Michael Einodshofer was named chief pharmacy officer of OptumRx in October 2021. He joined OptumRx from Maxor National Pharmacy Services where he served as chief pharmacy officer and was responsible for helping make Maxor Specialty one of the top specialty pharmacies in the U.S. He previously held leadership roles at Walgreens Specialty Pharmacy and University of Pittsburgh Medical Center Health Plan. In addition, Michael served as the 2020–2021 chair of the board for the National Association of Specialty Pharmacy (NASP). We recently spoke with him about his new role and his thoughts on how the industry needs to evolve to meet the challenges of today and tomorrow.
I’ve had the privilege to work at some high-growth companies during my career. As exciting as that is, the one thing that's hard to do is really feel like you're making a difference at the national level. So, when I got the call from OptumRx I was excited about the opportunity to work at an organization that has this type of scope and influence. I have always regarded OptumRx as the preeminent PBM that does the right thing for clients.
Being chairman of NASP afforded me the opportunity to see across all PBMs and get a sense of many different perspectives around specialty pharmacy. And when I got the call to join Optum I thought, "What a great opportunity to take the 25-year career that I've built around trying to always do the right thing for patients while trying to find value for plan sponsors and now do it at scale at a national level."
So, the bottom line is I'm here to help find sustainable solutions that we can do at scale that drive value to patients and plan sponsors.
2.As Chief Pharmacy Officer you have a wide range of responsibilities, but what are some areas of particular focus?
Making sure patients have access to the drugs they need is always number one. And that can’t happen if we don’t do our job helping plans manage their overall plan costs. We work hard at leveraging value from pharmaceutical manufacturers and pushing back on them around their market pricing. Manufacturers can essentially choose to price the drugs they manufacture at whatever price they want, and PBMs are really the only entity in a position to continually push pharma to drive drug costs lower. In instances where we have multiple manufacturers bringing similar products to market, we can drive a very substantial reduction in drug costs.
One emerging area where we can use our leverage with manufacturers to great effect is biosimilars. We are really excited about the cost savings we expect to see due to more biosimilars coming to market.
Biosimilars are complex molecules competing in well-established markets, and virtually all of them are manufactured by experienced biotech and pharma companies. This leads to some unique dynamics in the marketplace. For example, there are instances where the manufacturer of an innovator product agrees to have a lower net cost vs. the biosimilar competition. In such cases, it is in the best interest of our clients to make the originator the exclusive and exclude the biosimilar and wait to see how the market evolves. As a PBM, we can make sure the most clinically appropriate and cost-effective preferred product is dispensed by the pharmacy with much higher efficiency than the market would otherwise do on its own.
That said, no decision is permanent. The competition between manufacturers will continue going forward and thus will continue to be a force that improves affordability for plan sponsors and patients.
Another urgent consideration is sustainability. Plans think “Even if I can afford it today or tomorrow, what about five years from now?” And then an additional subtlety which is especially important for smaller and midsize employers is “Am I prepared for gene therapy and other high-cost, one-time treatments?”
Million-dollar claims related to drugs like gene therapies are a reality that is just beginning to be experienced by clients. If you're a thousand-life group, you probably spend about a million dollars a year on drugs within your pharmacy benefit. And as gene therapy becomes more prominent, the reality is that it only takes one gene therapy procedure for one patient to equal the entire annual pharmacy drug spend that you're used to seeing.
While gene therapy costs will typically be associated with the medical benefit, we recommend that our clients always look at medical and pharmacy drug costs together. The benefit under which the claim pays isn’t the important piece – being able to afford the cost of the drug is.
This fundamentally changes how drug costs get funded financially. How do we insulate plans from that million-dollar claim coming in and disrupting their financial picture and everything they thought they knew about drug benefits?
I suspect we will see more interest in products like the Optum Gene Therapy Risk Protection we offer. This protects plans from unexpected high-cost claims. Moving forward without this type of protection is akin to living in a flood zone without flood insurance – and the flood of cell and gene therapies is coming. These treatments represent amazing scientific achievements. We can’t let financial limitations keep patients who need these drugs from getting them.
Beyond gene therapy affordability, one other concerning trend that I see related to this is the growing industry of small alternate funding companies. They will dangle a product in front of a small or midsize employer to say, “you don't need to cover specialty. We have alternate funding arranged that will allow somebody else to pay for your employees specialty pharmacy product.”
If it sounds suspicious from the start, it should. However, it is completely understandable why an employer might be interested in a proposal that promises to reduce their costs. However, these alternate funding companies are distorting the marketplace by essentially manipulating the pharmacy benefit and then attempting to have these patients qualify for free goods from charitable organizations. Those charitable organizations exist to help uninsured patients afford drugs or underinsured patients afford their copays for drugs. These alternate funding companies profit from the funding the charitable organization provides, which I would imagine is not the intent of a charitable organization’s charter.
In the end, the plan sponsor loses the rebate performance and still must pay for the product from an alternate funding company. This diminishes any savings the client may expect. Most importantly, it’s also very disruptive to the patient, who often misses months of therapy as this gets worked out, and often ends up right back where they started – getting the product funded by their employer when the alternate funding attempt didn’t work out. So, this is a trend that I think we as an industry need to figure out.
4. Is this need for affordability and sustainability reflected in how sponsors now structure their benefits?
One thing we are encouraged to see is greater acceptance of more managed formularies. I think this is important. A managed formulary really gives us better leverage to negotiate lower costs with pharma and exclude products that don’t offer value relative to their benefit. For example, there are acne creams that cost thousands of dollars per month. Is this where an employer wants to spend their benefit dollars?
When it comes to managed formularies, I know a lot of HR directors are rightfully concerned about the potential for disruption to their membership. However, as an organization we excel at managing smooth transitions to our managed formularies. We know this can be done in a very thoughtful way for the member with significant cost savings for the client. So, when done properly, disruption does not mean dissatisfaction.
In addition to managed formularies, most of our clients now use our utilization management criteria and many are adopting our case management interventions. For example, we have more detailed case management solutions focused on members taking specialty medications and those with complex conditions or behavioral health challenges. This allows us to manage a patient over time, rather than just at a point in time, which is typical with a standard prior authorization process. Additionally, 91% of our OptumRx commercial clients now choose one or more modules from the OptumRx® Vigilant Drug Program™. This program targets high-cost drugs that offer little to no added clinical value over existing, less expensive alternatives.
Together, these programs make sure that drugs are being prescribed for medically necessary purposes and not for experimental treatments or things that we know are not going to work, and over time we are making sure the patient is getting the expected benefit from the medication.
We really need to start thinking about what the world looks like a few years from now. We're already at a point where roughly 90% of the drugs dispensed today are generic with the remaining 10% being split between specialty and brand.
If you play that out a few more years, some key brand categories will have more generics including diabetes and mental health. Then what? We will be living in a world where more than 90% of people are getting a low-cost drug, but 1 or 2% of people are using drugs costing $10,000 or more, with just a little bit left in the middle. So, what does that look like?
There’s also an evolving need for whole person care. This is especially true for the growing population of people who use five or more chronic prescription medications. Our OptumRx® Polypharmacy Value Management Program uses the extensive OptumRx case management infrastructure to engage members and their complex care needs.
We also need to stay ahead of consumerism-driven changes. There’s a growing demographic that every year is becoming more comfortable using online tools and price shopping for things. We now see apps that succeed at showing price disparities between different pharmacies. We as a PBM need to solve that. We do not want a benefit that's fractured – where members feel like they must price shop on their own to get the best deal. It's on us to figure that out.
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