricing.  Once those were received, a financial evaluation was performed by the data analytics team.  The financials will be specific to your institution, since pricing, charging, and reimbursement will vary across health systems. Biosimilars will not always be the most cost advantageous agent and sometimes a reference product makes the most fiscal sense.

Armed with what products are available under each insurance plan, and the profitability of each of those agents, Baptist identified the preferred agents for each insurer.  The Epic Beacon team then built the preferred agents as the default in the treatment plan.  So, when a provider is initiating therapy the preferred biosimilar or reference product for that insurer will default in the order.  The provider can still change the product, if for example a pegfilgrastim patient was more appropriate to receive the Neulasta OnPro onbody device because they have travel concerns, and it will save them a subsequent trip for their second dose.  Providers loved this solution, as this required no additional steps to their workflow, and they have the flexibility to change the order to a different agent if they deem appropriate.

While this has been a very effective and efficient solution for Baptist’s providers and patients, this is not a one-time exercise. Reimbursement and pricing changes quarterly, so every quarter a new financial evaluation is performed.  Automation is key to continually evaluating the profitability of outpatient therapies, like biosimilars, because of the constant changes and the lack of resources to perform all the necessary financial evaluations.  More to come around automating analytics in a future article.  Hope you enjoyed and please comment below or reach out directly with any questions.

There is substantial evidence that genotype influences drug safety and effectiveness.  Over 300 drugs have pharmacogenetic information in their Food and Drug Administration-approved labeling, and guidelines are available by the Clinical Pharmacogenetics Implementation Consortium (CPIC) to guide the incorporation of pharmacogenetic information into drug prescribing.^1,2 However, there remains limited uptake of pharmacogenetic testing in clinical practice. This is in part because of the demand for evidence demonstrating improved patient outcomes with genotype-guided therapy. While randomized controlled trials are the gold standard for establishing the efficacy of an intervention, they are costly and challenging to conduct for pharmacogenetic interventions since only a subset of the population (i.e., those with a variant genotype) are likely to benefit from the intervention. Alternative approaches to evidence generation include use of observational data from patients who received pharmacogenetic testing and pragmatic clinical trials. An example of each is provided below.

Observational data

CYP2C19 genotyping to predict response to clopidogrel and guide antiplatelet therapy after a percutaneous coronary intervention (PCI) is one of the most common pharmacogenetic implementations.³ Clopidogrel is a prodrug that relies on the CYP2C19 enzyme for bioactivation. Clopidogrel is less effective in patients with a non-functional CYP2C19 allele, who cannot generate sufficient concentrations of the active clopidogrel metabolite to effectively inhibit platelet aggregation.⁴ On behalf of the NIH-funded Implementing GeNomics In pracTicE (IGNITE) Network, investigators from seven institutions where CYP2C19 testing had been integrated into clinical practice pooled data for over 1,800 patients who had undergone percutaneous coronary intervention to examine outcomes with CYP2C19-guided antiplatelet therapy.⁵ At each site, alternative therapy (e.g., prasugrel or ticagrelor) was recommended in patients with a non-functional allele in whom clopidogrel was predicted to be ineffective, but the ultimate prescribing decision was left to the provider. The investigators found a significantly lower occurrence of adverse cardiovascular events (i.e., death, myocardial infarction, and stroke) in patients with a non-functional allele treated with alternative therapy versus clopidogrel. These data were consistent with more recent clinical trial data, demonstrating the value of real-world data.⁶

Pragmatic clinical trial data

Tramadol, hydrocodone, and codeine are dependent on the CYP2D6 enzyme for formation of more potent opioid metabolites. CYP2D6 intermediate and poor metabolizers with very little to no enzyme activity have low concentrations of the more potent opioid metabolites and may not attain sufficient pain relief with these drugs.⁷ In contrast, ultra-rapid metabolizers, with increased enzyme activity, may generate toxic concentrations of the more active metabolites and are at increased risk for respiratory depression.⁷ Investigators at the University of Florida conducted a hybrid implementation-effectiveness trial of CYP2D6-guided versus usual post-operative pain management.⁸ For patients randomized to the genotype-guided arm, recommendations were to avoid tramadol, hydrocodone, and codeine in those with a high risk phenotype (i.e., poor, intermediate, and ultra-rapid metabolizers) and to consider an opioid not metabolized by CYP2D6 (e.g., hydromorphone or morphine). Given the pragmatic nature of the trial, the prescribing decision was left to the provider. The majority of patients (72%) with a high-risk phenotype in the genotype-guided arm, but none of those in the usual care arm, received an opioid other than tramadol, hydrocodone, or codeine.⁸ There was similar post-operative pain intensity in the genotype-guided and usual care arm, but lower opioid consumption in the genotype-guided arm. A large, multi-site pragmatic trial is currently on-going to further examine outcomes with CYP2D6-guided post-surgical pain management.⁹ 

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As drug costs continue to rise, pharmacists across the U.S. rise to the challenge of coming up with clinically effective ways to contain costs.

But first, why are costs going up in the first place?

“There’s been a lot of drug innovation and research for the past ten years that has benefitted patients,” says Neal Dave, Executive Director of Pharmacy at Texas Oncology. “Due to these breakthroughs, cancer patients have more treatments available than ever before. But these newer medications have different side effects from traditional chemotherapy. With proper management, patients can stay on therapy longer than before. Even though these treatments are amazing, the cost is going to go up because of the research it took to bring these products to market.”

Texas Oncology has a long history of providing value-based care to patients. Dave works closely with physician leadership, fellow pharmacists and a full care team on an effective drug cost containment strategy. Here are a few strategies the team implemented:

• Dose rounding: A whitepaper examined the dosing of monoclonal antibodies. For example, if a drug vial contains 100 milligrams and a patient’s dose is calculated at 108 milligrams, researchers found these monoclonal antibodies have a wide therapeutic index, which means that eight milligrams won’t make any clinical difference. If a patient had a prescription for 108 milligrams, the pharmacist would use two vials and throw away the rest of the 92 milligrams because it can’t be used on another patient. This created a lot of waste. “After instituting a dose rounding policy, we evaluated how much waste we were avoiding just by rounding down to the nearest vial size,” Dave says. “It is approximately $1 million per month for just our Medicare patients. Texas Oncology uses a dose rounding strategy if the medication has a wide therapeutic index for over five years.”
• Dose banding: Texas Oncology does a similar strategy when the dosing is based on a patient’s weight. Typically, immunotherapy drugs are based on weight, but drug company research showed that you can do a flat dose basis and get the same result for a patient. Although flat dosing is a great idea, patients that have a lower-weight can be given a lower dose based on their weight, as compared to the flat dose. This saves using an additional vial for lower-weight patients, without affecting any clinical outcomes.
• Therapeutic interchange: This is when you can offer a patient an alternative medication that’s just as effective as the original, but at a lower cost. An example is in bone health where two different classes of medications have the same clinical efficacy, except one of them is generic and is 1/10^th of the cost compared to the other. Texas Oncology’s protocol, where appropriate, allows pharmacists to substitute for the lower-cost product.
• Biosimilar: Texas Oncology adopted biosimilars early and was able to show a savings of $4 million in one month alone after the adoption of biosimilars, which were originally launched for bevacizumab, trastuzumab and rituximab.

Having a cost containment strategy that your leadership supports is key. Getting the infrastructure of pharmacists, leadership and doctors together is what makes it successful.

“We have a pharmacy and therapeutics committee that meets regularly to discuss value-based care options for patients and discusses where we can have the most impact,” Dave says. “We have a team of pharmacists who are dedicated to cost-saving initiatives.”

For example, Dave says pharmacists can take the lead and build some of these cost-saving ideas into their EMR for dose rounding or therapeutic interchanges.

“A lot of times, providers aren’t aware of how much the drugs costs,” Dave says. “They’ll know they can be expensive, but don’t see the cost-saving differences among drugs in the same class.

Dave wants other pharmacists to know that providing quality care and reducing costs is possible.

“These are areas where we’ve cut down on costs significantly,” Dave says. “If you look for areas where you can make a difference, you’ll find them.”