Biotech Advances Offer Promises to Consumers and Challenges to Health Plans: "Health Affairs" Case Study

Scientific Base, Fairness and Collaboration Are Keys to Success

October 16, 2006

MOUNTLAKE TERRACE, WA – (October 16, 2006) – Each week the media report to consumers the potential health benefits of the latest advances by biotechnology researchers; however, those same potential advances hold great challenges to health insurers that are being addressed by Premera Blue Cross, according to a case study ("Managing Biotechnology In A Network-Model Health Plan: A U.S. Private Payer Perspective") published in the current issue of the journal "Health Affairs" by member of Premera's pharmaceutical units and a University of Washington professor of pharmacy and public health.

"Medicine today and biotechnology, in particular, offers us as patients such great promise of being able to treat diseases and conditions that only a relatively few years ago were untreatable," said lead author John Watkins, RPh, MPH, BCPS, pharmacy manager in Premera's Formulary Development. "Health plans must work ahead of the curve as much as possible by developing and implementing a formulary that is scientifically sound, fair to patients and cost-effective."

The case study in the renowned health-policy journal tracks how Premera developed an "integrated cross-functional approach to managing biologics, built around a robust formulary process."

According to the four authors, Premera monitored the results from merged pharmacy and medical claims. Using an integrated approach that had full support by senior management, Premera chose to manage their response to biologics internally rather than outsource the project like many health insurers do.

"Premera's reputation with physicians and other healthcare providers throughout Washington dictated that we approach biologics with the same collaborative commitment that we have historically approached quality of care issues for our members," said Ed Wong, Pharm.D., BCPS, FASHP and Premera pharmacy director, referring to Premera's groundbreaking collaborative Quality Score Card program. "Given our existing collaborative relationships with medical groups and our existing scientific evidence-based formulary process, we believed that managing the program ourselves was the only logical and acceptable option."

According to the case study, Premera established a Biotechnology Task Force that utilized services of more than 75 Premera staff members divided into eight work groups – three of which are still operational. The launch of the company's three phase program began in 2003. The first phase focused on assessing the magnitude of the situation. Phase II targeted technology assessment, patient and provider assessment and collaboration and benefits assessment. The third phase was the implementation which began in August, 2004.

"Our next challenge is genomics which not only opens the potential for 'personalized medicine,' but will also add a maze of ethical considerations," said Dr. Wong. Premera has already begun consultations with a range of ethicists in preparation for this next challenge.

In addition to Watkins and Dr. Wong, the report was authored by Sanchita Roy Choudhury, PhD, pharmacy program coordinator and senior internal consultant in Premera's Pharmacy Services, and Sean Sullivan, PhD, professor of pharmacy & public health and director of the Pharmaceutical Outcomes Research and Policy Program at the University of Washington. Dr. Wong is also a clinical professor of pharmacy at UW. Watkins is a clinical associate professor of pharmacy at UW.

Premera Blue Cross is a member of a family of companies based in Mountlake Terrace, Washington, that provide health, life, vision, dental, and long-term care insurance, and other related services.