Archive | May, 2011

The Cost Of Being Fat

With over 60% of Americans overweight or obese, this is a real issue for us as a nation.  You see more and more focus on it on TV, in our schools, and in the overall healthcare system.  So, what are the costs of being overweight:

I could go on about linking depression and obesity and to talk about genetics, but I think you get the point.  While it’s not easy (from personal experience), it’s an important topic for us all to continue to focus on.  For us to fix healthcare in the US, we have to think outside the system itself.

Pharmacy Reimbursement Needs To Be Re-Aligned With Effort

I know this is not a popular topic, but I really believe that reimbursement on a per Rx basis in misaligned.  Today, a pharmacy (retail, mail, specialty) is paid based on either a discount off a standard price (e.g., AWP) or based on a MAC (maximum allowable cost) list.  They may also receive a dispensing fee.  According to the latest PBMI Benefit Design Report, those dispensing fees are:

  • $1.62 retail
  • $2.33 mail (noting that only 21% of their surveyed employers pay dispensing fees at mail)
  • $3.26 specialty

And, the reimbursement rate is the same whether it’s a new Rx or a refill.  Does anyone out there believe that the amount of effort to fill a new Rx and a refill is the same?  Why not pay differently?

An industry number that has held up anecdotally when I’ve talked to lots of people is that 40% of new Rxs require some type of work to become a “clean Rx”.  That might mean that they are subject to a utilization management program (step therapy, prior authorization, quantity level limit).  It might mean that there is a DUR issue such as a drug / drug interaction which has to be addressed.  It might mean that the drug isn’t covered.  It might mean that the cost is too much based on formulary tier.

Additionally, the first few times a patient fills a drug is when they have questions.  When do I take the drug?  Are there any side effects?  Should I avoid any foods?  Should I eat with my meal?  Are there alternatives?

Once the patient has titrated to the right strength and is taking their medication on a regular basis, the job is pretty much to count the pills and get them to the patient in a timely manner.  It has been my argument for a while that if we could fix this reimbursement misalignment then you would see a better coordination between retail and mail order.

The right model in my mind shifts reimbursement dollars through dispensing fees or some other payment structure to compensate for these cognitive services on the initial fill and acknowledge where the effort is.  I believe this would allow for a “mail at retail” type model of central fill or a kiosk model at the store or encourage retailers to better support mail order efforts when appropriate.

Everyone is aligned (at some level) with getting patients to:

  1. Start on the appropriate medication
  2. Understand their medication and their condition
  3. Make appropriate choices that lower overall costs to the payers
  4. Stay on their medications
With that said, it seems like there is an opportunity here.  It won’t be easy, and I don’t hear anyone talking about it…but I’ll continue on my soapbox for now.

Short Survey On Copay Cards

Are they good?  Are they bad?  Are there times when they should be used?  Will they replace rebates?  When are they used?  Do they work?

AIS (Drug Benefit News) has asked me to do a webinar on copay cards in early July.  This is a hot topic area with limited information out there.  Rather than simply offer my opinion, I thought I would reach out to those of you that work in pharma, PBMs, retail pharmacies, and health plans to capture your opinions.  I put together two brief (<10 question) surveys, but I’m also happy to talk live if you’d prefer. 

 If you don’t feel like you’re the right person or you feel like you know others that would respond, please feel free to forward this to others.  I’m happy to share the results back with those of you that participate.  Thanks.   

 The survey for physicians and manufacturers is here – http://www.surveymonkey.com/s/ZQVM7DK.

 The survey for pharmacists, PBMs, and payers is here – http://www.surveymonkey.com/s/ZSBS32Y.

 Have a great holiday weekend!

Highlights From The CVS Caremark Insights Report 2011

CVS Caremark has been on a roll lately releasing lots of research especially in the adherence area. They just released another study this week that said:

In a study published online this week in the Journal of the American Pharmacists Association (JAPhA) the researchers said,”Approximately one-half of caregivers reported they are more likely to forgo their own medications than the medication needs of their caregivees, especially if cost was a problem, and that caring for their family members was more important than caring for themselves.” The researchers added, “Our findings indicate care-giving status may be an important characteristic for providers to identify and that caregivers may represent a fertile target for adherence interventions to improve chronic disease management and prevent chronic disease.”

But, today, I want to focus on their drug trend report called Insights which was released a few weeks ago. The report begins with a focus on change pointing out a few facts which will change our healthcare experience. Here’s part of the introductory letter by Per Lofberg, the President of Caremark Pharmacy Services.

We all know change is a constant, in this industry and in life, but the change we face over the next several years is monumental and unprecedented. The sweeping nature of the health care reform legislation makes it difficult, as even the government admits, to predict how the system and its stakeholders will respond. Regardless of how much is unknown and “still to be determined” about reform, all of us continue to face the urgent, ongoing need to reduce health care spending and simultaneously improve health outcomes.

They take a different approach than Express Scripts (see review of this year’s drug trend report) and Medco in their drug trend reports which are more encyclopedic in their breakdown of class by class. CVS Caremark poses questions by group and then presents data to address those questions.  They focus on health reform and overall changes to the market dynamic.  [Both Adam Fein and I review most/all of these reports every year so I’d encourage you to look at both of our blogs if you want historical facts or comments about comparing the drug trend reports.]

  • Employer: Benefit costs are hurting our profitability. Something’s got to change.
    • Only 6% of employers believe their company will be better off as a result of healthcare reform.
  • Health Plan: How do I compete, comply, and control costs in this new world?
    • 120M members will be seeking or changing coverage between 2012-2016.
  • Physician: My practice is already stretched to the limit.
    • The US will have about 159,000 fewer doctors than it needs by 2025.
  • Consumer: Where do we go from here?
    • In 2010, 1 in 4 households reported having trouble paying medical bills.

Key Statistics:

  • Overall trend = 2.4%
  • Non-specialty trend = 0.8%
  • GDR for 2010 was 71.5%
  • Specialty trend = 13.7%

Specialty now makes up 14.2% of their BOB (book of business) overall spending…[something that some people are predicting will be close to 40% in under 5 years].

I really like how they breakout the charts by type of client (employer, health plan, and TPAs) since they have different approaches to trend management. Here’s the health plan one:

They talk about some of the future trend influencers:

  1. Economy
  2. Aging population
  3. Chronic condition prevalence
  4. Changing condition guidelines
  5. Health care reform
  6. Adherence
  7. Generic launches
  8. Specialty growth
  9. Brand price increases
  10. Less predictable events – weather, flu impact

Like others…they are saying that GDRs (generic dispensing rates) of 80% are now possible by 2012! Talk about a change in the past decade and why there is so much pressure on the manufacturers.

They mention it in the publication, but they’ve also issued some press about their effort to target the specialty spend that happens under the medical benefit. They estimate that 80% of the drug spend in the medical benefit is from specialty drugs with cancer representing 46% and three other categories representing more than 2%:

  • Anemia and neutropenia
  • Osteoarthritis and RA
  • Immune disorders

Given their broad footprint, they pose an answer rather than a question from the next constituent – the pharmacist:

I know I can make a real difference for people.

One of the big areas of focus for leveraging that F2F relationship is adherence:

They provide an updated statistic on average Rxs PMPY of 12.6.

One of their big studies from the year was the one that was published around savings related to adherence:

I’ll end with a statement they highlight at the end:

“Every member interaction is an opportunity to improve outcomes for the plan and the member.”

The Information Blanket: Design Meets Health Literacy

Another story from Fast Company June 2011 that I found really interesting was about the Information Blanket. This is a tool being used in Uganda to address their infant mortality rate.

It includes information on:

  • Vaccinations
  • Breast feeding
  • Doctor’s appointments
  • Fever
  • Growth rates
  • Symptoms to monitor

I think this is a few cool and creative solution.

A Few E-mail Facts

Fast Company had an article the other day with some great stats on email:

  • There are 3B email accounts worldwide.
  • Email use by seniors increased by 28% from 2009-2010 while use by teens dropped 59% in. That same time.
  • The average business person sends 33 emails per day. [maybe on a day when I’m in meetings for 9 hours…that’s really low]
  • 89% of all emails sent are spam!
  • Only 8% of emails sent are business related.
  • In 2010, there were 107 trillion emails sent; 25 billion tweets; and 170 billion pieces of mail.

AIS Webinar Regarding Drug Coupons

Health Plans vs. Drug Coupons:

Tactics to Combat Brand-Name Drug Promotions

AIS Webinar: Wednesday, July 13, 2011

When faced with the loss of patent protection, brand-name drug manufacturers are increasingly launching promotional programs to maintain market share of their blockbuster drugs and improve brand loyalty. These promotions, including copay coupons, discount cards and rebates, can pose headaches for PBMs and health plans. But there are strategies plans can adopt — including zero-dollar copays, over-the-counter initiatives and utilization management strategies — to reduce the impact on utilization and move more enrollees to low-cost generic alternatives. Discover the pros and cons of various strategies.

Pharmacy Kickoff At #RESULTS2011

I’m currently presenting at our client event (see twitter hashtag #results2011 for real-time comments). My presentation is an extension of my white paper on the future of the PBM / pharmacy industry along with a blend of data from our annual client survey and Silverlink Communications best practices with a focus on our work around medication adherence. It also builds on my thoughts from NCPDP that I shared late last year.

Here are a few of the points I touch on:

  • Avoiding being commoditized by adding value
  • Keys to success with a focus on:
    • Evidence-based approaches
    • Consumer engagement
    • Patient experience
    • Cross-channel coordination
  • Adherence and other priorities
  • How to use SMS to drive self-service
  • An approach to condition management in hypertension and diabetes
  • Focus on the “un-engaged” but don’t forget about the engaged consumers
  • Case studies and research around adherence
  • Timing and sequencing of direct mail, automated calls, and e-mail
  • Measuring “trust”

Here’s a teaser of some of the slides I’m presenting:

Walmart: Good or Bad for the PBMs

I think this is a question many of my PBM friends would like to know. Fortunately, a few of the Walmart people that read my blog and are part of their Health and Wellness group agreed to sit down and talk about their strategy.

Let’s start with setting some background:

  • Walmart was the first to introduce the concept of $4 generics which originally caught the market off guard and has created lower generic costs and free antibiotic programs at several pharmacies. [I would also argue that it highlighted the fact that generic copays were getting too high.]
  • Walmart was the first to work directly as a pharmacy to create a limited network contract direct with an employer (Caterpillar).
  • Walmart has partnered with Humana on a limited network offering for Medicare.
  • Walmart came out with a direct to consumer mail order pharmacy offering.

If you follow the industry, you know that all of these things were potential game changers (if they’ve worked).

This creates some tension:

  • Is Walmart simply a catalyst for change in the healthcare space?
  • Does Walmart (pharmacy) want to disintermediate the PBM?
  • Is Walmart able to make money where others can’t?
  • Does Walmart get more foot traffic such that pharmacy can be a loss leader?

Here is the Q&A [interpretive not literal] from my dialogue with Marcus Osborne (Sr. Director, Business Development, Healthcare, Walmart) and Tom Hill (Director, Health Services Development, Walmart).

What is Walmart’s Health & Wellness strategy?
Walmart wants to help consumers “save money and live better”. That is our DNA and our fundamental approach to the market. Pharmacy has presented a unique challenge since consumers often have the same copay regardless of which pharmacy they went to. Even when it’s a percentage copay, the savings differential might not be much to the consumer. Walmart was disconnected from the consumer in the traditional pharmacy pricing approach. That has driven us to look at unique ways that we can create savings.

How does Walmart decide what “offerings” to bring to market?
Walmart looks at ideas that focus on our EDLP (Everyday Low Price) concept and leverage our supply chain efficiencies. We are constantly looking at non-store operational opportunities to work directly with key companies. We currently have over 20 direct relationships with managed care companies and PBMs where we are working with them to drive down consumer costs in the pharmacy and broader healthcare area.

Obviously healthcare is bigger than pharmacy. What other things are you doing to drive healthy eating, management of critical conditions, or other programs? We’re constantly looking at what’s needed in the healthcare sector and where to invest. We focus on our two key advantages:

  • Willing to trade profit for volume
  • Value of the total “box” [store]

A good example is the work we’ve done around “Healthy Mom Healthy Baby” in Medicaid. We looked at the issues of high pre-term labor and the high rates of injury post-birth. We felt like we had a moral and cost imperative to take action. As part of this, we worked with several managed care groups to redefine the entire process and look at our unique assets. Our solution includes:

  • Free pregnancy tests
  • Free pre-natal vitamins
  • Rewards for free diapers and other supplies tied to physician visits and other health activities
  • Free car seats
  • Leveraging our physicians and clinics

[I was impressed…this was a broad solution that looked at a lot of their assets.] We’ve also created several diabetic specific solutions; a smoking cessation program with Healthways; weight management programs; and women’s and men’s health programs. The focus is on payers that are at risk for their healthcare spending with more to come from clinics.

Will Walmart become a PBM?
No. We’re not looking to go into the PBM market. We’re supply chain experts. We see value in the PBM model. [We talked a little about the fact that “you are what your profits say you are” meaning that the PBMs have painted themselves into a profit corner where their profit comes from generics at mail order so any threat to that is a challenge.]

If the Caterpillar model was so successful, why haven’t others adopted it?
The reality is that over 400 employers have contracted directly with Walmart for a limited network model similar to Caterpillar. They are all seeing significant savings.

Does Walmart see the market through “different glasses” than others?
No. We still want to have the pharmacy be a profit center. We’re not looking to bottom out the market, but we are willing to trade lower profits per transaction in return for more market share. At Walmart, it’s not about maximizing revenue/Rx or profit/Rx…it’s about total revenue and total profitability. [A very different strategy than other CFOs which would say you can’t expect volume to make up for lower profitability.] Obviously, we also have the opportunity to get non-pharmacy sales associated with food traffic. One thing that may be is different is the fact that we believe scale should drive down costs. In pharmacy, the biggest players are always trying to command a premium. We think it should be the other way around. We also have been able to get our cost-to-fill to be the same at retail and mail so we’ve become channel ambivalent.

Have these programs improved market share in any significant ways? You have to look at the programs separately, but overall we’ve seen our market share increase from 6% overall [when the $4 generic program launched] to 10% now. The network design strategy has had great success. We look at three types of programs:

  • Incentive based networks
    (Caterpillar 1.0) where all the pharmacies are in the network, but there is a lower copay to go to certain pharmacies. If only 15% of pharmacies are preferred, their market share doubles. If Walmart is the only preferred pharmacy, their market share goes up 4x.
  • Limited networks where some pharmacies are removed from the network. If you drop the network significantly, they’ve seen their share go up 2-3x.
  • Limited networks with preferred pharmacies where you some pharmacies are removed from the network, but within the remaining pharmacies, there are still incentives to go to certain stores (Caterpillar 2.0). In these cases, they’ve seen their share go up 10x.

The $4 generics program has helped increase market share by an estimated 150 basis points. In many cases, companies that initially jumped to offer similar programs have dropped them. They couldn’t sustain them.

The Medicare program with Humana has been very significant and successful [as demonstrated by Humana’s huge jump in Medicare lives].

The direct-to-consumer (DTC) programs for mail have been pretty limited and haven’t had a huge impact, but they’ve been offered in markets where we have no stores (e.g., Detroit and NY) and therefore almost no share to begin with so any share is a gain.

People complain about the pharmacy location within the store. Would you ever consider a direct access point to the pharmacy which didn’t involve going through the entire store? This is a very hot topic. We did a lot of research about store design and what goods should be located next to each other, but in the end, we’re considering moving the pharmacy closer to the front entrance. Right now, 25% of the stores have a drive-through pharmacy which gets utilized at a very high rate. But, this does lose the pharmacist face-to-face benefit. [At the end of the conversation, my take is that they are looking at lots of scenarios here and trying to figure out the balance of convenience to the pharmacy only consumer and how to optimize the entire footprint.]

The partnership with Humana really seemed to help them grow their Medicare lives this year. How did this come about? We both were looking for new solutions to leverage the fact that scale matters and how to operate within the CMS parameters. We felt like there was an opportunity to do something different and began speaking with plans about some limited network ideas. We know that Walmart is over-indexed in the 65+ category based on store visits per week. Based on that, we were looking at what we could do to offer them more value as compared with our traditional, core customer of 35-50 year old females. Through a series of conversations, the partnership was born. We’re very happy with the relationship and believe they are also.

Limited networks have been around for a long-time with limited adoption. Do you think their time has finally come? What has changed? They have been around, but historically the networks weren’t limited enough to create enough savings to overcome the “costs” of disruption to the payer. Based on our experience at Caterpillar, we believe that you will see a transitional period where companies first move to incentivized networks and then 1-2 years later move to limited networks. [Something I would compare to the transitions which have happened in formulary over time.] The one area where we do see limited networks happening more rapidly is in the area of Managed Medicaid. [This plays into the focus of PCMA and others on the PBM opportunity around Managed Medicaid.]

It was a great discussion. I learned a lot. They allowed me to ask them a lot of questions about their programs and approach that honestly had led to some skepticism in the past. It sounds like they’ve brought together a great team with a broad vision of what they can do in pharmacy and in health and wellness overall. It has gotten my mind thinking about ideas, and I look forward to learning more.

[BTW – You can sign up to get posts like this e-mailed to you whenever I write them.  A registration link is in the right hand column.]

10 Things To Know About Engaging Patients

I just finished reading this publication by the Institute for Health Technology Transformation. Lots of quick nuggets of information summarized here. Let me share a few:

  • 88% of American adults with Internet acces research health information online; 60% say that the information they found influenced a decision (Pew)
  • Top sites (Alexa rankings) are NIH, WebMD, and medicinenet
  • 94% of patients say they at least sometimes forget important things they were told by their MD (Markle Foundation)
  • Only 3% of people have been harmed or know someone that’s been harmed by health information they found online (Pew)

They go on to provide some good usage statistics by age group; data around caregivers; data around who’s trusted and PHRs; and research from AARP and with Dr. Hibbard that shows the impact of engagement on outcomes.

Video Of Dr. Ted Eytan From Kaiser – Participation Changes Healthcare

This is a good, short video with some statistics, examples, and a nice video on the complete view of the patient.  (Thanks to Kru Research.)

PBM Mobile Applications – CVS, Humana, Medco, Express, Catalyst, Prescription Solutions

This week, Medco released their mobile application that they’ve been working with Verizon on.  Not a big secret in my mind since I’ve been hearing about it since last Fall.  I’ve talked about CVS Caremark’s application (CVS mobile), Humana’s application, and CatalystRx’s application.  So, this made me wonder why I hadn’t heard about one from Express Scripts.  It seems unlikely that they wouldn’t have one.

There doesn’t seem to have been a lot of fanfare, but they launched one in March.  Here’s a quick summary of it:

The new Express Rx mobile app works across multiple platforms, and is now available for a free download at both the Apple iPhone App Store and at the Android Market (simply search ‘Express Rx’).  In addition, members using a Blackberry or other smartphone device with web browsing capability can access our mobile optimized website at http://m.esrx.com.

With our new mobile app and mobile optimized website, Express Scripts members will be able to securely access the following functions:

  • Start Home Delivery – transfer available maintenance medications to the Express Scripts Pharmacy
  • Order Refills – select and schedule prescriptions to be refilled from the Express Scripts Pharmacy
  • Check Order Status – check to see if an Express Scripts Pharmacy order has shipped, the ship date and by what method
  • Find a Pharmacy – locate a nearby retail pharmacy using the GPS technology built into a smartphone
  • Drug Information – access Drug Digest database to look up drug information, common uses and possible side effects

The app consists of three features: My Rx Choices, which delivers on-demand, personalized out-of-pocket costs, interactions and other information for any prescription drug; My Medicine Cabinet, which allows patients to view the medications they’re on, including prescription and over-the-counter drugs, and set reminders for themselves; and Prescription ID Card, which allows convenient access to a member’s prescription drug card.

Of course, Walgreens also has a mobile application as does Walmart.  Neither of them are PBMs, but they are both critical players in the pharmacy space.
Next on my list to check out is Prescription Solutions.  They also have a mobile application which does:
  • Refill mail service pharmacy prescriptions
  • View your prescription history
  • Set up text message medication reminders
  • Check the status of and track orders
  • Locate a pharmacy by ZIP Code
  • Search your formulary by generic or brand name drug, status, or class
As one might expect, mobile web or mobile apps are quickly becoming the norm.  The key to look at is what is the functionality.  Is it simply putting their websites on a phone or are they developing other technologies that take advantage of the mobile environment (e.g., location based services or enhanced reality).  I’ll share some thoughts on those in another post.

Medicare Lives By Plan

Medicare has been a big area of focus for a lot of plans and subsequently for a lot of PBMs who manage the PDP plans.  The biggest area of discussion is around the STAR Ratings.  And, that’s important because if you look at data from the WilsonRx reports there is certainly a correlation between PBM satisfaction and health plan satisfaction. 

So, the question is who has the Medicare lives today and who are the big winners YTD (source – CMS and Citi Investment Research and Analysis – summarized by Carl McDonald and team at Citi):

For a detailed breakout of PDP lives and the huge win by Humana going into 2011, I would suggest reading Adam Fein’s post from a few months ago on DrugChannels

And…if you haven’t been following it, it looks like Medicaid is the green field that everyone is eyeing.  The savings from managed Medicaid are getting discussed in multiple states especially around pharmacy.  I just had a call today where the executive predicted that managed Medicaid would be the feather that finally broke the back to get limited networks more traction (interesting!).

MD Adherence Campaign – Uphill Battle

Based on the feedback I got on my post on KevinMD about paying MDs for adherence and other research out there, it would seem that this new campaign called Script Your Future is facing a significant uphill battle.  While I completely agree with the concept of pushing adherence discussions to the point-of-prescribing, the question is whether this will happen during the physician encounter.  The other challenge is whether patients realize that they are non-adherence.  Prior studies have indicated a lack of awareness around how non-adherent they are.

CVS Caremark Pilots New ePA Technology

CVS Caremark announced earlier this week that they were launching a pilot to improve the prior authorization process. They are partnering with Navinet, Allscripts, and Surescripts to do this. This should be an interesting pilot to monitor. They plan to share the transactions and the results with the market to hopefully drive industry standards.

“CVS Caremark understands the opportunities that innovations such as electronic prior authorization provide to prescribers and patients looking to embrace a more efficient and effective way to share critical prescribing information,” said Troyen A. Brennan, M.D., M.P.H., chief medical officer of CVS Caremark. “The prior authorization process is currently evolving to keep pace as prescribers transition towards electronic prescribing and electronic patient records to better manage their patients’ pharmacy care. This pilot is an important step toward demonstrating how the industry can integrate ePA with e-prescribing to streamline and speed up processing of prior authorizations to ensure that members have quick access to care that is medically appropriate and cost-effective.”

How Many Formulary Tiers Is Enough?

Just this week, I’ve seen two things about creating more formulary tiers.  One was talking about splitting generics into two tiers.  The other mentioned that CMS said a sixth tier could be used in certain circumstances.  It sounds like this could get out of control.

Will we end up with something like this:

  • Low-cost generics (i.e., $4)
  • Generics
  • Formulary brands (non-specialty)
  • Non-formulary brands (non-specialty)
  • Lifestyle drugs
  • Specialty biosimilars
  • Formulary specialty drugs
  • Non-formulary specialty drugs

It seems reasonable that we could end up with 8 tiers!  That is a patient nightmare.  It’s difficult enough to understand today.  Maybe, I’ll finally become a believer in a percentage copay model with just two or three tiers of cost share with maximums.

Summary Of Big 3 PBM Drug Trend Numbers

All of the big 3 PBMs have now reported their drug trend for 2010.  How do they compare?  [acknowledging that methodologies are different]

  1. CVS Caremark = 2.4% (0.8% without specialty)
  2. Express Scripts = 3.6% (1.4% without specialty)
  3. Medco = 3.7% (1.1% without specialty)

Now, I’ll reiterate my points from the past which are:

The Medco Drug Trend Report Is Out

Medco just released their Drug Trend Report this morning. For the second year, I got invited to their press call, but unfortunately, I had to miss the call. I sent in four questions:

  1. ADHD trend continues to increase.  With the new DSM-5 proposal, it looks like there will be more teens and adults diagnosed with adult ADD.  Do you see this accelerating the trend in this category even more?
  2. As generics get closer to 80%, the remaining brand drugs will have to try new strategies to sustain utilization.  One of the growing tactics is copay coupons or cards.  Do you see this as an issue?  Are there tactics that you intend to use to address these through POS programs or other programs?
  3. You talk about clients spending less PMPM on members age 0-18 which seems to run counter to the focus from last year on more, younger patients using maintenance drugs.  What do you attribute that drop in spending to?
  4. You bring up biologics.  It’s unlikely that biologics will generate large price drops as we’ve seen from generics.  What do you estimate will be the savings associated with biologics and will we see therapeutic interchange programs or will you manage the biologics more like a step therapy program?

     

Here are a few of the key highlights from the report:

  • Overall drug trend in 2010 remained low at 3.7%.
  • 2010 spending on specialty drugs accounted for 16.3% of plan costs but was responsible for a remarkable 70.1% of drug trend.
  • At 16.7%, diabetes was the therapeutic category that contributed most to trend.
  • The cost of cancer care is projected to rise from $124.6 billion to as much as $207 billion by 2020.

The report has a large focus on specialty which is really where the industry is going. I’ll dig into the report when I have some additional time.

Multi-Tasking Limits Self-Control

What a scary thought!  Essentially, the research is implying that we have finite self-control and can use it up on things like multi-tasking (which is pretty much a daily reality for most people I know).  And, since self-control is important for dieting, exercise, endurance, or concentration, this could be a real problem. 

This really creates an interesting issue around consumer engagement.  Are you better engaging them earlier in the day when they have more self-control to concentrate and evaluate information?  Or, are you better engaging them later at night when they’re relaxed and not multi-tasking?  Or, on the flip-side, should consumers think differently about how and when they engage based on their ability to evaluate complex decisions or options especially around something like healthcare? 

The human psyche is equipped with the capacity to solve problems using different mental states or mindsets.  Different mindsets can lead to different judgment and decision making styles, each associated with its own perspective and biases. To change perspective, people can, and often do, switch mindsets. We argue, however, that mindset switching can be costly for subsequent decisions. We propose that mindset switching is an executive function that relies on the same psychological resource that governs other acts of executive functioning, including self-regulation. This implies that there are psychic costs to switching mindsets that are borne out in depleted executive resources. One implication of this framework is that switching mindsets should render people more likely to fail at subsequent self-regulation than they would if maintaining a consistent mindset. The findings from experiments that manipulated mindset switching in five domains support this model. (abstract from paper Being of Two Minds: Switching Mindsets Exhausts Self-Regulatory Resources by Ryan Hamilton, Kathleen Vohs, Anne-Laure Sellier, and Tom Meyvis)

Why Aren’t We More Focused On Rx-OTC Interactions?

The pharmacy system in the US does a good job of catching drug-drug interactions at the POS (point-of-sale) when the claims are all processed by a PBM or all the drugs are filled within the same pharmacy.  But, with 68% of adults taking both a prescription drug and either an OTC (over-the-counter) or dietary supplement (per JAMA Jan 2009), do we need a broader safety net to catch all those?

I was looking at an old Medco deck from last year.  It estimated that there are 30B combinations if you look at 80,000 prescription doses, 300,000 OTC products, and 75,000 dietary supplements. 

Of course, when you go to the pharmacy, you fill out some basic information.  You do the same at your physician.  But, how often are those updated?  Do you have an easy way to register new products you’re trying? 

On the flipside, the question is what percentage of these 30B combinations are important versus just noise?

There are some significant examples here…

For example, Proton Pump Inhibitors (PPIs) increase the risk of major cardiovascular events by more than 50% for patients taking Plavix, but you can now buy several PPIs over-the-counter.  How would the pharmacy or PBM know?

Making People Talk

Getting people to talk is often key to engaging them.  With that in mind, I found these five common personality types and what it takes to make them talk interesting (from The Most Dangerous Business Book You’ll Ever Read as profiled in Inc. magazine on April 2011):

  • Teachers – listen closely and ask lots of questions
  • Jargon dorks – politely ask them what they mean by key industry terms or acronyms to get them to explain in detail
  • Complainers – spark a complaint fest by offering a few of your own
  • Smartypantses – knowingly make an incorrect statement and watch them share information to prove you wrong
  • Worriers – create the impression that whatever they say is no surprise…”oh, of course”

Your Refill Logic Has To Be Dynamic

I signed up for an auto-refill program recently.  It quickly made me realize how stockpiling happens.  (Stockpiling is where a patient ends up with a large supply of their medication over time…typically due to refilling too soon.)

Imagine the following:

  • I get a 90-day supply of a medication.
  • At day 75, I get a refill of the medication.  (I have 105 days left at this point.)
  • 75 days later, I get my next refill.  (I now have 120 days left at this point.)
  • 75 days later, I get my next refill.  (I now have 135 days left at this point.)
The problem here is what I would call “static refill logic”.  The auto-refill program is triggered to fill the drug 75 days after it was last filled.
What is needed is “dynamic refill logic” which calculated days supply on hand.  This isn’t easy, but it makes a lot of sense.  The risk (if I’m a mail pharmacy) is that without this, I get gaps-in-care and/or create a short-term retention issue.
Imagine the following:
  • You ask me to refill, but I have 30 days on hand so I say no.
  • Now I forget to refill on time and I have a choice – (a) skip my medication for a few days or (b) go back to retail.  Neither is ideal for the mail pharmacy.
BUT, all of this could have been fixed if the logic was dynamic and they called to confirm my refill when I had just a few weeks left (i.e., enough to be thinking about refilling but also enough to have time to get it shipped to me).

How Health “Improvements” Make You Worry

I was just at the grocery store.  Now, they offer you disposable cleaning wipes to wipe down your cart handle and avoid germs.  Seems like a good idea, but it makes you wonder if this has been a problem for years.

A few weeks ago, I was at the dentist.  When they went to take a picture of my teeth they covered me in the standard protective “blanket”, but this time they also gave me a new cover for my throat.  Again, this made me wonder whether I’ve been exposed for years and at risk.

Of course, we get smarter over time, but I found it interesting that it makes us (me) more aware of issues that have existed as they make these improvements to the process.

Are Limited Distribution Deals Good For Patients?

People with complex conditions such as RA, cancer, hemophilia, MS, HepC, and other diseases that are treated with specialty drugs (often injectibles) are subject to several unique complexities in filling their prescriptions:

  • Potentially significant cost burdens
  • Limited locations at which to fill their medications
  • Prior authorization requirements
  • Scheduling complexities for delivery or home infusion or coordination with their physician’s office
But, there can also be another complexity called “limited distribution” which is where the manufacturer has only allowed the drug to be filled by a select list of pharmacies.  So, imagine the following situation:
  • You are a patient with multiple co-morbidities.
  • You have several chronic oral medications along with several specialty drugs that you have to fill.
  • You fill one of your chronic medications at retail since you forgot to refill it in time one month at mail and just haven’t gone back since the saving is minimal (as it’s a generic).
  • You have two other oral, chronic medications that you fill at mail order.
  • You fill two of your specialty medications at the preferred specialty pharmacy under your benefit (i.e., limited network).
  • You fill your last two specialty medications at two other specialty pharmacies since both of them are limited distribution products neither of which have contracts with the preferred specialty pharmacy in your network.
You now have to coordinate between five pharmacies.  What ever happened to people worrying about poly-pharmacy?  Is it an issue?
Now, this is important since complexity of therapy (# of drugs and # of pharmacies) appears to be a key factor influencing likelihood of adherence, but I never hear anyone worry about it anymore.
So, I ask…are the limited distribution deals which limit access to a specific specialty drug an undo burden on the patient or is the value of specialized care and monitoring more valuable to the patient?

Social Media A Fad? Infographic

I love infographics so I’m sharing this.  I personally don’t know anything that thinks social media is a fad.  I think there is lots of debate about its proper use in different types of businesses especially in patient care, but I think it’s proven it’s here to stay in some form.

No Plans To Split Up CVS Caremark

I’m glad to see Larry Merlo come out in the CVS Caremark earnings call and talk about them not splitting up the company (see Adam Fein’s post).  I’ve been talking about this for a while (see old post).  I think that they have the right combination of assets to do something really significant. 

They followed that up with a press release this morning:

Speaking at the Annual Meeting of Stockholders for the first time as CVS Caremark CEO, Merlo said, “The fact is no one else can match our combination of assets — a leading PBM, one of the largest retail pharmacy chains, a leading specialty pharmacy, a growing Medicare Part D business, and the largest and fastest-growing network of retail health clinics. CVS Caremark is using these combined assets to develop and implement innovative programs and offerings, such as Pharmacy Advisor and Maintenance Choice, which should drive long term value for shareholders.”

The rumors and stories of increased value of splitting the company up were getting to be too much noise.  Employees, clients, customers, investors, and everyone else needed them to come out and set the record straight.  Of course, anything can be debated and changed over time, but you need a clear direction.  I’m glad to see them stand up and reiterate their strategy and vision around creating a unique set of assets to derive unique value. 

[Disclosure: As I’ve shared before, CVS Caremark stock is one of a few individual stocks that I own.]

How To Improve Use Of A Preferred Pharmacy

One of the key questions from PBMs, pharmacies, specialty pharmacies, and payers is…
 

How can we drive utilization of a preferred channel (retail, mail order, specialty)?

 
I’ve worked on 15+ different “retail-to-mail” type programs (or even just 30-day to 90-day).  They typically follow a pretty standard profile:
  • Identify who to target
    • Plan design (does the member save?  the payer?)
    • Maintenance drugs
    • Categories (is titration an issue?)
  • Score individuals for prioritized outreach
    • Likelihood to convert (drug, prior experience, costs)
  • Create personalized messaging
    • What’s In It For Me (WIIFM) – cost, convenience
  • Create business rules
    • What’s the best channel?
    • What’s the best time to call or e-mail? 
  • Engage people and quickly transfer them to an agent who can answer their questions
    • How do I get started?
    • How much will I save?
    • Why should I do this?
    • Who are you?
  • Make the process easy…call or fax their provider and get a new prescription for the new pharmacy
  • Implement a process of continuous improvement
    • What works?
    • What could be better?
    • Are their differences within certain sub-segments?
    • How can I test and validate my assumptions?

At the end of the day, this approach can also be used for formulary support and many other programs.  The important things are:

  1. Engage the consumer in a dialogue about their options
  2. Be clear about the value of change
  3. Make the process easy
  4. Answer their questions

15 Things You Should Know About Prescription Non-Adherence

One question I frequently get is “what should I know about adherence”. This is then followed by “so what should I do about it”.

Here’s my starter list of what you need to understand about medication adherence.

  1. It’s a $290B problem.
  2. Patients fall off therapy quickly.
  3. There are a lot of reasons for non-adherence…it’s not just about reducing out of pocket spend. AND, to make it more complex, there are variations by gender, culture, medication, condition, trust, copay levels, etc.
  4. There are lots of predictors of non-adherence (old study, Express Scripts, Merck tool), but generally the best predictor is past behavior.
  5. Interventions can improve adherence (CVS Caremark study, Express Scripts study, Silverlink data). BUT, physicians generally don’t see non-adherence as an issue they can address. (see also White Coat adherence)
  6. Patients don’t think they’re non-adherent (see “Rx Adherence Hits The Ignorance Wall” by Forrester that says only 8% of people think they are regularly non-adherent).
  7. Adherence reduces total healthcare costs (CVS Caremark study, Sokol study).
  8. Communications matter (misperceptions, physician-patient gap, health literacy, what physicians tell patients).
  9. There are lots of cool technologies that will work for different people (talking bottles, monitoring devices, iPhone reminders, websites, pill boxes). BUT, improved labeling and bottle design may not be the answer (analysis of Target improvements).
  10. Starting on generics (or lower cost drugs) improves the probability of adherence.
  11. Pharmacist involvement is key and impactful (CVS Caremark study, Ashville).
  12. 90-day prescriptions lead to better medication possession ratio (Walgreens study, CVS Caremark study, Kaiser study, Express Scripts study).
  13. Complexity of therapy (e.g., number of prescriptions) increases the likelihood for non-adherence.
  14. Electronic prescribing gives us new visibility into primary adherence and should also create opportunities to improve this issue.
  15. It’s an area where everyone wins and there’s lots of research…but there’s no silver bullet.
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