The year 2017 was another one with more launches of specialty pharmaceuticals than conventional mass-market ones, continuing the shift of the branded pharma industry into the branded specialty pharma one. This shift has been generating more and more business for outsourced hub and patient-support providers, many of whom report rapid staff increases and expansion. The field is becoming more crowded—and more competitive.
“Patient support” means many things to many people. On the other hand, “hub services” is sometimes restricted in meaning to only the steps taken to get a patient through the prior authorization (PA) process and line up reimbursement support.
Nevertheless, Pharmaceutical Commerce has espoused the “hub services” term to encompass the full range of services—usually funded directly or indirectly by pharma manufacturers—to assist getting patients on therapy, and keeping them adherent in disease states that require chronic care. Also called “wraparound services,” these include education and counseling of patients (and physicians in many cases); case management that provides a person at the other end of the phone line to handle patient queries; refill reminders and adherence programs; the data repository that brings patient data together from hospitals, clinics, labs and pharmacies; as well as the PA and reimbursement support. Some vendors also provide third-party logistics (3PL) services to expedite deliveries of drugs. The hub concept is critical to all of this—it’s the only way truly coordinated care can be achieved.
Historically, hub service originated with an earlier wave of (then) new biologics that required diagnostic tests and more complicated means of administration (such as infusion)—and were provided by the biotech companies themselves. In recent years and with the rise of specialty pharmaceuticals, hub services are applied to many therapy classes, and to the orphan drugs that target rare diseases. Some bioharma companies retain some or all of the patient support services even today; but the trend has been to engage with outsourced providers that specialize in the practice. Such service providers provide economies of scale, a more varied range of services, and a degree of assurance that the patient support does not violate regulatory standards for improper inducements.
“Different manufacturers have different philosophies when it comes to hub services,” observes Richard Whittington, director of marketing at TrialCard. “Some want a full spectrum of services at a one-stop shop; others want to pick and choose what they consider to be best of breed individual services.”
“Pharma companies spend a lot in their supply chain processes; that’s the world we’re focused on,” says Nitin Sahney, CEO of PharmaCord, a recently established hub services provider. “There’s a lot of opportunity to lower these costs through efficient patient support services, and when those lower costs pass through to the patient, it means access to therapies increases.”
Patient support services have important implications not just for the pharma companies that sponsor them, but for payers and providers. “Patient support is and will be an important component of value-based contracts,” says Dominic Galante, chief medical officer with Precision for Value, referring to the novel practice of tying pharma reimbursement to the outcome of a therapeutic regimen. “Payers and providers want to be assured that their funds and human capital are being allocated with the right objectives in mind,” adds SVP Maureen Hennessey. “With patient support, this includes psychosocial issues like providing transportation or shelter needs for patients undergoing therapy.”
One indicator of the vitality of the hub services business is the accelerated activity around the financing of these businesses; the market has attracted sizable interest from the private equity world. The most recent of these is the sale of Dohmen Life Sciences Services in February to two ventures, Water Street Healthcare Partners and JLL Partners, for an undisclosed price. Water Street in turn is melding DLSS with two market research and data firms, Alliance Life Sciences and Health Strategies Group, and a communications agency, Access Group. DLSS’s approach has been to assist manufacturers in both the clinical research and commercialization realms, an approach touted as “molecule to market.” Water Street’s announcement also mentioned that the firm has “$3 billion to invest in life sciences and service businesses.”
In the latter half of 2017, RxCrossroads, then a unit of CVS Health, was sold to McKesson, where it will be combined with McKesson’s Specialty Health Solutions unit. (McKesson will be announcing a reorganization of this unit later this year, with the pharma-facing services united as McKesson Manufacturer Solutions, according to Shawn Seamans, president of the unit.) and in the first half of last year, McKesson ponied up an eyepopping $1.1 billion for CoverMyMeds, a firm specializing in automating the prior authorization process (more about that later).
One “demerger,” so to speak, occurred last year when AmerisourceBergen acquired H. D. Smith, one of the last large drug distributors that was still private. H. D. Smith’s parent retained the Triplefin unit, which was the core of its hub services offering. Triplefin’s business had been growing over the past few years (Triplefin itself was a H. D. Smith acquisitions several years ago), and Tom Doyle, EVP of the unit, says that it intends to continue that growth.
Also last year, TrialCard recapitalized as one private equity firm backed out, and another, Odyssey Partners, came on board. TrialCard’s Whittington says that the larger financial base of Odyssey will translate into more investment in the firm.
Finally, the newest entry in this field is PharmaCord, which came into being last year, now has pharmacy licensing in place in all 50 states, and is about to begin managing its first pharma contract. PharmaCord’s Sahney has a long history in this field, having founded RxCrossroads in 2000, sold it to Omnicare where he eventually became president, and then left that company after it was acquired by CVS Health. He’s now reassembled some of the original RxCrossroads team.
All these firms—and others—compete in a space dominated by the specialty services operations of the big PBMs—Express Scripts’ Accredo Pharmacy and Curascript distribution services; Coram, CVS Health’s specialty infusion business; BriovaRx, now owned by OptumRx; and Walgreens Specialty Pharmacy. Lash Group, a business unit of AmerisourceBergen, is a leading hub services provider, while Cardinal Health’s Specialty Solutions unit has expanded into hub services. Something of an outlier is Covance, a contract research organization (CRO) but one that has a Market Access business unit for comprehensive hub services.
Accredo, Coram and other PBM-associated specialty pharmacies are big enough to justify their own inclusion in the limited-distribution networks set up by some pharma companies to dispense their products; these limited networks enable pharma companies to exert some control over how their drugs are dispensed and followed up with services. Independent specialty pharmacies represent another option. A recognized leader in this channel is Diplomat Pharmacy, which went through the exercise of setting up a hub service, Envoy Health, that is “firewalled” (Diplomat’s term) from the rest of the company. The firewall enables Diplomat to present an option to manufacturers that want to keep hub services separate from pharmacy-based services. And, in an action that certainly makes sense from the Diplomat perspective of providing comprehensive services, but which blurs the distinctions between trade channels, the company acquired two small PBMs last year, and so can be involved in price negotiations with pharma companies even while fulfilling prescriptions.
Other specialty pharmacies are big enough to offer an alternative distribution channel to manufacturers; Avella Pharmacy is often mentioned in this context. ExceleraRx is a network of academic medical centers (primarily) that enables manufacturers to tap into that hospital segment. Another network is Kloudscript, which says it has brought together the independent pharmacies of 500 communities across much of the continental US to provide specialty care, including hub services.
Choose your flavor
The hub provider business—and the nature of patient support and its relevance to various disease states—is such that manufacturers can choose what area of expertise or skill the service provider offers.
Ashfield Patient Services is an example of this. Alongside a substantial (and international) contract sales organization, Ashfield offers trained clinical educators in a variety of disease states. “Originally, this service was for educating physicians and their office managers on specialty pharmaceutical requirements,” says Nareda Mills, president of the unit. “now, our work is dominated by providing assistance to patients themselves, including visiting the patient’s home.” The company also maintains a sizable call center for telehealth services; and a significant part of the service is sustaining adherence programs to keep patients on therapy.
A recurring theme among hub providers is the ability to tailor an adherence program to the psychological profile of a patient—more services for those judged likely to drop off, less for highly motivated patients. Dropoffs can occur for financial reasons (raising the importance of reimbursement support), and for predictable side-effect occurrences. All this can be programmed into an adherence program. (Fig. 1)
Mills says “I guess so,” when asked whether Ashfield actually is a hub services provider, but notes that the company does not perform benefit investigations and provide reimbursement support for patients. “We are actively looking at an acquisition in that area, or to build our own expertise internally,” she says.
Coming from almost the other end of the spectrum, TrialCard started out with managing copay programs, has built out is range of hub services over the past couple years, and expects to intensify that with the backing of its new private-equity investor, Odyssey Partners. “Our reputation was built on our success in managing copay coupon programs, and the high quality of data reporting we were able to provide coming out of those programs,” says TrialCard’s Whittington. Scott Dulitz, SVP, corporate strategy at TrialCard, then picks up the thread. “Along the way, we learned that 50% of hub providers’ calls had to do with reimbursement, so it was a natural evolution for us to build on that interaction.”
Whittington and Dulitz tout the value of their proprietary relationship-management technology, a platform called QuickPath, which, while continuing the reporting and analytics of copay programs, integrates with the workflow of other participants in patient health. “We have an open-source platform, built on a Microsoft technology stack, and including reporting tools from MicroStrategy,” says Dulitz. The technology enables TrialCard to integrate with multiple electronic health-record (EHR) systems, now in wide use among healthcare providers, so that the patient journey can be tracked throughout all the treatment steps.
In a somewhat similar manner, TripleFin started out in patient assistance programs (which, among other things, arrange for drugs at no cost for indigent patients) and in pharma samples distributed to physicians’ offices, and has since grown to include a range of patient support functions. The company is notable for having trademarked the term “Hub Lite”—a reference to the ability of Triplefin and others to scale down a hub program to a lower-cost but sufficient option for drug programs that only need, say, a refill reminder program.
Another direction comes from the intense strategizing that goes into a well-run hub program. Jim Long, principal and cofounder of Biosolutia, cites his and his partners’ experience at prior companies (including PBMs, health plans and specialty pharmacies) that led to their initial work as consultants to the patient support field. “When we decided to operationalize our expertise and provide actual hub services, we put an emphasis on our consultative process,” he says.
This emphasis is so established the company has trademarked it as CSDS—the Commercialization Strategy Development System (see Fig. 2). It comprises five “P’s” (patient, provider, payer, pharmacy and pharma), and 15 “C’s”, ranging from “clinical care setting” to “collection of data.” Only by going through the analysis and agreeing on common, achievable goals, can a client and BioSolutia arrive at a meaningful program. (If nothing else, the 15 C’s show the complexity and multiplicity of factors that go into a comprehensive hub program.)
Yet another factor—one sure to start debates among competing hub providers—is the business foundation of the hub service. As indicated above, they range from extensions of a PBM (a business that is usually negotiating discounted drug prices with a manufacturer) to wholesaler-based entities (whose parents’ business is to take ownership of drugs, although that is almost never the case with a hub provider), to specialty-pharmacy based. That leaves the truly independent business, with no other ties, in a distinct position.
“What we offer is a 100% commitment to the manufacturer client,” says PharmaCord’s Sahney. Specifically, he says, the company won’t take on as clients competing products in the same drug class—something that PBMs and specialty pharmacies, by their very nature, usually do. “We not saying this is automatically better than our competitors, but we want to be clear that we’re offering an alternative to those models.” Sahney’s push for independence even goes as far as how the company is financed: “The private equity firms have a clock ticking on their investments; they want to see a return and eventually to sell the business,” he says. “We can afford to take a longer-term perspective.” (Sahney says that the firm is starting out with financing from himself and his executive-chairman partner.)
PharmaCord is not the only firm with no ties to another player in the pharmaceutical distribution world, and there are probably others that began with self-financing. The downside of being exclusive with one drug in one disease state, potentially, is that the company might be limited in its expertise across that disease state. Shawn Seamans, president of McKesson Manufacturer Solutions, cites the breadth of capabilities his business offers, as a component of McKesson, the biggest drug wholesaler in the US.
McKesson Manufacturer Solutions, besides now containing RxCrossroads, also has Biologics (an earlier patient support provider acquisition), a 3PL service, and McKesson Patient Relationship Solutions, a longstanding business that manages patient communications. Plus the unit has ties to US Oncology, a practice-management business for community oncologists, a similar offering for ophthalmology, and an infusion-services business.
And besides, says Seamans, “McKesson Specialty can create an exclusive launch package with various commercialization services (e.g., distribution, specialty pharmacy, awareness and education, market insights, etc.) for a brand in one therapy class, if the client so chooses. In cases where we are handling competing brands, the service teams are kept separate and there is no cross-communication. The advantage to working with us is the scale we can provide nationally, and the breadth we can create around a brand’s hub program.”
A key part of Cardinal Health Specialty Solutions was its acquisition of Sonexus several years ago; Sonexus’ management had a background in patient assistance programs and so-called “fast start” programs to get a drug to a patient even while PA and benefit verifications are progressing. Tara Herington, recently appointed vice president of the unit, touts the quality of customer service the company maintains. “Our case managers, besides the medical backgrounding they need, undergo a training program in customer service,” she notes. The program, called Traub Hospitality, comes from a training company that specializes in customer service programs for prestige consumer brands. Herington says that this commitment to customer service pays off in better interactions with the patients whose care is being managed by Cardinal.
The push for platforms
While there are all these variations in how hub providers position themselves, a universal claim is made for top-notch IT platforms to manage patient cases effectively, while generating vital information for both payers (who are tracking the outcomes of drug therapies) and manufacturers, who use the information in aggregate to monitor their marketing efforts.
Every vendor contacted for this report touts their platform: Asembia has Asembia1; Cardinal has ConnectSource; TrialCard has QuickPath; CareMetx has CareMetx Connect; Triplefin’s is branded as Rx365; BioSolutia’s is branded as BOSS (BioSolutia Operations Support System—company president Jim Long says that the it had to fend off a claim from Bruce Springsteen to own the trademark!). The big distinction among these is whether the company chose to use an off-the-shelf system, or to build one from scratch.
At this time, the most cited common platform is SalesForce.com, which is used by Cardinal Health, ConvergeHealth (an IT business of Deloitte) and Accenture, among others. Last year, Cardinal completed an extensive rebuild of its platform, ConnectSource. ConnectSource was built as a tailored adaptation of Deloitte’s platform, PatientConnect, which is Deloitte’s own configuration of Salesforce.com.
Ashfield’s Nareda Mills says that the company is in the final throes of a multi-million-dollar investment in Salesforce Health Cloud, a version of Salesforce software tailored to the healthcare industry with important features such as HIPAA compliance. Accenture has also made use of SalesForce Health Cloud for its Intelligent Patient Platform.
Most of the other platforms are home-grown; and this off-the-shelf vs. custom dichotomy is a common one in the world of business IT, with deeply committed proponents on both sides. While the trend in business IT overall is toward single, commonly applied systems (think SAP for enterprise resource planning), the custom-software proponents argue that those systems are too rigid, too expensive, and fail to meet user needs adequately. On the common-platform side, proponents argue that custom software is always difficult to maintain, requires building (and rebuilding) interfaces to other systems, and locks clients (in this case, the pharma company recipients of output data) to the service provider. The longterm trend in business software is toward standardized platforms, but in a field like hub services, where conventional practices are still evolving, that standardization might be a long way off.
One area where software and data standardization are trending now is in prior authorization and the benefit investigation/verification process. A leading firm here is CoverMyMeds (now owned by McKesson), which says that it has linkages to 700,000 providers (physicians and their employers), 80% of payers, essentially all of the EHR systems in the country, and over 200 pharma brands. PA forms traditionally have been filled out in physicians’ offices and faxed to payers or PBMs; CoverMyMeds has automated part of that process by creating online forms to be filled out.
According to Erica Conroy, VP of operations, CoverMyMeds is funded by the payer community and the pharma manufacturers; the former benefit from the reduced workload and better accuracy of PA filings, and the latter from reducing the obstacles to getting a prescription approved and dispensed. “We like to work with pharma companies throughout a product’s life cycle; pharma companies have found that having accurate PA forms even helps product marketing after loss of exclusivity, by keeping that prescribing option in front of physicians.”
CoverMyMeds has just issued an annual “ePA Adoption Scorecard” that assesses trends in adopting digital PA processes in the US. Among the data cited in the report, 10% of all prescriptions are initially rejected at pharmacies, and of those two-thirds required a completed PA. A third of rejected prescriptions with a PA requirement wind up as abandoned prescriptions (and that’s where the PA process can hit pharma markets hard).
CoverMyMeds has worked with the National Council for Prescription Drug Programs (NCPDP, a professional standards-setting body) on an ePA standard; this, in turn, has been put into force in a number of states. (Since the pharmacy profession is regulated at the state level, there is no national standard to be imposed.) Interestingly, ePA varies not just by the payer, and by the drug involved, but also by the state where the prescription is to be dispensed (see Fig. 3). According to CoverMyMeds data, 50% of PAs are now being processed with automation, and increasingly, the PA process can be an interactive one with the payer, such that the PA is completed in real time.
CoverMyMeds is not the only organization that has sought to standardize and automate the PA process; Asembia makes PA processing a part of its service; other vendors include AssistRx and ZappRx. Asembia has an extensive network of specialty pharmacies that work with it, and so is able to bring uniformity to how PAs are handled by those partner pharmacies. In September, CoverMyMeds announced a similar undertaking, where approved PAs could then be routed to specialty pharmacies that could fill the prescription.