Blues-Funded Startup Company Aims to Boost Value-Based Drug Pacts

In a move that signals Blue Cross Blue Shield plans are getting increasingly serious about driving down the cost of prescription drugs, five major Blues affiliates on June 22 launched a startup company that aims to “offer innovative medication solutions to patients, providers and customers.”

Blue Cross Blue Shield of Massachusetts, Blue Cross Blue Shield of Michigan, Blue Shield of California, Highmark Inc. and Independence Blue Cross are all providing “significant funding” to support the launch of Evio, which they characterize as an “independent pharmacy solutions startup.”

In its press release, Evio says one of its three chief goals is to continue “the evolution toward value-based care and enhancing outcomes-based contracting in the pharmacy space, especially on high-cost drugs.” Industry experts tell AIS Health, a division of MMIT, that Evio’s mission of furthering value-based pricing agreements for prescription drugs is perhaps the most promising, as such payment models aren’t currently doing enough to bend the cost curve.

“These approaches are challenging to set up, monitor and report on,” says Brian Anderson, a principal with Milliman, Inc. “The goal needs to be to eliminate waste in the system and overprescribing.”

Observing that current value-based drug pricing deals are “all kind of one-off” arrangements, Jeff Myers, senior vice president of market access and reimbursement strategies with Catalyst Health Care Consulting, tells AIS Health that the five Blues plans may be trying to change that paradigm.

“Part of me says that this is an attempt by the Blue Cross folks to standardize some kind of value-based purchasing arrangement in a way that would work over multiple plans, which probably would make it more effective,” he said.

When asked about that possibility, Evio CEO Hank Schlissberg tells AIS Health:

“We do need and are trying to make outcomes-based contracts easier to implement and administer and Evio will have those capabilities.” However, he adds, “we can’t force any plan to adopt anything,” and that doesn’t mean “that everything will be standardized across the plans as each one is independent and makes its own decisions.”

Myers points out that it could make sense for Evio to target drugs such as the hepatitis C treatment Mavyret (glecaprevir/pibrentasvir), which is the only drug that has both a high total cost in the Medicaid program and also a very high per-claim cost, suggesting it isn’t being discounted heavily.

Plans Seek More Weight With Pharma

“If they were to try to do something like that, then they’re picking high-cost drugs that have lots of volume. Maybe that’s the way they’re going to approach it, as opposed to trying to enforce a standard contract on Zolgensma,” Myers says, referring to the $2 million-plus gene therapy used to treat spinal muscular atrophy in patients ages 2 and younger.

Ultimately, “my assumption from the announcement was, they’re trying to get enough weight where they can go to a manufacturer and say, ‘Here is our standard VBP [value-based payment arrangement] that we want you to participate in, and here are the windows you can tinker with, but this is the structure,’” Myers adds.

Evio’s other two initial goals include:

  • “Using evidence and data from real patient experiences to ensure the right medication gets to every patient, where, when and how they need it,” and
  • “Developing new, and enhancing existing, partnerships that leverage the innovation happening in the pharmacy and broader healthcare, technology, and analytics sectors today — to improve affordability, outcomes, and experience for patients.”

Ge Bai, Ph.D., an associate professor at Johns Hopkins University’s Carey Business School and Bloomberg School of Public Health, says the new venture may have some challenges at first but then could have an impact.

“There are some operational advantages held by the specialty pharmacies and the PBMs, because they have been specialized in that area for a long time. This startup funded by the Blue plans, [it’s] relatively new in that area, so I think there’s going to be a learning curve,” she tells AIS Health. But once Evio is up and running, “the value adding-prospect is very promising” considering the profitability of the current specialty drug market, she adds.

Currently, Highmark, BCBS of Michigan and BCBS of Massachusetts all use Cigna Corp.’s Express Scripts; Independence Blue Cross contracts with FutureScripts (a PBM owned by UnitedHealth’s Optum) and PerformRx; and Blue Shield of California uses CVS Health Corp.’s Caremark, according to data from MMIT. The Michigan Blues plan also uses PerformRx.

“This venture will not affect the plans’ current relationships with their PBMs,” Schlissberg says. “The five health plan investors highly value the current PBM relationships and the roles they play today. But PBMs, just like us and the plans themselves, must continue to innovate on behalf of members and customers so we can collectively improve the cost and medication experience for everyone. We plan to build on current PBM relationships, and other innovative things the plan pharmacy teams are doing, and see how data and insights can help provide even more value to patients.”

Leslie Small

Leslie has been reporting and editing in various journalism roles for nearly a decade. Most recently, she was the senior editor of FierceHealthPayer, an e-newsletter covering the health insurance industry. A graduate of Penn State University, she previously served in editing roles at newspapers in Pennsylvania, Virginia and Colorado.

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