CONSIDERATIONS FOR PAYERS 

MEDICAL AND PHARMACY COST MANAGEMENT OF THE PATIENT WITH HEMOPHILIA 

AND 

UTILIZATION OF FEDERALLY-FUNDED HEMOPHILIA TREATMENT CENTERS

David R. Linney

The author wished to give special acknowledgement to Amy Shapiro, M.D., Medical Director of the Indiana Hemophilia and Thrombosis Center for her  very helpful commentary in the preparation of this article.

Hemophilia is a rare, inherited bleeding disorder, affecting approximately 18,000 persons, primarily males, in the United States. The most common forms of hemophilia are Hemophilia A, or Factor VIII deficiency, and Hemophilia B or Factor IX deficiency.  Each of these is subdivided based upon the level of the clotting factor activity into three severities, specifically – mild (levels > 5%), moderate (levels > 1% to < 5%)and severe (levels <1%). (Reference CDC website)  Each classification of hemophilia and severity requires specific care and treatment.  

Initial diagnosis and ongoing medical management requires specialized medical evaluation and laboratory testing (including coagulation and inhibitor studies).  Complications of hemophilia include musculoskeletal abnormalities, development of inhibitors (an antibody directed against the deficient coagulation factor that subsequently interferes with the effectiveness of replacement therapy), blood-born transmitted diseases, and other problems related to the consequences of bleeding that may occur spontaneously, as a consequence of injury or trauma, or related to a surgical or dental intervention. 

Medical treatment for hemophilia not complicated by inhibitors consists of treatment with coagulation factor replacement therapies generally referred to as “factor products”.  In addition, other drugs are also utilized for specific deficiencies or in certain circumstances such as Stimate, injectable DDAVP, Amicar, etc.  Medical treatment for hemophilia complicated by inhibitors often consists of the use of repeated doses of the deficient factor to induce a tolerant state, higher doses of the deficient factor to treat bleeding when the inhibitor is able to be overwhelmed, or use of inhibitor bypassing agents for treatment of bleeding episodes when use of the usual coagulation factor replacement therapy is deemed impossible or contraindictated.

Cost almost always increases with the severity of diagnosis.  Over 90% of the costs of hemophilia care are for factor VIII and IX factor products.  Annual costs for factor products for a patient with severe hemophilia can range from $50,000 for a child to over $1,000,000 for some patients on immune tolerance inhibitor treatment or through the use of bypassing products.  Costs for most “severe” patients without inhibitors typically exceed $150,000 per year.

There are two issues for payers:

·        How does a payer assure that a policyholder gets the very specialized medical care necessary to manage his(/her) hemophilia?

·        How does a payer provide the extraordinarily expensive factor products (and other specialty drugs) in a cost effective manner?

HEMOPHILIA MEDICAL CARE COST MANAGEMENT

Care Provided by Hemophilia Treatment Centers  

Hemophilia care is a subspecialty of hematology.  The federal government recognizes that the best hemophilia care is provided by the 142 federally funded hemophilia treatment centers (HTCs) nationally.  Per CDC data, hemophilia patients who receive their care outside of an HTC have a 60% higher mortality rate than patients that receive their care at an HTC.  (Soucie reference)  Not only does the federal government recognize the superiority of HTCs, but so do almost all practicing hematolgists in the catchment area of an HTC, as most hematologists readily refer their hemophilia patients to HTCs.

HTCs provide state of the art comprehensive care for patients with hemophilia and related bleeding disorders, working in collaboration with other specialists (orthopedists, hepatologists and immunologists) and primary care physicians.   HTC hematologists have specialized training in the care of hemophilia and related bleeding disorders.   Many HTCs are in academic health centers or hospitals.   Some states have more than one HTC and only two states (Wyoming and Montana) have no HTC. 

The benefits of utilizing HTCs include not just superior care but also great potential cost savings.  Savings come from the expertise of HTCs providing the correct, specialized prescription of factor products to treat each individual patient.  Incorrect prescriptions and inappropriate prescription dosing can result in treatment complications, over-treatment and under-treatment as well as added expense. Delays in treatment can also result in the need for additional treatment and greater expense.

The ability of HTCs to provide optimal, cost effective

treatment is reinforced by extensive education and training that HTC staff provide to patients/families about:   hemophilia, how a bleed should be treated; and, how to self-infuse at home (i.e. hemophilia home care).  HTCs also evaluate and monitor patients through regularly scheduled clinic evaluations and are readily available to answer patient questions about care or bleeding episodes. 

HTCs train the patient or family member to infuse (the patient) at home.   Hemophilia home care is universally recognized as the standard of care for virtually all patients for whom such care is deemed appropriate.  Home care provides the method for quickest administration of the critical factor product and also provides great cost savings, as hospital based treatment is avoided. 

Coverage of HTC s by Payers

Because of the positive benefits of utilizing HTCs, payers may want to refer policyholders to HTCs.  If an HTC hospital or affiliated physician group is not in-network, then a payer may want to consider approving care at the HTC as an in-network benefit to the policyholder or specifically approving services at an in-network rate to encourage policyholders to go to HTCs.  

Aetna is one payer that has recognized the value and benefit of having its policyholders utilize HTCs.  Aetna approves referral of all of its hemophilia patients to HTCs and provides the highest level of coverage afforded by each policyholder’s benefit plan to further encourage utilization of HTCs.

Listing of HTCs

A national listing of HTCs and HTC staff contacts can be found at this    website (Website will need to be developed)

FACTOR VIII AND IX FACTOR PRODUCT COST MANAGEMENT

Providing the very expensive Factor VIII and IX factor products in a cost effective manner is a challenge.  Factor products are priced per unit of AHF (anti-hemophilic factor).  Price for each of the different brands of factor products will vary by product and vendor.  Products for treatment of bleeding events in patients with inhibitors, or bypassing products, are quite expensive and as hemostasis may be difficult to achieve, often lead to the patients with the highest cost. 

Payer Coverage of Factor Products

Factor products can be covered as a medical benefit through a health plan or as a pharmacy or a specialty pharmacy benefit through a drug plan.  Health plans may or may not have in-network vendors of factor products.  Drug plans may or may not have an in-house specialty pharmacy or an affiliate specialty pharmacy that provides biotech injectable drugs like the hemophilia factor products.  Oftentimes the health plan in-network vendor is the same entity as the drug plan specialty pharmacy (e.g. Pharmacy Benefit Manager [PBM] specialty pharmacy).  

Payer Reimbursement of Factor Products

Payer reimbursement is typically based on a discounted price off of Average Wholesale Price (AWP).  Of note, however, in 2005, Medicare Part B established a new reimbursement methodology for Factor VIII and factor IX factor products, based on average sales price plus 6% plus an add-on 14 cent per unit administrative service cost.  In 2006, the administrative services cost was increased to 15 cents. 

Note that actual coverage of factor products under Medicare Part B is only 80% of this approved reimbursement rate; so patients must either pay the remaining 20% of uncovered approved costs or have a supplemental or secondary plan in place. This 20% payment is unrealistic for individual patient payment responsibility.

          Payer Contracting:  Pricing and Service Considerations

Different prices charged by different vendors for the same factor product can add up to significant dollars. 

For example, for an adolescent with severe Hemophilia A  without an inhibitor treated with  every other day prophylactic therapy of a recombinant factor VIII factor product (there are 5 specific products presently on the market) with a prescribed dosage of 1,500 units per treatment; a payer could save considerable dollars using Vendor #2 versus Vendor #1:

1,500 units X  182 days =  273,000 units/yr

Vendor #1  Price:  $1.15/unit  X  273,000 units =  $313,950

Vendor #2  Price:  $1.00/unit  X  273,000 units =   $273,000

ANNUAL COST SAVINGS UTILIZING VENDOR #2 VERSUS VENDOR #1 =                                           $ 40,950

Payers should be concerned about price and contracting with pharmacies/specialty pharmacies or other vendors of factor products in order to provide the prescribed product at the most economical rate.   

Best price consideration should also involve the ability of a vendor to fill a prescription very close to the prescription dosing.  The better able a vendor is able to do this, the lower the vendor’s submitted charge will be to the payer.  

Vials of factor product come in different sizes, based on assays of each lot that is manufactured.  Vials typically come in 3 general sizes: “250” units, “500” units and “1,000” units.  Of note, one manufacturer also has a “1,500” unit size vial and two manufacturers also have a “2,000” unit size vial.  Manufactured lots rarely assay out at exactly 250, 500 or 1,000 units.  More commonly assayed lots will have somewhat arbitrary unit numbers such as these:  232, 490, 615, 888, 994, 1246, etc.  For prescription doses that cannot be filled with a single vial, more than one vial is utilized to meet the prescribed dose.  The greater the ability of a vendor to access a large inventory of factor products, the greater the ability a vendor has to fill an order close to the required dose without going significantly over.  Additional units over the prescribed dose add to the overall cost of each patient’s prescription.

For example, using the same adolescent with severe Hemophilia A without an inhibitor who is on an every other day prophylactic treatment dose of 1500 units of a recombinant factor VIII product, a payer could save considerable dollars for just a one month order using Vendor #2 versus Vendor #1 when the price per unit for Vendor #2 and Vendor #1 is the same, but Vendor #2 has greater ability to fill an order closer to the prescribed dosage:

Vendor #1   1702 units X 15 treatments = 25,530 units  X $1.15/unit = $29,360

Vendor #2   1510 units  X  15 treatments =  22,650 units X $1.15/unit = $26,048

ONE MONTH’S COST SAVINGS UTILIZING VENDOR #2 VERSUS VENDOR #1 = $3,312

When considering contracting and best price, it is important to consider the key service component as well.  Service includes having:  access to a good inventory of factor products with long outdates; a skilled inventory management component; necessary infusion supplies; Sharps containers; the ability to express deliver; and knowledgeable pharmacy customer service staff.  Without good service, a patient’s care can be critically compromised.

The importance of express delivery cannot be emphasized enough because there will be times when a home care patient will need an order of factor product delivered the next day to treat an emergency bleeding episode.  Overnight next day delivery in such instances is critical.  If a vendor does not have such capability, then a key service component is lacking.

Consideration of HTCs with Factor Product Programs

Payers may want to consider HTCs that have factor product programs as a vendor option because of their ability to provide cost savings through lower factor product pricing.  Approximately half of the 142 HTCs have factor programs.  Because HTCs are federally funded, they are eligible to participate in the purchase of drugs through the Veterans Health Care Act (VHCA) and can acquire these expensive factor products at a discount.  The VHCA drug discount program is often referred to as 340B pricing or the 340B program (based on the VHCA statute reference).

While there is no federal requirement as to allowable markup on factor product pricing by participating HTC factor product vendors, HTC factor product vendors most often provide significantly lower pricing to payers compared to other vendors.

The other advantage of using an HTC 340B program is the unique ability to perform disease management through pharmacy case management that only HTCs can provide.  As the 340B pharmacy is an integral part of the HTC, the pharmacy has immediate ready access to the medical expertise of the physicians and nurses of the HTC staff.  In addition, when time is of the essence in getting a new factor product order processed stat, HTCs can often process orders more quickly than other pharmacies because of staff on site and the ability in many instances to deliver immediately within their catchment area. 

How to Use an HTC Factor Product Vendor

The key for payers, is to know how to be able to use an HTC factor product vendor.  HTC factor product programs only provide discounted 340B factor product pricing to those patients they serve.  (i.e. 340B programs cannot serve patients nationally.)   Therefore, payers need to develop a separate contract, agreement or individual authorization with each HTC.  Payers should consider this option, as cost savings are often well worth the extra effort.

Aetna, United Healthcare, Blue Cross plans and CIGNA are payers that have made agreements with individual treatment centers or authorized individual patients to receive factor products through 340B programs.  Aetna approves its policyholders using 340B programs as an option in addition to its own specialty pharmacy program established in 2005, so long as Aetna first approves the HTC cost of the product being supplied.  

          Listing of HTC Factor Product Vendor Programs

A listing of HTCs that have 340B factor product programs can be assessed at (List website which will need to be developed).