A resource for patients, prescribers and payers

BY Jim Frederick

Ask any of the roughly 900 people who work for Diplomat Specialty Pharmacy what the company is best known for, and you might get a variety of answers: creating a patient-centric, information-driven business model that merges effective clinical care and patient outcomes with lower costs for patients and payers; giving retail pharmacies the resources to compete in the specialty pharmacy arena; or boosting average patient adherence rates to 90% and above through effective management of patients, drug utilization data and out-of-pocket costs. But boiled down to its essence, the key question for Diplomat, said VP clinical services Gary Rice, is "how do we maximize the patient’s experience?"

"Persistency and compliance are just two of the surrogate markers of patient experience," Rice noted. "If we can create realistic goals and objectives for how those patients manage themselves through a particular drug treatment plan, and we’re helping them do that, there’s a much greater chance that the patient not only will stay on that med, but that the patient optimizes outcomes. And in the long run, everybody wins.

"Teams of pharmacists, patient care coordinators and insurance and funding specialists all work directly with patients to support them as they and their caregivers grapple with serious, often life-threatening conditions and drug regimens that often come with difficult side effects and high costs.

"We want our care coordinators to understand the journey these patients go through," said CEO Phil Hagerman. "How often do you think about breast cancer, and the fact that many of these women are debilitated for six to nine months during the treatment? What does that do to the mother who is a single-parent head of household who loses her job because she can’t go to work, she runs through all of her [financial benefits], and she eventually loses everything?"

For that reason, helping align patients with sources of funding and co-pay assistance to help allay their out-of-pocket costs has become a prime focus for Diplomat’s patient-support activities. As Robert Fleckenstein, VP operations, puts it: "If we can’t clear the financial barriers, the other services we offer patients fall by the wayside."

Thus, Diplomat employs a team of 15 funding specialists "focusing on doing nothing but working directly with the patient to facilitate those applications," said Stephanie Turnbull, director of patient access and member benefits management. Those 15 or so specialists saved thousands of patients roughly $19 million in direct out-of-pocket savings last year through non-profit organizations, and "that doesn’t include additional options … such as co-pay cards or manufacturer programs," she added.

"Patients don’t know that these funds are available," she said.

Diplomat’s funding team is composed of specialists in different disease states or therapies like cancer and immunology "because those specialists can focus on different sources of funding," Fleckenstein said.

"The key point is to be the facilitator, and to take as much burden off the patient and the prescriber as possible," Turnbull added. "We’re the coordinator between the prescriber, the insurance company, the [funding support] foundation and the patient — to be that central point to answer all those questions for the patient … instead of having to call five different people."

Diplomat’s service model even extends to suicide prevention counseling. That effort goes hand-in-hand, Hagerman said, with the ongoing management and monitoring of patients by the company’s patient care coordinators and pharmacists, including looking for signs of depression. "We do a lot of depression screening around our therapies, and we find depression to be a very serious problem with chronic illnesses like multiple sclerosis — especially around early diagnosis," he explained. "The early diagnosis of a serious chronic illness is one of the most challenging times the patient ever goes through."

Jennifer Cretu, VP information technology and marketing, says that the company’s homegrown software platform, eNAV (Electronic Navigator), provides the "underlying technology" that supports "a high-touch model and seamless patient experience."

Originally launched in 2008 to help guide Diplomat’s care specialists and clinical decision-making for patients with MS, eNAV’s workflow application now supports treatment applications for 20 disease states.

The goal, Cretu explained, "was to move away from managing patients with calendars and Excel spreadsheets. eNAV guides our patient care specialists through patient-specific care plans."

Those care plans, she added, "are driven by the system, and allow for the collection of patient demographics, historical adherence and surveys, refill assistance and clinical reporting."

Cretu called eNAV "essentially the legs for our company," allowing Diplomat to "take better care of our patients with complex diseases that have high costs," against a backdrop of increasing health regulations and REMS requirements. "We needed a system that was flexible enough to manage all those pieces and transfer data back to our pharma partners, prescribers and payers … to take better care of the patient," she said.


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Reviving Flint, Mich.’s, fortunes one employee and job at a time

BY Jim Frederick

There’s no way to sugarcoat it. Over the past two decades, Flint, Mich., headquarters city for Diplomat Specialty Pharmacy, had become a poster child for urban decline.

Thanks to massive renewal efforts by Diplomat and many other locally based corporate citizens, however, Flint’s story is far from over.

"Because of Diplomat’s long-standing loyalty to and belief in the city of Flint, much of our community rebuilding initiatives are focused on outreach in the city and surrounding areas," the company noted.

Among those initiatives: a three-year program to help lower-income and formerly homeless women become self-sufficient providers for their families, in partnership with St. Luke’s N.E.W. Life Center. The center provides career training and job placement in a small business that makes hospital scrubs and other products.

"When we started helping them, there were seven part-time employees," Hagerman said. "They’re now up to 26 full-time employees, …and the goal for next year is to have 100 women gainfully employed."

On a broader front, the company partnered with CareSource Michigan and the National Kidney Foundation of Michigan to deliver what it calls "the first comprehensive chronic kidney disease program incorporating both disease management and medication therapy management."

"We also value and support the NKFM Kids’ Camp and drug bank program," Diplomat reported.

The company also envisions giving back to the community on a more fundamental level — by helping thousands of patients obtain the medicines they need, regardless of cost. Indeed, providing funding assistance for patients is a self-described "fundamental part" of Diplomat’s corporate mission, the company noted. Diplomat was able to find and access more than $19 million for patients in need in 2012.

Diplomat’s efforts as both a corporate citizen and an employer have won praise from public and private groups, including:

  • The Michigan Economic Development Corp.;
  • Honors from the Detroit Free Press as one of Michigan’s top workplaces; and
  • Awards from Inc. magazine as one of the nation’s Top 100 Job Creators, and one of Inc.’s Fastest-Growing Private Companies in America.


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Diplomat’s mission: Bridging gap between specialty and traditional Rx

BY Jim Frederick

Can one of the nation’s premier specialty pharmacies maintain its focus on each patient it serves while simultaneously smashing its own growth records and reaching national power-player status in the rarified world of specialized medication services?

Absolutely, say the people running Diplomat Specialty Pharmacy Serving all areas of specialty pharmacy, with its largest sectors managing oncology and immunology medications, the Flint, Mich.-based provider has exploded in size in recent years. But its successful track record and business model, say company leaders, remain rooted in a bedrock of disease-specific patient management programs, successful patient outcomes, highly effective drug adherence efforts and a wide-ranging, holistic brand of care for patients that goes well beyond clinical outreach.

"Our model has always been very patient-focused," said Diplomat co-founder and CEO Phil Hagerman. "Even though we’ve become a more than billion-dollar company in revenue, we’ve never lost sight of the fact that at the end of everything we do, there’s a patient attached to it."

"One of the questions we get asked a lot at Diplomat is, ‘At what point are you going to be too big to deliver a high-touch model?’ We don’t believe our business model is predicated or constrained by size. We think this is a combination of philosophy and technology, and as long as we can use technology appropriately, we believe we can continue to drive that high-touch service model, using technology to create a more efficient touch-point process," he said.

In fact, added Hagerman, "I think our model has gone back to the roots of traditional corner drug stores: to know and understand the needs of our patients, and not forget that they’re individuals with their own serious challenges whom we need to support."

The company traces its roots to its opening as Ideal Pharmacy in Flint in 1973, the fourth store in a small chain owned in part by pharmacist Dale Hagerman. When his son Phil graduated two years later, the father/son team of pharmacists purchased that fourth store from Ideal Pharmacy and launched Diplomat in 1975, specializing in a more comprehensive and focused model of care and personal service, much of it for patients with serious and chronic conditions requiring a higher-touch level of care.

Since then, Diplomat has grown to become one of the premier players in the specialty arena, along with a unique business model as a back-end specialty pharmacy provider to hospitals and major retail pharmacy operators, as well as with locations in Flint and Grand Rapids, Mich.; Chicago; Ft. Lauderdale, Fla.; and Ontario, Calif. Nevertheless, the company hews to the guiding principle advanced by its founders: "Take good care of the patients, and the rest will fall into place."

In a daylong series of interviews with DSN in June, Diplomat’s leaders repeated that mantra with obsessive regularity, insisting that the focus on improving patients’ well-being — and on saving them and their health plan payers money — is encoded in the company’s DNA.

It’s also hardwired into the job descriptions for Diplomat’s 60-odd pharmacists, its clinical-care and patient-support teams, its insurance and funding specialists, and even its sales and marketing people, according to Hagerman and other Diplomat managers. Indeed, says Jennifer Cretu, VP information technology and marketing, in an off-hand remark that nevertheless reflects the philosophy that has kept Diplomat true to its core mission: "We have 900 employees, and essentially two-thirds are patient-care coordinators."

In line with that patient-centric approach, Diplomat president Gary Kadlec said his role "is simple: to take a company that’s growing tremendously and doing the right things clinically for its patients — and the right things economically for the country — and allow it to continue to grow at the same rate without losing that connection to the patient." That means that even when the company doubles or triples in size, "the patient should never know that we’re bigger," he added.

From his experience in leading high-growth pharmacy companies, Kadlec has patiently and quietly reorganized the executive structure. "We have 13 executives who run this company … in a manner that will allow us to continue growing at this rate, and not lose sight of that patient," he said.

To that end, the baker’s dozen of top managers meets every Wednesday for three hours. "We pretty much took the presentations out of these meetings unless there’s something we all need to [address]," he explained. Instead, the key function of those weekly gatherings is "to go around the room, round-robin, and let everybody in that room know what everybody else is doing."

"We’re doing our darnedest to not allow silos to build within this company," Kadlec said. "And if you carry that through the company, … I believe what we’re building is an agile pharmacy system … that can interact with hospital systems and retail communities and laboratories. We can build a virtual pharmacy."

In line with health reform, the rise of accountable care organizations and medical homes — and the health system’s urgent need for greater connectivity and collaboration to boost patient outcomes and curb costs — that integrated pharmacy model is being created "so that if we need to have a lab or a hospital interact [on behalf of a patient’s treatment plan], we can," Kadlec explained. "And the team we put together here can be the core."

Diplomat, its leaders assert, has put itself in the sweet spot of both a U.S. healthcare system desperate for lower-cost solutions to an unsustainable cost spiral and a pharmaceutical marketplace increasingly shifting from traditional to specialized medications as manufacturers target more specific disease states and patient populations with breakthrough large-molecule research and bioengineering. How?

  • By developing a suite of cost-effective, holistic clinical services designed to improve long-term patient outcomes and boost adherence, along with proven expertise in drug compounding, long-term disease management, cost containment, step therapy and other services;
  • By developing data-based decision-making tools like its proprietary eNAV platform to aggregate patient data on behalf of payers, pharmaceutical manufacturers, prescribing physicians and health plans;
  • By creating win-win partnerships with retail chains, hospitals, pharmaceutical makers and other healthcare stakeholders to help each of those groups participate more effectively and profitably in the exploding market for specialty medicines;
  • By helping traditional drug store, supermarket and mass merchandise-based pharmacy retailers navigate risk evaluation and mitigation strategies, detailed reporting and data metrics requirements, and the other complex issues surrounding specialty pharmacy; and
  • By working with pharmaceutical manufacturers to help them make the right decisions about where to distribute their specialty medications. That effort could pay dividends for the pharmaceutical companies concerned that their high-end, highly complex products are dispensed only in pharmacies qualified to provide the patient outreach, clinical care, drug-adherence and documentation support services needed to maximize patient outcomes and satisfy regulatory requirements. But it also could boost access by Diplomat’s retail pharmacy partners to hard-to-obtain, limited-distribution drugs to keep them in the distribution network and keep their specialty-needs patients coming back.

"All the retailers in the country are now trying to get their arms around specialty. And they’ve got a lot of challenges," said Hagerman. "The REMS programs make it tough for them. The limited-distribution drugs make it almost impossible for them to participate. And even the traditional pharmaceutical companies are channel-managing products away from retail because historically retail pharmacy doesn’t show as good a rate of persistency, result or outcome with specialty drugs."

Diplomat, he adds, sits at the nexus of a massive sea of change in the nation’s pharmaceutical and healthcare arena, where the new era of specialized and bioengineered drugs intersects with the increasingly urgent need among many retail pharmacies to adapt to the new paradigm and gain entry to this exploding arena of expensive, high-tech and high-touch medications. "We see specialty growing and continuing to expand in these complex therapies, where you’ve got more limited-distribution drugs, drugs with REMS programs that require validated touch points by medical professionals, and a lot of side-effects management," Hagerman told DSN. "So we see specialty pharmacy as getting more rather than less complex over the next five years."

To that end, said Hagerman, "we made the decision about four years ago as a company, for us to really be relevant in the future, we needed to be more than just a distributor of high-cost drugs. High-cost drug distribution is a critical part of what we do, but it’s also an industry that’s become somewhat commoditized. And we believed that in order for us to expand our scope of relevance, we also needed to be a service provider."

It’s that high-touch service model that really sets Diplomat apart. "It could be creating a specific adherence program that’s not involved in distribution to keep a patient on a drug longer," Hagerman explained. "It could be a program to manage the side effects around a drug. Or it could be services … that expand specialty’s model into different channels like the retail and hospital setting … for patients who are not yet truly getting specialty pharmacy services [like] improved outcomes management or persistency programs."

That need led the company in 2009 to launch its Retail Specialty Network, which Hagerman said has "been a tremendous growth engine for us, and part of why we’re so excited about the National Association of Chain Drug Stores [Total Store Expo] meeting." More recently, Diplomat launched a similar program to provide hospitals and health systems with specialty services.

Diplomat is positioning RSN as a solution to a critical void that all but the biggest retail pharmacy chains are facing. Said Gary Rice, Diplomat’s VP clinical services: "Specialty is really the new retail pharmacy. Ninety percent of what retailers do today is generics, and if you look at all the branded products coming out, … it’s all specialty. So in terms of sustainability, the visionaries in retail pharmacy are seeing the need to have some involvement in specialty" and "become more progressive in their approach to specialty pharmaceuticals."


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Which area of the industry do you think Amazon's entry would shake up the most?