PBMI Day One Notes

Just getting back from the first day of my first PBMI conference. Very pleased.

Here are some notes / observations:

• PBMI was bought in the past 2 years by PSG (Pharmaceutical Strategies Group) which interestingly has numerous ex-Express Scripts people working there.
• Great opening speaker (E. Kinney Zalesne) who is the co-author of Microtrends (a few blog comments about it). Fascinating set of facts about small (and often influential) groups within the US. You can learn more at their website www.microtrending.com. [Note: I have not read the book yet.]
  • Compared today’s Starbucks economy (everything customized) to the Ford Economy
    • How you look ($12B cosmetic surgery market)
    • Who you marry
    • How you pray
    • Your gender
  • Talked about moving from Megatrends to Tipping Points to Microtrends (versus fads)
  • Said we drink 10x more water today than in 1980 BUT at the same time, the fastest growing beverage segment is energy drinks
  • There are 2-3 new religions formed everyday
  • There are 5M people over 65 working today…which will have huge benefit implications
  • Talked about DIY (do it yourself) Doctors as a group of people who use the Internet to self-diagnose and treat MDs as an ATM (here’s is what I need from you). Described the group as mostly woman and typically younger. Linked the growth in OTCs from $2B to $15B to this trend.
  • Said 3/5 people worry about hospital errors.
  • Good quote: “Better we understand people; the better we can serve them.”
  • Said young people today think of being on prescriptions as normal.
  • Talked about the “30 Winkers” or 16% of adults that get less than 6 hours of sleep a night.
    • 2/10 adults say lack of sleep has led them to make an error at work
    • Sleeping only 6 hours a night increases your probability of being obese by 23% and if you only sleep 4 hours then it goes up to 70+%.
  • Talked about looking for microtrends versus fads.
  • Said they might have a microtrend spotting competition on their website soon.
• There was a VP of HR who talked about the importance of communications around benefit information.
  • Repeat the message but change it so you don’t de-sensitize the audience.
• Matt Gibb (Chief Clinical Officer) from Medco presented on Extreme Generic Dispensing with several interesting comments:
  • Talked about how insulin and coumadin are the top two drugs that drive HR admissions
  • Called Therapeutic MAC a “draconian” benefit structure.
    • Therapeutic MAC means that the plan covers $X for a class.  (E.g., you have $30 per month for cholesterol lowering drugs.)
  • Showed a sliding scale of programs which a company could use to influence trend ranging from low impact on consumers and low savings potential to high on both.  Here are a few from low to high.
    • Decision support tools
    • Copay waivers
    • Coupon mailing
    • Maintenance medication program
    • Generous generics (which I guess is a benefit plan with a low copay for generics)
    • 3-tier
    • Co-insurance with POS rebates
    • Brand only deductible
    • Mandatory generics (which I can’t believe is this far up)
    • Mandatory mail
    • PA
    • ST
    • High Performing Formulary (which sounds a lot like the product I ran at Express Scripts called High Performance Formulary)
    • Therapeutic MAC / Reference-Based Pricing / Reverse Copay
  • Showed their 2006 generic fill rate at 58% with the remaining 42% being broken into 4 categories:
    • 17.4% where there was a brand with no generic alternative
    • 4.5% where the brand is less expensive than the generic alternative
    • 11.1% where the brand has a generic alternative (i.e., you should be at 68% GFR today)
    • 9.0% where there will be a generic alternative by 2009 (i.e., you should be at 77% GFR in 2009)
  • I must admit I was confused / surprised when he revealed that their “emerging solutions” for driving generics included the following which I think of as basic programs:
    • Mandatory generics
    • Co-pay waivers
    • Generic step therapy
    • Co-insurance
  • I did think their idea of a benefit design where generics and mail order prescriptions don’t count against your deductible was interesting.
  • I was a little surprised when he mentioned (without discouraging) clients offering generics at $0.
    • The economics (every time I modeled it for clients) don’t work since you have 50% of people getting generics and paying a copay which you just lost.  You would have to improve generics significantly to even breakeven.
  • I (and many people I asked) was surprised with his response to the question of what was a “significant” difference in copays between brand and generic to drive behavior.  His answer was $15-$20 which he said was based on what pharma believes is important to get rebates.
  • I did like the fact that they had clients fund a free first fill of OTC Zyrtec to promote moving to the OTC rather than another Rx.
  • He walked through some of the great statistics they have had from their MyRxChoices web tool.
    • Versus a control group, those that got a letter encouraging them to go to the web and used the website.  58% more likely to change to lower cost drug or channel.  51% conversions from brand-to-generic.
  • He also talked about the importance of rebates in PBM pricing which seemed out of place in the generic discussion.

Several things that came to mind listening to the presentations and perhaps for another post were:

• Would / could we ever get to an individualized benefit which allocated X dollars and allowed the patient to choose what was included (e.g., tatoos)?
• What would be the implication for recruiting / hiring if we could create a healthcare cost index similar to a credit score that didn’t tell potential employers what your medical conditions were but gave them an estimate of your medical costs?
• What are the implications of driving consumerism to web tools which patients use at work when more and more companies use monitoring tools to track keystrokes and web visits?  Will they accidentally learn about private healthcare information?