Provides an overview of the various pricing types that DHS access for pharmaceuticals. 340B is for hospital outpatient drugs, as well as for HIV/family planning clinics with MLK and the ACN. Non 340B outpatient is for outpatient drugs dispensed and administered throughout MLK and the ACN Inpatient GPO is not currently eligible for 340B pricing access- we access group purchasing organization (GPO) pricing for hospitalized patients
Provides a 5-year trend of overall costs for DHS, by pricing type) Note the big increase in FY 13-14, which was due to loss of access to pharmaceutical patient assistance programs, as our previously uninsured patients became insured and no longer eligible.
The arrows demonstrate the % increase (or decrease) from the previous year.
Note that the inpatient costs are increasing in the last two FY.
Examples of three high cost pharmaceutical treatments. While these are not high in number, the cost per patient is very high
Pompe disease is a progressive neuromuscular disorder.
Morquio A is a genetic disease that results in missing or low levels of the N-acetylgalactosamine-6 sulfatase (GALNS) enzyme that breaks down glycosaminoglycans (GAGs).
Overview of 340B program. 50% of DHS prescriptions do not qualify for 340B pricing access. However, these are the ACN and MLK sites. With the exception of oncology, most of the medications that are dispensed at the non-hospital sites are primary care agents- not higher cost specialty drugs.
The first column represents total 340B expenditures in FY 2015-16. The second column represents the costs had we not accessed 340B pricing. The difference is $170 million for this fiscal year.
Each of these steps is critical in controlling our overall costs. These are strategies that provide a high rate of return for DHS.
PAP programs are providing DHS approximately $8 million in savings per year.
Within DHS, high cost and non-formulary drug requests go to our central team of clinical pharmacists. These pharmacists review the proposed request, ORCHID notes, and identify potential for alternative formulary options, and discuss with the provider. This is critical in our teaching facilities.
If no formulary option is possible and the drug is medically necessary, the pharmacist validates patient insurance status. If the patient is uninsured, the issue is referred over to our Cardinal PAP coordinators to process for PAP access.
Overall, we have done well with the balancing act. Besides the 12% increase around the time of the ACA transition, we have contained FY spends at about 3%.
It is important to note that over the last two years we have also lost some outpatient pharmacy volume given that insured patients have choices of outpatient pharmacy selected.
2016 Forum: "Landscape Reality on the Ground" - Dr. Katz
LANDSCAPE: REALITY ON THE GROUND
The Sustainability of Prescription Drug Prices
Mitchell Katz, M.D.
Director, Los Angeles County Department of Health Services
Los Angeles County Department of Health Services
Pharmaceutical Pricing Categories
39% Outpatient 340B
Fiscal Year 2015/16
Los Angeles County Department of Health Services
Pharmaceutical Costs - Five Year Trend
Outpatient-340B Outpatient-340B Outpatient-340B Outpatient-340B
Outpatient-GPO Outpatient-GPO Outpatient-GPO
Inpatient-GPO Inpatient-GPO Inpatient-GPO
FY 11-12 FY 12-13 FY 13-14 FY 14-15 FY 15-16
ACA- resultant reduction in pharmaceutical PAP
Los Angeles County Department of Health Services Top
Drug Classes- by Drug Spend
0% 5% 10% 15% 20% 25%
% of total
Newer High Cost Pharmaceutical Therapies
Pompe Disease (glycogen storage disease)- Lumizyme
$500,000 per patient year
Morquio Syndrome (mucopolysaccharide storage disease)-
Vimizim (elosulfase alfa)
$1.1 million per patient year
Paroxysmal Nocturnal Hemoglobinuria- Soliris (eculizumab)
$300,000 per patient year
Inflation Trends- Examples of Older Generic Agents
with Skyrocketing Prices
HRSA 340B Drug Pricing Program
Established in 1992
Requires drug manufacturers to provide outpatient drugs
to eligible health care organizations at significantly
For Los Angeles County DHS:
Only hospitals and grant-funded HIV + family planning sites
qualify for 340B pricing access
Approximately 40% of prescriptions prescribed at clinic
medical homes do not qualify for 340B pricing access
What is the Value of 340B Pricing Access to Los
Angeles County Department of Health Services?
Relative Cost of
Fiscal Year Savings
DHS Pharmaceutical Management Strategies
1. Maximize 340B pricing access
2. Active formulary management
3. Access to pharmaceutical manufacturer patient assistance
4. Pharmaceutical contracting (sub-340B prices)
5. Centralized purchasing and trending of costs
6. Centralized pharmacist therapy review of high cost specialty
7. eHR guidelines/protocols for high cost agents
8. Formulary collaboration with health plans
Centralized Pharmacy Therapy Review
High Cost Specialty Therapy Use
Utilized for restricted/non-formulary high cost specialty
pharmaceutical therapy use; highly trained pharmacist
reviews therapy options with provider
Focus is on ensuring appropriate system use of high cost
therapies by all providers
Approximately 7% of initial therapy requests are modified by
provider after pharmacist consultation and discussion of
therapeutic alternatives available
Cost avoidance= $2.9 million over past year
Ongoing Balancing Act
Maximizing 340B Pricing
Prescription Drug Price