PBMI Presentation On PBM Marketplace

Organic And M&A
Based PBM Growth

GEORGE VAN ANTWERP
SVP, Pharmacy Services
Silverlink Communications

February 23, 2012

ENGAGE. EDUCATE. EMPOWER. © 2011 Silverlink Communications, Inc. All rights reserved.

ENGAGEMENT COPAY CARDS ADHERENCE CONSOLIDATION

CMS GENERICS PASS-THRU MAIL ORDER

LIMITED
Rx + Dx SPECIALTY MOBILE
NETWORKS

2

The Core PBM Skill = Adaptability

The PBM will continue to drive value. While some had forecasted PBMs
becoming commoditized five to six years ago, they have continued to grow and
demonstrate value time after time.
But, Merritt admitted that the exact model they hold in the future is unknown.
PBMs have focused on affordability and access and with that mantra, they have
continuously changed and adjusted.
 They’ve evolved from claims processes to trend managers.
 They’ve moved from mail order companies to add specialty pharmacies.
 They’ve moved from focusing on rebates to focusing on generics.
 And, at the same time, they’ve launched new technologies such as electronic
prescribing and been critical to the Medicare Part D solution.

Source: Interview with Mark Merritt from PCMA – The Core PBM Skill: Adaptability | Enabling Healthy Decisions

3

4

Big 3 Changes To ???

How will PBMs  Transparency
 Integrated model
 Pass-Thru
be evaluated and  Captive PBM
 Clinical
differentiate themselves:  Carve-in / out
 Service

Source: Chart from Barclays Capital report
5

Bringing Other Players Into The Mix

6

7

It’s also important to point out that during negotiations, Walgreens offered
to hold rates for a new contract flat and did not seek an increase in
rates. The response from Express Scripts was to insist on being able to
unilaterally define contract terms, such as what does and does not constitute
a brand and generic drug.
Express Scripts also proposed to slash Walgreens reimbursement rates to
levels below the industry average cost to provide each prescription.
Walgreens is focused on helping payers with their total health care
spend, not just the 10-12 percent of their health care costs that are
spent on prescription drugs. While a patient with asthma can lower drug
spend by not getting refills on their medication, the resulting emergency
room visit that could result will be much more expensive overall for the
payer. So we are focused on expanding the pharmacist’s role among health
care providers to lower overall medical costs rather than focusing on drug
spend alone.
Source: Interview with Michael Polzin, Walgreens - Walgreens Interview As Follow-up To Their White Paper
| Enabling Healthy Decisions

8

Tweets from
Express Scripts

9

“While Mr. Crawford suggested that he would have
expected to have seen an agreement reached between
Express Scripts and Walgreens by year end 2011, he
doesn’t anticipate any near-term resolution now given
that many customers have already switched
pharmacies. He has seen some expansion in RFPs
requiring broad retail network inclusion for PBMs for
the 2013 selling season. While he did not suggest that
limited retail networks will meaningfully expand given
the ESRX/WAG dispute, he did highlight the benefits of
more “performance-based” networks.”
From Barclays Capital PBM “Hot Topics” Conference Call Series with Drew Crawford, President and CEO of
BeneCard PBF on 1/26/12

10

Medicare Is Leading The Path On
Preferred Networks
 Humana and Walmart
 Aetna and CVS
 Coventry with Walmart, Walgreens, and Target

11

The Model Is Changing With Some Pains

Old Model Evolving Model
 Spread  Specialty
 Mail Order  Clinical
 Scale Matters  Outcomes
 Transaction Based  P4P

12

Consumer Experience Is A New Focus

Source: Silverlink Client Survey, December 2011
13

Consolidation Is Playing Out Elsewhere Also

UA HealthTrans FutureScripts HealthSpring

Healthnet PDP PTRx Walgreens
Health
Aetna MedMetrics Initiatives

MedFusionRx

With the long-term deals keeping everyone focused on the remaining captive PBMs –
Cigna, Humana, and RegenceRx

14

The Traditional Fundamentals Are Challenging

Source: Chart from Barclays Capital based on IMS Health data
15

Generics Continue To Go Up
Utilization By Tier 2000-2011
80

70

60
% of all Rxs

50
Tier 1
40
Tier 2
30 Tier 3

20

10

0
00 01 02 03 04 05 06 07 08 09 10 11

Source: Drug Benefit News Volume 11, Number 16, p.5.

16

Cost Management Dominates The Trends But Other
Areas Of Focus Include:

EXPERIENCE CLINICAL SPECIALTY TRADITIONAL
 Digital  Adherence  Clinical pathways  Lipitor
(SMS, QR, Web, Mo  Star Ratings  REMS (Risk  Copay cards
bile) Evaluation and
 Post-Hospital  90-day and Mail
 Consumer Insights Discharge Mitigation Strategies) Order Acquisition &
 Multi-channel  Diabetes  Biosimilars and Retention
Coordination Management Utilization  Satisfaction Surveys
Management
 POS Walkaways
 Acquisition &
Retention  Limited and
Preferred
Networks

17

Engaging with Members Where They Are

90+% of population now own mobile phone

40% of mobile phones are smart phones

40% of US households don’t have a landline

THE TIME FOR MOBILE CHANNEL IS NOW

72% of phone subscribers have pre-paid texting plan

18

19

Star Ratings For Medicare Is A Huge Focus
Adherence, New Scripts for Diabetics, Patient Safety

 Outcome measures are the key new
CMS focus for star ratings
Getting Diabetic
 5 Rx Adherence/Patient Safety Hypertensives
on ACE/ARB
measures each weighted at 3 points
 Collectively a huge part of the Part D High Risk
3 Adherence
score Measures
Medication in
Elderly
 Plan scores for 4 of the 5 can be
influenced significantly with “easy to  ACEs/ARBs for HTN
 Cholesterol
implement” communications  Diabetes Oral Meds
15 Points of
interventions Weight*
 More comprehensive programs for
each of the 5 can be introduced and
sustained into 2012

For 2012 Stars Ratings, These 5 Measures Represent:
 18% of the 81 points of weight for MAPD Plans
 47% of the 32 points of weight for PDP Plans
20

21

A Key Foundational Item Is Consumer Insights

Combining the right
Social-norm messaging sequence of mail and
(savvy consumers like automated calls to Sending a wellness
you...) is 20% more seniors improves message prior to a
effective for people response rates by 14- pre-ANOC message
under 50 than for 24% on average and increases satisfaction
seniors. as much as 100% in by 26%.
some programs.

22

23

But, We Can’t Forget Specialty

Source: EMD Serono Specialty Digest, 7th Edition
24

My View Of The Future

1 Consolidation will continue
2 There will be a shift to “outcomes-based contracting”
3 Limited / Preferred networks will slowly take off
4 Adherence will be a key service function
5 Engagement is a differentiator
6 Specialty is ripe for innovation
7 Mobile, social media, and gamification is still TBD
25

PBMI Presentation On PBM Marketplace

Recommended

Recommended

More Related Content

What's hot

What's hot (18)

Viewers also liked

Viewers also liked (18)

Similar to PBMI Presentation On PBM Marketplace

Similar to PBMI Presentation On PBM Marketplace (20)

More from George Van Antwerp

More from George Van Antwerp (7)

Recently uploaded

Recently uploaded (20)

PBMI Presentation On PBM Marketplace

Editor's Notes