Archive | November, 2010

Leading Trends in Rx Plan Management (Medco)

November 30, 2010 by George Van Antwerp 0 Comments

It’s always nice when you get on the marketing distribution list from companies. I love to get the PR and marketing materials to review. Medco recently sent me this document called “9 Leading Trends in Rx Plan Management: Findings from a National Peer Study“.

The survey was across 380 organizations plus 100 consultants and brokers. And, the survey was conducted prior to health reform passing so that’s an important timeline to keep in mind. It’s a nice quick read with lots of stats and charts from the survey with comparisons to last year’s numbers.

Executive Summary:

  • Less than 40% said they were extremely or very concerned about economic conditions affecting their ability to offer the same level of prescription benefits over the next 2-3 years. (down from 60%)
  • Plan sponsors are increasingly eager to find cost control solutions:
    • 90% – promoting the use of formulary products (brand and generic)
    • 80% – encouraging the use of mail order
    • 83% – helping members make more effective healthcare choices
  • 76% of plan sponsors state that balancing costs with care is the key philosophy (which is a reversal from 5 years ago where it was providing broad coverage)
  • Respondents see pharmacy as representing 22% of their overall costs (a higher number than I’ve seen before so I’d like to see actual data here)
  • Surprisingly, plan sponsors were more concerned over DTC advertising and minimal attention to personal health than aging and use of specialty drugs
  • 72% EXPECT their PBM to help reduce overall healthcare costs (what I’ve been saying for a few years)
  • 79% say that specialty pharmacy is better managed by the PBM than the health plan

The 9 leading trends:

  1. A transformative shift in benefit philosophy continues
  2. Rising costs replace economic woes as key affordability issue
  3. Plan sponsors prefer targeted but limited government employment
  4. Use of integrated data is becoming standard practice
  5. CDH plans are struggling to gain momentum
  6. Specialty medication management programs are increasing sharply
  7. Generics and preferred drug programs moving from incentives to mandates
  8. Decisive move towards stronger mail incentive programs
  9. Plan sponsors look to PBMs to reduce overall healthcare costs

(The ones that surprised me here were #4 which I just haven’t seen significant movement on and #7 where I haven’t seen much in the way of mandates, but I’m on the outside looking in these days.)

#1: Transformative Shift in Benefit Philosophy

  • Only 6% are focused on limiting coverage
  • Honoring retiree commitments is still the #1 factor in guiding retiree benefits
  • 95% of benefit advisors agree

#2: Rising Costs as Key Affordability Issue

  • 72% blame physicians for complying with patient requests for more expensive branded medications
  • 52% believe that engaging members to make better health and cost related decisions is their number one priority (which is exactly what Silverlink does for clients!)
  • 95% of benefit advisors agree

#3: Targeted but Limited Government Involvement

  • 60% say the government should have minimal or no role in providing prescription benefits (only 15% preferred a private plan)
  • 71% want the government to help bring generic biologics to market faster
  • 42% believe the government should mandate e-prescribing initiatives
  • 75% of benefit advisors agree that government proposals will help lower Medicare Part D costs

#4: Use of Integrated Data

  • 64% use integrated data to improve health and financial outcomes (I would guess much of that is outsourced to 3rd parties. This also still doesn’t include lab values.)
    • 74% do it to improve case management
    • 70% do it for disease management
    • 68% do it to identify members at risk
  • 95% of benefit advisors agree on the likelihood of recommending data integration over the next 2 years to control drug costs

#5: CDH Plans are Struggling

  • 27% of respondents offer a consumer-directed health plan but 73% say their members are reluctant to join
  • It was virtual tie between those that thought CDH plans helped reduce Rx costs and those that didn’t…but the majority of people agreed that they help employees better understand the real costs of healthcare
  • 67% of benefit advisors agree on the likelihood of recommending a CDH plan over the next 2 years to help control costs (which seems out of line with the employer perspective)

#6: Specialty Medication Management Programs are Increasing

  • 83% of respondents plan to install clinical and cost-management programs to help contain the cost of specialty medications
  • 40% cite specialty as the key cost driver
  • Respondents believe that billing under the pharmacy benefit:
    • Provides more consistent pricing (79%)
    • Provides a better understanding of therapy management savings opportunities (77%)
    • Provides a more complete and accurate picture of specialty spending (80%)
  • The programs being used are:
    • Utilization management (64%)
    • Limit days supply (63%)
    • Preferred pharmacies (58%)
    • Step therapy (55%)
    • Move coverage from medical to pharmacy (41%)
    • Waive copayments to increase use of a preferred pharmacy (9%)
  • 76% of benefit advisors agree on the impact of UM programs controlling specialty drug costs

#7: Mandates Over Incentives For Formulary Agents

  • 58% are requiring the use of generics and preferred drugs (does this mean going back to closed formularies?)
  • 90% use programs that incent (i.e., lower copays I assume)
  • 94% are likely to increase member communications to encourage the use of generics
  • 63% of benefit advisors agree on mandating the use of generics to control costs

#8: Stronger Mail Incentive Programs

  • 58% have installed programs where the member pays more at retail after a set number of refills (I think this is a Medco anomaly…they’ve always had the highest mail utilization)
  • 85% have a cost-share strategy that favors mail
  • 38% waive one or more copays as an incentive to move to mail
  • 5% auto-enroll members in mail
  • 54% believe dispensing errors are less likely at mail (while 7% believe retail is better)
  • Mail order is seen as having a better chance to maximize generic use (by a 5:1 margin over retail)
  • 69% of benefit advisors agree that dispensing errors are less likely at mail than retail

#9: PBMs and Overall Healthcare Costs

  • Why use a PBM:
    • More focused and experienced at controlling drug costs (88%)
    • Most competitive drug prices (88%)
    • Provide detailed analysis and reporting to help explain cost drivers and identify savings opportunities (87%)
    • More innovative approaches to controlling costs (83%)
  • After cost control of Rx, what do they look for in a PBM:
    • More effective in promoting adherence (69%)
    • Helps control overall healthcare costs (72%)
    • Better medication counseling (70%)
  • Benefit advisors believe the following are the most critical priorities for plan sponsors:
    • Engaging members (39%)
    • Controlling specialty costs (24%)
  • Ensure the pharmacy benefit supports a broader health strategy (20%)
Books / Articles, Healthcare, Marketing / Communications, PBM / Pharmacy, Research, Silverlink

Interesting Data Points From Specialty Pharmaceuticals Report

November 29, 2010 by George Van Antwerp 0 Comments

One my flights over the holiday, I had a chance to read the 2010 Specialty Pharmaceuticals Facts, Figures and Trends. This is a publication put out by the Center For Healthcare Supply Chain Research. The data represents survey data from manufacturers and distributors from surveys sent out in March 2010. I pulled a handful of things that caught my eye into this post, but there is a lot more in the report that manufacturers and distributors would be interested in.

Overall Market:

  • Global market for specialty pharmaceuticals is $144B (7.5% growth).
  • US specialty pharmaceuticals market is $64B (4.9% growth).

Survey Data:

  • Anticipated 2010 growth rate is 8.4%.
  • Half of distributors specialize in specific disease states.
  • All distributors claim to specialize in oncology and 2/3rds in RA. The next big focus areas are Autoimmune (including HIV/AIDS) / Immune, CNS (including MS), and Hematology.
  • The biotech drugs in development by disease area (from PhRMA 2008 Report):
    • Cancer                     254
    • Infectious Disease            162
    • Respiratory                27
    • Cardiovascular                25
    • Blood Disorders            20
    • Diabetes and metabolic        19
  • Nearly 60% of distributor’s product sales are distributed to independent clinics owned or operated by physicians. Only just over 20% are distributed to specialty pharmacies. (This was a shocker to me.)
  • From a storage perspective (based on SKUs not volume):
    • 41% require refrigeration
    • 2% require a freezer
    • 6% have to be stored in a cage
    • 4% have to be stored in a vault
  • From the distributors:
    • Avg # of orders per day = 2,153
    • Avg dollar amount per order = $10,503
  • ¾ of distributors with revenue streams below $1B use refrigerated boxes while none of those with revenues > $1B do…but all of them regularly use ice packs and insulated boxes.
    • A temperature monitor is used on 47% of the shipments
    • A humidity monitor is used on 17% of shipments
  • Manufacturers buy insurance always in 38% of the responses and 13% of the distributor responses. 50% of the time, in both cases, insurance is never bought.
  • One question which I found very interesting was what services they provide (by % of manufacturers):
    • 38% offer disease management programs
    • 75% offer drug and disease education programs
    • 25% offer compliance management programs
    • 75% offer patient assistance / copay subsidy programs
    • 25% offer an Internet community
  • Now, from a distributor perspective, what services they offer:
    • 75% offer call centers (I thought this would be 100%)
    • 14% offer disease management
    • 50% offer loyalty / incentive programs (this seems high to me)
    • 38% offer MTM
    • 38% offer refill reminders (why wouldn’t this be 100%)
  • Distributors reported an average of 1.4% of specialty units returned.
  • Manufacturers reported an average of 1.6% of specialty unites returned.
    • 73% outdated
    • 22% short dated
    • 4% damaged
  • 38% of distributors collect HIPAA information and share it in a de-identified and aggregated manner with manufacturers (with 60% of that information being at the dispensing location level).
    • Adherence
    • Disease
    • Filling location
    • Dosing
    • Physician information
    • Treatment plan
    • Treatment facility
  • Oncology makes up 60% of the sales volume for the distributors.
    • 1.5M new cancer diagnoses will be made in 2010 (American Cancer Society)
    • New cancer incidence rates are higher in men than women
    • 1/3rd of women and ½ of men will be diagnosed with cancer (National Cancer Institute)
    • Nearly 8% of cancer survivors admit to putting off medical care and 11% skip taking their medications due to cost
  • One very interesting insight was that some physicians prescribe an IV-administered agent rather than an oral medication to allow the patient to be monitored. (I wonder what the cost / value tradeoff is here.)
Books / Articles, Healthcare, Marketing / Communications, PBM / Pharmacy, Research

Wal-Mart and Humana for Medicare Part D

November 23, 2010 by George Van Antwerp 0 Comments

Again, I’m a little late on this story (too much work), but I was thinking about it after the CMS news recently that they were going allow plans with a 5-star rating to have an open enrollment season all year round.  That’s a huge deal. 

(If you’re don’t know what the Star Ratings are about,  see the Kaiser Family Foundation piece on What’s In The Stars or if you’re working on improving your Star Ratings, you can see Silverlink’s Star Power solution.)

Humana Walmart-Preferred Rx Plan

If you missed it earlier this year, Humana announced that they were partnering with Wal-Mart to offer the lowest national plan premium for 2011 for standalone PDP plans (see details).  Consumers who select the plan will get a lower copayment when they use Wal-Mart pharmacies.  (I’ve talked about limited networks before so it will be interesting to see if this gets more to be offered in the marketplace.)

“The basics of the preferred network – tight formulary and a low premium – offer an affordable value proposition for patients.”  William Fleming, Vice President of Humana Pharmacy Solutions (from Drug Benefit News on 10/8/10)

This creates a network with 4,200 preferred pharmacies and 58,000 non-preferred pharmacies.  Personally, I’m still surprised more people haven’t gone to the $0 copay for prescriptions at mail which Humana offers in this plan (for tier-one and tier-two).  United Healthcare has recently rolled out a program called Pharmacy Saver which has some similar attributes to the Humana plan. 

So, has it made a difference?  We won’t know yet.  I would expect it would.  The economy is still tight.  Seniors are budget conscious.  Humana has good brand equity.  Wal-Mart, especially in certain geographies, is frequented heavily by this population.

Medicare open enrollment is from November 15th thru December 31st.  This certainly caught everyone’s attention when it launched.  (You can see some of Adam Fein’s comments when it first was announced and here’s a more recent AP article on the topic.)  In a few months, we will know a lot more.

Blogroll, Books / Articles, Consumerism, Healthcare, Innovation, Leadership, Managed Care, Marketing / Communications, PBM / Pharmacy, Silverlink, Value Propositions

2010 Rx Benefits Survey (KFF)

November 23, 2010 by George Van Antwerp 0 Comments

This came out a few months ago, and I’ve been carrying it around for a while. (Here’s the summary.)

I read section 9 which is about the prescription drug benefits. A few facts from the report:

  • Almost 3/4 of people have copays (i.e., flat dollar amount) versus co-insurance (i.e., percentage of cost).
  • The average copayments were:
    • $11 first-tier
    • $28 second-tier
    • $49 third-tier
  • For co-insurance, the payments were:
    • 17% first-tier
    • 25% second-tier
    • 38% third-tier
  • 13% of workers had a plan with four or more tiers
  • 5% of workers have plans were the cost sharing is the same regardless of drug chosen

One of the more interesting things I saw is that average copays on first and second tier drugs are going up while the average coinsurance is going down.  Not much but directionally interesting.

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

Highly Stressed…Eat A Small Piece Of Dark Chocolate

November 22, 2010 by George Van Antwerp 0 Comments

A new site I heard about is called VideoMD.  Here’s one of the videos I found on it.

(But, I couldn’t use the embed code from their website so I used the embed code from YouTube.)

Healthcare, Marketing / Communications, Research, Social Media, Technology

Blog Reader Survey

November 22, 2010 by George Van Antwerp 0 Comments

I’m always interested to know more about my readers.  The only things that I can do to judge success are (1) look at number of visits; (2) look at number of subscribers; (3) look at number of comments; or (4) look at number of links.

Here’s a few questions.  I appreciate you commenting:

Blogroll

Why Do Consumers Not Pay Their Healthcare Bills (McKinsey)

November 22, 2010 by George Van Antwerp 0 Comments

Why don’t healthcare bills get paid?  Here’s a study from McKinsey.  Not surprising is that it’s a mix of lack of understanding and lack of resources.  It would be interesting to map that to type of costs – preventative versus emergency. 

Healthcare, Research

To Improve Health And Healthcare, We Need To Start Asking…

November 22, 2010 by George Van Antwerp 0 Comments

Apparently, this was one of the questions for TEDMED. You can see the Twitter results using hashtag (#ideaempowered).

How would you answer?

Here’s a few of my thoughts:

  • Why? Question unnecessary tests. Question use of a brand drug when a generic equivalent is available.
  • How can I get help? We need to figure out how to engage the system and the resources that are there for us.
  • WIIFM (what’s in it for me)? We need to require healthcare companies to deliver information in a way that allows us to understand how our decisions impact our overall goals.
  • What are the alternatives? If we get prescribed a drug, do we know what our alternatives are – drugs, exercise, diet, alternative therapy?

How would you finish the statement?

Healthcare

Updated Share of Revenue Growth Chart

November 21, 2010 by George Van Antwerp 0 Comments

Adam Fein was kind enough to send me an updated chart of the one I posted yesterday that comes from his new report “The 2010-11 Economic Report on Retail and Specialty Pharmacies” which will be available December 7th here – http://www.pembrokeconsulting.com/industry-reports.html.

One of the interesting things that isn’t clear in the industry is that while mail order made significant gains in the past decade, the IMS numbers show negative growth over the past few years. On the flipside, mail order numbers and new users are still a big focus across the PBMs.  It begs the question of whether mail order growth without intervention programs is negative and only those with an effective retail-to-mail strategy can replace and potentially grow mail faster than people organically leave.

It also begs more discussion on the topic of retention which while a hot topic for a while hasn’t manifested itself in many rigorous programs as of yet (to my knowledge).

Books / Articles, Healthcare, Marketing / Communications, PBM / Pharmacy, Value Propositions

Which Pharmacy Type Has Benefited Most?

November 20, 2010 by George Van Antwerp 0 Comments

Another chart in the Barclay’s report that I’ve been sharing piecemeal is from Adam Fein’s analysis. [If you don’t follow him, you should. He does some great analysis on the market.]

This chart looks at which type of pharmacy (chain, mail, …) benefited the most over the past 16 years in terms of share of growth.

 

The report also uses 2009 numbers to rank the top pharmacies by dollars:

These 9 companies represented 44% of the pharmacy revenues in 2009.

Healthcare

Legitimate Online Prescribers

November 20, 2010 by George Van Antwerp 0 Comments

From an article in USA Today, it sounds like tele-prescribing or virtual prescribing is making some steps forward.  It’s no longer a scam business set up to allow people to skirt the system but a legitimate set of online companies leveraging technology to make it easier for patients.  It will be interesting to see how this plays out.

With big companies and start-ups working in this space, it will likely take the same route as the clinics have taken in getting physician support although most of these described in the article seem to have physician involvement.  Will they protest their peers?

Eventually, this won’t even be a debate as we can use home monitoring devices that plug into our computer or smartphone or iPad app to tell temperature, blood pressure, and other key statistics.  I can see some cool scenarios being explored about how to allow the physician to do a virtual physical exam to complement the patient reported data.  I can also believe that an online record of the patient’s symptoms will be easier to pull into an EMR / PHR than the physician’s notes.

The one thing the article doesn’t bring up is why the physician isn’t accessing a PHR (personal health record) to conduct the exam.  I would think that should be a requirement for patients to use this.  Make them go thru the step of pulling their history into an online tool and adding data about OTCs and allergies.  Then, the virtual consultation would have a physician with all (most) of the data readily available.

You match that with some specific symptoms, some realtime data, and you have a recipe for improved care.

The three companies that the article mentions are:

 

Books / Articles, Consumerism, Healthcare, Innovation, Managed Care, PBM / Pharmacy, Technology

Augmented Reality Grocery Shopping

November 19, 2010 by George Van Antwerp 1 Comment

I’ve talked about it before – augmented reality.  I love the concept and the technology.  There are so many things you can do with it.  I was reading the post the Healthcare Blog about this a few minutes ago and realized what a great healthcare use it would have in grocery shopping.  Imagine that you look at different items on the shelves and it helps you see their calories and fat content.  You could probably even develop an application to help you select foods that when paired with your food at home create a meal.

This could be great.  I think crossing this last mile of linking healthy behaviors to shopping is critical path to helping people make smarter decisions and augmented reality could go a long way in accomplishing this.

Plus, if you add in a Yelp type rating system you can see what people and y our peers think of different products and brands. Watch out consumer products companies.

Healthcare

MD or RPh for info on prescriptions

November 18, 2010 by George Van Antwerp 0 Comments

If you have detailed questions on prescriptions, would you talk to your physician or your pharmacist?  I’d certainly talk to my pharmacist.  That’s their job while the physician is there to diagnose and treat.  I don’t think they can keep up with all the 10,000+ prescriptions in the market. 

But, apparently, I’m not the norm (not a big surprise on most things).

Healthcare, PBM / Pharmacy, Research

How Generic Prices Drop With Number of Manufacturers

November 18, 2010 by George Van Antwerp 2 Comments

Here’s another great analysis by my friends at Barclays Capital (contact Meredith Adler).  It’s amazing to see the correlation of these two variables:

  1. Generic price as a percentage of the brand price and
  2. Number of generic manufacturers in the market.

It begs the question of why those last few manufacturers get into the market.

Healthcare, PBM / Pharmacy, Research

Brand Prices vs. Generics Over Time

November 18, 2010 by George Van Antwerp 0 Comments

It’s amazing to look at the increasing gap over time between the price of a brand drug and the price of a generic drug.  There are a few things going on:

  • More specialty drugs
  • Less blockbuster drugs and therefore more research costs per new brand drug
  • More generic competition

But, regardless of the logic behind it, it is dramatic.

(Note: Research from Meredith Adler and team at Barclays.)

Healthcare, PBM / Pharmacy, Research

Smaller Homes – Better Health?

November 18, 2010 by George Van Antwerp 0 Comments

Apparently, there is a trend toward smaller homes (although I don’t see it out in the burbs).  The median home size has dropped from 2,300 square feet in 2007 to 2,100 square feet with more than 1/3 of Americans saying their ideal size is below 2,000 square feet.  (stats from article)

This makes me wonder if having less room will encourage people to get out of the house more.  Go out in the yard and play.  Go out to the gym.  Be more social. 

Will this encourage more neighborhood interaction?  Since we know that social pressures affect our decisions around smoking, eating, and exercise, this would seem like a good thing. 

It would be an interesting thing to study at a macro level.

Books / Articles, exercise, General Thoughts, Healthcare, Research

CVS Caremark Insights 2010

November 17, 2010 by George Van Antwerp 0 Comments

I’m catching up on a few things this week. One of those is sharing my notes from the CVS Caremark Insights 2010 publication (their drug trend report). While this year’s report outlines all of the traditional things you would expect – trend, spend by condition, market conditions, generic pipeline, I really thought the exciting information was at the end where they really begin to stitch together the retail / PBM model. I’ve talked about why I believe in this model so strongly in the past (you can also see some of their executive’s comments here). And, I think my perceptions about the future of pharmacists create lots of opportunity for a combined entity. I also think they hint at some of the insights they gained from research around non-adherence and around abandonment which is important and creates a foundation for them around predictive modeling and focused interventions.

  • I like that this year’s publication starts with a letter from Per Lofberg (the new President). He has brought them a renewed perspective on the PBM within the overall CVS Caremark enterprise which I think has been very helpful for them in this year’s sales cycle. [I personally haven’t met him yet, but I’ve heard a lot of good things about him.]
  • This introduction talks about:
    • Generics, specialty, and genetic testing as key trends
    • Controlling costs thru – plan design, clinical strategies, and negotiations with the manufacturers and retailers
    • Executing flawlessly
    • Improving outcomes
  • I like the fact that they introduce the outcomes focus early on. I think that linking themselves to outcomes given their unique footprint (retail, PBM, clinic) is critical for long-term differentiation.
  • Much like I see at Prime, CVS Caremark is a company that is blending its long-term team with some new leadership from outside the company and from the retail side of the business to drive innovation and change. I believe the clients and market has seen some of those changes already.
  • A quarter of their clients maintained a gross trend of less than 3%.
  • I found it interesting at the beginning of the document where they talk about the recession and macro-economy where they mention the effect that the COBRA subsidy had on health consumption.
  • They say that their member contribution is 15.7% which seems really low to me, but that is pulled down by the Medicare average.
  • As everyone has talked about, one of the big drivers of cost this past year was significant price inflation (9.7%) for brand drugs.
  • Their generic dispensing rate (GDR) in Q1-2010 was 70.4%.
  • Their average specialty trend was 11% with a best-in-class trend of 7.3% which seems really low.
  • Not a big surprise, the top classes are similar to other PBMs with large commercial populations. Here’s the list of the top 10 categories:
  • They mention later on their managed Medicaid lives (which I didn’t even know that they had). I think this should be a good growth area along with their Medicare Part D (PDP) lives.
  • They introduce a new methodology which I like which looks at trend by group – employers, health plans, TPA, and Medicare. There are differences in each so being able to compare to a relevant peer group is valuable.
  • They also talk about another change which is looking at book-of-business (BOB) which represent their top clients which represent 65% of total drug spend.
  • Their average gross trend was 3.4% (or 2.4% if you exclude specialty).
  • Digging into the best-in-class numbers is interesting. For example, for employers, 78.6% of their days supply was filled at preferred channel pricing (mail order or 90-day retail). I assume this is essentially for just maintenance drugs, but it seems really high (which is good) and is a new metric for me to think about.
  • They talk about 77.7% of hypertensives (in employers) being optimally adherent (which I assumes means having and MPR > 80%). This seems pretty good, but I don’t have an industry number to compare to.

“With overall goals of reducing health care cost and improving member outcomes, health plan respondents in our 2010 benefit planning survey placed high value on proactive member outreach (93 percent), multi-channel access for members (87 percent) and opportunities for face-to-face consultation (73 percent)—all factors that can help keep members on prescribed therapies and satisfied.” (page 14)

  • For each segment, they give the distribution of trend numbers. Here’s the one for health plans:
  • The best-in-class Medicare and Medicaid number for Generic Dispensing Rate are high and set a high goal:
    • 78.2% Medicare Part D
    • 86.8% Medicaid

Member retention is critical and involves a balance of copay levels, premiums and drug coverage as well as less tangible factors. Member satisfaction plays a significant role in loyalty and re-enrollment. High-performing plans focus on effective member communication and outreach as well as added-value services such as the CVS ExtraCare Health card.

  • They talk about using a split generic tier design for Medicare to allow for different member copays for higher priced generics. I think this makes a lot of sense, but I don’t know all the details or member data and feedback to really understand how it plays out.
  • I’ve never spent much time on Managed Medicaid, but they give a few numbers here:
    • Their average age is 17.6.
    • The average PMPY spend is $288.
  • Several times they use the term “evidence-based” which I really like. I recently was using that term to refer to communications and talking about how to leverage data to create “evidence-based” communications to consumers.
  • They provide a nice 2-page summary of reform.
  • They put out a short list of recommendations:
    • Prepare to take advantage of pending new generics; evaluate plan design and communication strategies for quick mobilization when new launches are pending. (This will be a big year for this with Lipitor.)
    • Many specialty pipeline products are for orphan diseases and will have narrow indications; have plans in place to ensure appropriate utilization. (This will continue to be a bigger and bigger issue.)
    • If you haven’t already done so, investigate the use of genetic testing to help guide treatment decisions. (Given their relationship with Generation Health this is an area that I expect to hear a lot more about in future Insights publications.)
    • Newer, more expensive pharmaceuticals may offer little advantage over existing products in the class; consider step therapy or preferred product strategies. (I think Utilization Management (UM) activities like Step Therapy (ST) will be a continued focus for the next few years especially as biologics allow these “traditional” techniques to be applied to specialty.)
    • Use wellness and preventive programs to identify people at high risk for chronic disease and help them lower their risk profile. (This is an area that I would have liked them to talk more about. As I’ve said many times, this is an opportunity for them to shine and differentiate.)
    • Members with chronic disease who are non-adherent tend to have higher health care costs; evaluate your population’s adherence levels and the support you provide to help people stay adherent. (Differentiation in this area is a huge opportunity. I think they are doing some interesting work in this area as they’ve talked about in some recent press releases – Rx abandonment, barriers to diabetes care, US Airways program, and behavioral research.)
  • They provide a forecast on trend for overall, non-specialty, and specialty. Here’s their forecast for the overall trend.

  • They give a clear chart on the generic opportunity and likely impact on overall generic fill rates for 2010-2012.

  • They go on to talk about specialty drugs which could be as much as 50% of the total spend by 2013…a scary prospect.
  • They have a good “state of the union” for specialty in the deck:
    • As of January 2010, 57 percent of all late-stage pipeline drugs fell into the specialty area.
    • 71 percent of applications for supplemental indications are for specialty products.
    • The number of new specialty drugs approved in 2009 was more than double the number of 2008.
    • Provenge, the first therapeutic vaccine—which utilizes the patient’s own DNA and stimulates the immune system to fight prostate cancer—was approved early in 2010.
    • Potential approvals 2010-2012 include four new products for multiple sclerosis (all oral), three for hepatitis C, and three for cystic fibrosis.
    • 18 of the products pending approval in 2010 target orphan diseases, which currently have few or no treatments.
    • While health care reform legislation provides for a pathway for approval of biosimilars, it also mandates a 12-year minimum exclusivity period for brand innovators with the possibility of additional exclusivity in 12-year increments for the development of new uses.
  • They then talk a little about pharmacogenomics (PGx). Again, I expect this to be a much bigger area in the future. It’s interesting. It’s changing rapidly. BUT, there is a huge education mountain for patients and MDs.

For a 1M member population, ~$12M is spent each year on 18 drugs that are administered to patients who do not respond and/or who are more likely to experience drug-induced medical complications.

  • I think some of the hidden gems begin on page 27 where they talk about their study on electronic prescribing:
    • 22.1% never filled their first claim. (why – samples?)
    • They found that those who had an eRx were most likely to fill than those with a paper Rx. (I personally would have bet on the other…i.e., that I have something physical in my hand that it would serve to remind me to go to the pharmacy.)
  • Another study towards the end was on abandonment (which they recently released more information on). It showed that copay, income, and whether it was an NRx (new start on Rx) were predictors of abandonment.
  • They also share work done around adherence focused on complexity of therapy – number of Rxs, number of MDs, number of pharmacies, and synchronization of refills. They talk about using this to score patients and predict risk of non-adherence. (I look forward to seeing more here since this seems very interesting especially in terms of focusing resources and developing a triage model.)
  • They shared the results of a deep dive on reasons for abandonment of prescriptions. Being able to respond and position messaging around these reasons is important.
  • They share some of the work from their Pharmacy Advisor program:
    • IVR messaging improved the odds of refills by up to 70.6% when members answered the phone.
    • Early IVR refill reminders were 2x as effective for first fill persistency rates at mail as compared to reminders after refill due dates.
    • Physician directed fax alerts about gaps in care nearly doubled gap closure rates.
    • Pharmacist interventions were most effective at improving adherence.
    • Members in VBID (value based insurance design) in which copays were lowered or eliminated were more likely to initiate therapy, less likely to discontinue therapy, and had better adherence.

“Diabetes is one of the most prevalent and expensive chronic diseases in the nation, costing the U.S. an estimated $174 billion a year,” said Troyen Brennan, MD, MPH, EVP and Chief Medical Officer of CVS Caremark. “The Pharmacy Advisor program improves clinical care because we are able to identify and address pharmacy-related care issues that if left unattended could result in disease progression and increased health care costs. We are also better able to engage the member in their care through multiple contact points, providing counsel that can improve adherence and help members optimize their pharmacy benefit and find the most cost effective options.” (quote from press release)

  • They talk about a pilot program they did in Polk County were patients signed a contract for care and was focused on diabetes care. It had some great results:
    • Reduction in blood glucose levels from 52% under or equal 7% at the beginning to 72% after one year.
    • 30% reduction in hospitalizations.
    • 24% reduction in ER visits.
    • Only 3.4% of enrolled members had poorly controlled diabetes (compared to national average of 29.4%).
    • Improved patient care – identification of potential adverse events, streamlined medication regimens, and formulary support.
    • (I personally would think this would get other plans (or PBMs) to partner with them on regional strategies where they have a strong retail presence.)
  • This also coincided with their announcements about their Pharmacy Advisor program which officially launches in January 2011. I’m very interested to see the uptake here which I would imagine will parallel the success of Maintenance Choice. This is a program which leverages their Consumer Engagement Engine (see image from last year’s report) and their retail presence to engage consumers.

Overall, it was an easy read without a lot of fluff. It cuts to the chase and gives you a good perspective on how they think. You begin to get a feel for what they are doing differently, but I imagine that you’ll continue to see a lot more research and case studies come out in the next year about some of the work they are doing.

(Note: In the sense of disclosure, CVS Caremark is a stock that I own.)

Books / Articles, Consumerism, Healthcare, Innovation, Leadership, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Technology, Value Propositions

$ESRX – Continued Growth

November 16, 2010 by George Van Antwerp 0 Comments

Some people think I should be impartial on my blog. But, no one really wants to read posts that are just PR recast for the sake of driving hits to the blog. One of the things I did a lot at Express Scripts was to see new research, try to find flaws in it, point out the flaws, and then try to find ways to innovate around them. I enjoy doing that here. With a lot of my clients, I get to do that in meetings where they respect my bluntness around what they are or aren’t doing. In other cases where I’m not included in those dialogues, I may play out some of those thoughts here. Hopefully, it’s a helpful perspective.

I have a fine path to walk which is to protect the confidentiality that I have with lots of PBMs while at the same time providing a fresh perspective on the industry. I hope all of you view it that way. I know all the analysts and competitive intelligence people enjoy what I talk about and lots of industry veterans find the views worthy of discussion. But, I think of few people take the intellectual challenges personally. Don’t.

One thing that a few analysts have asked about is my thoughts on why Express Scripts stock has done so well (see below). The short answer is FOCUS. But, I’ve certainly learned from talking to them that I see things differently. I’m often looking at the edges of the strategy and the innovation versus focusing on what the day to day operations are doing. At the end of the day, the analysts and the street are pretty focused on achieving the quarterly numbers.

Some of the things that they do that have made them successful are listed below.

  1. Focus. They have been one of the few companies that have really stayed the course on the PBM core business model – processing claims and mail order. I’ve talked to a bunch of the Wall Street analysts to gain their perspective. They look at things differently. While I may find much of the ancillary activities and strategy more interesting, George Paz (CEO) has been great at keeping them focused on what matters and constantly improving the key metrics.
  2. Integration. One of the best things they’ve done repeatedly is buy PBM assets and integrate them into the core system and existing business processes. This drives efficiency and scale which is critical to the core model.
  3. Research. From early on under Barrett Toan, the company brought in a group of statisticians and researchers. They focused on using data to research interesting topics and publish them. Eventually, this got better integrated with product management, and this now gives them a core team around which to build on for segmentation and predictive models. (Note: This research focus has become the norm in multiple PBMs now.)
  4. Consumerology. While I could talk on this one for days, this was an important move. They claimed the space before anyone truly realized it was the competitive battlefield for PBMs. They found a way to rapidly test things and package them up for the market to digest. (Although I’m disappointed that the Consumerology blog seems to have died with no new postings since May.)
  5. Generics. They realized early on that there was more money to be made from generics than from rebates and pushed hard for this. (Although I’ll admit to a few ugly meetings between me and the rebate team early on.) This positioned them well (“we save when you save”) and allowed them to have a leading generic fill rate (GFR) for years (although others have made up much of that ground).
  6. Intense Culture. The company has successfully adapted and rallied around numerous challenges with a relentless focus. For those that like this culture and can adapt on the fly, it creates a highly intensive environment of competitive people. They’ve created a GE culture of rewarding the high performers and creating competition for upward mobility. And, there is a hyper focus on a few key competitors – Medco and CVS Caremark… a lot of my friends didn’t even know who the other PBMs were.
  7. Worker’s Compensation. This business unit struggled to find a home forever, but some core people continued to push it based on the margins it represented. They seem to have doubled down with their acquisition of MSC a few years ago and have brought their lower cost approach to the market to win business.
  8. Medicaid. They seem to be one of the few PBMs that have traditionally played in the managed Medicaid business. Given the increase in lives that may come into Medicaid via healthcare reform, this could create a large growth opportunity.
  9. Golden Handcuffs. When you have a stock that’s growing like this, what do you want to do…tie people to the stock. The executives have huge investments in the stock and traditionally got lots of options. People that have been there for years have lots of options. This has definitely reduced turnover.
  10. Small Risks. They have also tried a lot of things under the radar. If it wasn’t for an analyst, I wouldn’t even know that they had started a GPO with Krogers. And, they barely talk at all about their work in China. The view there has definitely been that when you try something new to manage the risk.

All the PBMs are doing interesting things. The market has become very dynamic compared to some of the “me-too” days of old. Everyone is finding their space and claiming it. The next few years will continue to be interesting.

[A point of clarification and disclosure – I do not own any individual Express Scripts stock although it may be held by some of the funds that I have invested in.]

General Thoughts, Healthcare, PBM / Pharmacy

Prime Therapeutics 2010 Drug Trend Insights Report

November 12, 2010 by George Van Antwerp 1 Comment

I am way behind this year in getting thru the Drug Trend Reports and posting my comments.  I think I still have to do both the CVS Caremark report and the Walgreens report…and if I can get it, the SXC report also.  (You can see my thoughts from the Medco and Express Scripts Drug Trend Reports earlier.)

A few things I’ve found interesting this year were that Medco reached out via their PR group to engage me and several other bloggers in the space.  And, Prime Therapeutics has always been very active in engaging me around my thoughts on their report (see comment from last year) and continued to be proactive in discussing it with me and sending me a hard copy to read on the plane.

Overall, I think their Drug Trend Report continues to improve year after year.  It’s interesting in that this year I found the tone slightly more aggressive in talking about them versus their competition.  Certainly, Prime is going thru some changes (if you haven’t noticed).  They brought Eric Elliott on board who I think very highly of after hearing him speak and engaging him on a few topics.  Eric has brought in a set of core people from Aetna, Cigna, Express Scripts, and other places to complement an existing management team that really understands the market and how to work with the Blues owners.  [I personally think of them (and MedImpact or SXC) as a dark horse would could consider bidding on the Walgreen’s PBM lives while everyone is pretty focused on it being either Express Scripts or Medco.]

  • If you don’t know, Prime works with 17 BCBS plans who are either owners or clients.  They managed $9.1B of drug spend in 2009 and had 15M members.
  • Their overall trend was 3.4% which is good.  Everyone’s trend was generally low this year although I continue to question if this is the right metric for the industry.  I also wonder if they will embrace the outcomes based rebating that Eric did with Merck at Cigna.
  • Early on they talk about one of the ways they manage trend being through adherence and not manufacturer programs.  I might be out on a limb here, but I believe manufacturer funding on adherence programs (especially in specialty) is a good thing. 
  • They are always quick to point out that they report drug trend across their entire book of business not a random set or using any other cut of the data. 
  • They share some early analysis looking at medical claims where they identified that 1/3 of people with diabetic complications had no recent diabetes prescriptions.  A gap-in-care intervention opportunity. 
  • They also shared a study that I hadn’t seen published that members using a 90-day supply of medication (retail or mail) were 40% less likely to stop taking their drugs than those using a 30-day supply.  That’s a big difference. 
  • Interestingly they source a study saying that their members get Rx refills a day faster than competitors.  Again, that’s a big difference.
  • Generics were 67%.  (in 2009)
  • They talk about their MAC list (Maximum Allowable Cost) which is used to manage the cost of generics in the payment terms with the retailers.  They are the only PBM that I’ve ever seen do this. 
  • Their average costs per Rx were:
    • $145.51 Brand
    • $18.21 Generic
    • $62.40 Overall
  • They talk about the need to establish out-of-pocket (OOP) maximums for higher cost drugs.  I AGREE!
    • 1 in 6 cancer patients with high OOP costs abandon treatment
    • Capping OOP at $100 reduces abandonment to 4.9%
  • They (like others) discuss the impact of rising drug prices primarly around brand products. 
    • I had an interesting discussion with a reporter at the NY Times yesterday on this where he talked about manufacturers essentially paying the entire copay (20% of a $100,000 drug) to keep it getting filled. 
  • They projected that the GFR (generic fill rate) would exceed 70% by the end of 2010 which I suspect will happen (if it hasn’t already). 
  • It was interesting that they layout their pharmacy benefit for their employees.  That would be an interesting one to come across PBMs.  How do they treat their employees?  What do they recommend?  Do they take their own advice?
    • Generics were 10% with a $4 min and $10 max
    • Mandatory generic policy
    • Step therapy
  • Specialty medications had a 13% trend while representing less than 1/2 percentage of the overall prescriptions processed…but they did account for 12% of the cost.
  • Prime’s members filled 11.8 prescriptions per year (2.5% increase in utilization).
  • Prime’s Medicare trend was -5.6% with utilization of 48.2 Rxs PMPY.  The average age for their Medicare lives is 73 (compared to 33 in the commercial lives).
  • As I’ve talked about before, I like the way they break out their “Focus” drugs which are drugs used to cover diabetes, high blood pressure, high cholesterol, respiratory disorders, and depression.  These are categories with clear value propositions around adherence and are often co-morbidities. 
  • The average specialty drug cost $2,117.07.
  • Here’s some of their top drugs based on spend:

  • A few facts…
    • 7 in 10 Americans die from chronic illness.
    • As many as half of all patients don’t adhere to their prescription regimens.
    • More that $100B is spent each year on avoidable hospital admissions due to non-adherence.
    • Adherence to high blood pressure treatment alone could prevent 89,000 premature deaths in the US annually.
  • They shared that 70.5% of their 683,000 members using a statin in the second half of 2009 had an MPR (medication possession ratio) of 80% or higher (which is considered clinically adherent).  They talked about using copay waivers, value-based benefit design, and member education to drive up MPR.  [I’d love to see how the 3 compared in terms of results and ROI.]
  • They talked about an MD intervention program around respiratory illness that got 10% of members to return to therapy.  [I’m a big believer that PBMs need to integrate their MD and consumer intervention strategies since 1+1 can equal 3 in some cases.]
  • They then go thru different therapy class (drug categories) to discuss each one.  In the gastrointestinal disorders (think Prevacid, Protonix, Prilosec), I was surprised they didn’t talk about a strategy to drive OTC (over-the-counter) use.  [Although with some of the new rulings about what can be considered part of your flexible spending accounts, it may change how people compare the costs of OTCs to copays.]
    • I’m still a big fan of step therapy in this category using OTCs then H2s then generic PPIs then brand PPIs, but I know step therapy with OTCs can be a pain. 
  • Specialty drugs accounted for 21% of the $300B in 2009 drug spend (National)…by 2030, it’s estimated that specialty will account for almost 50% of drug expenditures.
  • They talk about Ampyra (a new MS drug) but don’t talk about how they are managing that.  [From my NCPDP meeting last week, RegenceRx was talking about more aggressively managing this.]
  • They share the research from PhRMA that there are 861 drugs in the pipeline for oncology.
  • Here’s a nice graphic on designing the right benefit…

  • They provide some best practices around plan design which did prompt some questions for me:
    • They talk about value-based benefits when MPR is less than 80% for diabetes, high blood pressure, and high cholesterol.  I’m good with this as long as it’s not selectively offered to just those with low MPR (i.e., rewarding those who aren’t taking their medications).
    • They talk about requiring prior auth (PA) before a non-preferred drug is dispensed.  Does this mean the formulary is essentially closed?
    • They talk about using co-insurance to deter the use of brand-name and non-formulary drugs.  I’ve always been a skeptic here since the patient doesn’t know the cost of the medication so I believe that flat copays are much easier to understand the difference, but there might be research that I’ve missed on this one.
    • They talk about reaching out to MDs on generic utilization.  This should work but is tough.  I had an academic detailing team at Express Scripts and a generic sampling team.  I’d love to know what the success rate was and if MDs impressions of generics have changed over the past 5 years. 
  • For tiers, they share data that suggests that the copay savings needs to be $25.50 per month for a patient to choose a generic over a brand (and I might assume one brand over another).  As they point out, that’s much larger than the $13 difference which exists today.
Books / Articles, Healthcare, Leadership, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Value Propositions

Get New Posts E-mailed To You

November 8, 2010 by George Van Antwerp 0 Comments

If you’re like me, you don’t regularly go out to the blogs that you like.  I’ve found that having new content e-mailed to me is very convenient.  I can read it on the plane or easily forward it.

On top of the people that read the blog in Google Reader, Plaxo, LinkedIn, and Facebook, about 300 people across healthcare have already signed up to get updates e-mailed to them.  To do the same, just click here. 

Thanks for reading.

Blogroll

Todd Park (HHS CTO) On Unlocking Innovation Mojo (#mhs10)

November 8, 2010 by George Van Antwerp 0 Comments

I came out to the Mobile Health Summit (Twitter hashtag #mhs10) in DC today, and I had the opportunity to interview Todd Park who is the Chief Technology Officer (CTO) for the US Department of Health & Human Services (HHS). Todd is a great resource for the country and perhaps a surprising bureaucrat (in the nicest sense of the word) given his background as a consultant and then co-founder of athenahealth.

It was an interesting discussion starting around what his role is. The CTO role is a new role in the US government which he describes as an internal change agent who is responsible for working with HHS leadership. He described his objective as forming virtual start-ups to advance new solutions. [A radical departure for those of us that view government as a monolithic organization which is slow to change and full of red tape.]

He said that one of the first questions people ask when they see the new initiatives such as HealthCare.gov is who were the consultants he brought in from Silicon Valley to do the work. He says that it was all internal people. We talked about that being a cultural change which he described as “creating the right vision” and a “work pathway”. That sounds exactly like what one might see a change agent being responsible for – better leveraging internal assets by changing the framework for service delivery.

We talked about several of the initiatives that HHS has worked on lately:

  1. HealthCare.gov which is a focused on helping consumers find public and private options for healthcare. He said this was a 90-day implementation. I think if you go to the site you’ll see a few things:
    1. Easy navigation
    2. Content for multiple personas
    3. Links to social media
    4. Videos, widgets, blog postings, iPhone app, etc.

    This is much like what you would expect from a direct-to-consumer company or your health plan.

  2. The Open Health Data Initiative which is focused on taking data which HHS has and making it available for use by companies for FREE. The idea is to stimulate an eco-system around the data and enable better health thru better decisions. He uses the NOAA framework as an example for how they share data to sites like weather.com. He then mentioned that they had done a brainstorming session earlier this year to think about what could be done with this data (some of which was new to everyone). You can learn more and see the 2-hour YouTube video here, but a talk by Todd Park at another event is below.

     

  3. The Blue Button Initiative which was launched in October and focuses on getting Medicare members and veterans to get a copy of their own data to print, download, share, upload, etc. Already more than 100,000 have downloaded their data. This should certainly be an enabler for PHR adoption.

We then went on to talk about HHS as a “reservoir of innovation mojo” which needs to collaborate with the public sector. In Todd’s words, he sees government as needing to be a catalyst and enabler. When he joined, his idea was not to fly in like aliens and change HHS, but to come in and find ways to unlock the mojo which already existed.

I asked him if he sees this as being a model for the private sector. Obviously, one of the challenges we have everywhere is figuring out the right way to balance co-opetition and competition. If we’re going to “solve” our obesity epidemic, we need to have some collective knowledge and insights rather than constantly re-creating learnings in a microcosm. On the flipside, companies want to create intellectual property and sustainable differentiation. It’s not easy to balance.

But, Todd mentions that several companies are already following in the “blue button” model such as Gallup / Healthways which is making their Well Being Survey data available publicly (for FREE) for the top 200 cities.

Of course, there is a lot of work to do here. I asked him about what the government was doing to address some things at a national level (e.g., obesity) where in my mind we almost need a reframing such as that which happened with littering, smoking, or wearing our seat belts. He brought up three things that were happening:

  1. National Quality Initiatives
  2. HealthyPeople 2020
  3. Community Level Dialogues

One of the other things that we talked about was the challenge of making changes to health outcomes with the health literacy levels in the US. I suggested that we need to address this systemically as I believe we need to address financial literacy…beginning in the schools and the home. He talked about needing to making learning fun through educational games. He mentioned that the First Lady had been promoting the creation of apps to accomplish this as part of a competition. (This made me think of the iTots article in today’s USA Today.)

We closed with a quick discussion on other things that he’s monitoring that will drive healthcare innovation. He talked a lot about improvements in the provider payment system – think Accountable Care Organizations (ACOs) and Patient Centered Medical Homes (PCMH). The goal with these is the change from “pay for volume to pay for value”.

Talking to Todd gives you a positive view on what government can do. I can see him motivating his team and his prior teams to follow his vision and embrace change.  I’d have to agree with Matthew Holt’s article on Todd Park from earlier this year.

Books / Articles, Consumerism, Events, Healthcare, Innovation, Leadership, Politics, Research, Technology, Value Propositions

Notes / Thoughts From The NCPDP Meeting

November 5, 2010 by George Van Antwerp 0 Comments

Here are my notes from the discussions and presentations at the NCPDP meeting in Portland.

  • The recession is a matter of perspective. Those with jobs think it’s over. Those without jobs or with family members without jobs don’t.
    • A good point to be made here is that much in life (and health) is seen thru our own lenses.
  • One of the issues with mortgages was the “liar’s loans” where people could get a bigger house by lying about their income. Things weren’t validated.
    • A good point here is the parallel with patient self-reported data and the lack of “tough love” in telling patients what they need to do to manage their weight (for example).
  • There is a new type of drug dealer – the elderly that are selling their drugs to pay for food.
  • Where is the tradeoff between competition and sharing data in the best interest of public health.
  • Kaiser pharmacies will help patients that can’t afford their medications on the spot.
  • Kaiser developed a system for converging multiple terms to ICD codes and then donated it for public use.
  • Every 7.5 seconds someone turns 50.
  • 80% of consumers see the value of a PHR but only 3% have them.
  • Only 44% of MDs are willing to use PHRs.
  • Tylenol PM is not good for people over 65.
    • The panel had a good dialogue about whose job it is to push this to consumers – AARP, Tylenol competitors, pharmacist, MD, consumer.
  • Long-term care is not just nursing homes – it is a continuum.
  • There is a whole effort focused on short-fills (daily, weekly) at long-term care.
  • Will reform kill the 340b pharmacy?
  • Are pharmacists doing what they should be doing?
  • The pharmacy metrics of # of Rxs per hour safely dispensed don’t have anything to do with outcomes.
  • More Rxs aren’t being picked up.
    • I personally wonder if this isn’t a red herring associated with more Rxs being written with electronic prescribing.
  • In one state, less than 3% of Medicaid costs are for primary care preventative services.
  • Would bankrupting the entire healthcare system be a bad thing or would it force us to collaborate?
  • Vaccines in the pharmacy is the beginning of pharmacists taking on more PCP type activities.
  • Is the CE model outdated? Did it ever work anyways?
  • Should a pharmacist take a patient’s blood pressure before refilling a hypertension drug?
  • 55% of claims filled are refills. Shouldn’t techs be able to do more of this function?
  • Ampyra is an MS drug that costs $15K per year. Its basic value is that it helps MS patients walk faster. What’s that worth?
  • If the plan design for medical and Rx aren’t coordinated, you could find patients trying to find the least costly option for products that could fall on either. Is this what was intended?
    • But who’s responsible for coordinating – payor, employer, PBM, consultant, HR?
  • RegenceRx is using a claim for an insomnia medication as a trigger to have a patient talk with a health coach. There often are other issues.
  • There are 1+ new genetic tests being launched each day.
  • 50% of mammograms offer a false positive over a 10 year period and 20% of women are harmed by these false positives.
Healthcare

The Future Of Pharmacists

November 3, 2010 by George Van Antwerp 0 Comments

I went into yesterday’s NCPDP presentation expecting that I would be an outlier in proposing a radical model for pharmacists … but others had the same ideas before I spoke. I think everyone has talked about pharmacists wanting to do more counseling with their patients for years. Some of this is fulfilled with Medication Therapy Management (MTM) which began to be a compensated service under Medicare.

But, there is a huge gap in terms of what pharmacists are trained to do and what they actually do. I remember initially running into this concept when I worked on my pharmacy kiosk model. Some people saw this as a horrible thing that would replace the pharmacist. I actually saw it as a way to free up their time to focus on the patients that needed counseling not on people filling an antibiotic or getting a refill for the 30th time. In that case, I ended up going to talk to the Head of the St. Louis College of Pharmacy to see his thoughts. I remember him talking about the gap between what the students learn and the reality of what they do.

Most pharmacists (unfortunately) become high paid pill counters for much of their day. As someone said yesterday, “I didn’t go to school to learn to count in 5’s.” Another person pointed out yesterday that the top questions at the pharmacy are “How much will this cost”, “How long do I need to take this”, and “where’s the bathroom”. These aren’t things that require clinical knowledge.

There was a healthy discussion yesterday about expecting more from pharmacy technicians. For refills (which are 55% of prescriptions filled), why can’t they handle the process with oversight from the pharmacist.

Which I think brings us around full circle…

We’ve gone from a shortage of pharmacists to an overabundance of pharmacists. This has changed the paradigm. How do we leverage them?

At the same time, we have a shortage of PCPs which is likely to get worse with more insured people. Why can’t pharmacists step in here?

The change in flu shots may be the beginning. Will this be the start of all immunizations for people over 7 (as one person suggested yesterday) moving to the pharmacy? Given the profit on these, that would be a boom for the pharmacies, but it would certainly get pushback from the physician groups.

I would also suggest that the pharmacist could act as a PCP in helping manage care. Think about conditions like diabetes where the pharmacist in certain settings would have a unique ability to help the patient select food or look at devices. They could become a much more active “floor” resource for people shopping.

And, my radical idea that another presenter suggested yesterday was to look at focusing the pharmacist on new fills and initial titration. This of course would blow up the financial model in pharmacy. Why not pay them $10 or $15 per new fill and for the next 2 fills (of maintenance drugs) and then move everything to mail order, kiosks, central fill, and/or pharmacy technicians. We could write rules into the system to flag the technician to ask questions of people on statins every 12 months about getting lab work done or muscle pain.

At the end of the day, I would argue that pharmacy needs a radical overhaul like the entire healthcare system, BUT since it only represents 10-15% of total healthcare spend, some would argue that improving it be 25% (which would be huge) would only impact 2-4% of our healthcare spend. The problem with this is it’s like the PBM trying to justify adherence without looking at the impact on total health, absenteeism, and other factors.

Today, prescriptions are first line therapy for 90% of diagnosis. Over 50% of patients take 1 or more maintenance drug. And, most patients drop off their maintenance prescriptions by the end of year one. This costs us $300B a year.

Finding a new role for pharmacists and pharmacies, and giving them a better seat at the table is an imperative for change not an option. At the same time, there is a role for integrating technology into what they do to automate the simplier, repetive tasks. I’m not sure who’s the champion here, but I was emboldened by the fact that I wasn’t a radical at the conference.

Events, Healthcare, Leadership, PBM / Pharmacy, Politics

Guest Post: CIGNA Launches Mobile Browser, Not App

November 3, 2010 by George Van Antwerp 1 Comment

Last week, CIGNA announced the launch of a mobile version of its web site. They are not the first health plan to allow mobile users optimized access to their tools and content. For instance, Aetna launched a mobile browser and mobile app earlier this year (and Caremark released its app over the summer. According to Pew, 9% of all cell phone owners now have health apps and 17% look up health or medical information on their device. It is clear that portable health information is here to stay. What’s not so clear is whether mobile users are more inclined towards a mobile version of a website or to downloading and then using health apps.

It is interesting that CIGNA did not include a health app in its announcement last week. It is possible that a similar health app is forthcoming, but that was not mentioned. Regardless, CIGNA chose to spend resources on launching its mobile browser first. Why would they do that when apps are all the rage? Could it relate to more general stats from Pew that only two-thirds of those with apps actually use them? And that older adult cell phone users in particular do not use the apps that are already on their phone?

Lately it’s not a popular opinion, but there are some who believe that apps are overhyped. Jim Balsillie, co-CEO of Research in Motion (Blackberry) “thinks the world is wrong about apps. Many are just glorified bookmarks, he argues, that aren’t necessary if you can connect customers to the Web. “I’m not going to bring developers to the Web. I’m going to make mobility Web-friendly,” he says. “Why do you need a YouTube app if you play YouTube? Why do you need an app to follow the Tour de France if you can just follow the Tour de France?” (Business Week article)

IMO, Balsillie is on target. Perhaps CIGNA agrees also.

Guest Blogger: Jeff Abraham is a Senior Director of Pharmacy Solutions at Silverlink Communications where he works with pharmacies, PBMs, and pharmaceutical manufacturers to help them design and implement multi-modal campaigns to engage consumers around their health. Jeff brings deep industry expertise including time with WebMD and Medco Health Solutions.

Healthcare

Technology Challenges (and Opportunities) For Pharmacy

November 1, 2010 by George Van Antwerp 0 Comments

Here’s the presentation that I’m going to deliver tomorrow (11/2/10) at the NCPDP education event in Portland.  The question posed was what are the busines models needed to survive and thrive in the new economy.  My mind immediately jumped to what are the challenges in the industry, what are the trends that got us to where we are, and how can pharmacies (or PBMs) think about turning these challenges into opportunities.

At the end of the day, I think there is still lots of white space for pharmacies to leverage technology to build relationships with their clients (consumers / customers / patients).  I think technology makes that scalable. 

One bias that I also have long-term is that (with the right economic model) retail pharmacies should focus on the acute drugs and new prescriptions and get compensated for the initial education and titration with the patient and the physician.  After that, maintenance drugs which are essentially just refills should be handled by the lowest cost option – kiosks, central fill, mail order.  I think that would encourage a different payment model centered around cognitive services and encourage greater collaboration between retail and the mail order pharmacies. 

Business Tools, Events, Healthcare, PBM / Pharmacy, Silverlink, Technology

Would You Eat Ice Cream That Requires A Waiver

November 1, 2010 by George Van Antwerp 0 Comments

I heard about this ice cream last week called “Cold Sweat” from Sunni Sky in NC.  It’s a cool name.  I was intrigued enough to Google it (not to eat it).  You have to sign a waiver to get it.  Would you do that?

It sounds like it was a one-time batch…I wonder why.

But, I assume there is some culture for these crazy hot foods.  Another friend told me about a restaurant that has a super hot food night once a year where you also have to sign a waiver. 

Or, are these just marketing tactics to capture attention and free press. 

Now, let’s turn this concept around…what if we required people to sign “waivers” or something similar to actively acknowledge when they smoked or ate meals with thousands or calories?  Could this force people to think differently?

Healthcare