CVS Caremark TrendsRx Report 2009

This is one of my favorite times of year. After working on the Drug Trend Report at Express Scripts for several years, I love to get all the trend reports from the PBMs and read them. The first one that I have had a chance to review is the one from CVS Caremark. I found it an easy to read document with good case studies and a mix of strategy and tactics.

Here are some of my highlights and observations:

• 3 out of 4 clients cited “reducing health care costs” as their primary measure of PBM success…AND 2 out of 3 prioritized “plan participant behavior change” as the way to reach that goal. [Maybe the plan design bigot is finally dead.]
  
• With pharmacy spend approaching $1,000 PMPY, I found their chart on potential cost reduction a simple way of pointing people to things they should think about.
  
• A 10% improvement in diabetes adherence can save $2,000 in annual health care costs. [I assume this is based on improving MPR and would definitely like to learn more on how the health care costs are quantified.]
• They layout three objectives – improve use of lower cost drugs, improve adherence, and get people to take better care of their health. [Similar to the concept I laid out in my white paper of needing to be broader than just Rx benefit management.]
• They talk about two of their solutions:
  • Consumer Engagement Engine (CEE) which is very similar to what Silverlink does and provides business logic for targeting the right member at the right time with the right message.

    

  • Proactive Pharmacy Care is their “medical neighborhood” concept to stitch together their entities – Mail Order, CVS retail, Specialty, MinuteClinic, and their disease management company.
• Their trend was 3.9% PMPM in 2008 (or 2.8% excluding specialty drugs).
• Medicare Part D utilization was up 4.1% compared to 0.8% for the rest of their BOB (book of business).
• Their GDR (generic dispensing rate) averaged 65.1% for 2008 and was 66.3% in December 2008.
  • Best in class employers = 68.2%
  • Best in class health plans = 73.4%
• As they remind you, a 1% increase in GDR is roughly equal to a 1% reduction in pharmacy spend.
  • [What I would like to see is improvements in GDR from new drugs coming to market in 2008 versus improvements that came from clients implementing plan design.]
• They say [which I preach all the time} – “proactive consumer engagement improves results and lowers the risk of disruption. For best results, provide personalized actionable information at a range of touchpoints.”
• I saw a few interesting things in one of the case studies they share about their “Generous Generics” program. [Does that name get used with consumers? What’s their reaction to it?]
  • $0 generic copay at mail [that should drive volume]
  • 10% coinsurance penalty for not shifting to mail after the second fill [similar in concept (I believe) to the Medco “retail buy-up” concept]
• Top Ten Therapeutic categories (53% of spend):
  • Antihyperlipidemics
  • Ulcer drugs
  • Antidiabetics
  • Antidepressants
  • Antiasthmatics
  • Antihypertensives
  • Analgesics, Anti-inflamatory
  • Anticonvulsants
  • Analgesics, Opioid
  • Endocrine and Metabolic Agents
• They state that the population of diagnosed diabetics is growing by roughly 1M a year.
  • Executive Summary, Economic Costs of Diabetes in US in 2007, American Diabetes Association, March 2008
    
• They state that a generic for Lipitor is now expected in Q4 2011 [which I think is about a year later than originally expected]
• They show some data from their Maintenance Choice program which I think has a lot of opportunity.
  • This is where you can get a 90-day Rx from either mail or a CVS store for the same copay. [The key here is for them to understand member profitability and for CVS Caremark to understand how to drive consumers to the preferred channel.]
  • [I would really need to understand their profitability by channel because if I read the chart in here right, it would appear that given the choice 45% of those at mail would choose 90-day at retail…a scary concept for mail order pharmacy.]
    
• They give a case on Maintenance Choice which leaves me looking for a key fact. They state that a recent implementation has a goal of 70% of the client’s day’s supply will go through the preferred network (CVS) or mail and that 20% of it goes through mail today. [What percentage goes through CVS today? If it’s a client in Boston, that one scenario. If it’s a client in Chicago, that would be another feat.]
• Specialty pharmacy trend was 13.5%.
• They say that pharmacogenomic testing is being used more frequently for specialty drugs. [I would love to know more…how often? For what drugs? Has it improved outcomes? Are their clients covering it? How are they playing in this space?]
• They talk about adherence which continues to be one of the hottest areas in the Rx arena today. They give stats showing 15-48% improvement across different metrics and up to $142 in cost avoidance in one case. [Are these again control groups? What was the cost / benefit analysis or ROI? Is this improvement in average MPR (Medication Possession Ratio) or improvement in the % of people with an MPR of >80%?]
• They talk about 88% of heart failure patients maintaining optimal prescription adherence compared to a norm of less than 50%. [My questions here (which isn’t apparent) is whether this was an opt-in program so the 88% is for engaged and active participants or whether it was across all targeted members.]
• They provide a quick list of factors that will impact drug trend:
  • Driving costs:
    • Aging
    • Obesity
    • Diabetes
    • Specialty pipeline
    • More aggressive treatment guidelines and earlier diagnosis [which hopefully would lower total healthcare costs]
    • DTC advertising
  • Reducing costs:
    • Economy – reduced utilization and improved GDR
    • Increased availability of generics
    • FDA safety reform
    • Lackluster non-specialty drug pipeline
    • Utilization and formulary management
    • Consumer price transparency