Enabling Healthy Decisions

My PCMA Presentation On Copay Cards

February 8, 2012 by George Van Antwerp 1 Comment

I’m giving my PCMA presentation in FL right now about copay cards. For those of you that can’t attend, here is my executive summary and a copy of some slides. (My actual slide deck was shorter for presentation but this gives more data to those of you looking online.)

I focused on three key points:

Copay cards are a direct threat to the PBM model. They can run against the idea of copay differentials and formulary tiers. Since they’re not allowed at mail order, they create a disconnect there. And, eventually, I believe they will be in conflict with rebates (i.e., why pay for both).
The cost numbers to the payer are huge ($32B according to Visante) although this is less than $1 per Rx over that 10 year time period. But, it’s concentrated on 3% of all scripts which makes it a big deal.
There should be a win-win IF they are concentrated on specialty medications with a link to improved adherence and health outcomes.

There doesn’t seem to be clear data (although another article says it is available) but the general data shows that availability and use of copay cards is growing rapidly.

Investing in copay cards seems to be based on four myths:

Cost is a large issue in non-adherence. It’s an issue but not the dominant issue.
Costs will influence physician choice. The reality is that they don’t know the costs and see this as a pharmacist issue.
Copay cards are a cost effective way to improve adherence. They get about a 10% improvement in MPR which sometimes produces a positive ROI. There are much lower cost ways to get a similar improvement.
Copay cards can delay conversion to generics. This is still in the air with the Pfizer Lipitor program, but if it works, it will be a lightning rod for PBMs and payers to focus on.

This topic’s not going away. For now, the easy PBM response is to close down the formulary, move more scripts to mail, and implement prior authorization programs. I would expect this will happen more often unless there is more transparency here around what’s happening and the benefits.

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Reading Labels; Understanding Side Effects

February 8, 2012 by George Van Antwerp 0 Comments

We all know people don’t read labels on their medications or their over-the-counter (OTC) pills. If they did, their eyes would gloss over, and they would start to worry about all the side effects. Of course, this is a problem since some things can create drug-drug interactions or create an overdose.

I was reading an article in USA Today called “Read the labels because ‘all drugs have side effects’“. It lists out Tylenol, Advil, Motrin, Benadryl, Claritin, and Zantac as examples of OTC medications with overdose risks. It gives more details on these and provides several other examples. Here’s a quote from the article:

“It’s important for the public to realize that all drugs have side effects. It doesn’t matter if they’re prescription, over-the-counter, herbals or nutritional supplements. If they have active ingredients, they have side effects and can interfere with normal body functions.” Brian Strom, director of the Center for Clinical Epidemiology and Biostatistics and the University of Pennsylvania

The reality is that we’re making an unconscious choice about tradeoffs. Do the risks and probabilities of the side effects outweigh the probabilities of improvement? Of course, in many situations, they do.

I think this points to several things:

Document everything you take whether it’s an Rx, OTC, herbal, or supplement.
Read labels.
Tell your MD and Pharmacist what your taking especially if it’s regular and long-term.

Ideally, once we have broad use of PHRs (personal health records) which are tied into our grocery bills to track purchases and use then computer algorithms can look for risk factors. And, with personalized medicine, we might one day know which things to avoid based on our genes.

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90 Day Rxs Get Better Adherence

February 5, 2012 by George Van Antwerp 3 Comments

I think we can all agree now that 90-day prescriptions are correlated with better adherence (and the percentage of retail 90-day scripts is going up). The latest study here is from Walgreens.

A new Walgreens study analyzing relative medication adherence of patients filling 90-day supplies of maintenance medications using retail and mail order channels over a one-year period concluded that patients who fill prescriptions via retail have as high or slightly higher adherence levels than those utilizing mail (77 percent vs. 76 percent). The study, “Medication Adherence for 90-Day Quantities of Medication Dispensed Through Retail and Mail Order Pharmacies,” was recently released in the November issue of The American Journal of Managed Care.

This reflects other studies from CVS Caremark, Express Scripts, Kaiser, and BCBSNC. (Although sometimes it shows mail order as better and sometimes retail.)

Of course, the data is slightly different in either case, but the general consensus is the same. So, the question is what’s next. How should you compare the two channels?

Generic fill rate
Overall health literacy and health outcomes
Patient experience / satisfaction
Payer cost
Cost to fill

This issue won’t go away so it’s going to be important to continue to find ways to compare the channels and find populations that are similar for comparison or remove the bias.

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Medicare Enrollment Up 1.2M (9.5%) in 2012

February 2, 2012 by George Van Antwerp 0 Comments

Based on new data from CMS as shared by CSFB in a report, the enrollment in Medicare Advantage through January 12th is up 1.2M to 13.3M. This is 27% penetration into the Medicare market. PDP enrollment was up to 19.69M a similar gain of 1.2M.

A quick summary of the big winners are:

For Medicare Advantage (by percentage)
- Humana +13.5%
- Amerigroup +13.3%
- Coventry +12.2%
For Medicare Advantage (by membership)
- Humana +262K
- United +132K
- Aetna +35K
For PDP (by percentage)
- Coventry +25.3%
- Cigna +14.8%
- Humana +12.3%
For PDP (by membership)
- Humana +312K
- Coventry +291K
- Cigna +80K

This is also interesting in light of Kermit Crawford (CEO of Walgreens) comment yesterday:

“Based on our preliminary analysis of the Centers for Medicare and Medicaid Services (CMS) data, Medicare Part D plans with Walgreens in their network gained market share in the aggregate, while those without Walgreens lost market share. Importantly, we were very pleased to see that those plans that included Walgreens grew nearly twice as fast as those Medicare Part D plans without Walgreens. In fact, several health plans that partnered with Walgreens grew significantly faster. For example, Coventry, who partnered with Walgreens and introduced a low cost Medicare Part D option, grew five times faster than the overall market.”

The one obvious account that he’s talking about is Wellpoint which lost 2,000 (0.3%) members in MA and 73,000 (11.6%) members in PDP.

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Uping The RxAnte: An Adherence Predictive Model

January 30, 2012 by George Van Antwerp 0 Comments

Those of you that have heard me speak know that I look at this topic of predicting adherence both from an area of fascination along with the eye of a skeptic. While I love the concept of predicting someone’s adherence and therefore determining how to best support them from an intervention approach, I also believe that the general predictors are pretty straightforward:

Number of medications
Plan design (i.e., cost)
Gender
Health literacy and engagement (see PAM score research)

And, this is a hot topic (see post on FICO adherence score). You can see my prior posts on some different studies, on the Merck Estimator, and some notes from the NEHI event on this topic. It generated a good dialogue on Kevin MD’s blog when I talked about paying MD for adherence.

I had a chance to talk with Josh Benner the CEO of RxAnte the other day. It sounds very interesting, and they have an impressive team assembled. In general, they’re focused on:

Predictive modeling
Decision rules
Monitoring and managing claims to track adherence
Evaluating effectiveness of interventions
And creating a learning system

There are definitely some correlations to the work we do at Silverlink Communications around adherence. We’re helping clients determine a communication strategy that might include call center agents, direct mail, automated calls, e-mail, SMS, mobile, or web solutions. We’re looking at segmentation and prioritization. We’re looking at past behavior and messaging. The goal is how to best spend resources to drive health outcomes from primary adherence to sustaining adherence. This is a challenge, and we all need to build upon the work that each other is doing to improve in this area. We have a huge problem globally with adherence.

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Why Use Facial Recognition Software At The Pharmacy…Retention?

January 23, 2012 by George Van Antwerp 0 Comments

I’m sure this is a little bit out there in terms of some of my ideas, but I like it. While a little Orwellian, I was talking with a retailer the other day about how to maximize the experience at the counter between the patient and the pharmacist. At a small independent pharmacy, the owner (pharmacist) probably knows a lot of this patients (customers) by name. On the other hand, this is a lot harder at the larger chains which are busier and with multiple pharmacists working different shifts.

I was thinking about how technology could address this. What if you had a camera that was monitoring customers as they came in the store (which most probably have today in terms of security cameras)? Could that be augmented by adding facial recognition software (which I have no idea how expensive it is)? Then, the pharmacy could know that George was in the store and tap into a CRM system that could remind Nancy the pharmacist that I have a dog and a fear of needles (for example). When I got to the counter, Nancy could greet me by name and ask about my dog. It would certainly make me feel welcome and should create some stickiness (although maybe less if I knew it was technology enabled).

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Pharmacy Needs A Neuromarketing Study

January 23, 2012 by George Van Antwerp 0 Comments

I was reading this article in Fast Company about neuromarketing with a focus on the CEO of NeuroFocus. Companies like PepsiCo, Intel, CBS, ESPN, and eBay have used them and many others are trying work in this area. But, I’ve never heard of a healthcare company doing anything in this space. I’ve talked about this before in my article about the book Buyology. It’s fascinating, and the mobile tool that NeuroFocus has created could create new ways of capturing data.

One interesting example he talked about was the expression of a person on a poster (for example). If the expression is too easy to decipher, we simply move on…BUT if it’s hard to decipher, it causes us to pause and think.

He also talks about always putting images on the left hand side of the screen and words on the right. (Seems applicable to direct mail and maybe my next slide presentation.)

Another example is that the brain loves curves not sharp edges.

Given the shifting pharmacy marketplace, I would think this is a study that the industry needs. The PBMs should better understand what the consumer thinks about when they hear the word mail order. Manufacturers should understand the reaction to brand names or copay cards. The retailers should think about how brand equity plays into choice. There are endless opportunities here. (A business opportunity perhaps!)

(They Have Hacked Your Brain by Adam Penenberg)

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Adam Fein From Last Year’s PCMA Event On Copay Cards

January 16, 2012 by George Van Antwerp 1 Comment

Just revisiting what Adam Fein talked about last year as I work on my slides for this year.

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Walgreens Interview As Follow-up To Their White Paper

January 16, 2012 by George Van Antwerp 0 Comments

As anyone who follows the pharmacy industry knows (and now millions of consumers), Walgreens and Express Scripts have had an ongoing contract dispute since mid-2011. Most of us expected this to get resolved by the end of the year to minimize patient disruption, but it didn’t.

With that in mind, Walgreens has published several white papers to help articulate the results of their employer survey data and to help plans quantify the value of keeping Walgreens in the network. As this is a fascinating case study that will someday make a great Harvard case study, I reached out to Walgreens to get their thoughts on a few points.

Thanks to their PR team, I was able to get responses from Michael Polzin, their VP of Corporate Communications, to my questions.

Consumers are always resistant to change. After the initial disruption and assuming you eventually reach terms with Express Scripts, how will you get your consumers to return to Walgreens’ pharmacy? Is the retail pharmacy experience able to be significantly differentiated? How are you doing this today?

As we’ve previously stated, we are now moving on without being part of the Express Scripts network. While we are open to any fair and competitive offer from them, we also are fine with continuing to operate our business without Express Scripts.

We intend to retain patients affected by this situation over time by reaching out on both a consumer level and a business-to-business level. To date, more than 120 health plans, employers and other Express Scripts clients have informed us that they have either changed pharmacy benefit managers (PBMs) or taken steps consistent with their contracts to maintain access to Walgreens pharmacies in 2012. That represents 10 million of the 88 million Express Scripts prescriptions we filled last year. We’re also in active negotiations with many health plans and employers to provide access to Walgreens in their networks as soon as their contracts allow. In addition to those 10 million prescriptions already retained, we also expect to retain many Medicare Part D patients who previously were in an Express Scripts-managed Part D plan and moved to a different plan during last fall’s open enrollment period. We will get more detail on those numbers when CMS announces the results of the open enrollment period later this month.

On the consumer level, they are very receptive to looking at options to continue using Walgreens pharmacies whenever possible. They want to retain their choice of pharmacy and are exercising that ability as best they can. For example, we’ve had great response this month with our Prescription Savings Club (PSC) promotion. The PSC offers savings on more than 8,000 brand name and all generic medications. During the month of January, you can get an annual membership in this program for just $5 ($10 for a family). We have seen more than 250,000 patients sign up for the club just since Jan. 1, and we continue to have record sign-up days. The interest we’ve seen in the club has been extraordinary.

As for differentiating the retail pharmacy experience, that is exactly what we are doing through our new Well Experience store format, which has piloted so far in about 20 Chicago area stores and the entire Indianapolis market. The pharmacy, health and wellness area of these stores are truly a game changer. The pharmacist is more accessible by bringing them out from behind the pharmacy counter to a desk in front of the pharmacy. As a result, patient interactions are higher than our pharmacists have ever experienced. The format also allows for tighter integration between our Take Care Clinic nurse practitioners and pharmacists to create a real community health corner.

We’ve had many CEOs of major health plans and large employers tour these Well Experience stores, and their No. 1 comment is, “This is exactly what we need. How fast can you make this happen?”

The white papers are good summaries for the consultants. How are you taking your message to other constituents – consumers, MDs, Wall Street?

Our best ambassadors to consumers are our pharmacy staffs. They are the ones with the trusted relationship with our customers and are able to have individual, face-to-face conversations with them. They’ve done a tremendous job educating our patients, and that’s why we’re seeing so much interest in the PSC and have patients finding other ways to continue using Walgreens, such as using their spouse’s coverage, if available.

The same is true with physicians. Our pharmacy staff work with them every day and help them find the best options for their patients including generic alternatives that can be very competitive through the PSC card with a 90-day supply compared with the patient’s program under Express Scripts.

As for Wall Street, we’ve been quite active speaking at analyst conferences, addressing the issue on our earnings conference calls and at our recent annual shareholders meeting. The analysts also have found our white papers and other SEC filings to be helpful in understanding the situation.

Ultimately, payers/employers care about cost. If a PBM creates savings for them thru a limited network, can you summarize what they lose by not including Walgreens and how that transfers to hard dollar savings? Are Walgreens consumers more engaged with their health? Are they more satisfied with their healthcare?

Our research demonstrates the importance of Walgreens presence in a payers’ network in addition to the cost factor. A Walgreens proprietary survey conducted in December of 823 executives and managers who are key decision makers for pharmacy benefit decisions or provide input found that 82 percent of employers said that they would not exclude Walgreens for less than 5 percent savings on their total pharmacy spend. Sixty percent of employers would not exclude Walgreens for less than 10 percent savings, and 21 percent would not exclude Walgreens from their network regardless of the amount of savings. These findings on employer attitudes are consistent with recent research published by several leading equity research analysts. Clearly, employers value having Walgreens as a pharmacy option for their employees, but Express Scripts wants to take that choice away.

Now, add to that the small variation in costs among pharmacies. We believe that the vast majority of pharmacies, including Walgreens, receive reimbursements per prescription that fall within a narrow band, typically within less than 5 percent of one another. Therefore, excluding any pharmacy with our 20 percent market share from a 5 percent pricing band can only result in savings on the order of 1 percent or less. And that doesn’t take into consideration the additional savings Walgreens can provide through our leading generic dispensing rate or the 7 percent savings that payers can see by adding a 90-day refill option at our retail pharmacies.

It’s also important to point out that during negotiations, Walgreens offered to hold rates for a new contract flat and did not seek an increase in rates. The response from Express Scripts was to insist on being able to unilaterally define contract terms, such as what does and does not constitute a brand and generic drug. Express Scripts also proposed to slash Walgreens reimbursement rates to levels below the industry average cost to provide each prescription.

Walgreens is focused on helping payers with their total health care spend, not just the 10-12 percent of their health care costs that are spent on prescription drugs. While a patient with asthma can lower drug spend by not getting refills on their medication, the resulting emergency room visit that could result will be much more expensive overall for the payer. So we are focused on expanding the pharmacist’s role among health care providers to lower overall medical costs rather than focusing on drug spend alone.

Adherence is a big issue these days especially in Medicare where it is one of the key Star measures for PDP. One of the key value points in the paper is about adherence. How has Walgreens improved patient adherence and are you collaborating with payers to do this?

Walgreens pharmacies provide many medication adherence services, counseling and other assistance that lowers medical costs by improving outcomes. These include monthly adherence calls to inform patients about critical upcoming blood tests that are required to continue therapy; next-day home delivery for medications; assistance programs to help patients minimize risk resulting from economic circumstances that may negatively impact therapy compliance; and alerts for missed doses, at-risk patient behavior or serious adverse side effects that are communicated to a prescribing physician. We also offer 90-day supplies of medication, further promoting adherence. Walgreens pharmacists have consistently demonstrated increased adherence to chronic medicines for high-risk conditions for the populations that we serve. For example, for patients in one study who filled their statin and thyroid medications at community pharmacies and who consulted with a pharmacist, a significant improvement in first refill rates resulted (from 55.7 percent to 70.4 percent) after the adherence program was implemented.

While CVS has opted to own a PBM, Walgreens has sold their PBM. Has this experience with Express Scripts changed the way you interact and contract with PBMs? Do you think this will have broader implications on the industry?

I think it has helped us tremendously in terms of building closer relationships with other PBMs and payers. We’re moving forward with partners such as Catalyst Rx, Prime Therapeutics and SXC Health Solutions, and health plans such as Coventry and Humana. All of us see this as an opportunity to create a differentiated offering during the upcoming selling season.

Have any PBMs stepped up to work more strategically with you to create a differentiated offering to take advantage of this disruption during the 2012 selling season?

See answer above.

What’s next? As Walgreens looks to the future and focuses on creating new value, how are you embracing key changes in the industry around health reform and technology innovation?

See question 1 and our development of the Well Experience store and pharmacy format.

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Speaking at the upcoming PCMA Event

January 14, 2012 by George Van Antwerp 0 Comments

I just got added to the agenda for the February PCMA event so look me up if you’ll be there. I’ve spoken on the topic of copay cards a few times for AIS in the past. Since then, there have been a few significant events:

The Pfizer Lipitor strategy and push around a copay card.
The PCMA study on the impact of copay cards.
CVS Caremark’s changes to their formulary of which some were attributed to the existence of copay cards.

As always, I welcome comments, articles, suggestions, or data to support this discussion. It is certainly one where there is limited data or facts. Thanks.

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“Twight” (Twitter Fight) Between $ESRX and $WAG

January 13, 2012 by George Van Antwerp 0 Comments

This is either a massive validation of the perceived value of Twitter or a crazy distraction, but either way, it’s interesting to those of us who study the industry and/or study marketing and communications.

As part of the ongoing dispute between Walgreens and Express Scripts, Twitter has become one of the latest tools. (see June post and September post) In an effort to sway public opinion and thereby pressure Express Scripts and its clients, Walgreens turned to bloggers and Twitter to push their messaging…but these were in some case paid comments which was surprising. They already have strong messaging in their IChooseWalgreens website and whitepapers on the Value of Walgreens. I also thought they were demonstrating some success in converting people to their discount program which was part of their overall growth strategy shared at their shareholders meeting.

After Walgreens (with almost 84,000 followers) created a promoted hashtag of #ILoveWalgreens, Express Scripts (with 1,645 followers) countered back with several Tweets about the dispute (see below). I guess the question is whether with millions affected and decisions made by the businesses and not consumers…does this forum matter? But, journalists and analysts follow them so it’s important to keep the messaging up. (Other articles on this are here, here, and here.)

Conveniently, I found this infographic on how Twitter is changing healthcare. At the same time, this is an interesting fight because it’s a blend of B2C and B2B crossing paths. More to come since I’m sure this fight is long from over.

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Presenting at PBMI in February

January 6, 2012 by George Van Antwerp 0 Comments

I am excited about the opportunity to present at PBMI in February. I hope many of you will be there. If you want to meet up, send me a quick note at gvanantwerp at mac dot com. Thanks.

Here’s the description of my presentation:

The PBM industry continues to consolidate through mergers and acquisitions. At the same time, new PBMs and niche PBMs continue to grow. While the majority of the green space is gone, there is increasing focus on the individual market through exchanges and the Managed Medicaid market. But, this maturing of the market has forced PBMs to look at more organic growth opportunities also. How do you retain business? How do you innovate? How can you increase profitability per member? With a few large market dynamics playing out in 2012, we’ll begin to look at what the future might hold and what we can learn from the past. It is an interesting time for all PBMs, pharmacies, and manufacturers as they embrace the role of pharmacy in improving overall health outcomes.

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PBMs As A Short-Term Story…I’m Doubtful

January 6, 2012 by George Van Antwerp 0 Comments

While I certainly think the PBM market is going to evolve with increased use of generics, the Express Scripts acquisition of Medco, and the growth in specialty pharmacy, I have to disagree with Matthew Herper from Forbes and Richard Evans of Sovereign & Sector who talk about them as a short-term solution that will struggle (see point 5 in this article).

I think Mark Merritt from PCMA did a nice job of talking about this when I interviewed him last year about how PBMs have continued to change and will continue to evolve over time. I also think that Per Lofberg’s comments from earlier today reflect this. There is still a lot of opportunity around specialty spend. Certainly, the market dynamics put pressure on the traditional margin areas of generics and mail order for oral solids, but these companies are here to stay and I believe valuations will stabilize even if not at the highs of 5 years ago.

And, while in general specialty management has been a stagnant space for innovation over the past 5 years, I expect that to change. I think we’ll see more collaboration with manufacturers both around REMS programs and outcomes-based contracting. I think we’ll see continued evolution in the area of genetic testing and clinical support. I think we’ll see the traditional utilization management programs and formulary management programs show value with the growth of competitive products and bio-similars. I also believe that understanding how to help patients manage their condition and start to take a broader role in overall condition management will and should create PBM opportunities.

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Interview with Per Lofberg (CVS Caremark) on the Future of the PBM

January 6, 2012 by George Van Antwerp 1 Comment

After sharing my forecasts about the PBM industry for 2012, I reached out to several people to get their perspective. One person for which I have a lot of respect is Per Lofberg. Per’s now the President of CVS Caremark’s PBM and has an impressive background at companies like Medco, BCG, and Generation Health. Everyone who’s ever worked for him has nothing but great things to say.

Given the change we all expect to see in the industry, I was glad that Per agreed to participate. Here are his answers to some of my questions:

1. 2012 is shaping up to be an exciting year in the PBM industry. Do you think this will finally be the year that limited retail networks take off?

Payers are always looking for new savings opportunities, and limited retail networks provide another avenue to increase savings without compromising access or quality. I have always believed it is quite possible to service large nationwide customers with retail networks that are smaller than the large 60,000 plus networks that are so common today. The current debate in the marketplace will only draw further attention to the topic of limited retail networks, which may result in more PBM clients, including clients who have not previously considered a limited network, engaging in a dialogue about this approach. As a result, I believe that during the 2013 selling season, benefit consultants will be quite focused during the RFP process on understanding the types of savings payers can realize with smaller networks. PBMs like CVS Caremark will need to be able to address this topic clearly with our clients and prospects so they can accurately weigh the benefits and impact of narrowing their network and consider how best to manage the natural disruption factor that will occur.

2. As the generic wave passes in the next few years, how do you expect PBMs to differentiate themselves going forward?

We can’t discount the importance of taking advantage of the large number of blockbuster drugs that will be going generic in the next few years. Being able to deliver strategies designed to drive generic utilization and work with clients to ensure that they appropriately move members to safe and cost-effective generic alternatives should become a best practice standard across the industry. Increasing GDRs will no longer be differentiators, but rather will be expected by clients as a basic PBM offering. As a result, during the generic tidal wave, PBMs need to sit tight, refine their standard formularies and perfect the implementation of programs that drive generic utilization.

As PBMs continue to drive GDR, those that are also successful at offering clinical solutions that support adherence, effectively manage the growing costs related to specialty pharmacy and helping clients manage the intersection of pharmacy and medical benefits to reduce waste and improve health are the ones that will stand out from the competition. Now and in the future, a best in class PBM is one that can accomplish all the basics that used to define differentiation (e.g., GDR, MDR) effortlessly, while bringing value to their clients through an integrated approach to managing the patient’s pharmacy care across the entire spectrum of care. The hallmark of a best in class PBM will be one that effectively addresses access, quality and cost for their clients.

Another consideration for PBMs will be around stricter formulary management strategies to counter increasing, and increasingly frequent, price hikes by pharmaceutical manufacturers. Brand manufacturers are using two basic strategies to protect their market share and we are seeing increased activity as generics erode the profitability of drug blockbusters. Unfortunately, these strategies – brand co-pay coupons and high and frequent price increases — ultimately raise costs and undermine the cost-controls used by employers and health plans to effectively manage their pharmacy spend. To help our clients manage pharmacy costs in this environment, PBMs will need to construct clinically appropriate formularies that provide our clients with options to manage sky-rocketing drug costs without compromising access or outcomes. CVS Caremark is combating price increases by pharmaceutical manufacturers by tightening what is offered on our recommended prescription formulary. As you know formularies are the list of approved drugs that an insurer or employer makes available to beneficiaries and, up until now, the formularies have been quite broad, including most FDA approved drugs, so that doctors and their patients have choice. However, physicians and pharmacists have long recognized that many drugs within a therapeutic class are essentially equivalent, and a “narrow” formulary can be comprehensive while also providing for substantial cost savings.

3. The role of the pharmacist continues to evolve with vaccines and their involvement in more patient management. Given your unique set of assets within the industry, how do you see CVS Caremark leveraging your POS resources to strengthen your focus on clinical outcomes and partner with clients?

As a pharmacy innovation company, we will continue to further develop our unique clinical offerings that leverage the pharmacist interaction and intervention in order to improve the health of our PBM members and drive costs savings for our clients. Our flagship products, Maintenance Choice and Pharmacy Advisor, developed to build on the member’s relationship with their pharmacist, are gaining increasing traction in the marketplace. These programs leverage the clinical expertise and insights of our PBM business along with the broad reach and face-to-face engagement in our retail business to deliver innovative solutions that are unmatched in the marketplace today.

Moving forward we will continue to build on this model by finding ways to further expand member access to these programs. For example, in 2012 we are expanding on our successful Pharmacy Advisor program, originally launched to increase adherence and close gaps in care for diabetes patients, to encompass patients with chronic cardiovascular conditions who are at risk of becoming non-adherent. We are also enhancing Maintenance Choice to make our integrated capability more broadly available to the CVS Caremark book of business and easier for members to use. In addition to enhancing our existing programs we are also continuing to innovate as a PBM by piloting new programs, including one we are piloting in 2012 that leverages pharmacist counseling to better coordinate drug treatment for patients recently discharged from hospitals in order to reduce rehospitalization rates and finding ways to fully integrate our Specialty Pharmacy business so clients and members get the full benefit of the entire CVS Caremark enterprise—PBM, CVS/pharmacy and MinuteClinic.

4. Medicare has pushed quality to the forefront with some of the new Star ratings. Additionally, some PBMs are looking at outcomes-based contracting with pharma. How do you see the marketplace engaging and leveraging pay-for-performance structures within the PBM industry?

Pay-for-performance based on outcomes is an extension of the guarantees that most PBMs negotiate with their clients today. These guarantees are in place to specify a level of service that clients should expect from their PBM with regards to such activities as response time on calls to the customer care center and performance for measurements such as a minimum GDR or MDR to be achieved within a specified time period. Adding in a level of clinical accountability is in line with how the PBM industry is evolving from one focused on channel/access and pure pharmacy cost savings through generics to one that encompasses health outcomes, adherence and the resulting overall health care cost savings associated with these measures. As PBMs get even better at implementing clinical programs and managing adherence across the spectrum of care, I would anticipate we will see more requests by our clients for contracts that either reward or penalize PBMs for their performance in these areas.

5. There is lots of talk about the value of carve-in versus carve-out pharmacy and the integration of medical, pharmacy, and ultimately lab data to provide improved management and identification of at-risk patients. Given your relationship with Aetna and ActiveHealth, how do you see CVS Caremark leveraging these assets even when they work in a carve-out relationship to help clients?

In our current partnerships with health plan clients, our main objective is to find ways to smoothly integrate our pharmacy management activities with the health plan’s focus on solid medical management. This integrated approach—one that balances traditional utilization management with programs to improve adherence, close gaps in care, improve outcomes and reduce negative health events – can deliver better results than a carve-out model that simply focuses on minimizing pharmacy spend. As I mentioned earlier when talking about how PBMs will differentiate their offerings in the future, a best in class PBM delivers on more than increasing GDR or moving members to mail order, it is about managing the whole patient and delivering results that address access, quality and cost. Being able to integrate a full view of the patient and their health works because it makes pharmacy care an integral component of overall health management for the member

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Healthcare, Leadership, PBM / Pharmacy

Does Duration Of Team Matter In Business As In Sports?

January 1, 2012 by George Van Antwerp 2 Comments

One thing that I often think about is the amount of change in the teams within rapidly growing companies (e.g., many PBMs). Does this have an effect on internal knowledge, productivity, and therefore success? It’s a great question. With that in mind, I found the infographic below very interesting.

At the same time, I looked back a few years to see how much change there has been in the management teams at each of the largest PBMs (Medco, Express Scripts, and CVS Caremark). [Honestly, it was less change than I had expected, and I didn't look at average age since I'm not sure that's a great proxy in business while it may be in sports.]

At Express Scripts, 7 of the 10 people listed on the website have been there that entire time. Most of them in their current roles.
At CVS Caremark, 6 of the 10 people listed on the website have been there that entire time althought there has been more movement across roles.
At Medco, 14 of the 16 people listed on the website have been with Medco that entire time and the two others might have also but their start date wasn’t listed in their bio.

So maybe more change is needed? Certainly with the changes in the market dynamics, there is always a need for bringing in a fresh perspective…at the same time, the PBM industry is complex and continuity given long-term contracts is important.

by visually via

Books / Articles, General Thoughts, Healthcare, Infographic, Leadership, PBM / Pharmacy

Opportunists vs. Solidarity

December 22, 2011 by George Van Antwerp 1 Comment

With the Walgreens and Express Scripts dispute unresolved, you are certainly seeing more of an opportunistic attitude in pharmacies than one of solidarity. Maybe this shouldn’t be a surprise, but early on, I thought that the pharmacy groups would see Walgreens as their “leader” standing up to the large PBM. If the largest retailer can’t get negotiating leverage over the PBM, can anyone?

Now, if you go into my local grocery store (Dierbergs), you see signs about moving your prescriptions to them from Walgreens before it’s too late. You see and hear videos playing throughout the store talking about how to move your prescriptions and how easy it is.

CVS Caremark is predicting that it could see as many as 23M prescriptions move from Walgreens to CVS stores.

I’m certainly a fan of preferred or limited networks although I’m not sure I ever imagined a scenario where one PBM would totally exclude one of the big two retailers. I always imagined a scenario where you were playing them off each other and letting the client choose which one(s) to exclude.

You can see in the new whitepaper by Walgreens that they point out several things:

The savings being offered / created is likely not enough for clients to want to exclude Walgreens and create the disruption.
Clients who can include Walgreens are doing so and others would like to or believe they can.
If Walgreens is excluded long-term, self-funded clients will be more likely to consider other PBMs.
Many people still think this will get resolved in 2011 or by early 2012.

This brings up two other discussion topics:

Will they come back? If the disruption happens (or has already happened), will consumers come back to Walgreens once they are back in the network? This will be a true test of satisfaction, branding, and many other efforts. On the flipside, the other retailers should be spending real effort welcoming and trying to retain the new consumers so they don’t boomerang back.
Has the pressure shifted from Walgreens to Express Scripts? Depending on the timing, Walgreens will have felt most of their pain by mid-January. At that point, the pressure (IMHO) shifts to Express Scripts. Will they want to go through their 2012 selling season without Walgreens in their network, a major acquisition in the works, and any other potential distractions? I wouldn’t.

Books / Articles, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy

What If The Medco Acquisition Doesn’t Happen?

December 20, 2011 by George Van Antwerp 0 Comments

First, I believe that the deal will happen without a doubt especially with the new specialty market share numbers from Adam Fein. While I understand the concerns of the independent pharmacies, I both disagree with them, and I don’t think that the FTC is focused on business protection but is looking at consumers.

That being said, the markets are still discounting the Medco stock which means they think there is some perceived risk. With the shareholder votes at both companies tomorrow, it got me thinking about what would happen if the deal didn’t happen.

If it didn’t happen, you’d have a much smaller Medco. They’ve lost United Healthcare, FEP, CALpers, BCBSNC, and I’m sure others. I’m sure you’d also have some change in the team with people’s resumes out in a tight healthcare executive labor market. You’d have a lot of clients wondering what they would do next. I’m also not sure if David would stay and his team has been together for a while so some of them would likely follow him. At the same time, I think Express Scripts would end up in good shape. They’ve paralyzed one of their big competitors for a year while they’ve continued several projects.

Medco would have to come out swinging in my mind. They would have to look at growth through acquisition putting several companies in play. They might also look at expanding beyond just the core PBM model which I think was always David’s perspective. Perhaps disease management or ACOs or exchanges or technology or maybe try to go vertical by looking at pharma or a wholesaler. I would think companies like IMS or inVentiv would also be interesting.

I’m not sure the FTC would disrupt the acquisition, but I did wonder if someone would try to be the spoiler like Express Scripts tried with the CVS acquisition of Caremark. I’m not sure who could do that but a United Healthcare could pull it off to support their services growth strategy with Optum. Or, Walgreens could take action to counteract their dispute with Express Scripts and follow the CVS Caremark success.

Interesting times.

[Note: I do own stock in many of the companies mentioned here.]

Healthcare, PBM / Pharmacy

Using the Local Pharmacist to Moderate the P2P Discussion

December 15, 2011 by George Van Antwerp 1 Comment

P2P or Peer-to-Peer healthcare is a common discussion topic these days. Patients want to go online and learn from others with their condition on sites like Inspire.com or PatientsLikeMe.com. The government has been one of the early adopters.

“The social media sites we have created show that the government can interact in a meaningful way with the public. We don’t just push information out; we strive to make the content relevant so people can act on it, share it with family or friends and ultimately change their behavior.” Amy Burnett, CDC (Tapping Into The Power By Getting Personal, Robin Robinson, PharmaVOICE, May 2011)

The question is how can traditional companies – pharmaceutical manufacturers, disease management companies, providers, managed care companies, pharmacies, and PBMs – interact in these discussions. On the one hand, they have a broad depth of experience and data to share. On the other hand, they can’t just jump in and drive their agenda. They have to add value to the conversation, demonstrate that they care, and add value.

Much like the idea that you can purchase things online and return them to the physical store, I think these virtual discussions need to eventually be tied to a physical experience for many patients. One group that I think could play significantly in this is local pharmacists. Imagine that a chain or an association created a social media team. That team could monitor and interact with patients especially in key conditions such as some of the specialty drug areas. As relevant, this could be linked back to a local store where a pharmacist could spend time consulting with the patient. I think this would be a great way to drive the retail specialty business and increase consumer brand awareness.

“The potential use of social media as a bellwether for identifying trends, informational gaps, support tools, even improved communications between providers, allied health professionals, and others could pave the way for a more collaborative approach to population mapping and patient care.” Michael Parks, Vox Media (Social Media: Paving The Way, Robin Robinson, PharmaVOICE, May 2011)

The CDC has even created a toolkit for people to use.

Books / Articles, Consumerism, Healthcare, Innovation, Leadership, Marketing / Communications, PBM / Pharmacy, Social Media, Technology

Barrett Toan To Speak At PBMI Spring Conference

December 14, 2011 by George Van Antwerp 0 Comments

Barrett Toan who was the motivating force behind building Express Scripts has been gone for since 2006 when he stepped down as Chairman of the board. He is now the chairman of Sigma Aldrich here in St. Louis and active in other pursuits. I was excited yesterday when I heard from Brenda Motheral, the Executive Director at PBMI, that Barrett had agreed to speak at their conference (register here).

While I never got to work with Barrett as closely as I would have liked to, I was on several projects with him. I was always amazed by both his passion for the industry and the patient along with his ability to move from both the macro-vision to digging down into the details. It should be fascinating to hear his view on where the industry is today and all the changes that have happened.

And, that should add to the agenda they already have which includes Gilbert Welch, the author of Overdiagnosed, Kjel Johnson from Magellan, Stacy Dow from Whirlpool, and Dr. Troy Brennan from CVS Caremark.

The focus of the agenda this year is on specialty which is obviously front and center for all of us. The one concern that I have had in the past was around attendee mix. It always seemed like the PBMs talking to each other, but Brenda told me that so far ~75% of the registrants are plan sponsors and that the actual number of plan sponsors registered already exceeds last year. This would be a big and very positive change.

Brenda also mentioned several other key topics – 340B, MTM, eRx, generics, consumerism, OTC, and Rx and Dx integration. Of course, I’m sure there will be discussion from their survey which I reviewed earlier, and they will be releasing their new specialty survey at the event. I’m planning to attend, and I hope to see you there.

Events, Healthcare, Leadership, PBM / Pharmacy, Research

Cost and Outcomes Drive Better Use of Data

December 8, 2011 by George Van Antwerp 1 Comment

Overall, I would describe healthcare companies as trying to figure out how to drive the best outcomes at the lowest cost while maintaining a positive consumer experience. This isn’t easy. One area of opportunity that companies increasingly look at is how to use data to become smarter.

Can I build a predictive model of response curves? Who’s likely to respond? Who’s likely to take action?
Can I develop a segmentation model that works? How will I customize my communications after the segmentation?
Can I rank and prioritize my outreaches? Should I do that based on risk or based on potential value?

Ultimately, I think this is driving companies to be a lot smarter and to look at how they use both medical and pharmacy data. For example, I’ll point to both CVS Caremark and Prime Therapeutics in press releases from earlier this year.

“The ActiveHealth CareEngine offers evidence-based information that can be used to improve the health care of our members and enables us to take our programs to the next level by seamlessly incorporating medical data,” stated Troyen Brennan, EVP and chief medical officer of CVS Caremark. “This agreement will enhance our existing programs to identify issues related to gaps in care, potential drug-to-drug interactions and duplicative care — information that is important to bring to the attention of the member’s physician.” (article that this is sourced from)

Smart use of medical and pharmacy data is one of the most powerful tools we have to improve outcomes and increase value for our members and clients,” said David Lassen, PharmD, Chief Clinical Officer at Prime. “Through ongoing partnership with health plan clients, Prime is uniquely positioned to view the entire spectrum of patient care, and we can leverage that information to help manage cost and to improve outcomes. We are very excited to collaborate with Corticon on the development of this clinical platform.” (press release)

The next step will be to integrate PRO (patient reported outcomes) from sources like connected devices and PHR (personal health records) that might show blood pressure, workouts, calories, or other data points that could help companies determine when to intervene and how to add value to drive an outcome.

Additionally, another key is continued work in the outcomes-based contracting world and bonus areas such as Star Ratings where the financial value is tied in the short-term to outcomes. This creates a burning platform for smarter use of data and use of a broader set of data to understand and impact care.

Books / Articles, Healthcare, Leadership, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Press, Research, Silverlink, Technology, Value Propositions

Medicare Patients Save $1.5B on Rxs!!

December 6, 2011 by George Van Antwerp 0 Comments

Now, here’s a great story. This may be one of the best government success that I’ve heard about in what I think of as a collaboration of the government with multiple businesses. (Although I think this is a lot more of what HHS is doing these days under Todd Park’s guidance.)

According to USA Today this morning, more than 2.65M Medicare recipients have saved an average of $569 per person this year based on addressing the donut hole with a 50% discount on the brand drugs filled during this time. And, the average premium for 2012 is actually LOWER than the premium in 2011 (by $0.76 per month).

The other part of the article is about the potential value of preventative care and leveraging this as part of the Medicare benefit. The key here is engagement of the participants to help them understand and take action on their healthcare. The power of the consumer in driving healthcare costs and outcomes is significant which is a topic that I know was discussed by several people today at the mHealth event in DC.

Books / Articles, Consumerism, Healthcare, Leadership, Managed Care, PBM / Pharmacy, Research, Value Propositions

Healthcare, Innovation, Leadership, Marketing / Communications, Methodology, PBM / Pharmacy, Social Media, Technology

Managed Care Digest Sample Diabetes Reports

November 30, 2011 by George Van Antwerp 0 Comments

Sanofi sponsors the Managed Care Digest Series. I was looking at some of their data last night, and I thought I’d share two sample reports looking at diabetes retail pharmacy claims. A few things that this quick use of the tool shows you are:

Looking at the Brand and Generic mix of diabetes drugs based on payer, I notice 3 things:

No significant geographic variance based on looking at a few regions
People who pay cash are much more likely to choose generics while those with limited difference in copays (Medicaid) are more likely to choose brands
Not a significant difference between Medicare and Commercial

In another view of the data, I looked at the brand and generic mix by age. Interestingly, it shows differences by geography especially in the younger ages. It also shows a clear correlation of age and generic utilization.

Books / Articles, Healthcare, Managed Care, Methodology, PBM / Pharmacy, Research

Text4Baby Learnings About Flu Shots And More

November 30, 2011 by George Van Antwerp 0 Comments

Here’s a slide presentation from the Text4Baby team that they presented yesterday. This has been one of the biggest SMS programs in the country and has gotten a lot of press. They did a survey of people about their plans to get flu shots and also share some other data and plans.

Books / Articles, Healthcare, Leadership, Marketing / Communications, PBM / Pharmacy, Press, Research, Technology

IDC On Personalized Medicine

November 30, 2011 by George Van Antwerp 0 Comments

I was reading the IDC Health Insights newsletter this morning where they had an article by Dr. Alan S. Louie on personalized medicine. While this was a hot topic in the PBM world 12-18 months ago, I’ve heard much less about it lately. I thought it made sense to share one paragraph from his article here. I hope that his predictions for delivery of this evidence-based approach to care come true and can be delivered in a cost-effective way to consumers with physician buy-in and understanding about how and when to use this information.

“I believe that the FDA is likely to be significantly marginalized as a major player in the transformation to a more personalized care scenario. While still rigorous in their role as gatekeeper to ensure that drugs are safe and effective, the ability to apply growing genomics, EMR, and CDSS data and knowledge to routine medical treatment is likely to be executed outside of FDA purview. If the FDA decides to lay down the heavy hand and demand that all testing be FDA approved, then all bets are off and medical innovation will be delayed by at least 10 years or more. With payers, clinical laboratories, and others (e.g., PBMs) all buying genomics testing capabilities, it becomes increasingly possible to deliver the latest genomics insights to the point of care and amortized over large patient populations, recognizing that what are probabilities for the individual become real outcomes for portions of patient populations. Net improvements in patient outcomes become real and avoidances of treatment with little or no likelihood of success reduce both wasted efforts and unnecessary adverse drug exposure.”

Books / Articles, Healthcare, Innovation, Methodology, PBM / Pharmacy, Research, Value Propositions

Utilizing The Same PBM For WC and Health Insurance?

November 29, 2011 by George Van Antwerp 0 Comments

While on the surface this seems like a natural opportunity for synergies, I’m not sure I really see this happening or simply wishful thinking by those in both businesses (see article about this). Since it’s not possible to track the same consumer as they move from one group to another within a PBM for historical data (i.e., when I change employers but stay with the same PBM), I can’t imagine aligning consumer profiles across divisions like Worker’s Compensation and Health Insurance.

And, while the market may be changing, there are real differences such as:

Management objectives (get back to work and off the drug)
Plan design (no copays, different formulary)
Processing (different BIN at POS)
Eligibility (there is no “eligibility” file until an incident happens to create a claimant)

In Worker’s Compensation, you also have an adjuster to deal with who is in the middle of the process and different legal frameworks to operate.

On the flipside, I agree that applying some of the processes that have worked in the traditional PBM business to WC has value it’s going to be very different. As the consumer, why do I want to use the generic when I don’t pay anything? There should also be some clinical value in coordinating the data, but the question exists of whether the consumer can be viewed with the same member ID in the adjudication platforms.