AH019 - Wrestling with Coverage of High-Cost CGTs, GLP-1s, and How to Meet Regulators' Intent, with Casey Stockman, PharmD

Transcript

Lightly edited for clarity.

[00:27] Justin Venneri: Hello and welcome to this episode of the Astonishing Healthcare podcast. I'm Justin Venneri, your host and Director of Commnications at Capital Rx, and I'm excited to have Casey Stockman as our guest today. Casey is a pharmacist and is Vice President of PBA, or pharmacy benefit administration services, here. She's an avid runner, fitness enthusiast, and a former health plan executive. Casey, thanks for being here.

[00:48] Casey Stockman, PharmD: Oh, Justin, it's so wonderful to be here with you. Thanks for the opportunity.

[00:52] Justin Venneri: Sure thing. So, to start off, can you share a bit about your background, your prior roles, just to frame up the discussion?

[00:58] Casey Stockman, PharmD: Yeah, I'd be happy to. I can't believe I'm saying this, but I actually graduated from pharmacy school this month, 15 years ago. I first started in retail and then less than a year, had the opportunity to pursue a career in managed care. So, I first started a company called ICORE Healthcare, which had been purchased by Magellan Health. It was an oncology benefit management company. So, I spent most of my time working with health plans across the country on their medical benefit drug management strategies and I served in different roles during my eight plus years there, ultimately leading the medical pharmacy product offering.  

From there, and through a connection at a local nonprofit board I serve on, I was offered the opportunity to lead the pharmacy department at a local health plan here called Neighborhood Health Plan of Rhode Island. And it was really eye-opening experience going from the pharmacy vendor side to the health plan side. Although I enjoyed my nearly four years there and I'm grateful for the opportunity to lead the pharmacy strategy at neighborhood, there were dynamics in our PBM relationship that I was not happy about and even with all my best efforts, couldn't control. And it occurred to me that if I could not bring about the change I wanted to see in my PBM partner while in a leadership role at a health plan, then I needed to join an organization that was setting the model, an example, for a financially aligned, transparent offering, and be part of that change in the PBM industry.  

So I've been here now at Capital Rx for about a year and a half and once again working with health plans across the country, but this time on total drug management strategies and solutions.

[02:40] Justin Venneri: Got it. Thanks for that. That definitely seems like a common theme amongst our colleagues, trying to change things hasn't worked. So become the problem to solve the problem. Maybe we'll start off with high-cost drugs. That's about as good a place to start as I can think of -- Cell and gene therapy (CGT). AJ our CEO, he's talked about risk-pooling publicly as an option. There are outcomes-based contracts, etc. What are your thoughts there?

[03:06] Casey Stockman, PharmD: Yeah, it really is a timely question and one that's top of mind for all payers across the country. But you know, especially spending most of my career managing provider administered drugs, I remember when this dynamic first started towards the end of my time at my first employer at Magellan, and at that time there were a couple CAR T cell therapies. There was Luxturna. It was an interesting time as then I entered into the plan side and learned more about the brass tacks of how to coordinate these therapies across multiple departments at a health plan. So, you'd have the medical management or UM team sometimes get the case first for the out of network review for the authorized treatment center and all of the corresponding non-drug services, like the inpatient stays. Then you would have coordination with your provider network management team for the single case agreement or the SCA with the authorized treatment center. Then you would have our pharmacy department for the medical necessity review of the drug. You would work closely with the finance team for notification to the reinsurer, and then you would work hand in hand with the case management team for the member support. So as a largely Medicaid plan, and because this was before CMS clarified that outcomes-based agreements didn't impact best price and there could be multiple best prices, we were left without such discussions with manufacturers at the time. If the product was part of the Medicaid prescription drug rebate program, we had to cover it for eligible members.

[04:40] Justin Venneri: Interesting. Okay.

[04:41] Casey Stockman, PharmD: And maybe focusing on that reinsurance piece for a second. This was really helpful for plans in the existing budget year. But then after that event, the reinsurance premiums would increase for the following year, or the policy may not even be offered the next year based on your volume and costs of patient cases.  

Since then, a lot has changed. It's no longer a handful of members and drugs for cell and gene therapies. It's 10+ therapies in existence and applicability in new disease states and treatments earlier in the course of disease state, and many discussions on how to cover now and moving forward.  

I heard a stat recently that there could be 18 more products in the next 24 months. So, the advancements of some of these gene therapies have brought about in certain disease states is honestly mind blowing. It's miracle level and it's extremely beneficial for the recipient patients and their families. So, we're definitely grateful for the technology these in our industry.

[05:46] Justin Venneri: It is pretty amazing to see the results of some of these studies and then in real life, how they're curing patients or halting disease progression. How does all this tie in with PBMs and health plans?

[05:58] Casey Stockman, PharmD: Yeah, I think it's, you know, we know that they're there, so what can we do about them? And one is the outcomes-based agreements.

So, these are offered in the industry between manufacturers and plans, but there's a lot of feedback from plans right now about. There's basically discussions around what type of members qualify for the outcomes-based agreement. Is the criteria similar to the trial? Is it reflective of real-world patients? Is it more or less restrictive? So, there's really a lot of questions. It's already fitting such a narrow population. And then there can be some requirements in the contract that really don't allow for your members to actually participate if they don't meet the exact criteria of that agreement.  

You know, I think it's important to note that there's no health plan that really wants to receive money back, right? Because it means that the product didn't work. You want the product to be effective and you want members to have durable responses to these products. The idea just being that because they're so expensive, to have some sort of insurance policy basically for them from the manufacturer because of the really high costs and the long time that it takes to ensure that the price product is working, not just for that first year or two, but it has durability.  

I guess some of the other comments I'd make about outcomes-based agreements and what I'm hearing is that on the health plan side, they take a lot of time and energy. You need folks to collect the data. There's a lot of persistence because they can be over multiple years; analytics, the oversight of the process and the multiple departments involved. And the question is, did that work when you maybe had one, two or three members, maybe on one, two or three products total, but if you're starting to think about 20 plus products and multiple members, and then multiple members that have been accumulating over the years, is this still worth it? Is there an ROI? Has anybody received money back on one of these agreements? Is it worth the investment to continue to build out the teams to manage these outcomes-based contracts if folks aren't seeing any results from them?

So, you know, that's kind of one bucket is the outcomes based agreements. The other is this annuity or mortgage model for how do you manage cell and gene therapies? So one is, instead of paying for a $4 million therapy all up front, do you make it in equal installments over five years? And then do you couple that with milestone payments? So the product starts working in year three, you only paid your mortgage payments in year one and two, and then you stopped payments moving forward.

[08:44] Justin Venneri: Oh, okay.

[08:45] Casey Stockman, PharmD: And then how does this work if the member leaves your plan and goes to another plan? Does that annuity or mortgage model follow them to the next plan to make the remaining payments?  

So there's some dynamics that play it as well based on the line of business. So typically, in some states, and specifically as we talk about Medicaid, cell and gene therapies may be carved out to the state to cover, from a financial perspective, dollar for dollar reimbursement with the plan. What can be really challenging for Medicaid plans, though, is that this coverage may not start the day that the product is FDA approved and marketed. It may take several months for these products to be added to the list of covered drugs for this state carve out. So, it leaves Medicaid plans, who sometimes have a disproportionate share of the members that are going to benefit from these therapies, open to receiving these requests prior to that state carve out benefit coming into play.

[09:47] Justin Venneri: Right. So they have to wait. Is there like a typical amount of time? You said several months. Is it like three months, six months? Like on average? I mean, I know these are newer products, so probably hard to say, but yeah.

[09:58] Casey Stockman, PharmD: So, it could be FDA approved, part of the Medicaid prescription drug rebate program, and marketed and available in the United States, but it may not actually be on the list of covered products for the state carbon program for five months or so later.

[10:14] Justin Venneri: Oh, wow.

[10:15] Casey Stockman, PharmD: During that time, if the plan does get a request and the member is eligible, they may end up on the hook for that product, even though in a couple of months it would be part of the state carve out.

[10:26] Justin Venneri: Got it.

[10:26] Casey Stockman, PharmD: And so aside from that, I'd say the last one is really this idea of risk pooling, which is in a particular region or state, do all of the plans band together and enter a certain amount of money that reflects their population size into a pool so that if any one plan ends up the member in these types of disease states that qualifies for the product, that plan is not on the full risk of the costs associated with it, but really the cost is deducted from that risk pool that all the plans contributed to.  

So, it's really like another reinsurance that's being offered, but it's being done collaboratively among plans in a particular region. The question is, will plans be able to bring about this change on their own in working together, or through state associations? Or will it really be something that's brought about through the state implementing a regulation or through the feds bringing about this type of change?  

Maybe last comment on cell and gene therapies is it really depends what size plan you're talking about and what lines of business as you think about the lens that they're approaching this from. So, a massive national plan that gets a couple of members that qualify and are eligible for cell and gene therapies, even though the costs on their own are very large and multimillion dollars, it's likely a rounding error for them. But when you're talking about a small regional plan that maybe has a billion-dollar total in revenue and they get one cell and gene therapy patient, that really impacts their existing and future budgets and is a major concern to them. There's some dynamics as well in terms of members seeking out local plans that are really member centric and then maybe perhaps going to a large national plan, and, you know, are these smaller regional plans who are really member centric at adverse selection for these members? So just a lot of things to think about with these therapies and impacts.

[12:42] Justin Venneri: Makes sense. Moving on to another sort of high-cost area, not millions like the CGTs, but GLP-1s are another hot topic. So for diabetes, for weight loss and more now, how concerned are you, or how concerned are health plans about the GLP-1s and the costs, and what are you hearing there?

[13:03] Casey Stockman, PharmD: Yeah, it was of major concern last year in terms of, you know, not so much type two diabetes, but weight loss for all plan sponsors. And then this year, really the concern has been more around the expanded FDA approval for one of the products, Wegovy, that now has what's considered a medically necessary or medically accepted indication beyond weight loss.  

So now it has been approved to reduce the risk of MACE, which is short for major adverse cardiovascular events in adults with established cardiovascular disease who are either overweight or obese. And that's about 10% of the overall obesity population. But the idea here is that previously Medicare payers are instructed not to cover weight loss products. That's part of the initial creation of Part D is that medications are not to be covered if they're used for weight loss. But now that Wegovy has an indication beyond weight loss, CMS actually clarified in March that Part D plans are allowed to offer coverage for MACE reduction and other medically accepted indications.  

So, for certain lines of business that previously weren't as concerned about GLP-1s for weight loss -- although they had to make sure that folks requesting GLP-1 receptor agonists for type two diabetes were actually on it for type two diabetes -- now they're in a different circumstance where they have the option and most of them are covering way gov for this expanded indication only.  

It's interesting because there's a few factors as to will these products have a large uptake for this particular indication in older adults in the Medicare population. And some of it is affordability in terms of how the benefit is designed. You know, these members who are on Medicare do not qualify for manufacturer copay assistance, so they are fronting the whole cost of the benefit design. The cardiovascular risk reduction is a benefit that's typically not realized until many years on the product. And when you look at some of the real-world evidence at adherence to this medication, it tends to be a couple of months; there's not a large portion of members that are still on it after a year.

[15:28] Justin Venneri: Yeah, that's been really interesting. It definitely seems to be that like two, three, four months, and there's some quote unquote churn. Interesting.

[15:35] Casey Stockman, PharmD: Agreed. And so, the thought is that, you know, especially when the provider is having the discussion with the member, if there's thoughts that the member wouldn't be adherent to it for enough time, then really you're not going to see the benefit of that cardiovascular risk reduction.  

So, there's multiple reasons why it might be a little bit different in this group. They might not be as motivated by the weight loss effects as a younger patient. They also have a higher incidence of adverse effects and lower tolerance. So, it'll be interesting to see the uptick since March of adoption in Medicare patients for this particular indication.

[16:10] Justin Venneri: Agreed.

[16:11] Casey Stockman, PharmD: I'd say that this is one of those classic examples of when you're thinking about total medical expense for members. In this particular instance, with a product that's $1,300 a month and you're paying for this product on the pharmacy benefit, are you seeing any type of offset in the medical spend based on reducing these major cardiovascular events?  

And so it's interesting, there's some number needed to treat data. You know, the answer really is no. You're not going to see that offset in the first year. The answer for longer, like four years is maybe. And that's really because the number needed to treat was based on only the mace reduction and avoiding a major cardiovascular event and how many members you need to treat in order to avoid one and what the cost of treating one major adverse event is.  

But, in general, there weren’t more studies performed to say, well, what are the other benefits of weight loss and these products on those members? So, folks realize that, you know, CMS has stated that coverage of Wegovy for mace at face value will increase total medical expense, but they acknowledge these other considerations that I just mentioned.

[17:24] Justin Venneri: Okay.

[17:24] Casey Stockman, PharmD: And it's not just Wegovy . There are four more anti-obesity drugs being studied for this indication. Beyond that, it's not just this indication. Right? So, these GLP-1 receptor agonists are being studied in chronic kidney disease, NASH, obstructive sleep apnea and osteoarthritis. So, this dynamic of having medically accepted indications in the future is going to continue to grow.

[17:49] Justin Venneri: Yeah, it seems like the more data that comes out, they work for different things. It's really fascinating. So, kind of transition a little bit. You've been here a year and a half now, a little longer. I'm wondering what are a couple of things you can highlight that are things you wish you would have had in your prior role at a health plan that are readily available with modern technology like JUDI, I'm talking things that just solve problems, real hurdles that listeners may experience or people may not fully appreciate.

[18:19] Casey Stockman, PharmD: It's interesting because they were the same type of questions that I had as I was exploring opportunities with Capital Rx.  

And one of them that I had gone into initially was, how do you structure a combined benefit? So, for a dual eligible member for any type of benefit that has a primary and a secondary payer involved, which is typically, you know, Medicare being primary and Medicaid being secondary. Because on legacy systems it's set up as a STCOB or single transaction coordination of benefits. And, you know, there's some dynamics related to that that require continual training internally at the plan. It can make it very confusing from a reporting perspective. When I would work with finance or analytics on the plan side, I'd always have to be like, now, what carriers did you include? Did you net out the claims? Are you sure you didn't double count the claim volume? Do you see only the net claims that are available with the secondary carrier? There's a lot that goes into making sure that you're always calculating the cost and the claim counts correctly for those lines of business members, etc. because of the dual setup.  

From an operational perspective, it's challenging because there can be times that the member has a prior authorization on file, but it's only for whatever reason on the primary benefit. It didn't carry over to the secondary benefit. There's other times where overrides only make it on the primary benefit and they don't carry over. And now the member has a cost share and they're not supposed to have a cost share. There's just between the training and the understanding of it, and the administrative hurdles that it causes and ultimately sometimes impacts to members. You know, my question to Capital Rx was, well, how do you do that?  

The answer was, we don't. Like, we, we don't do the two separate carriers, we don't do the STCOP process. It truly is a single transaction. We set up the plan the way that it is designed, and then we produce the separated reporting on the back end after claim has been adjudicated for downstream processing purposes. So that was one of those things that I was like, wow, they've approached it an entirely different way that really removes these complexities that I just described.

[20:30] Justin Venneri: Okay, maybe one more.

[20:32] Casey Stockman, PharmD: Yeah, sure. I'd say the other one was that I really worked only with government programs -- all the lines of business were part of some sort of regulatory body -- and we were constantly being tasked with new regs, new rules, new memos that needed to be put in place very quickly, and there would be a lot of back and forth between. What's the intent of the regulator? Clarifications, questions, documentation, until we got to the place where we all understood exactly what needed to be done and the PBM would need to implement it.  

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But sometimes people can probably relate. Sometimes things went into effect before testing happened or unbeknownst to the plan, sometimes things had to be backtracked. It was just not always the them with smoothest experience and could create longer term kind of downstream households as well as, you know, I had to assign folks to basically oversight the project to make sure that this happened from start to finish, and it could take quite a while. So I asked and give you some examples of those regulatory requirements. When I got to capital and the product team kind of lit up and they're like, oh, that's a, that's a good example. Let me show you. So they would go over to this one part in the coverage strategy called tags and overrides, and they're like, all right, what, what's the requirement? What do you want to us to tag? What attributes of certain claims do you want to be recognized for this requirement? And we put that in the system and then, okay, well, what do you want it to do once you tag those claims? And that's the action. That's the override, Right?

[22:05] Justin Venneri: Okay.

[22:05] Casey Stockman, PharmD: And they're like, okay, you know, it's in the system. We can either run batch testing now and deploy it, or, you know, deploy it the next day. I think what was remarkable about it was one having a conversation with somebody and clearly being able to understand the intent and then, and being able to clearly see the intent within JUDI, because of its simple, human language, natural language, and drop downs and point and clicks, etc. It made it easy to understand that your tent had been captured and communicated and translated into the system as you would expect it to. So, I mean, those are two of many, but ones that really stick out for me.

[22:46] Justin Venneri: Thanks for that. And so, last question today, and I ask everybody, and it's the name of the podcast. So, what is the most astonishing thing you've seen over the course of your career that you can share, of course, as it relates to our discussion topics today? Tell us a good story.

[23:01] Casey Stockman, PharmD: Okay, I will try. There's definitely some ones that I thought of, but due to confidentiality agreements, etc, I wasn't able to share.  

But, you know, one that comes to mind and, you know, other folks may resonate with this is, you know, that full circle experience of going from the provider to the patient. And so, in college, I actually interned at our local women and infants hospital and prepared oral and iv medications for babies in the NICU. So I did this, you know, every weekend during school and summer breaks. And at that time, it was an open NICU, and there were separate bays, but there weren't any private rooms. And the culture was, hey, there's a lot going on down there, deliver the medications accurately and correctly and as quickly as you can and get out of there. Don't make eye contact, don't be seen. Kind of do your job and get out.  

And life goes on, and you go on to new opportunities. And I was working at Magellan managing medical benefit drugs, and it was interesting because in that time, in that dynamic, everything was about site of care. You're paying for oncology drugs and the physician office setting. And if that same member got them at the hospital outpatient facility, it could be twice as expensive or more without really any type of documented difference in effectiveness or outcomes. And so, you know, we're spending a lot of time with plans, talking about how to kind of neutralize and change this dynamic so that there was more of a parody and reimbursement across service settings.  

So, ten years after serving patients in the NICU, I found myself with my youngest daughter in the NICU for seven weeks. And it's interesting because it was private rooms, and I looked forward to anybody coming in to see me. I look forward to the pharmacy person coming in who would, like, go as quickly as possible. I'm like, no, no. Hey, what's going on? How's your day?

[24:59] Justin Venneri: Stay, let's chat.

[25:01] Casey Stockman, PharmD: You know, I look forward to morning rounds. So, it, you know, it's different again going from the provider to the patient. One of the things that was interesting was that our situation occurred across the country in Seattle, and I was going to need to come home to Boston after NICU stay, and my daughter -- thankfully but in this situation, it caused a little bit of a thing -- is she was born one week after you needed to be born to qualify for Synagis injections. So Synagis is a product that's available for children to help prevent respiratory syncytial virus, or RSV. And we're in our last days at the NICU. We've been cleared to leave. And I really wanted her to get this injection because we were going to have to take a commercial flight home.  

And I put all my advocacy skills to work. And I'm calling the health plan, I'm calling the pharmaceutical manufacturer, and everything takes time, and time wasn't really on my side, so I told the hospital team, you know, just give it to her. I'll. I'll pay for it out of pocket because our stay straddled the benefit years. So, I hit my high deductible health plan max out of pocket two years in a row to cover this.  

The next day, the head pharmacist comes in and she goes, you know, I heard about your story, and all of us have felt really bad about this, and we wanted to do something for you. So, we took your case to the high-cost drug review board here at the hospital, and we're going to approve it and dispense it without reimbursement. And, you know, that still hits me today, just, like, the humanness of it, the kindness, that they understood my situation, the self-motivation, you know, to do something. And so, again, does that solve the dynamic I talked about earlier with parity by side of care? No. Does it show kind of where maybe some of those dollars are going that we don't see? Yeah, probably.  

So you start to look at healthcare very differently when you're a long-term patient and dependent upon providers and systems in place to address your needs during these most vulnerable times when you're really not in control. And although the system has its flaws, for those of us who have been through it and come out the other side with the health and outcomes we were looking for, there's just no higher level of gratitude for the healthcare that we have in place today.

[27:20] Justin Venneri: Well, that's a good story and had a good outcome. Well, Casey, thanks so much for joining us today. I hope you have a great rest of your day and we'd love to have you back on soon.

[27:28] Casey Stockman, PharmD: Oh, thank you. Thanks for the time, Justin. I hope you have a great day as well.

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