2015 Hub Services Report

Fig. 1. A view of the relationships and data flows between hubs (lower right) and patient service providers. The ‘Brand Data Center’ essentially resides at the manufacturer. Credit: ProMetrics

In 2015, the hub services business model finds itself still struggling for a distinct identity and purpose, while the unmet needs of patients continue to rise as more specialty products enter the market, necessitating complex reimbursement and drug-administration processes. Part of the struggle is over definitions: some vendors of hub services dislike the association of the “hub” term primarily with reimbursement, and want to emphasize ongoing patient care and therapy maintenance programs (especially for chronic conditions). And another part of the struggle is the competitive market position: the largest hub service providers are the major pharmacy benefit managers (PBMs) who seek to manage the overall “patient journey” from initial prescription to fill to ongoing care management—with drug costs and reimbursements (to pharmacies in the patient direction, and to manufacturers in the other) as one entity. The subject of limited distribution—keeping drug distribution and dispensing within a small number of specialty pharmacy providers (SPPs) is also a factor in this market competition.

Pharmaceutical Commerce likes the “hub services” descriptor because it unifies a variety of patient services under one umbrella: the initial benefit investigation/benefit verification (BI/BV) process; negotiating prior authorization requirements with payers; arranging the delivery of the drug (to SPPs, to clinics, to doctors’ offices or to the patient’s home); and providing follow-up care management. Acting as an advocate for patients to manage copays, coinsurance or support from charitable foundations (a crucial factor for many rare diseases) is critical for many patients. Whether hub services becomes the accepted terminology in the long run remains to be seen; nearly everyone in the field agrees that the core business activities are evolving, and whatever hub services are today, they will be something different in the future.

“Many people associate the ‘hub’ term with benefits investigation and reimbursement support, but we prefer to look on it as overall patient care management,” says Amy Grogg, SVP of AmerisourceBergen Specialty Group that manages hubs and patient care for a large number of manufacturers via one of its units, Lash Group. “Patient support service center” is the preferred term at inVentiv Health Patient Access Solutions, a unit of inVentiv Health, according to David McLeod, a VP of program development there.

One point that most executives in the hub business agree on, regardless of the overall term used, is the value to the patient having a single point of contact for issues related to obtaining and using the drug. Depending on the disease condition and patient situation, patients can be contacted by representatives of payers, pharmacies, the doctor’s office, patient advocacy groups and manufacturer representatives (in some limited cases). Information overload can set in, and handoffs from one healthcare provider to another can falter.

Marc Duey, president of ProMetrics, an IT and data-analytics service that works with many parties involved in hubs, presented a chart at the CBI Hub Models and Design Program meeting (February 5—6, Philadelphia, PA) that gives an indication of the complexity of patient support in the US market today (Fig 1). Patients might enter the network at a variety of points; but what concerns manufacturers most is what happens along the way, ranging from which drug-selection influence (a doctor, a formulary or something else) dominates, to when and if patients abandon therapy.

Specialty Patients Require Holistic Management

Fig. 2. The high cost of specialty patients, and the range of healthcare services they require. Credit: CVS Health, based on 2013 Milliman study.

Internal, external, hybrid

The manufacturer perspective on hubs is also important, because many hubs reside within the walls of the pharma manufacturers themselves. Usually, that internal hub is firewalled from the rest of the company, due to HIPAA and other privacy and regulatory considerations. Manufacturers have the option of running and staffing the hub entirely internally, entirely externally by working with a business partner, or a hybrid of the two. And external business partners range from dedicated, freestanding enterprises entirely in the hub business to hub services offered by PBMs, specialty pharmacies or specialty distributors.

“We have an outsourced model that we have always supported,” says Mark Hansan, president and CEO of CareMetx (Bethesda, MD), “because the manufacturer needs to support the patient across the continuum of treatment, from different doctors and as patients migrate to other specialty pharmacies and on and off insurance coverage.” But the company also supports the hybrid hub of manufacturers by providing its proprietary Connect technology for data management.

At the other end of the spectrum are companies like Lash Group or UBC (Chesterfield, MO); the former is a unit of AmerisourceBergen Specialty Group (ABSG), while the latter is part of Express Scripts, the leading PBM and also owner of the Accredo SP and CuraScript, a specialty distributor. ABSG has other business units for specialty logistics (ICS), specialty pharmacy (US Bioservices and Premier Source). Both companies say that they can provide either a full-blown commercialization platform with their sister business units, or act as the hub provider only, while working with other SPs, distributors and others.

“This isn’t a one-size-fits-all business,” says Lee Ann Steadman, director of business development at UBC. “We participate in limited-distribution networks that use Accredo exclusively, as well as others that involve other SPs.”

Limited distribution

“The manufacturer makes the call on how limited the distribution of a product should be, and what outsourced provider or providers should be management patient care,” notes Lash’s Grogg. “Ultimately, we want to ensure that the patient gets the necessary care management, regardless of payer and distribution channel.”

Among drug wholesalers, AmerisourceBergen isn’t alone in pursuing hub business. McKesson, which touches on hub services through its Patient Relationship Solutions, as well as McKesson Specialty Care Solutions (which encompasses an earlier acquisition, US Oncology) is a player; Cardinal Health Specialty Solutions made a major foray into hub services by acquiring Sonexus Health, a recently established specialty distributor and hub services provider, in 2014. And H. D. Smith, the No. 4 drug wholesaler in the US, has been building out Smith Medical Partners, a specialty pharmaceuticals distribution business, for several years, while acquiring Triplefin, a patient-support company, a year ago. “Our sweet spot is mid-market pharma companies or emerging biotechs, that need support in logistics, distribution and patient support,” says Troy Koch, executive account director at the Cincinnati, OH firm.

Oncology support

Another major company that combines hub services with logistics and pharmacy is Omnicare Specialty Care Group (Louisville, KY). It operates a major specialty pharmacy in Orlando, FL, and additional pharmacy and patient-support services in Louisville, where a related business unit, RxCrossroads, is based. In the past couple years, it formed a partnership with ONS:Edge, the for-profit subsidiary of the Oncology Nursing Society. Through the partnership, Omnicare SCG supports nonbranded nurse education and stays close to developments in the clinical pathways that healthcare providers use in treating cancer. (Oncology drugs remain the single-largest component of the specialty pharmaceutical market and are likely to increase as new drugs appear on the market.)

Both Omnicare SCG and Smith Medical Partners/Triplefin are proponents of “specialty lite,” an approach that provides some of the services associated with hubs—especially handling prior authorizations and benefit investigation—but not the full range of patient support services. The advantage: an economical approach to drugs whose cost or pattern of treatment doesn’t justify the expense of full-fledged patient services. “We have been expanding our business in this area,” notes Rob Brown, VP of business development at Omnicare SCG.

Specialty lite is available at other hub providers; what’s interesting about the concept is that ultimately, it becomes akin to support for almost any branded drug. As both the costs of new drugs and the cost containment activity of payers rise, patient access and support services will be a contentious arena in coming years.

The opposite end of the spectrum for hub services are those products for ultra-rare diseases, and those that have a complicated, FDA Approved Risk Evaluation and Mitigation Strategies (REMS) requirement. The ultra-orphan space was pioneered by Centric Health Resources (now part of Dohmen Life Sciences Services) over the past several years, but the growth of orphan drugs has attracted the interest of most hub providers. (“Orphan” drugs are generally regarded as those for under 200,000 patients; “ultra-orphan” is some number less than that, usually a few thousand.)

REMS with an added regulatory burden, Elements to Assure Safe Use (“REMS with ETASU”) also demand a high level of hub services. ETASU can require, for example, use of other drugs in addition to the prescribed treatment, or drugs with restricted access that require dispensing by only certified physicians, pharmacies or pharmacists. The process of identifying appropriate prescribers, arranging ancillary medical services and providing patient and prescriber education are all tasks that a limited or even exclusive distribution arrangement make more manageable.

SP patient support

Specialty pharmacies, in and of themselves, want to capture as much of the patient support business as they can, and while independent hubs and SPs collaborate with each other, there is also a competitive edge to the arrangement. Diplomat Pharmacy, the largest independent specialty pharmacy, has set up a subsidiary, EnvoyHealth, expressly to provide hub services as distinct from the patient support from its pharmacy business. “The quality of our service starts with the deep expertise our organization has in patient support,” says Cheryl Allen, VP industry relations. “Then we sit down with manufacturers, usually 18 months before launch, to work out the details of a hub program with them.” While providing a high volume of dispensing itself, Diplomat also serves as the de facto specialty pharmacy for several retail pharmacies, hospitals and health systems.

The bigger PBMs, which have been operating mail-order pharmacies for years, also seek a role in hub-related patient support—but in many cases, with a view toward directing the drug dispensing to their own facilities. CVS Health (which owns the Caremark PBM) has a program called Specialty Connect that offers patients the choice of filling prescriptions by mail or by picking up prescriptions at a local CVS store. The company says that patients experience a double-digit improvement in adherence to therapy through the “seamless” integration of specialty staff with local pharmacists.

Catamaran opened a specialty pharmacy business a couple of years ago called BriovaRx; and in the past year added to it with the $260-million acquisition of Salveo Specialty Pharmacy, an independent pharmacy with locations in Florida, California and New York.

Express Scripts, working with its UBC subsidiary mentioned above, touts the value of its “Health Decision Science” to improve adherence and patient outcomes through behavioral analysis of the patients it cares for.

Copay expertise

A relatively new entrant in the hub services field are at least two of the leading providers of copay card systems: Opus Health, a division of Cegedim Relationship Management (and now a unit of IMS Health), and TrialCard. Both have been major players in the growth of the copay and coupon business in recent years and, given the centrality of reimbursement support that specialty pharmaceuticals usually require of patients, combined with the direct-to-patient relationship that copay cards afford, it makes sense for companies like these to integrate more patient-support services into their platforms.

“We’ve grown dramatically in the past couple years, and as specialty pharmaceuticals have grown in the overall market, more of our services are directed at that,” says Paul Kandle, VP and GM of Opus. Its call center staff are dealing with a more complex set of reimbursement issues, as well as the growing number of SPs and healthcare providers involved with specialty therapies.

For its part, TrialCard now promotes “market access solutions” including financial assistance, adherence programs, drug shipment and patient education, notes Richard Whittington, director of business development at the firm.

Data feeds

Everyone in the hub business, and specialty pharmacies and others assisting patients in getting therapy, deals with the hurdle of “prior authorization”—clearing the permission and reimbursement process for dispensing a prescription for a restricted (by payers) drug. In most cases, the payer wants assurance that, for example, a preferred drug has been tried first or that the medical condition warrants using the drug. (Obviously, the more expensive the drug, the more “prior auths” enter the picture.) Hub providers have responded with automated processes to get the authorization by filing the necessary documentation, turning a process that could take weeks into one that takes days or less.

Armada Health Care, which acts as a group purchasing organization for specialty pharmacies, developed its ApproveRx program several years ago to compile prior-authorization documentation from payers, thereby streamlining the process for pharmacies and hub providers. Lash Group has developed its “eConcierge Platform,” which includes prior auth as part of the patient intake process. A company called CoverMyMeds has devoted itself exclusively to this process, offering its software and data to healthcare providers, pharmacies and as a complement to electronic health record (EHR) systems. According to attendees at the CBI Hub Models meeting, prior auth is intended, for the most part, to clarify the conditions under which many drugs should be prescribed; once those conditions are met, the authorization goes through. The documentation burden on doctor’s offices, pharmacies and hub providers, however, can be high.

Relative to the PBM and specialty pharmacy businesses that have been running for years, some of the newer hub providers tout the investments they have made in data processing and IT services for manufacturers, along with information portals that can deliver timely prescribing and patient-related developments to their clients. To a certain degree, the independent hub providers exist because of the difficulties of collecting, and then analyzing, the data coming from multiple pharmacies in a distribution network, providers, patient services like home health and the rest. A manufacturer trying to keep track of what’s going on with its drug is hard-pressed to obtain and then compile this data coming from diverse sources.

Erica Toatley, a senior director at Lash Group, noted at the CBI Hub Models meeting that as many as 500 data elements go into the report that a hub provider delivers. Many of these data elements are for complying with the terms of the contract between a manufacturer and a hub provider—call volume, “speed to answer,” patient abandonment (or adherence)—all of which are used by hub providers to compete for business from manufacturers.

But the bigger part is analyzing what is going on in terms of patient therapy which, given the complexity of administration for many specialty pharmaceuticals, is challenging to ferret out. Case in point: the difficulties that Dendreon, developers of the innovative prostate cancer treatment, Provenge, encountered when it entered the marketplace in 2012. Not quickly enough, the company discovered that there was a significant hitch in physicians getting approval from payers (including Medicare) for the therapy, and although the drug had a successful initial launch, its growth projections had to be severely reduced while the reimbursement issues were resolved. (Ultimately, Dendreon went bankrupt and has just been acquired by Valeant Pharmaceuticals International.)

To the surprise of many observers, even the orphan-drug market has become competitive, with multiple manufacturers introducing products for certain conditions—all of which makes tracking uptake and adherence a priority.

Manufacturers used to expect monthly or quarterly reports on drug dispensing, notes ProMetrics’ Marc Duey, but today, it’s possible to get near real-time reporting. His company offers a data service to compile these results; last fall, the company reported on the variations in “speed to therapy” (how quickly a patient obtains a drug, once prescribed).

CareMetx touts its Connect technology data service, which it uses and licenses to manufacturers to manage their own internal hubs. It has recently been expanded to provide an SP portal and another portal for nursing networks.

The Affordable Care Act, with its structuring of accountable care organizations (ACOs) is going to require a new level of data integration, says Lash’s Amy Grogg, as the ACOs seek to justify their reimbursement through better patient outcomes. “The transition from fee-for-service for healthcare, to fee-for-value as demonstrated by the ACOs, will require a new level of analytics in patient support,” she says. Lash has complemented this effort with another program, called the ACE Service Center, to consult with manufacturers on how patients being insured by the new health insurance exchanges will gain access to needed therapies.

Oral meds for cancer—something of a mini-trend in oncology these days—are another challenge for manufacturers, because the advantage of oral meds (apart from their therapeutic efficacy) is that a patient simply takes a pill rather than report to a clinic or hospital for an infusion. “There is a need to aggregate data all through the process,” says Jan Nielsen, division president at Cardinal Health Specialty/Sonexus. “Data needs to be shared with payers to justify use of the drug by its outcome; reporting that data is a challenge for most doctors’ offices.” On top of this complexity, she adds, there is now the beginnings of a regional variation to certain therapies, and that can be addressed by manufacturer marketing teams only when the variations become apparent. (Some industry commentators point to the regional dominance of certain health systems—for example, Kaiser Permanente in California—as the source of these variations.)

“Regarding specialty pharmaceuticals, the Affordable Care Act is better called the ‘Unaffordable’ Care Act,” wryly notes inVentiv’s David McLeod, noting that as formularies shape up for health exchanges, high-cost specialty pharmaceuticals will have financial hurdles for patients—thus emphasizing the need for reimbursement support to get those patients on therapy..