Specialty Pharmaceuticals: Reimbursement Moves Toward ASP

July 23, 2012 at 2:55 PM Leave a comment

There has been exciting progress in treating many chronic, debilitating, and life-threatening conditions and diseases in the last 15 years. Many of these advances have been made by using specialty pharmaceuticals. As healthcare costs continue to increase, the use of specialty pharmaceuticals is under increasing scrutiny.

MedSpan Research recently conducted a survey of 40 payer executives to understand how health plans are responding to the challenges and opportunities specialty pharmaceuticals represent. The survey identified a number of noteworthy trends. Over the next few weeks we’ll share these trends, as well as insights on how you can prepare for these potential changes.

The first trend our survey identified is…

Trend #1: Many health plans are expecting to increasingly use average selling price (ASP) as a basis for determining reimbursement for specialty pharmaceuticals administered in a physician’s office.

The chart below depicts the growth in ASP-based reimbursement from 2012 to 2014, according a recent survey of our payer network.

Increasing use of ASP to determine reimbursement for specialty pharmaceuticals administered in a physician’s office is likely to decrease physician profitability, which may lead to these changes…

  • Shift in administration sites from physician offices to hospitals or infusion centers.
  • Search for lower cost access to specialty pharmaceuticals. Physicians may join larger physician groups or affiliate with a 340B-qualifying institution. At 340B-qualifying hospitals and clinics, many manufacturers reduce the cost for their outpatient therapies by 25% or more.
  • Greater interest in treatment approaches that do not require administration in a physician’s office, such as oral or self-injected treatments.
  • Interest in using specialty pharmacies to acquire injectable drugs.

The shift to ASP-based reimbursement presents a number of challenges for life science companies. Below are recommendations to help you navigate the changing environment.

  • Enhance your knowledge: Understand the relevant issues regarding pricing and reimbursement, and develop plans to minimize challenges and barriers for your prescribers and patients.
  • Demonstrate value: If prescribers are changing their preferred therapy due to the increasing use of ASP-based reimbursement, be prepared to provide data to demonstrate the clinical benefits of your product versus alternatives.
  • Assess shifts in sites of care: How interested are physicians and patients in shifting care to alternative treatment sites? If this is likely, develop strategies to help them overcome barriers and develop sales and marketing plans to accommodate this change.

At MedSpan Research, we work closely with payers and pharmaceutical and biotechnology manufacturers to understand the dynamics of changes in reimbursement and their impact on treatment utilization. Our insights can help you overcome pricing and reimbursement challenges for your specialty pharmaceutical products. We have an extensive network of thought leaders, payer executives, and decision makers at hospitals and alternate sites of care that can provide insight into your market. These insights are critical to developing effective marketing strategies to overcome barriers to coverage, reimbursement, and access.

Author: Robert Kaminsky


Entry filed under: ASP, Average Sales Price, Healthcare Reform, Insurance Design, Payer Reimbursement, Specialty Pharmaceuticals.

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