Despite obstacles, health systems are exploring the powerful potential of orphan drugs for their critical benefits.
For patients facing rare diseases, high-cost medications known as orphan drugs can offer a chance at remission, recovery, or an improved quality of life. And for health systems that offer these advanced therapies, they can become a valuable differentiator in achieving more for their business of pharmacy.
Both globally and nationally, the prevalence of rare diseases and conditions is on the rise — a trend that’s compounded by projected global population growth from 8 billion to 9.7 billion by 2050. The specialty pharmacy market is growing as a result, with health systems focused on maintaining oversight throughout the continuum of care. Orphan drugs are a significant part of the specialty pharmacy landscape in terms of both volume and economics. They also play a vital role in helping health systems optimize clinical outcomes and financial performance.
Keeping high-touch patients wholly within the health system
Each time an orphan drug prescription is fulfilled by an external pharmacy, or the patient must go elsewhere for a highly specialized treatment, the primary health system loses visibility into the healthcare journey and care. This puts an unfair burden on physicians and hospital staff, who require accountability when managing these high-touch patients at every step to ensure continuity of care. This also creates unnecessary barriers for the patient who is prohibited from continuing care with a care team they have chosen.
“Health systems want to oversee the care of these complex patients. They stand behind their positive outcomes, and those outcomes rely on their ability to manage the entire clinical journey.”
—Lindsey DeMarrais, PharmD, MS, Managing Consultant, Specialty Pharmacy
Additionally, the financial impact of prescription leakage for high-cost orphan drugs is an important consideration. To effectively treat patients with rare diseases, health systems require access to orphan drugs, favorable pricing, and beneficial payer contracts — yet none is a simple proposition.
Which comes first? Orphan drug access or a robust specialty pharmacy program?
As one of the nation’s largest distributors of specialty medications, McKesson has access to a wide range of orphan drugs, including those with exclusive or limited distribution. For health systems looking to establish or expand treatment of rare diseases, however, access often presents a chicken-or-the-egg dilemma. They can’t fully grow service lines without access to these medications — yet manufacturers favor health systems that already have providers, patients, and processes in place to support treatment of these rare disease states.
The key is to work with industry experts who can help pharmacy leaders balance the required program investments with the potential impact to patient care and business performance. McKesson’s team of expert advisors help health systems tackle business challenges such as this one — developing or fine-tuning a specialty pharmacy program that meets manufacturer requirements for orphan drug access.
Manufacturer discounts are available — but not automatic
Once health systems gain access to a particular orphan drug, it’s up to pharmacy leaders to pursue discretionary manufacturer discounts. And with an average annual cost of $32,000 per patient without discounts, favorable pricing on orphan drugs is essential, particularly for 340B-eligible entities treating rare conditions.
A common misconception is that 340B pricing is not available for orphan drugs dispensed at rural referral centers, sole community hospitals, critical access hospitals, and free-standing cancer centers. While it’s true that these entities are specifically excluded from 340B pricing mandates, it’s also true that many manufacturers still choose to extend discounts to these entities on their own terms. McKesson’s expert guidance can help health systems reestablish 340B pricing or pursue other discounts and rebates.
Negotiating beneficial payer agreements
With so much at stake in terms of patient care and financial risk, health systems can’t afford to ignore the tremendous impact of payer agreements. Without effective payer access, roughly half of a health system’s opportunity in the orphan drug space may be shifted outside the health system. Even with ample access to orphan drugs, a team of providers to manage these complex disease states, and a comprehensive clinical program to manage these rare disease states, health systems must have beneficial payer agreements in place to keep prescriptions in-house and ensure reimbursement.
“From a health system perspective, you can have access (to orphan drugs), you can have providers that can manage those disease states. However, you’ve got to be sure there are direct payer agreements in place as well to be reimbursed for it. Because you can build this great infrastructure and business plan and still not receive reimbursement if there are no direct payer agreements.”
—Brad Myers, Vice President, Health Systems Advisory
Working with a specialty-focused pharmacy services administrative organization (PSAO) like McKesson’s Atlas Specialty network can help health systems navigate the complexities of payer contracts to target prescription capture and payments.
Craft an orphan drug strategy to help your health system achieve more
With a strong specialty pharmacy program in place, along with favorable pricing and payer agreements, health systems have the building blocks to position themselves as experts in these highly specialized areas. By establishing centers of excellence to treat rare diseases like cystic fibrosis (CF), amyotrophic lateral sclerosis (ALS), Multiple Sclerosis (MS) or certain cancers, health centers not only serve their immediate patients — they also serve the tightly knit patient and provider communities far beyond their walls. To learn more about orphan drug strategies to support positive clinical and financial outcomes, contact McKesson today.