Archive | October, 2010

Mississippi Specialty Pharmacy Settlement

I just saw this.  I wonder if this will have any implications on the Mandatory Specialty model that has been prevalent.

Vital Care of Meridian, a franchise of Vital Care Inc., (“Vital Care”) has won a significant partial summary judgment motion in a matter against the Mississippi State and School Employees’ Life and Health Plan (the “Plan”), a state insurance plan that covers certain state employees, and its pharmacy benefit manager (“PBM”). The lawsuit is currently in progress on remaining issues, but a major issue in the lawsuit was whether Mississippi’s “Any Willing Provider” statute (“Statute”) applies to the Plan. The Plan and the PBM awarded sole provider status for specialty pharmacy services to a single specialty pharmacy, to the exclusion of Vital Care and other specialty pharmacies in Mississippi. The Plan and its PBM argued that the Statute did not apply to them for a variety of reasons, but those arguments were rejected by the Mississippi Chancery Court. It is thought that this case will likely serve as precedent for several other similar cases across the country.  (Court Order)
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Scary Healthcare Realities

Thinking about Halloween got me to thinking about what “scares” me about healthcare…

  1. We have 10’s of millions of uninsured and underinsured people in the US while being one of the most prosperous nations.
  2. People can and do actually go bankrupt due to trying to medical costs.
  3. Health literacy is a huge problem and isn’t being addressed at a systemic level.
  4. Surgery on the wrong body part still happens.
  5. You can get sicker going to the hospital than you were before you went.
  6. People who work in healthcare can’t figure out the system (much less the people outside the system).
  7. Over 20% of kids need medication.
  8. Obesity, diabetes, depression, and other conditions are all related and growing quickly.
  9. Health and wealth are correlated yet the financial payment system rewards sick care and short term ROI.
  10. People don’t want to be PCPs due to the risk, the pay, and other challenges.

What scares you about our healthcare system or health in general?

Express Scripts Model – DBN Article

I was quoted in yesterday’s Drug Benefit News with one of my favorite people – Dr. Steve Miller from Express Scripts.  This was a follow-up to talk about their predictive model for adherence.  Steve confirmed what had previously been reported that it is 85% accurate in predicting the 10% of people least likely to be adherent.  He says that the model takes into account past behavior, demographics, condition, and the drug.  Those sound like a lot of the right variables.

The article teases us with information that CVS Caremark is planning to publish a study in the upcoming months on their model.  Medco Health Solutions comes across as more of a skeptic in the article talking about efforts from 20 years ago that were difficult and expensive to execute. 

My quotes were very consistent with what I’ve shared on the blog – fascinating, somewhat skeptical, more concerned about the group that is somewhat adherent than those that are the bottom 10%, implementation of behavior change is more important that the model. 

“Everybody’s trying similar efforts in terms of how to predict adherence…but there hasn’t been a model that has proven itself as being a good predictor.  Maybe Express Scripts has cracked the code…I would assume that if you can accurately predict who is going to be adherent that will be a good tool.”

However, attempting to change behavior in the top 10% of patients likely to be nonadherent will be tough, Van Antwerp contends. “The industry is still waiting for that proof,” he maintains. “If we can predict that patients are adherent but can’t change behavior, then the model doesn’t do us much good.”

Medco and United Healthcare – What Will Happen?

With Walgreens announcing that they were going to sell off their PBM assets (something I’ve suggested was going to happen for a while), the attention is clearly on what United Healthcare will do with their relationship with Medco.

Right now, United operates both a captive PBM (Prescription Solutions) and has an outsourced PBM relationship (Medco). Together the two represent about $27B in spend – $16B for Prescription Solutions and $11B for Medco. This decision is significant in terms of several things:

  • Which model is “better” (i.e., the logic, structure, and timing of their decision)
  • Medco revenue
  • UHG strategy

As I talked about a few weeks ago, the trend has been to shed the internal PBM assets and sign long-term contracts. Will that happen here?

There are several options which I think could be considered:

  1. Renew a Medco contract and continue to operate both models while slowly migrating lives to Prescription Solutions;
  2. Further segment the relationship with Medco by making separate decisions regarding PBM management, claims processing, mail order, and specialty thereby insourcing parts but not all of the Medco relationship;
  3. Terminate the Medco contract and move all the lives to Prescription Solutions; or
  4. Sell Prescription Solutions to Medco and sign a long-term agreement.

There are lots of things to weigh here:

  • What, if any, are the implications of the MLR definition and health reform on the benefits of ownership versus outsourcing the PBM?
  • Will health reform impact the mix of lives (group, individual, Medicare, Medicaid) and how will that affect the immediacy of the decision?
  • How much money do they make on the PBM asset and is the cost of capital to transition clients and make infrastructure investments worth it?
  • Is there some type of structural relationship (e.g., Wellpoint and Express Scripts) that offers them tax advantages?
  • What is the value of the Prescription Solutions asset if sold?
  • Are there underwriting benefits to ownership of the PBM (i.e., current Medco lives)?
  • Can they get a price from Medco on managing the lives that is comparable to what it would cost them to run their PBM?
  • Does the scale of adding the current lives from Medco into the Prescription Solutions model create such cost efficiencies that it makes them more competitive in their existing markets?

I’m not sure how this will play out, but this will certainly be a huge decision under any situation. Of course, all the other PBMs would like to play here to either get the contract instead of Medco or buy the Prescription Solutions assets, but I don’t see those as likely outcomes.

New PBM Offering – Lab Based Reject

So, here’s my free idea on a PBM product which could be developed and launched. If you believe (as I do) that physician’s are likely moving patients to higher strength or stronger medications based on lab data (i.e., cholesterol is still high so drug must not be working) without asking about adherence, then you have to think about (a) how to get the data into the physician’s hands that the patient is non-adherent and (b) how do you see if this is a real issue. (See prior blog post)

So what do you do? Here’s my idea…

  1. Select a few clients where you can get their lab data on a regular and timely basis.
  2. Select a few classes where physicians regularly use lab data to monitor prescription effectiveness.
  3. Integrate lab data into a data warehouse.
  4. Query the database to identify patients who have a lab done and have a medication possession ratio of less than 80%.
  5. Trigger a patient intervention to determine their barriers and/or other rationale for low MPR (e.g., perhaps they had samples).
  6. Develop a point-of-sale (POS) edit which rejects for any new drug in the product category or any increase in dosage for those patients.
  7. Develop messaging at the POS which tells the pharmacist to ask the patient about their adherence to the original medication.
  8. Message the physician about the patient’s non-adherence and barriers (if collected) and see if they still want to increase the dosage or change the medication.

This would be an interesting study.

Prescription Use Continues To Grow Over Time (and Age)

As I like to refer to us, we’re the “most medicated generation”, and that’s not likely to change. Our children are more obese. They have less economic options. They will live longer. All of these things will contribute to their use of medications.

Additionally, personalized medicine will take hold, and if reform creates a shakeout in the managed care industry, there will be less companies which means their likelihood of retaining a member longer is higher. With longer retention, they will be more interested in investing in adherence programs that drive lower long-term healthcare costs. Use of prescriptions as a predominant approach for initial therapy (versus diet and exercise for example) is likely to continue.

Let’s look at some charts from a recent NY Times article:

The increasing complexity of therapy when patients have numerous drugs is a serious consideration in managing their care.

Some of the other data points from the study by the National Center for Health Statistics were:

  • If you’re older than 60, you’re likely taking a cholesterol lowering drug.
  • If you’re between 20 and 59 and have a prescription, it’s likely to be an antidepressant.
  • 22% of kids under 12 have a prescription…most commonly for asthma.
  • Almost 30% of teenagers take a prescription…most commonly for ADHD or related conditions (6%).
  • 88% of people 60+ were using at least one medication and more than 2/3rds were taking 5 or more.
  • Women use more medications than men.
  • White people used more prescriptions than non-Hispanic blacks of Mexican-Americans.
  • Those with health insurance were twice as likely to use prescription drugs.

Predictive Model + Segmentation + Intervention

I was fielding a few questions today about the predictive model from Express Scripts.  The concept of predictive modeling is one that everyone is working on and holds great allure.  BUT, it is only a piece of the puzzle.  In the dialogue, I identified three key tenets for success.

  1. Predictive Model – Can you predict who is likely to act in certain ways – be adherent, log-in to the member portal, use mail order, switch to generics, pick up the phone?
  2. Segmentation Model – Once you can predict people, can you develop a segmentation model about how to get them to take action based on different attributes – gender, age, past behavior, preferences, income, other?
  3. Intervention Strategy – If you can predict who is most likely to act and know what type of segment they fall into, do you have a cost-effective intervention strategy to get them to take action…right message at the right time using the right channel?  For adherence, this could be reminders, coaching, devices, or other tools.  (As many people say, a less sophisticated strategy executed perfectly is better than a complex strategy executed less than perfectly.)

And, then you need to study and refine these on an ongoing basis especially since topics like adherence may be affected by macro-economic trends (e.g., economy), patient beliefs (e.g., fatalism), and other attributes (e.g., plan design) on top of the attributes in your models. 

I do believe we’re early in the days of modeling and that the access to data and greater availability of informatics resources will increase the development and focus on these models.

“One Walgreens” Advertisement

I liked the simplicity of the Walgreens’ ad that I saw this morning in a magazine (although I don’t like the tagline about “there’s a way to stay well” since there is a healthcare company named StayWell).

It provides this series of data points:

70,000 healthcare professionals

25,000 certified immunizing pharmacists

7,560 community pharmacies

1,670 physicians, nurse practitioners, and physician assistants

900 infusion nurses

700 worksite health centers and convenient care clinics

125 medical facility and specialty pharmacies

100 infusion and respiratory centers

1 Walgreens

PBMs and Social Media

I always get pulled into the discussions about what PBMs are doing, should be doing, or could be doing in social media. For now, let’s just look at the current state – i.e., who is doing what.

I’m going to focus on the big channels – Twitter, Facebook, YouTube, and blogging.

 

Twitter

Other (Facebook, YouTube, Blogs)

CVS Caremark @CVS_Extra

@CVS_Health

@CVSCaremarkFYI

http://www.youtube.com/user/CVSPharmacyVideos

http://www.facebook.com/CVS

Medco @DrObviousPhD

@LibertyMedical

@Medco

http://www.youtube.com/DrObviousPhd

http://www.facebook.com/DrObviousPhD

Walgreens @Walgreens

@WalgreensNews

@WalgreensHealth

http://www.facebook.com/Walgreens
Express Scripts @BobNease

@EScripts

http://www.consumerology.com/blog
MedImpact @MedImpact  

 

To make it easy, I created a Twitter list on my profile of the PBMs, pharmacies, and several other key resources in this area – http://twitter.com/#!/gvanantwerp/pharmacy-pbm.

I welcome your links to other PBM or pharmacy social media assets. I looked under CatalystRx, Prime Therapeutics, and SXC also. I also checked Cigna Pharmacy, Humana Pharmacy, Prescription Solutions, and Kaiser Pharmacy. I couldn’t find more, but I’m sure there’s a few I missed.

The question of course is how to judge if these are successful. Is it the number of followers or fans? I would argue no. The goal of social media is to create a dialogue and engage the patients or consumers. Given the traditional focus on the PBM on the business-to-business relationship and the pharmacy on the business-to-consumer relationship, there is an interesting question of how the mail order pharmacies (owned by the PBMs) make that leap. Can social media create a forum for discussion about plan design, drug trends, and other things in straightforward language that engages consumers? Will consumers be willing to use these channels to interact with the PBMs or only with their pharmacist? This could be an area where companies like Walgreens or CVS Caremark who have a large physical footprint can leverage a real-world connection with consumers to a virtual one easier than others.

As you can see, there are not a lot of people doing a lot yet. This area will change a lot in the next 5 years.

COMFORT – A Way For Breaking Bad News To A Patient

I came across this framework that I like.  It seems to take into account the health literacy and emotional challenges of a patient when receiving and assimilating bad news. 

COMFORT stands for:

  • Communication
  • Orientation
  • Mindfulness
  • Family
  • Ongoing
  • Reiterative
  • Team

Communications – use clear and familiar language.

Orientation – set reasonable expectations.

Mindfulness – focus on the patient without being distracted.

Family – include the family in the information and the ongoing support.

Ongoing – stress the ongoing activities so there is no sense of abandonment.

Reiterative – continue to reinforce the message to help them come to terms.

Team – coordinate care so that there is not conflicting or confusing information.

Quote Regarding Number of Pharmacies

“We have more than 60,000 drug stores in America, 38,000 grocery stores, and about 13,000 McDonalds. How difficult is it for someone to find a McDonalds hamburger if they want one?…Not hard. So why do we need 64,000 drug stores within our network?”

— Michael Jacobs, national clinical practice leader at Buck Consultants, told AIS’s DRUG BENEFIT NEWS.

 

CVS Adds Mobile Application

Communications continue to evolve.  Mobile health in the form of applications has either crossed the chasm or is crossing the chasm.  I expect in 5 years that most communications in healthcare for people under 45 will start with a mobile application.  It may “escalate” to other modes, but using a secure application on the ubiquitous mobile phone will be a primary starting point to engage them.

Caremark rolled out their mobile application earlier this year.  Now CVS has rolled out there application.  Several other companies have rolled out their applications also.  Humana’s application is out (mobile site).  Another big PBM is piloting their mobile application with one employer right now. 

So, what does the CVS mobile application do:

  • Find nearby CVS/pharmacy locations using the GPS-based store locator with integrated driving directions and maps;
  • Refill prescriptions from a personalized prescription history for pickup at any CVS/pharmacy;
  • Transfer prescriptions from another pharmacy to CVS/pharmacy;
  • Access the Drug Information Center to retrieve critical details about medication management, including instructions for use, dosing information, side effects and relevant safety warnings;
  • View and manage sales circular to create a custom shopping list and identify money-saving deals each week; and
  • Schedule a flu shot at any local CVS/pharmacy location.

Total Medical Costs Lower For Diabetics At Mail

I can’t believe I missed this one earlier this year especially since a friend of mine is one of the authors…BUT this is an important one for the industry showing that not only did adherence improve moving from retail to mail order pharmacy but as pharmacy costs when up the corresponding medical costs went down MORE!

I’m just going to paste the abstract from the Journal of Medical Economics below:

Objective: To compare long-term diabetes medication adherence and healthcare costs in patients using mail order pharmacy versus retail pharmacy.

Methods: The MarketScan database was used to identify patients who filled prescriptions for oral anti-diabetes medications in a retail pharmacy for at least 6 months before switching to mail order pharmacy for at least 12 months. These patients were matched to others who used retail pharmacy continuously for at least 18 months. A propensity score was used to create matched groups of patients comparable on probability of switching to mail order, weighted Poisson regression was used to analyze differences in medication adherence, and Tobit regression was used to compare costs.

Results: A total of 14,600 patients who switched to mail order were matched to 43,800 patients who used retail pharmacy continuously. The average adjusted adherence in retail pharmacy was 63.4% compared to 84.8% after switching to mail order. Per-member-per-month total healthcare and total medical costs were on average $34.32 and $37.54 lower in the mail order group, respectively. Diabetes-related medical costs were on average $19.14 lower in the mail order group, while pharmacy costs were $14.13 higher.

Limitations: Limitations include a patient population under the age of 65, no information on pharmacy benefit design, and limited follow-up time relative to that necessary to identify long-term diabetes complications.

Conclusions: After adjusting for measured confounders of medication adherence and disease severity, individuals who switched to mail order pharmacy had higher medication possession ratios and trended toward lower total and diabetes-related medical costs over time.

Press release about it here.

Here’s a slide showing the values:

Why Mail Order Is Better (ESRX)

I was looking at the latest investor decks from Express Scripts on their site and found this slide in the presentation from the William Blair Growth Stock Conference.  It does a nice job of comparing the two channels although I’m sure that my retail friends would hotly debate this topic.

Changing Rxs (or Doses) Without Asking Basic Question

I’ve talked about this with many clients.  Since physicians don’t always engage patients in the basic dialogue around adherence, how can they decide to increase doses or change prescriptions simply if the patient’s condition isn’t becoming better?  This has to drive waste in the system. 

The reality is that a physician may get a lab value that shows that their patient’s cholesterol (or A1c or…) is higher than it was last time.  They know the patient is on a certain dose of the medication.  They instinctively think to increase the dose or change the medication.  BUT…they don’t always ask the patient about their adherence to the medication.  This is attributed to multiple reasons:

  • They don’t see adherence as their issue.
  • They assume the patient is adherent.
  • They assume the patient would tell them if they weren’t adherent.
  • They assume if they ask that the patient would lie to them and say they were adherent.

I’d heard about a study done about a decade ago that had looked at this, but it had never been published.  I was excited to see that Medco had published some research on this topic today. 

There were some interesting things in the research also.  It was another validation on the fact that men are more adherent than women.  And, it showed that people with multiple conditions were more adherent.  I would expect that there is a curve around this that people with a few medications and those with lots of medications are least likely to be adherent, and those somewhere in the middle are most adherent.  (But, I’ve never looked at the data with this question in mind.)

Some Medicare Survey Data

The Medicare Part D prescription drug coverage has been a great validation for the PBM industry. It has shown the ability of the traditional tools to manage spend and provide an affordable benefit.

With that said, a new survey conducted on behalf of the Medicare Today coalition shows more reinforcing data:

  • 84% of beneficiaries are satisfied with their coverage.
  • 80% said their Part D premiums and co-pays are affordable
  • 94% said that they understand how their plan works and know how to use it
  • 65% said that they don’t feel a need to shop for a new plan during open enrollment
  • Only 20% were aware of the new discounts on brand-name medications that are available when they hit the donut hole next year [If I was pharma, I would make the PDP plans educate consumers on this.]

“The Medicare Part D program continues to defy its doubters,” said Mary R. Grealy, president of the Healthcare Leadership Council and co-chair of Medicare Today. “At its outset, critics said health plans wouldn’t participate in Part D, but today seniors have ample choices of affordable plans. They said the program would cost too much, but the last Medicare trustees report reported costs are 41 percent below initial expectations. And they said seniors would find the program too confusing, but it remains enormously popular.”

Presentation Secrets of Steve Jobs

One of the things all of us do is present. Steve is a genius at this. If you haven’t looked Presentation Zen and seen Jobs present, here’s a few points from a deck I found…

Your Personal Brand

Years ago, one of the articles that changed my approach was by Tom Peters called The Brand Called You. It’s a great article if you haven’t read it.

Here’s a good presentation I just stumbled upon with some similar messaging…

Slides From Kaiser Family Foundation

If you don’t visit, it’s worth going to the Kaiser Family Foundation Fast Facts section every once in a while.  They take the research data and put it in slides that you can download.  I did that and saved it up on Slideshare (see below)…

Some Social Media Videos

More and more, I am getting in conversations with clients about emerging media and how that plays into their healthcare communications strategy.  Whether that is simpler things like PURLs, SMS, and mobile applications or more complex decisions around Twitter, Facebook, YouTube, blogging, and social media. 

Here are a few things from YouTube that I thought were good on the general market.

Predicting Non-Adherence

There is lots of buzz over yesterday’s article in the WSJ about Express Scripts being able to predict who will be adherent.  Today’s blog post on the Corporate Research Blog added some details (or further confused me).  It says that the model is 80% accurate in predicting the 10% of people who are least likely to be adherent.

Is that all it does?  For sake of this post, let’s assume it does.  That seems much less interesting and much easier to do.  In talking with a leading researcher in this area that has looked at the correlation of 9,000 variables to adherence, he told me that nothing was highly correlated, but the most correlated metric was past behavior.  Where they adherent in the past on other medications?  Did they take preventative action (e.g., get flu shots, mammograms)? 

Several people have been looking at how credit scores can be used to predict adherence.  Given errors in credit scores, this may be deceptive even if it works.

But, back to the issue.  If you know who’s least likely to be adherent, so what?  Do you give up on these people?  They aren’t likely to chance behavior.  Do you try harder or have a different strategy with these people?  If you succeed and move them to taking their medications 40% of the time (using a proxy like a 40% medication possession ratio), does it make a difference? 

I would think it’s better to focus on the people who are likely to be adherent and how to enable them to move from 40-70% MPR to >80% MPR.  We often work with clients to stratify their population and have different intervention strategies (channel, messaging, level of effort, etc.) across where they fit in the model (value, likelihood to engage, likelihood to change).

Would You Trade Privacy For Lower Healthcare Costs?

There are several devices that have been invented that can be installed in cars to lower your car insurance costs.

Would such a concept work in healthcare? Would we (as consumers) be willing to trade privacy for lower costs? Would we willing to have our calorie intact monitored? Our exercise tracked?

Certainly, there is lots of talk about incentives versus penalties in healthcare.  Should you use a carrot to incent people to stop smoking, lose weight, take their medications, etc.?  Or should you use penalties where they pay more when they don’t follow guidelines and physician’s advice?

Humanizing Healthcare Thru Science

I was getting ready for a presentation last week and thought that the right way to position technology was as “science” that helps to humanize an overly complex healthcare system that overwhelms most people.  In thinking about that, I stumbled upon the UnitedHealthcare concept of “Health in Numbers“.

Another example of this is the WSJ article this morning on using data. The question is how to find the right mix of data to use and understanding what data applies when. Healthcare isn’t like consumer products. People change segments over time. The segment they fit in for adherence is different than the segment they might fit in for retention programs.

Analysts On The PBM Marketplace (ESRX, MHS, CVS)

I continue to get the chance to talk with more and more analysts about the PBM marketplace (see list of PBMs by claims processed).  It teaches me a lot from how they think about and analyze events versus how I see things.  I heard several of them speak the other day.  Here’s my spin on what they collectively said.

  1. The general dynamics are good.  Prescription utilization has continued to go up slightly even with the bad economy.  Mail use has stagnated but still offers value to the market.  The PBM model has continued to be validated and shown proven savings.  There is less client churn.  There is potential growth in covered lives around Medicaid.  There are more generics coming to market.  Specialty continues to grow and with biosimilars will offer opportunities for the PBM.  (see prior post on health reform and the PBMs)
  2. There is a short-term market (pre-2014) and a long-term market (post-2014) positioning for PBMs.  In the short-term, the flow of new generics into the market will drive the bottom line so mail order penetration and ability to convert members to generics thru plan design and education will be important. 
  3. The long-term is a little unknown pending how health reform plays out.  It’s possible (probable) that exchanges do happen.  It’s possible that employers push employees into the exchanges (although the recent waivers impact this).  Then, a government focus and a managed care focus becomes much more important that PBM success in the self-funded market.
  4. The PBMs are making different moves today but the value of those will be obfuscated until post-2014.  Express Scripts is staying very focused on the core PBM business with some moves in ChinaCVS Caremark is pursuing an integrated retail-PBM model which leverages the pharmacist and focusing on pharmacogenomics and MinuteClinic.  Medco is leveraging their Therapeutic Resource Centers (TRCs) as a phone-based care model and focusing on pharmacogenomics, several international investments, and several new service companies. 
  5. The managed care companies have looked to outsource PBM (e.g., Wellpoint and Aetna), but if health reform were to drive consolidation in the managed care industry (such that there were 3 large players like in the PBM marketplace), it’s possible that the managed care companies would carve pharmacy back in.  It was interesting that they saw the 10-12 year deals as enough time for the reform and the exchanges to play out giving the managed care companies time to see whether they want to carve these assets back in at that time. 
  6. The PBM tools have been effective but pharmacy is still only 15-20% of healthcare spend.  They saw an opportunity to pull more things under the PBM (e.g., specialty spend in medical, devices) and the opportunity to leverage experience in pharmacy in other areas of healthcare. 
  7. They also talked about the potential Accountable Care Organization (ACO) impact.  Will they become insurers?  How will they be structured?  The final models that prove themselves legally, financially, and clinically will impact the industry.

Some quick thoughts for you.

Stop By The Silverlink Booth At The Forum 2010 (DMAA)

Next week in DC is The Forum 2010 which is the annual event for The Care Continuum Alliance (formerly known as The Disease Management Association of America).  If you’re there, you should stop by the Silverlink booth and attend the presentations that we’re giving with some of our clients and other industry leaders. 

  Aligning Employee, Employer & Provider Research to Maximize Value-Based Benefits
October 13, 1:00 – 2:00 p.m.
Jan Berger, MD, MJ, Chief Medical Officer, Silverlink Communications
Cheryl Larson, Vice President, Midwest Business Group on Health (MGBH)
   
  Improving Statin Adherence through Interactive Voice Technology & Barrier-Breaking Communications
October 13, 2:15 – 3:15 p.m.
Ananda Nimalasuriya, MD, Chief of Endocrinology & Complete Care, Kaiser Riverside
George Van Antwerp, MBA, General Manager, Pharmacy Solutions, Silverlink Communications
   
  Addressing Colorectal Screening Disparities in Ethnic Populations
October 14, 12:30 – 1:30 p.m.
R. Reid Kiser, MS, National Director, Clinical Excellence Special Projects and Reporting, UnitedHealthcare
Jack Newsom, MBA, MS, ScD, Vice President, Analytics, Silverlink Communications
   
  Addressing an Epidemic – Improving Diabetes Care with Personalized Communications
October 14, 3:00 – 4:00 p.m.
Jan Berger, MD, MJ, Chief Medical Officer, Silverlink Communications
William Shrank, MD, MSHS, Instructor, Harvard Medical School and Associate Physician, Division of Pharmacoepidemiology and Pharmacoeconomics, Brigham and Women’s Hospital

Is E-Prescribing Good Or Bad For Pharma?

With e-prescribing finally reaching some critical mass here in 2010, this is an important discussion point. A decade ago (in a different prescription environment), the manufacturers were very excited about the opportunity to help drive formulary choice and have messaging to the prescriber during the drug selection process. Now, I think there are two major impacts related to the manufacturers:

  1. Formulary / Clinical Management

    From a PBM perspective, the “holy grail” of eRx is that they can push decisioning and information to the point-of-prescribing (i.e., the physician’s office). This should make it easier to drive formulary utilization (brand and generic) and also implement more utilization management programs (i.e., step therapy, prior authorization, quantity level limits).

  2. New Rxs

    Depending on what research you look at, anywhere from 10-30% of prescriptions that are written are never filled (for a variety of reasons). Let’s assume all of those have a reasonable chance of being filled.

So, on the one hand, from a brand manufacturer perspective, I’m likely to have less and less ability to influence choice of prescriptions through detailing and DTC advertising…leading to a higher generic fill rate. Although if I am the drug on formulary, I’m more likely to be chosen.

On the other hand, I’m likely to get more claims.

So, how does this work out mathematically? I have no idea, but here’s my thoughts.

  • 70% generic fill rate today
  • 85-90% generic fill rate is probably clinically possible between today’s generics and those coming off patent in the next few years
  • So, out of every 100 claims today, there would be 15 less brand Rxs. BUT, I would assume most of this would happen without eRx so let’s assume the technology either accelerates or drives an additional 5% generic fill rate. They lose 5 brand Rxs due to eRx.
  • 100 claims today goes to 120 claims (taking the midpoint) when capturing all the Rxs written (and getting them to fill by addressing their barriers)
  • They get 10% of the net new 20 claims…which is only 2 claims.
  • So, they are down 3 claims.

BUT…Don’t forget that the brand manufacturers make ~50% of the generics in the US. So, of the 23 net new generics (5 + 18), they get 11 new claims. This is a net positive of 8 claims (per 100) although at a different profit mix.

So, assuming 3.3B prescriptions claims per year in the US, this means a growth of 264M claims per year (8%) but they are trading brand claims which should be more profitable for generic claims.

Someone will have to help me understand if this is good or bad.

Pharma Manufacturers Need To “Blur” The Rx

Years ago when I was at Ernst & Young as a consultant, several of the partners wrote a book called BLUR.  The concept (that I took away) was that products and services were being combined into offerings.  That one could not stand without the other.  A quick example for me is General Motors with OnStar, but there are numerous examples out there.

In pharmacy, I think this has been the standard around specialty drugs for years.  Manufacturers produce the drugs and sell them to a pharmacy for distribution.  With that, they provide educational materials, adherence programs, or other “services”.

I think going forward that there is going to be increasing need to differentiate even oral solids (traditional small molecule products) that are less expensive and focus on chronic conditions.  Formularies are only going to get more narrow.  Comparative effectiveness is going to push companies to compare overall outcomes of products.  Why not find a way to wrap a similar service strategy around these medications in a more technology driven, scalable manner?

It seems like a great way to show that not only is your product effective when taken, but that patients on your product are more engaged with their condition and more likely to stay adherent.

Managed Care Companies Should Offer Free Shoppers

Someone almost stole my idea today so I better post it while I can seem somewhat original. 

We know that consumers (us) don’t make the best decisions (in general) when we shop.  We also know that small differences can add up.  (An extra 100 calories a day = 10 lbs per year.)  We know that being overweight drives lot of health conditions.  We know that it’s costly to treat multiple conditions.  We know that the complexity of care impacts people’s ability to follow a care plan.  And on and on…

So, why don’t the health plans partner with the grocery stores to offer free shopping services.  I can send in my list of have a shopper help me make decisions to pick the healthy bread.  To learn how to prepare my pork chops versus my steaks.  This seems to be a great opportunity to localize healthcare and make a tactical difference.

You Have Metabolic Syndrome – Say What?

Metabolic Syndrome…does that mean anything to you?  I doubt it.

Here’s the official definition (and a good summary here), but in layman’s terms, it means you’re obese and at risk for many different health conditions.

Metabolic syndrome is a combination of medical disorders that increase the risk of developing cardiovascular disease and diabetes.  (definition and picture from Wikipedia)

I just find this a classic example of us (healthcare people) creating and then using a medical term to describe something that simply obfuscates the problem that someone is overweight.

Drinking, Breast Cancer, Heart Disease, and Donations

Another story I’m taking from USA Today.  It was interesting.  First, they talked in one article about a few alcohol companies that are promoting “pink drinks” as ways to support raising money for breast cancer.  The companies didn’t appear to be linking sales to donations, but since drinking increases the risk of breast cancer, it raised an interesting question.  Is that okay?

Would you buy chewing tobacco if they gave 10% of the purchase to fighting mouth cancer?  Or would you buy more cigarettes from a company that had a lung cancer logo on the outside of the package and an advertising campaign around finding a cure for lung cancer?  Maybe that’s not apples to apples.  Would you buy more McDonalds (over Burger King) if they were more active in fighting childhood obesity?

Now, the breast cancer issue gets more interesting when they point out the health challenge of thinking about two sets of data…

  1. Drinking increases the risk of breast cancer
  2. Drinking reduces the risk of coronary heart disease

I think this is an interesting microcosm of what consumers face everyday.  Confusing information from multiple sources leading them to not know what to do.  Who do I trust?  What action do I take?  How do I weigh the tradeoffs?  (Read the USA Today article for more or look at the blogger they feature at www.breastcancersisterhood.com.)

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