Enabling Healthy Decisions

Detailing physicians and providing them with samples has been the cornerstone of the pharmaceutical industries marketing efforts for years. Over the past few years, there have been changes where physicians don’t allow detail reps to meet with them or even physician groups that charge them for the meetings.

There have also been attempts to move to eDetailing where physicians log-in to virtual detailing sessions on their own time or attempts to push advertising or other drug information into the software solutions that prescribers use (electronic prescribing, practice management, electronic medical record).

One of the critical components for detailing is knowing doctor’s prescribing behaviors. How many prescriptions do they write? What drugs do they write for? This allows the pharma companies to focus their reps on the high prescribers that prescribe their competitors products or generics disproportionately.

So, if I interpret the recent decision from the New Hamshire District Court, it would appear that they are upholding an initial decision to prohibit companies from using this prescribing data for detailing. This is a big enough issue that I am sure it will get appealed again, but it would be a game changer if it is upheld.

Anyone who works with drug manufacturers knows that once a drug gets closer to its patent expiring, they are going to look for creative ways of extending the patent life – new approvals (e.g., pediatric dosing), an extended release (XR) version, or a me-too drug for example. And, as a product manager, who can blame them.

As the payor or the public, this is a greedy action that they take. In another WSJ article from the other day (“How a Drug Maker Tries to Outwit Generics”), it deals out the strategy that Cephalon (the manufacturer) is taking relative to its narcolepsy drug Provigil. I give them credit for a well thought through plan (although I am not sure I would have made it public).

Over the past 4 years, they have raised the price by 74% (now $8.71 per tablet). At the same time, they are preparing to bring a longer acting version of the drug called Nuvigil to market. So what does this price increase accomplish:

• They are maximizing revenue and profit in the waning years of the patent (which expires in 2012).
• They are going to launch Nuvigil in 2009 at a much lower price which will encourage most payors to exclude coverage of the higher priced (and older) Provigil and shift utilization to Nuvigil.
• When the patent expires in 2012, anyone still on Provigil will be quickly moved to the generic version, but most of the market share will have shifted to Nuvigil so they can then begin to raise the price on that drug with less dramatic market share erosion.

This wouldn’t work in a lot of drug classes because there already is a generic available and dramatic price increases would drive utilization to the generic alternatives. But, if you are one of the only brand drugs to treat a condition, you have a lot of pricing upside.

I was just talking with someone yesterday about what happens as the retail clinic concept (e.g., Minute Clinic) and virtual consultations (e.g., American Well) take off. Given that primary care physicians (aka General Practitioners) have seen increased reimbursement pressure, will these trends finally make that the least desirable job coming out of medical school? [Which would be a shame in my opinion.]

In a survey done by The Physician’s Foundation in May, they had 12,000 responses from US physicians that confirmed this. [They define primary care physicians (PCPs) as family practitioners, general internists, pediatricians, and OB/GYNs.]

• 78% said there is a shortage of PCPs.
• 49% said that over the next 3 years they plan to see less patients or stop practicing.
• 60% said they would not recommend medicine as a career.

This is a topic that has been around for a while. Before the Medicare Prescription Drug Plan (PDP) and a significant number of drugs losing their patents, you used to hear about people driving to Canada to get their prescriptions at reduced prices.

I believe this is one of the things that Obama talked about in his plans to lower healthcare costs. I haven’t studied up on it in a few years, but I got to work with our General Counsel at Express Scripts on our position for this several years ago. At the time, a lot of our clients were asking what they should do and what we would do.

Here were my conclusions (updated with the general market conditions above):

• There is certainly a window of opportunity to import brand drugs from other countries (e.g., Canada) into the US and reduce costs.
• That window will be short-lived as the US is the biggest prescription drug market based on high prices and the manufacturers will simply increase global prices putting pressure on those governments to not allow re-importation.
• There is some increased risk of “counterfeiting” but that could be managed with some of the drug pedigree things being discussed and implemented.
• Brand drugs are cheaper in other countries because they negotiate as a country and have larger buying power and give higher probability of market share to the approved manufacturer. [Which isn’t likely to happen in the US anytime soon.]
• (One of my biggest ah-hah moments…) This is only relevant for brand drugs which now represent less than 40% of all drugs dispensed in the US. Generic drug prices are cheaper in the US than anywhere else for the exact same reason – competition.

As a corporation, we couldn’t encourage this activity back then, but we could process paper claims as out of network for our clients if they included those locations as part of their benefit.

So, I think it’s an outdated suggestion that will ultimately hurt the other countries for our short-lived benefit. Hopefully, Obama brings some people onto his team that look at these facts not at playing to the general public’s perception. [And, yes…I would happily volunteer to help us fix the healthcare system no matter how painful of an experience.]

I think we are all still waiting on the final business models to find the profitable solutions. I think many of the tools are great. Some are even amazing in what they can do. But, ultimately most of these are businesses, so how are they making money?

In a recent report by Manhattan Research, they define Healthcare 2.0 consumers as “adults who have read health-related blogs, access message boards, or participated in health-related chat rooms.” It also includes people who have contributed content through comments to a blog entry, writing, or creating and posting videos or pictures.

It seems a little easy to become a Healthcare 2.0 consumer using this definition and without much stickiness.

“Healthcare in the US is an expensive commodity and, as a result providers are always seeking to streamline operations. Allowing members to manage their own healthcare portfolio services online helps them to achieve this, as well as raising levels of customer satisfaction. It’s a win-win situation,” said David Lavenda, vice president of marketing and product strategy at WorkLight.

See study here.

See WorkLight press release on this here.

If there are 60M “users”, there is a great install base to build upon.  I think we are all hoping to see how some of these companies make their models work and blend with the establishment to change the industry.

Based on different statistics I saw today, it is clear that a healthcare strategy for reaching the Hispanic community is needed. Just looking at what I see being done:

• Some companies are building out a “language flag” in their databases to allow members to choose the language for communication.
  • This works a lot better than “guessing” based on their last name.
• Some companies are offering Spanish and English versions of print documents.
  • It may exist, but I haven’t seen any companies allowing a member to “toggle” their website between English and Spanish.
• Some companies doing calls offer patients the ability to choose Spanish during the automated call (i.e., Spanish on the fly).
  • These could be offered to every member or only to members in zipcodes with a high concentration of Spanish speakers.
• An older solution which exists many places is hiring call center staff that are bi-lingual.
  • And many companies use the AT&T language line to support less common languages.

But, the key is that you should have some strategy and be working towards improving it and understanding the differences in that population segment.

As a follow-up to the statin study (JUPITER) which showed that Crestor could save lives, there is lots of discussion about what to do. USA Today has an article showing the cost of putting the additional 7M people on Crestor that the study was based on versus putting them on a generic statin.

Using Crestor would cost $557,000 versus $24,000 for the generic. If I am the maker of a statin (or cholesterol lowering drug), I am feeling good right now.

Hard economic times definitely bring out the creative solutions from people. Today, I heard an advertisement to get two Kia cars for a very low price. If you can’t sell one car, sell two at a time?

Perhaps we can increase preventative care by offering two cholesterol tests or exams for one low price?

If things like this work, will they ever be used in healthcare?

Lots of companies price things at $X.99 versus $Y.00. But, copays are always flat. We pay $20.00 for a brand drug not $19.99.

It will be interesting to see how the results of a recent study impact medicine and prescription use. The study involving 18,000 patients showed that those using Crestor compared to a placebo had:

• 54% fewer heart attacks
• 48% fewer strokes
• 46% angioplasties
• 20% fewer deaths

The study volunteers had normal cholesterol but high blood levels of C-reactive protein.

1. Will physicians prescribe more statins?
2. Will national standards be changed to recommend statins for everyone with high levels of C-reactive protein?
3. Do cheaper statins like generic Zocor have the same effect as Crestor?

As drug sales in the US slow to 1-2% growth per year, they continue to grow by double digits internationally. From 2002-2007, the developed markets (US, Canada, Japan, and the top five European markets) grew at 52% while the emerging markets (China, India, Brazil, Russia, Mexico, Turkey, and South Korea) grew by 141%. (According to IMS data in the WSJ article “Drug Firms Target Newly Rich Abroad” on 11/5/08)

The article makes good points about the ethical questions that this may create in terms of pricing and what happens when only a small portion of the population can afford essential medications.

I guess this also poses the question of whether it is better to have no one with the access or only the top 1% of the population having access.

The costs for people with a Medicare Prescription Drug Plan (PDP) continue to go up. They will go up 43% this year and have gone up 329% in the past 3 years according to a front page article in the USA Today (11/12/08). That’s the bad news.

What’s the good news – The program has cost us taxpayers less than originally estimated mostly due to the use of generic drugs.

Monthly premiums are going up to $37.10 next year according to Avalere Health. This is up from $26.03 in 2006. Members have also seen their copays go up from $1 to more than $13 (hopefully not for generics).

Open enrollment for the benefit starts 11/15. Right now there are 17M members in the PDP programs and 9M in Medicare Advantage programs that cover health and prescriptions.

There has traditionally been low “churn” among members. I wonder if this will continue. Medicare spokesman Jeff Nelligan says that most beneficiaries should be able to find a plan that is the same price or cheaper if they are willing to change.