Surescripts CEO Harry Totonis to step down
ARLINGTON, Va. — The head of the country’s largest e-prescribing network is stepping down, the company said Thursday.
Surescripts announced that president and CEO Harry Totonis would leave the company in March. Totonis began with the company following its 2008 merger with RxHub.
Surescripts’ board of directors is retaining an executive search firm to find a successor, and a spokeswoman for the company told DSN that it was actively looking for a replacement with Totonis’ help, and did not have plans to appoint an interim CEO at this time.
"Harry is a visionary, responsible for the transformation of Surescripts into the nation’s leading clinical network that is shaping how health care connects and communicates by expanding capabilities to enable interoperability between health systems, physicians and pharmacists," Surescripts co-chairman Steven Miller said. "We are extremely pleased with what Harry has accomplished and believe the company is well-positioned for continued success."
The company has grown rapidly under Totonis’ leadership, today connecting more than half a million prescribers, 94% of retail pharmacies, pharmacy benefit managers, hospitals and others, allowing the transmission of e-prescriptions, immunization records, continuity of care documents and referrals. The company also acquired data encryption firm Kryptiq in 2012.
Creating generic powerhouses
A deal announced last month between CVS Caremark and Cardinal Health created a joint venture that the companies said would be the largest generic drug sourcing entity in the United States.
Each company will have a 50% stake in the joint venture, contributing its respective sourcing and supply chain expertise. The deal also included an extension of Cardinal Health’s existing pharmaceutical distribution agreement with CVS Caremark through June 2019.
McKesson’s purchase in October of a majority stake in German drug distributor Celesio resulted in the two having a combined generic purchasing power of between $9.5 billion and $11.5 billion, according to an analysis by FBR Capital Markets. McKesson announced last month a bid to buy up the rest of Celesio, though hedge fund Elliott Management, which has a stake in Celesio of more than 25%, is trying to block the deal.
A similar analysis of the respective purchasing power of CVS Caremark and Cardinal Health means their deal will create a combined purchasing power of between $9.5 billion and $11.5 billion. According to FBR, the Walgreens-Amerisource-Bergen-ABC Consortium has about $12 billion in combined generic purchasing power. Pembroke Consulting president Adam Fein described McKesson-Celesio, Walgreens-AmerisourceBergen-ABC and now CVS Caremark-Cardinal Health as “King Kong vs. Godzilla vs. Mothra.”
Alternate sites woo payers
Administering high-touch, expensive and complex medications to patients intravenously in their homes — or in a setting other than a hospital — is essentially a large-scale bid to “reduce costs by transferring non-self-administered drugs to the most cost-effective and clinically appropriate site of care,” said pharmacist Michael Einodshofer, senior director of specialty strategy and innovation at Walgreens Specialty Pharmacy.
The strategy saves big dollars. “Moving infusions from high-cost sites of care — typically outpatient hospital — to alternate treatment sites while maintaining the same drug, dose and dosing frequency can generate savings of 20% to 60% savings per infusion,” Einodshofer said.
Pharmacy benefit managers, health plan payers and patients themselves should take note. In one study of nearly 5.4 million patients in managed care, “the top 25 infused drugs cost 110% more when billed from an outpatient hospital instead of an alternate treatment site,” Einodshofer noted at a meeting of insurers. That equals approximately $38 million in additional costs per 1 million covered lives, he added — and significantly higher out-of-pocket costs for patients, as well.
Despite that, said the Walgreens executive, the current reimbursement system practiced by many health plan payers is hamstrung by “misaligned incentives” that lead to much higher overall costs for some plans that pay for specialty pharmaceutical treatment for their patients. The reason: Those plans force patients to pay up to four times as much in out-of-pocket co-pays if they have their specialty medicines administered for far lower cost at a Walgreens Specialty Care Center rather than at a much more expensive acute care setting like an outpatient hospital.
This perverse reimbursement system — a legacy of an earlier provider network system with fewer treatment location options — encourages patients to seek treatment at hospitals and acute care centers that charge the maximum for infusion services, despite the fact that Walgreens can provide those services at a fraction of the cost, Einodshofer said.
Nevertheless, payers are looking for more cost-effective ways to treat chronic care patients with specialized medication needs. And retail pharmacy providers are aligning their businesses and clinical capabilities to meet those needs.