From data analytics to biosimilars — How 5 pharmacy leaders are tackling drug pricing

Drug prices have risen steeply in recent years, taking a toll on the finances of many Americans as lawmakers propose a wide variety of potential solutions. The cost crisis has hit providers too, forcing many health system and hospital leaders to reassess their organization's budget to accommodate for high costs.

During a panel discussion at the Becker's Hospital Review 8th annual CEO + CFO Roundtable Nov. 11, five executives discussed strategies to control pharmacy costs.

The panelists included:

  • Onisis Stefas, PharmD, vice president and chief pharmacy officer of Northwell Health in New York City.

  • John Grubbs, chief pharmacy officer of Sacramento, Calif.-based UC Davis Health.

  • Christopher Fortier, PharmD, chief pharmacy officer of Boston-based Massachusetts General Hospital.

  • Michael D. Brown, vice president of managed services for Cardinal Health, based in Dublin, Ohio.

  • Amy Gutierrez, PharmD, senior vice president and chief pharmacy officer of Kaiser Permanente in Oakland, Calif.

While each executive detailed a different strategy that works for their respective organizations, they agreed that analytics can play a big role in controlling pharmacy costs.

According to Dr. Fortier, Massachusetts General is looking at ways to get more in-depth data on both drug costs and utilization, then providing that data to not only the pharmacy department but to commission chairs and executives so that they can work together.

Dr. Gutierrez said that since Kaiser Permanente is such a widespread health system, it uses data and analytics to identify where its lowest cost to treat is and works with physicians from there.

Northwell Health looks at data on high-cost, high-utilized drugs to identify which could be replaced with cheaper versions, Dr. Stefas said.

Mr. Brown said the most important thing to track using analytics technology is drug utilization. He said that measuring the cost of a drug all the way down to the lowest unit of measurement allows Cardinal Health to quickly make adjustments to its strategy and identify hidden costs.

"I truly believe analytics can drive success, and it can drive modification of your strategies so you can sustain those results over time," Mr. Brown said.

For UC Davis Health, Mr. Grubbs said the biggest opportunity to lower drug costs is through biosimilars.

Mr. Grubbs said biosimilars make up 10 percent of his organization's total drug expenses, so when a biosimilar for a drug the health system dispenses comes to the market, his strategy is to go to the manufacturer of the original drug and request that it lower the cost.

But using biosimilars hasn't worked out as well for Northwell Health, Dr. Stefas said.

"We have successfully implemented some of the biosimilars, but we haven't really seen the benefit that we were expecting," he said.

Often, biosimilars are used in outpatient settings and require pre-authorizations that can make it difficult to get the drugs, Dr. Stefas said.

And payers often require hospitals to carry both biosimilars and the original drug, negating any potential cost-saving benefits from using biosimilars, Dr. Fortier added.

Mr. Brown also discussed Cardinal Health's strategies for dealing with drug shortages. Through its network of managed hospital pharmacies, Cardinal Health finds alternative drugs and quickly lets its other facilities know about them, he said.

"Sometimes, you're just going to have to find something else to use and quickly get that out to all of your facilities" Mr. Brown said.

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