Elevance Health and an alliance of other Blue Cross and Blue Shield carriers have formed Synergie Medicine Collective, an independent company that the plans see as a new solution to expensive physician-administered drugs. , insurance companies announced on Thursday.
Nearly every Blue Cross and Blue Shield insurer has invested an undisclosed amount in the new venture. That makes Synergie one of the biggest Blues collaborations in history. The partners are: Elevance Health, formerly Anthem, a for-profit company that sells Blue Cross and Blue Shield policies in 14 states; Blues plans in Arizona, Arkansas, Idaho, Iowa, Maryland, Missouri, South Carolina, Vermont and Washington state; Blue Cross Blue Shield Association; pharmacy benefit manager Prime Therapeutics and data analytics consultancy Evio Pharmacy Solutions, both founded by Blues plan.
The companies include nearly 100 million members and aim to use their collective strength, said Synergie CEO Jarrod Henshaw, who previously served as chief innovation and supply chain officer at Prime Therapeutics. to achieve better deals and standardized contracts from pharmaceutical companies and drug management providers. . He said Synergie aims to offer its services to other insurers and develop value-based payment models for these drugs.
Synergie represents the insurance industry’s pioneering effort to confront the new reality of drug prices. Drug manufacturers now make most of their profits by developing high-cost treatments for small groups of patients. Specialty drugs make up the bulk of the $407 billion spent on pharmaceuticals in the United States in 2021—55 percent, up from 28 percent a decade ago—according to data from the IQVIA Institute. The category includes drugs like CSL Behring’s Hemgenix, the first gene therapy for Hemophilia B, which has a list price of $3.5 million, the highest of any drug. The Food and Drug Administration approved Hemgenix in November.
“If you think about what that means for the healthcare system, it’s very exciting in terms of disruptive technology and what it will do for patients,” Henshaw said. “In terms of how people buy those drugs, how the programs actually manage the cost of these drugs, our system today isn’t built for that.”
Unlike Mark Cuban Cost Plus Drug Co.’s pharmacy-distributed prescription drug pricing strategy, Synergie aims to disrupt the burgeoning specialty drug market. Doctors inject or infuse these drugs in a clinical setting or in the patient’s home. That means they are covered by medical benefits, not pharmaceuticals, and it can be difficult for insurance companies to manage costs that are often lumped into single bills that include location of service, time of service. clinician’s time, drug prices, and many other items.
Henshaw said Synergie is no longer a full medical benefits manager because it doesn’t offer usage management services like pre-authorization or focus on providing onsite services by encouraging visits. at home, Henshaw said. It will operate under a transparent, pass-through model, he said, where it transfers cost savings to participating insurers.
The new company will effectively function as a group-buying organization for specialty drugs that don’t exist, said Wayne Winegarden, director of the Center for Health Economics and Innovation at the Institute of the Pacific. at today.
Along with package payments, hospital consolidation and mismatched incentives reward health systems, said Antonio Ciaccia, CEO of drug pricing research firm 46brooklyn Research and president. More to administer more expensive drugs can make it harder for insurers to negotiate with providers to reduce spending on specialty drugs. of the consulting firm 3 Axis Advisors.
“This is part of a new frontier,” says Ciaccia. “It’s something we’ve come to expect and in a way exists alongside duct tape and glue. Health plans are often ‘managers’ because they handle everything in terms of medical benefits. And when we bought things within the hospital confines, a lot of things were cooked into sauces.”
Ciaccia says specialty drugs are expensive because they are dispensed in smaller quantities, require customization for the patient, and have a more complex preparation and administration process than drugs that patients self-administer. Ciaccia says specialty drugs are also hard for competing drugmakers to copy, and their patents last four years longer than traditional pharmaceutical patents.
And some of these drugs, such as Hemgenix, only need one infusion.
Health insurers, especially those like Blue Cross and Blue Shield, have a large presence, said David Dobrzykowski, associate professor and director of healthcare initiatives at the University of Walton. In the fully insured market, there is a strong incentive to manage this type of drug spending. Consumers in the individual market tend to change plans frequently, he said, and their insurers are responsible for paying claims with their own money, unlike in the retail market. self-insurance where the plan sponsors fund the health benefits.
“It’s a low hanging fruit, isn’t it? If I can somehow pool my spending and I can buy more, then I will buy that gadget at a lower unit cost,” Dobrzykowski said.
