Archive | June, 2011

Why Doesn’t The FDA Require Adherence Programs?

The one thing that kept jumping into my head while thinking about the FDA’s decision to require REMS programs is why they don’t require adherence programs.  They approve drugs based on clinical trials.  In the clinical trials, we see unreal adherence rates that are never duplicated in the real world.  If they saw the same adherence drop-off rates in the clinical trials, would they still approve the drugs?  I would venture a guess that the answer would be no because the outcomes would be much less. 

So, if drugs don’t work in people that don’t take them (as Dr. Koop would say), why do we have a bunch of drugs on the market that “don’t work”?  Wouldn’t the FDA want to address adherence of these ~9,800 drugs where 99% of the spend is and which have a huge impact (~$290B) on the healthcare costs of the US in addition to focusing on the ~120 drugs that have safety concerns that require REMS?

REMS: A Few Learnings

I just finished reading Assessing the Impact of Risk Evaluation and Mitigation Strategies (REMS) Requirements on the Pharmaceutical Supply Chain by the Center For Healthcare Supply Chain Research

If you don’t know what REMS is, here is the FDA page on REMS.  Essentially, they are programs that the manufacturer is required to provide to mitigate risks associated with certain drugs. 

This study does a good job of describing the REMS landscape and sharing some challenges and opportunities.  As someone who was less familiar with this than many of you in the industry, I found it a good foundational piece which got my mind thinking. 

Overall REMS can be required to include five distinct elements:

  1. A medication guide
  2. A communication plan to healthcare professionals
  3. An ETASU (Elements to Assure Safe Use)
  4. An implementation system
  5. A timetable for submission of assessments of the REMS (required in all cases)

“As part of the REMS submission to the FDA, a manufacturer also must show that the strategy elements will not unduly burden patient access (particularly where patients have life-threatening diseases or difficult access to healthcare providers of the drug).”

Definitely, that access issue is key.  These programs add time and hurdles which need to be seamlessly worked into the workflow for physicians and pharmacies and show improvement in outcomes or reduction in risk.  And, ideally that should happen with cost in mind. 

Given the infrequency that some generalists might have with some specialty products, this can create communication and compliance challenges.

For distributors, this creates both a burden but also a financial upside as they charge to manage and implement the REMS.  On the flipside, for physicians, this creates extra effort which isn’t reimbursed.  As the study broke out different perspectives from constituents in the process, this along with several others from providers caught my attention:

  • Do the REMS requirements hold the physician liable for safety?
  • Will the perception of risk impact the likelihood of the patient starting or continuing on therapy?

Certainly from a communications perspective, REMS have led to the buildout of “hubs” that provide services around these drugs in the areas of data management, patient counseling, call center, registry, and content management. 

The study estimates the economic impact of these programs on both the distributor and the provider (physician, nurse, and pharmacy).  For example, they estimate that a pharmacist at a specialty pharmacy spends 100-165 minutes per patient per month for those on drugs with a REMS requirement. 

They pose a question towards the end around generics and biologics which gets at the heart of the cost / benefit tradeoff for bringing a product to market which requires a REMS when part of your value proposition is a lower cost. 

Anyways, for those of you interested in the topic, it’s a good read. 

 

Discount Code For AIS Webinar: Drug Copay Cards

For those of you that are interested, here’s a link for a $30 discount on the AIS webinar that I’m doing with Sean Brandle from Segal Company on drug copay cards.  As a teaser, here’s results from one of the survey questions that I posed earlier (noting that the sample size was small, but likely indicative of the overall market).

Prior fMRI Research Would Say That New Smoking Labels Won’t Work

I talked about this briefly in my review of the book Buyology, but in the book, the author talks about an fMRI study that showed exactly the opposite.  Warning labels don’t discourage smoking.  Of course, the logical question is whether graphics have a different impact than words.  It would be interesting to test, but I wonder if the FDA even considered this study in their analysis.  And, if they did, did they not believe it?

Here’s the labels which definitely get your attention but is it like believing you’ll win the lottery…it won’t happen to me; I won’t get addicted; I’ll only smoke socially.

BTW – A quick search tells me that I’m not the only one skeptical of the labels.  Discovery magazine has a more thorough story on this.

Enchantment Infographics (by Guy Kawasaki)

I’ve had the privilege to hear Guy Kawasaki speak and have read a lot of the stuff he’s written over the years.  I haven’t read the new book Enchantment, but these infographics might get me to go out and do that.

I’d love to think about similar graphics which blend his work and the work of David Shore on trust in healthcare…how to you engage and build trust as a healthcare entity!

$5.2B In Savings From OTC And Patient Self-Diagnosis?

This is an interesting piece with some good data in it.  It estimates that 10% of physician visits are for minor healthcare items where an OTC (over-the-counter) drug could be used.  It then estimates that if 50% of those unnecessary visits were eliminated we could save $5.2B.  It will certainly get some political attention (which it already has).

I have a lot of questions:

  1. How does the patient know that their “ailment” is something to self-diagnose?
  2. Does self-diagnosis lead to new issues?
  3. What are the restrictions around OTCs versus Rx products?  [Look at Prilosec OTC which has labeling limiting it's long-term use versus the Rx product which could be viewed as a maintenance drug.]
  4. Were there other benefits to the patient and healthcare system of them visiting the physician?

On the other hand, if I were a clinic company (think MinuteClinic or TakeCare Clinic), this would be great.  It’s proposing to move 26M physician visits to another channel.  I think the research believes this all jumps to Dr. Google, but I think it’s more likely that this gets pushed to clinics (and hopefully not to ERs). 

Sleepiest States And More On Sleep Impact

The impact of sleep on health is an important topic. 

Let’s begin with a list of the sleepiest states from CDC/WebMD which I came across.  It reports the percentage of adults who report not getting enough sleep:

  • West Virginia – 19.3%
  • Tennessee – 14.8%
  • Kentucky – 14.4%
  • Oklahoma – 14.3%
  • Florida – 13.5%

Some of the facts that I took from the other article I was reading in Experience Life magazine (Dec 2010) were:

  • People between the age of 32-59 who only slept four hours were 73% more likely to be obese than those sleeping 7-9 hours…and those that slept only 6 hours were 23 more likely to become obese than those sleeping 6 hours.  (Columbia University)
  • The average sleep of Americans has fallen from almost 9 hours in 1960 to just over 6.5 hours in 2009.  (National Sleep Foundation)
  • Nearly 1/3 of the population gets less than 6 hours of sleep per night.

Sleep impacts weight because leptin decreases and ghrelin increases when you don’t have enough sleep (2004 study in the Annals of Internal Medicine).  These are both hormones that control hunger.  Leptin tells the brain when the body has had enough food and ghrelin indicates that our energy reserves are running low. 

 

Here We Go Again – WAG and ESRX Network Dispute

This morning Walgreen’s announced that it could not reach agreement with Express Scripts on their retail network contract. This is a big deal (for both parties) as Walgreens processes approximately 90M Rxs for Express Scripts or approximately $5.3B worth of Rxs.

This has definitely happened before (see CVS Caremark and Walgreens before), but this year’s dispute is different for a few reasons:

  1. CVS Caremark clearly had their own retail network to fall back on. Express Scripts wouldn’t likely partner up with CVS so they’d be pushed into creating limited networks and partnering with everyone except the two biggest retail chains (in so much as PBMs partner with retailers versus simply negotiate with them).
  2. Last year’s dispute seemed focused on Maintenance Choice while this year’s dispute seems focused on contract terms (from press release).
    1. Express Scripts insisted on being able to unilaterally define contract terms, including what does and does not constitute a brand and generic drug, which would have denied Walgreens the predictability necessary to reliably plan its business operations going forward.
    2. Express Scripts rejected Walgreens request to be informed in advance if Express Scripts intends to add or transfer a prescription drug plan to a different Express Scripts pharmacy network, and to provide patients with equal access to Walgreens retail pharmacies.
    3. Express Scripts proposed to cut reimbursement rates to unacceptable levels below the industry average cost to provide each prescription.

As with last year (and year’s prior), I believe this will get resolved, but it creates an arbitrage opportunity for all the PBMs except Express Scripts in the short-term. [In the short-term, Express Scripts gets hurt in the sales cycle with this distraction. If this played out, Walgreens would take the brunt of the real impact by losing significant script volume. Ultimately, it's a game of chicken with potential bad outcomes for all (as the picture indicates).]

My questions are:

  • These have been issues in contracting for a long time. Why now?
  • Why are these disputes with CVS Caremark and Express Scripts? What are Medco (or others) doing to avoid these issues?
  • Does Walgreens get these terms from other PBMs? Or, is Express Scripts able to get these terms from CVS and other large chains like Walmart?
  • Is this just a negotiating tactic which is to put public pressure out there? If so, it’s seemed to work in the past. Will it work again? [The UAW used to do this on a rotating basis to the big 3 auto makers. It worked well, but every once in a while they had to go on strike.]

I know one Wall Street analyst who is at Express Scripts tomorrow. That should be an interesting discussion.

If history is any indication, I would expect we’ll see an Express Scripts press release on their perspective by the end of the day.

Ultimately, the big question is whether something like this could be the final event to push the industry into limited / restricted networks (see Walmart post) and get it from the 5-10% of clients that use this today to a more meaningful number.

[FYI – As of right now, ESRX is down 1% and WAG is down almost 6%...buying opportunity?]

The Implication Of Personal Decisions On Health

I was reading Ralph Keeney’s article “Personal Decisions Are the Leading Cause of Death” over the weekend. It’s very interesting. He attributes 1M of the 2.4M deaths in 2000 in the US to personal decisions that we make. And, unfortunately, he says that retrospective analysis would suggest we’re on a bad trend line of increasingly being responsible for a greater percentage of our deaths.

The article points out that the fact that these are personal decisions makes this a manageable issue.

  1. We can engage consumers to take more responsibility for their healthcare.
  2. Improving decision making is less expensive and in some cases more effective than other options.

“A personal decision is a situation where an individual can make a choice between two or more alternatives.”

“A premature death resulting from a personal decision is defined to be one where an individual dies sooner than would have been the case if a different choice had been made.”

The premature deaths attributed to personal decisions in the article are:

  • Smoking
  • Weight
  • Alcoholic diseases
  • Accidents
  • Suicide
  • Unprotected sex
  • Homicide
  • Illicit drugs

If you go read the paper, you can see how he breaks down each of these areas.

What I also found very interesting was the breakdown of the percentage of deaths by age group that are attributable to personal decisions. [I honestly expected it to peak earlier, but I think the fact that 80% of the impact is from smoking and weight that it takes time to see that impact.]

“Take control of your own health. Studies show that at least two-thirds of cancer deaths can be prevented by not using tobacco products, maintaining a healthy weight, getting plenty of physical activity, eating health foods, and avoiding the midday sun and protecting the skin with a hat, shirt, and sunscreen.” (Quote from the American Cancer Association)

A key question is whether people feel responsible for their own health. A 2009 survey by Thomson Reuters showed that those with a higher education level had a much stronger sense of that ownership (71.2% for those with a college degree versus 47.5% for those with less than a high school education).

The article made me think of a few things:

Much like Silverlink Communications, many healthcare companies are very focused on consumer engagement. As this article points out, getting consumers to understand the impact of their decisions on their health may be a very effective way of reducing premature deaths. That should also reduce the burden of chronic conditions on our economy.

“Seven chronic diseases…have a total impact on the economy of $1.3 trillion annually. Of this amount, $1.1 trillion represents the cost of lost productivity.” (Milken Institute)

While we typically focus on throwing money or incentives at the issue, this may not always be the answer (see post on the book – Drive). There are many simple interventions to help address health literacy and help consumers understand the need to take action (see post on cured after the first fill). Creating personalized communications that address people’s barriers is a critical success factor for healthcare organizations. There are several critical success factors to consider:

  • Help consumers understand the need for the action (WIIFM)
  • Make it simple so they can fit it into their busy schedules
  • Coordinate with the physician
  • Address their fears
  • AND, be cognizant of cost and the burdens this can cause (see recent article on OOP spend for people with cancer)

Is The PBM A Fiduciary? I Don’t Think So.

I’m not a lawyer, but with the potential repealing of the Maine law regarding PBMs, it’s time to think about this question.

Here’s a definition from USLegal.com:

A fiduciary duty is an obligation to act in the best interest of another party. For instance, a corporation’s board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust’s beneficiaries, and an attorney has a fiduciary duty to a client.

A fiduciary obligation exists whenever the relationship with the client involves a special trust, confidence, and reliance on the fiduciary to exercise his discretion or expertise in acting for the client. The fiduciary must knowingly accept that trust and confidence to exercise his expertise and discretion to act on the client’s behalf.

Just looking at this definition, it raises a few eyebrows:

  1. Can the PBM be responsible to its shareholders and to the clients?
  2. Does the PBM act on behalf of the client?

The fiduciary relationship basically makes the PBM into a cost-plus model where profits and costs are know. There are already lots of transparency standards for clients to leverage in designing their PBM contracts.

I struggle to see a comparable fiduciary business relationship out there. Suggestions?

On the second point, the whole PBM model around benefit design and interventions has been set up as consultative where the PBM provides ideas and models for the payer to select from. They don’t get to chose what’s best for them. I’m not sure that the lobbyists for the original plan would want this. If I’m a PBM with a mail order pharmacy, I believe that this is the best model to save money, drive adherence, and avoid errors. So, as a fiduciary, wouldn’t I have to put in a mandatory mail program with mandatory generics lots of utilization management programs and a closed formulary? That’s what’s best financially in most (all cases).

I’m all in favor of disclosure of conflicts of interest. PBMs should explain how they make money to their clients so it’s clearly understood.

In this older post on another blog, a physician talks about physicians having some fiduciary responsibility, but I don’t think this goes far enough. If the physician has a fiduciary responsibility to the patient, wouldn’t they have to disclose their profit based on different choices:

  • If you choose this medication and fill it from my in-office dispensing, I make $X versus you choosing this other drug.
  • If you get this procedure done, I get a referral from my colleague plus I make $X on performing the surgery.

Of course, maybe the issue is that Maine (and others) have tried to use fiduciary to focus on the financial controls around the PBM business model instead of the business practices about helping payers understand their decisions (the legal breakdown on MDs seems more business focused):

  • This will affect X% of the population.
  • This will save you $X compared to your other options over here.
  • This will be a win-win for us because we make money as your GFR goes up.
  • We charge manufacturers an administrative fee for managing the rebate contracts and will keep that.

When the DC regulation around PBM fiduciary responsibility went to court, it was struck down. Will Maine finally end up in the same bucket? Will others follow?

I guess the question for people to ask is what has happened to Maine’s pharmacy costs in the past few years. Has there been an advantage (or disadvantage) to this law?

A Few Emergency Department Facts

I found this quick list of facts in HealthLeaders (May 2011) which I thought was worth sharing:

  • In 2008, 124.9M people visited an ER in the US.
  • More than 9 out of 10 ED visits were related to acute conditions.
  • Injuries comprised 1 in 4 ED visits for adults.
  • ED visits for people ages 65-74 have increased the most over the past decade and are projected to double from 2005 to 2013.
  • In 2007, 10% of the population under age 65 visited the ED for reasons that were considered non-urgent.
  • ED visits increased by nearly 22M between 1997-2007 (23% faster than the US population grew).

So, what’s the issue here:

  • Lack of access to care
  • Difficulty getting into a PCP or clinic during regular hours
  • A lack of understanding of how and when to use the ER
  • Increased anxiety about conditions
  • Putting off care until the last minute

Or, I guess the flipside of the coin is that this is ok. My impression has always been that the ER is overused and has lots of inappropriate use.

Forrester On Automated Customer Service

I was reading a report that Nuance commissioned a few years ago with Forrester Consulting about using automation for customer service. It’s worth a read (and publicly available here) if you work in the customer service space and get questions from your clients about automation versus agents. Here are a few things that caught my eye:

  • Consumers who use cell phones to call into customer service are relatively more interested in using automated telephone systems for customer service interactions. (Hint: You could probably reverse that logic also to say that they are most receptive to outbound IVR also.)
  • Consumers rate automated customer service higher than live agents for certain straightforward interactions (including Rx refills).
  • Once they engage with automation, 74% of consumers typically stick with the process.
  • 12% liked automation because of privacy and not having to divulge information to a person. (Something we’ve seen at Silverlink in multiple healthcare scenarios.)
  • 81% of people surveyed were interested in proactive notifications around healthcare via automation (e-mail, voice, SMS).
  • People prefer being steered to answers versus just being able to respond and have the system understand them. (i.e., give me a list of options)

Very interesting. It maps well to a lot of our best practices and how we consult with our clients in designing healthcare engagement strategies. (Of course, you have to make sure you use create engaging, personalized messaging in these channels to optimize success. Van Antwerp household is the same as Dear Resident to me…and if I have 5 drugs and 3 conditions, a generalized call to action won’t get much response.)

What I Learned In PharmaVOICE

I’ve been reading the magazine PharmaVOICE for the past year or so. I really enjoy it. I occasionally pull a few articles out.

I was reading the March 2011 version on the plane and found a ton of interesting information. I thought I would share some of the nuggets from it:

  • In 2010, 112M people (48% of US adults) were e-pharma consumers (individuals who went online to find pharma information). (Manhattan Research)
  • Fewer than 20% of consumers who go online for pharma information mistrust pharma websites (branded and unbranded).

“We found the degree to which consumers are open to online content from manufacturers surprising, considering the common perception that consumers are generally critical of pharma generated information.” (Manhattan Research Healthcare Marketing Analyst Maureen Malloy)

  • Top Prescribing-Driving Sites (Manhattan Research):
    • Levitra
    • Chantix
    • Cialis
    • Nexium
    • Yaz
    • Lyrica
    • NuvaRing
    • Symbicort
    • Viagra
    • Lunesta
  • Talk about how research is now “peer reviewed” via social media – original article.
  • Talk about the Sanofi-Aventis blog – Discuss Diabetes – which enables two-way conversations with patients in public.
  • Talk about how Merck is helping patients engage with consumers using online videos and checklists.
  • Talk about a text messaging service focused at teens and young adults for adherence – www.ireminder.com.
  • An interesting article by Ogilvy about 8 Health Engagement Zones and 7 things to keep in mind about public and individual communications:
    • Technology is not a panacea…it has to be adopted and incorporated into everyday behavior.
    • Information must be communicated and interpreted effectively to change behavior.
    • To cut through the “clutter”, information will increasingly be communicated via story-telling and visualization.
    • Technology will allow us to create the right message with the right tone in the right place at the right time. [or already does allow for this with the Silverlink Platform]
    • Health messaging will become personalized. [already happening]
    • Highly targeted, persistent, positive messaging will be needed to help overcome fear and embarrassment.
    • Although health is a serious matter, we don’t always have to take ourselves seriously when it comes to health communications. (e.g., gaming)
  • In the year ending Oct. 2010, $4.4B was spent on DTC advertising around pharmaceuticals.
    • Pharma 3.0 success will be “based not on how many drug units are sold, but on how well pharma’s market offerings improve health outcomes, putting patients and payers at the center of the model”.
    • Pharma investments in condition support tools – smartphone apps, websites, devices, and social media – was up 78%.
  • In a recent Harris poll, only 11% of respondents perceived the pharmaceutical industry as generally honest and trustworthy.
  • According to SDI, there’s been a shift in spending from 2007-2009:
    • 30% decrease in print
    • 32% increase in online activities targeting physicians
    • 29% decrease in magazine DTC advertising
    • 300% increase in internet advertising
  • Learned about a physician “hotlink” (my name) by AstraZeneca where they can connect with the AZ medical affairs team by a feature on their iPhone – formulary status, adverse event reporting, request samples, …
  • Similarly, learned about an “Ask Pfizer” button in Sermo.
  • According to the Manhattan Research’s ePharma Consumer v10.0 study – almost 3/4th of the people visiting pharma websites take a product related action afterwards. (That’s amazing!)

“When pharma is thought of as a health-services industry, the possibilities for growth in revenue, engagement, personalization, and freedom from pipeline dependency are almost endless.” (Paul Simms, eyeforpharma)

  • A list of manufacturers and what percentage of their portfolio is at risk in the next 3 years for patent expiration:
    • #1 Pfizer with $53.6B and 68% of their portfolio
    • #2 Lilly with $20.8B and 66% of their portfolio

“The industry has to address the consumer population across multiple channels with information that is timely, easy to understand, accurate, and actionable.” (Deborah Schnell, Health Advice Networks)

  • There was an article discussing a great question about whether “brand equity” exists after patent expiration.
  • There was talk about the shifting “customer” of pharma from the physician to the consumer and the formulary committee.
  • There were some statistics from a Tufts study on REMS where 75% of people thought the program needed a major overhaul.

I shared a lot here to make a point…this is a monthly magazine packed with interesting content. If you’re in this space, you should be reading it.

Will Copay Cards Doom Rebates?

Only 20% of the people I surveyed believe that copay card success could ultimately be the end to pharmaceutical rebates, but I think it’s a fascinating discussion topic.

If you’re a manufacturer, you have a finite budget to drive sales of your product. That budget can go to DTC advertising, market access (i.e., rebates), samples, copay cards, adherence programs, physician education, detail reps, and a few other areas.

The question of course is what do you get for your rebate dollar. Would I rather pay a $10 rebate to the PBM based on formulary status or would I rather offer a $10 “coupon” to the consumer to fill my drug?

This leads to a lot of questions:

  • What does formulary status gain you in terms of increased market share above national market share?
  • Could formulary status with Medicare / Medicaid get you trickle down effects that make you care less about formulary status within a plan or PBM?
  • Do copay cards work to gain new marketshare, get new starts, reduce primary adherence, reduce abandonment, or improve MPR?
  • Will your drug be affected utilization management programs?
  • Which builds better long-term brand equity?
  • Will health reform change anything in terms of the individual’s ability to access drugs (i.e., PBM of one)?
  • Which is more likely to influence a physician – formulary status or copay relief?
  • If there are less “me-too” drugs will the majority of relevant drugs be “on-formulary” due to clinical reasons so you can’t gain much?
  • How will personalized medicine impact the formulary concept in the long-term?

I’m in the middle of researching the topic of copay cards for my AIS webinar on July 13th. It has uncovered a few nuggets about changing PBM and manufacturer relationships, support for these programs, proof points, and other items I’ll share then.

Of course, if it became clear that these cards were being used for market access not for adherence and improving outcomes, that would put these two on a head-to-head collision course. Or, if these tools slow down the generic adoption curve post patent-expiration, that could also draw some attention across the industry. (I believe Lipitor will be a big test of this since the increased margin from generic Lipitor is already factored into the PBM valuations and impacting that would impact stock price which would be a big deal.)

Positive Germs And Their Long-Term Impact

I’ve always found this study of kids in the Philippines very interesting.  It focuses on the question of whether we oversanitize our kids and whether creating a lack of exposure to germs has any long-term effect.  It suggests that early encounters with bacteria and microbes may help build a stronger immune system.  Other studies have shown that lack of exposure to pathogens early in life can lead to asthma and allergies later.  I’m sure their is some line of how much exposure is good, but where is that line?

“In the U.S. we have this sort of hyper-sanitary culture, hyper-hygienic environment, with antibacterial soaps everywhere and cleaning products. And we might want to reconsider the application of some of those products,” said Northwestern University anthropologist Thomas McDade, lead author of the recently-published study.

“Now for the first time in the history of our species, our bodies are being deprived of exposure to those everyday germs because we live in such a sanitary environment,” McDade said.

This makes me think of a few stranges things I’ve seen recently.  The first was cicada ice cream.  If you don’t know what cicada’s are, they are these large, annoying bugs that come out occassionally. 

 

 

And yesterday, the guy at the “reptile party” that my son was at shared that he had just earned a Guinness Book Of World Records for holding a live scorpion in his mouth for 17 minutes and 17 seconds.  Why would someone even try to do that?

Walgreens Program For Splitting Fills Of Oral Oncolytics

Walgreens Specialty Pharmacy has a program for oral oncology drugs that saves clients between $2K-$4K PMPM based on a study released last year.  So, what do they do?

They split the monthly fill to make sure patients are getting their clinical assessments done midway through the regimen.  They were doing this for 3 drugs (Nexavar, Tarceva, and Sutent) for the first 3 months of therapy.  According to the study shared in the December 2010 Drug Benefit News publication, the program increased compliance from the 60% range to the 70% range. 

The program also includes monthly reports back to physicians.  It was supposed to expand at the beginning of the year.

As far as I know, this is a unique program.  I don’t know of others doing anything like this.

How Close Should Your Pharmacy Be?

The question of limited networks continues to be a hot topic with mandatory mail, Maintenance Choice, Restat’s Align, Humana / Walmart, and OptumRx’s new Value Network.  So, the core question is what are reasonable expectations for access. 

Most people look to the “TRICARE access standard” which the Department of Defense uses:

  • 90% of the members in an urban area must live within 2 miles of a pharmacy
  • 90% of members in a suburban area must live within 5 miles of a pharmacy
  • 70% of members in a rural area must live within 15 miles of a pharmacy

DAW Rxs Impacts Adherence

5% of the prescriptions analyzed by CVS Caremark in a study were DAW (or Dispense As Written).  Obviously, for SSBs (single-source brands) this doesn’t matter since there isn’t a chemically equivalent generic drug.  But, for MSBs (multi-source brands) this can make a difference since the patient is often required to pay significantly more based on either (a) the drug being on the 3rd tier or (b) the plan design requiring the patient to pay more for “chosing” the brand over the chemically equivalent generic.

I guess one easy answer would be to get rid of DAW, but there are NTI (narrow therapeutic index) drugs where DAW is much more  relevant or the rare consumer who has some allergy to the fillers in the generic. 

So, why does it matter?  It mattes because the researchers found that

“chronically ill patients just starting critical therapies were 50% to 60% less likely to fill prescriptions for expensive brand name drugs” (Drug Benefit News, 4/1/11)

Which PBMs Have Highest Mail Penetration? 2010 data

For the companies in the AIS Pharmacy Benefits Survey, the mail order penetration in Q1-2010 was 22.76%.  The top mail order pharmacies (based on percentage of overall adjusted Rxs) were:

  • Pequot Pharmaceutical Network at 76.79%
  • Maxor National Pharmacy Services Corporation at 48.40%
  • 4D Pharmacy Management Systems at 39.60%
  • Medco at 34.34%

If you look based on number of mail order Rxs:

  • Medco
  • Express Scripts
  • CVS Caremark
  • ACS

Overall, mail order usage has continued to decrease from its peak in 2006 of 18.83% of Rxs to 16.80% at the time of this survey last year.

400 Orphan Drugs In Development

A report from PhRMA looks at rare diseases and orphan drugs.

An orphan drug is a pharmaceutical agent developed to treat a disease that affects less than 200,000 people in the US.

While individually this may not seem like a big market, it is estimated that 25-30M Americans suffer from a rare disease.  And, developing therapies for these unique conditions can allow for price premiums. 

At the end of the document, they have some FAQs and suggest some websites.  Here’s one FAQ:

How can you find out about clinical research on rare diseases?

There’s a web site that was just set up a few years ago by the federal government. It’s called www.clinicaltrials.govIt’s important to remember “.gov” because there are some commercial sites that have similar names. Every research project receiving any money from the U.S. government must be listed on this site. It’s a requirement. You can type in the disease name and find all sorts of information about the studies, where they’re being conducted, what is needed to be eligible, and who to contact to learn more about participating. If you don’t have a computer, ask your local librarian to help you search on that web site.

$15 Compound Vs. $1,500 Injection – Price Gouging?

You don’t often get to see outrageous pricing examples like the one around KV Pharmaceutical’s Makena product.  Specialty pharmacies have been compounding and making a version called 17P for years.  17P sells for around $15 per shot and patients typically take 15-20 injections during pregnancy to help prevent pre-term birth. 

“As far as I know, most physicians are using the compounding pharmacies for 17P,” said Dr. George Saade, president of the Society for Maternal-Fetal Medicine. “If we feel there’s no extra advantage of a more costly treatment, then our obligation is to prescribe the less costly treatment … It’s not right to abuse the health care system by prescribing an astronomically more costly medicine when there’s no evidence that it’s better.”

KV Pharmaceuticals came out with a branded version of the compound to create easier access to the drug.  They initially priced it at $1,500 but had already dropped it to $590 per shot when an article with the above quote appeared at the beginning of May

For those of you less familiar with compounding, here’s a statement from an FDA study in 2006:

FDA regards traditional pharmacy compounding as the extemporaneous combining, mixing, or altering of ingredients by a pharmacist in response to a physician’s prescription to create a medication tailored to the specialized medical needs of an individual patient. Traditional compounding typically occurs when an FDA-approved drug is unavailable or a licensed health‑care provider decides that an FDA-approved drug is not appropriate for his or her patient’s medical needs.  By definition, pharmacy compounding involves making a new drug for which safety and efficacy have not been demonstrated with the kind of data that FDA requires to approve a new drug.  In virtually all cases, FDA regards compounded drugs as unapproved new drugs.

The unapproved status of compounded drugs notwithstanding, FDA has long recognized that traditional pharmacy compounding serves an important public health function.  FDA has historically exercised enforcement discretion and generally has not taken enforcement action against pharmacies engaged in traditional compounding.  Rather, FDA has directed its enforcement resources toward firms that manufacture large quantities of unapproved new drugs under the guise of traditional compounding, and whose compounding practices result in significant violations of the new drug, adulteration, or misbranding provisions of the FDCA.

Will managed care, managed medicaid, and PBMs aggressively limit the use of Makena or will they leave it to physicians?

CatalystRx Mobile Is “Health Entertainment”

I talked about this months ago after I saw Catalyst speak at a conference.  The mobile application is now fully deployed, and you can watch a video about it.  They describe it as health entertainment.

Here’s an example of their refill reminder:

(Note: In the spirit of disclosure, I do own some individual shares of Catalyst stock.)

“Disorder” Is A Dirty Word?

In the spirit of my “words matter” theme, I found it interesting that the military has stopped using the term “posttraumatic stress disorder” and changed it to “posttraumatic stress” arguing that “disorder” ‘unnecessarily stigmatizes soldier’s natural response to the emotional and violent experience of battle’. 

“I drop the d.  That word is a dirty word.”  General Peter Chiarelli, US Army (Time Magazine, 6/20/11)

Healthcare Lessons From Car Shopping

Someone in the past month used a car analogy for healthcare reform. They were pointing out that you can’t have it all. You’re not going to find the most comfortable car with the best radio that gets great gas mileage and is reasonably priced. Their point was that that is what we’re looking for in healthcare reform.

Then, Ford came out with its press release around working with Welldoc to develop an allergy and diabetes solution that integrates with its SYNC platform in the car. It’s definitely intriguing. I get the allergy part, but I’m not sure I see monitoring diabetes while driving. It will be interesting to see where this goes.

Now, I’ve been out car shopping and learned a few things. First, it’s important to say that I’ve never really car shopped. We’ve bought Ford cars from the same dealer for the past 20 years. After the first time, I simply faxed him a request and told him to call me when it was on the lot for me to drive. Since we buy under the employee plan, there’s no negotiating.

My guy retired so I decided this was a good time for me to shop around (as my car just passed 100,000 miles). It’s been an experience which (as always) I can translate to healthcare.

  1. Overwhelming – At one place, the sales person talked the entire time and just kept showing me options. The technology was too overwhelming and distracting while I drove. To me, this is how I am sure many patients feel when presented with too much data to make a decision.
  2. Focusing on the wrong information – At almost every dealership (5 so far), no one has asked me what matters to me and how I will make a decision. They want to talk to me about their features. One guy actually showed me how clean the repair garage was as if that was a reason to buy a car from them. Again, I am sure many patients want different information then they receive in the process. Ideally, we would understand how they evaluate information and present it in that way.
  3. Not taking you seriously – At another dealership, they passed me off on the 22-year old kid in the corner as a lead. He knew very little about the car that I was interested in. He couldn’t even pronounce the car color. I know sometimes people write off the obese patient as someone that won’t ever change which is something we have to be careful of as part of the care team. It also reinforced the point of trying to match providers and patients which is a difficult and whole other discussion.
  4. Not considering the entire family – At another dealership, the salesperson almost yelled at my son when he touched the electronics and again when he sat on the edge of the seat. I immediately wondered how the car would hold up over time if it was going to break in 5 minutes of him touching it. This reminded me of going to a provider’s office or hospital and the importance of the staff and how they engage the patient and family.
  5. Not giving you time to evaluate options – At another dealership, the guy actually asked what it would take for me to buy the car today. I was immediately put off. Everyone else wanted me to come back and drive it again or encouraged me to do some research. When we present information to consumers, are we giving them enough information and opportunities to weigh their options?

Why do I tell this story? Because I think the consumer experience in healthcare is complex. We need to think about where it breaks down. We need to think about the entire family. We need to think about the physical facilities. We need to think about how information is presented and consumed. This car shopping process has reinforced that for me.

Infographic: The Cost of Care

Here’s another great infographic on healthcare premiums and the cost of care.

 

Source – Carrington College

Domestic Medical Tourism and Telemedicine

The idea that local healthcare in a physical setting doesn’t work seems to be the crux of many solutions for leveraging limited resources (MDs) and addressing the geographical pricing differences which exist.  Given what we know about engagement and the value of the physical and personal relationship, there should be a better way.

BUT, without trying to solve for that…I thought I would share a few things that I recently saw.

BridgeHealth Medical is a Colorado based company that is focused on domestic medial tourism.  We’ve all heard about international medical tourism (i.e., flying someone to India for a surgery) and the savings there.  The key (and interesting) question is whether there is some middle ground within the US. 

At least according to the brief story I read in Inc. Magazine, they are getting some traction:

  • 40% savings on a total knee replacement
  • 22% savings on a spinal fusion surgery
  • 13% savings on a prostate surgery

I was amazed that the article said that Americans spend $2.1B outside the US today.  Will this replace that or will it be a new category of spend to track?

And, it will be interesting to track outcomes here and see whether savings translates to better survival rates or improved quality of life.  There will be challenges to the model as I’m sure there have been for international medical tourism.

Cisco on the other hand has rolled out their telemedicine initiative called HealthPresence which uses videoconferencing and high-tech medical equipment to share data.  Obviously, telemedicine has been a tool that’s been tried several times over the years with varying levels of success.  Can Cisco’s efforts and model finally push this from a fringe technology approach to mainstream? 

It’s certainly possible.  Timing may be right.  We’ve seen some success with AmericanWell’s efforts.  The question is how will the consumer respond.  Will they appreciate the easier access?  Will it impact the caregiver / patient relationship? 

Who knows…there is still a lot to learn especially in a country where we’ve been traditionally over-served with our access to healthcare.

Medco Follow-up On Questions RE: 2011 Drug Trend Report

In my post a few weeks ago, I had four questions which my initial read of Medco’s Drug Trend Report had generated. I just got the answers to them…

Q: 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? 

A: The proposed changes to the diagnostic criteria for ADHD / ADD in the DSM-V include changing the age of onset limit (on or before age 12, instead of age 7) and lowering the required number of symptoms which effectively will “loosen” the criteria and permit doctors to more easily diagnose the condition. If this indeed takes place, we would expect some further acceleration of the ongoing upward trend in ADHD drug use.

Q: 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?  

A: Medco believes the best way to manage costs for both patients and payors is through the use of clinical and managed care programs that incentify the use of lower cost alternatives when clinically appropriate.  

Q: 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? 

A: Because the prevalence in the pediatric category is so much lower than that of the adult population utilization/prevalence can trend higher than adults, but spend could be down, especially since there is much heavier use of specialty medications in the adult population. It’s a trend versus spend look.

Q: 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? 

A: The industry is awaiting the final FDA guidance for approval and possible interchangeability of biosimilars. The estimates are that biosimilar will be priced in the range of 15% to 30% of branded product pricing. And as with generics, it is anticipated as biosimilars become increasing more accepted and completion begins within the biosimilar market itself, saving may increase overtime. 

Up To 200,000 MDs Require eRx Exemption From CMS

Electronic prescribing has been an effort for at least the past decade and significant progress has been made (see Surescripts latest report). That being said, we all know that changing behavior in the office setting is difficult. It has been the bane of many a technology vendor in the healthcare space.

On the one hand, I’m not surprised to see that lots of physicians might apply for an exemption from CMS around electronic prescribing.

BUT, I was surprised by several things in this article:

  1. Some physicians simply used electronic prescribing to write the 10 scripts required and then turned it off.
  2. The fact that there could be so many doctors that fit the approved exemptions.

The exemptions are for physicians who:

  1. Practice in an area with limited high speed Internet access.
  2. Work in an area where a limited number of pharmacies accept electronic prescriptions.
  3. Cannot prescribe enough drug orders electronically due to local, state, or federal laws (e.g., controlled substances).
  4. Have limited prescribing activity. [but yet still see a lot of Medicare members]
  5. Have insufficient opportunities to report the e-prescribing measures because of their patient type.

I didn’t think that could get you to 200,000 physicians (who were actively working with Medicare patients). The one that seems most feasible is for physician who register to participate in the Medicare or Medicaid EMR incentive program AND both adopt and use the technology by the 2011 deadline. They can also get exemptions.

Physicians care because they have to:

  • Prescribe electronically 10 times before June 30th to avoid a 1% penalty on all Medicare payments in 2012 or
  • Prescribe more than 25 times before Dec 31st to earn a 1% bonus in 2012.

Depending on your patient base, this seems like a pretty good business case to at least get a system in; write for 26 prescriptions; and collect your bonus.

Less Likely To Take Your Statin After Surgery

A recent study looked at people who were hospitalized for heart disease. It then tracked people’s use of statin medications (e.g., Lipitor) for the next year and looked at their adherence based on whether they had surgery or were simply discharged with a prescription.

SURPRISE – 70% of people who had surgery stayed on their statins for a year while 79% of those who didn’t have surgery stayed adherent. (thanks to Box Cutters for sharing this)

This begs a whole lot of questions:

  • How did they get the people to be so adherent in the first place? (this seems higher than the national statistics)
  • Did the surgery patients feel like they were “cured”? (see post on similar issue)
  • Was the statistical difference true at a location or prescriber level also? (i.e., was it simply that some locations or prescribers always wrote a script and talked about adherence or was it really a patient difference?)
  • Were the patients who had surgery sicker to begin with and therefore on more medications (which would reduce their likelihood of being adherent)?

On the other hand, this is perhaps another warning flag on the whole hospital readmissions issue where we have to address issues of health literacy, follow-up, discharge process, support network, and medication reconciliation.

New Moran Bill Uses Legislation As Business Model

The Moran bill in Kansas is another example of localized politics for independent pharmacies trying to legislate competition rather than find ways to differentiate their business.  I’ve talked about this before in:

This is focused (I believe) on the whole issue of limited networks and preferred networks as you can see from the NCPA letter about Maintenance Choice.  They throw everything but the kitchen sink at this model…why?  Because it works.  Maintenance Choice is saving consumers money and payers money.  And, it’s moving market share to CVS stores

This is the future.  This is what Walmart is focused on.  This is what Restat is focused on.  OptumRx (Prescription Solutions) just launched their limited network.  Humana is leveraging this in Medicare with Walmart

At the end of the day, isn’t it the payer’s option to decide how to design a benefit plan to offers a clinically effective solution at the lowest cost posible? 

Given that there are way too many pharmacies in the US today, someone (unfortunately) has to lose.  That is reality.  Based on the fact that there are more than 5x as many pharmacies as McDonalds in the US, we’re saturated.

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