Enabling Healthy Decisions | Category Archive

IDC Quote

February 25, 2008 by George Van Antwerp 1 Comment

In our recent press release, we had a quote from IDC that I think is relevant to all of you that read this.

“IDC’s research projects that actionable information, interactivity and communications to better manage consumer behavior will be a leading spend category for healthcare plans through 2010,” said Janice Young, Director, Healthcare Payer Strategies, Health Industry Insights, a subsidiary of IDC. “This will be critically important to health plans, not only to improve member satisfaction and retention but also to significantly lower costs.”

Books / Articles, Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Value Propositions

Managed Healthcare Executive Article

February 25, 2008 by George Van Antwerp 1 Comment

There is a nice article that appeared in the latest Managed Healthcare Executive magazine about non-compliance with a focus on behavioral health. Mari Edlin is the author and has written numerous articles for them.

I bring it up both because I talked to Mari and got a good quote from her in the article, but also because I think it is such a great example of why patient communications are so important. Although we would all like to believe that we pay attention to all the details of the product information (i.e., side effects), the reality is that we become much more aware of the medication once we start taking it. I believe some compliance issues could be addressed by quick follow-up with the patient.

For drugs which take time to take effect, right after the patient begins therapy, reach out to them and remind them that it can take time for the effects of the drug to take place.
Or, if it is a drug with significant side effects, reach out to them and remind them of the benefits of sticking with therapy so that they don’t give up due to the side effects.
Or, in other cases, they may need to titrate to a different dosage so reach out to them and capture some information about how their feeling on the medication.

From the facts I pulled from PharmacySatisfaction.com a while ago, the number one reason for non-compliance was “I forgot”. Combine that with the Caremark report showing that only 25% of people with a disease actually end up on the medication, and you have a real issue for us to address. I think for people with depression, ADD, bi-polar disease, and other behavioral health issues this has the added complexity of using controlled substances and medications that ultimately are affecting your mind.

“Medication adherence is driven by two significant factors,” says George Van Antwerp, vice president, outsourcing and professional services, Silverlink Communications Inc., a Boston-based company providing outreach to patients in their homes. “First is the patients’ view of prescriptions and belief in their ability to improve their health. Second, there are the experiential impacts of the regimen, such as realizing an immediate gain in health, the complexity of the therapy, the magnitude of the side effects and the cost to the patient.

“Since diagnosis of behavioral health conditions is not an exact science and the use of the medications can affect an individual’s behavior in different ways, several new complexities join the adherence discussion,” Van Antwerp continues. “Some patients with depression who have been prescribed an antidepressant, for example, may be thinking they should be feeling better very quickly. This is the kind of situation in which a patient can be reminded that it often takes a few weeks for the medication to begin working.”

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

Prime Therapeutics Drug Trend Insights 2006

February 22, 2008 by George Van Antwerp 3 Comments

As you may know, Prime Therapeutics is a PBM headquartered in Minneapolis that is owned by a group of BCBS plans. I just had a chance to read their Drug Report this past week. As I have talked about Caremark, Express Scripts, and Medco, I thought I would share a few comments and highlights here.

First, I thought it was interesting in that it took a slightly broader perspective (perhaps the BCBS influence) on the industry dynamics. It mentioned the war and YouTube (for example). [I don’t think I have seen many other people in healthcare even acknowledging YouTube.]

I was surprised by a 2004 Rand and BCBSA study they quoted saying that “approximately 70 percent of survey respondents cited the Internet as their main source of health information” thereby supplanting the role of the personal physician as the primary source.

Given the focus on wellness across the industry, I found their list of common components and incentives that are used in creating a wellness program to be a good, quick checklist.

I couldn’t figure out two things that were either “corporate DNA” opportunities or something different about their pricing and plan designs.

They say that plans that transition to Prime from other PBMs save 4.5 percent. (Which is significant.)
They also said that their utilization was only 10.65 in 2006 which would be lower than most numbers that I have seen.

They do a good job of explaining some of the generic scenarios in the industry as people try to get that small advantage.

At-Risk Launches

Several generic companies launched their products ‘at-risk’, which means that the FDA has granted approval to their product prior to the expiration of a patent that is contested in court, but after all applicable exclusivity periods have ended. These ‘at risk’ generics, including generics of Biaxin®, Plavix®, Toprol XL® and Wellbutrin XL®, are subject to large penalties payable to the brand-name drug manufacturer if they lose pending lawsuits. Citizen Petitions Brand drug manufacturers, or their agents, frequently use Citizen Petitions in attempt to slow down the approval of generics. These are not legal proceedings in the typical sense, as they usually do not involve specific protection of a patent. The FDA must make a ruling on a Citizen Petition before it approves a generic, and this frequently takes a significant amount of time. These products are currently involved in Citizen Petitions: Lovenox®, Concerta®, Catapres TTS®, Skelaxin®, Vancocin®, Miacalcin® and Flovent®.

Authorized Generics

With authorized generics, the brand-name drug manufacturer makes its own generic version of its own brand-name drug. By doing this, they can reduce the profit a first-to-file generic company reaps during generic exclusivity periods, which could discourage generic companies from entering the market.

Agreements Between Brand and Generic Companies

Another pressing issue, which has also been around for several years, involves agreements between brand and generic companies. These agreements end litigation and keep generics off the market for a period of time, but still may allow generics on the market before all patents have expired. Sometimes these agreements involve payments to generic drug manufacturers in an effort to delay the release of the generic product.

The other thing that I thought was a good summary in their document was their predictions for 2007 and 2008.

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Books / Articles, Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research

Drug Mix – Saving You $300

February 20, 2008 by George Van Antwerp 1 Comment

You can go and buy the AIS audio conference on drug mix for $300, or I will give you my executive summary of what you likely would hear. (Note: I did not listen but used to do these presentations.)

Here is what they say they will address:

How an optimal drug mix can result in significant savings
- Brand drug = $100 less network discount plus dispensing fee less copay less rebates…let’s call it$60.
- Generic drug = $40 less network discount plus dispensing fee less copay…let’s call $5.
- You save $55 for each prescription you move to a generic.
- Each 1% improvement in generic fill rate = 0.75% – 1.00% reduction in pharmacy spend.
- 14 Rxs PMPY * $50 average cost per Rx = $700 PMPY
- 1% of $700 = $7 PMPY for a 1% improvement in generic fill rate
- 100,000 member plan saves $700K per year
- And, inflation on generics is much less than inflation on brands year-over-year
How drug mix has become a factor in selecting a pharmacy benefit manager
- First, I have to say that this is great positioning. For years, we tried to convince clients and consultants to weigh this in proposals with limited luck. So, change it to imply that it is what’s done.
- You would much prefer a PBM that guaranteed you that it would improve your generic fill rate by X points that simply getting a slightly better discount.
What PBMs and plans must do — and NOT do — to develop the best drug mix
- Make sure you have at least a $15 difference between your generic copay and brand copay
- Lower your generic copay to less than $10
- Have a mandatory generic plan in place (i.e., the patient pays the difference if they want the chemically equivalent brand…unless they can prove they have a rare allergy to the dye)
- Use a 3-tier formulary
- Reach out to patients and tell them when they should discuss generic alternatives within the class with their physician
- Offer to waive the patient’s copay if they switch to the generic (Don’t just drop your generic copays to $0…you’re just wasting money.)
- Consider implementing a step therapy program which requires generics as first line agents
- Drive web utilization of tools that show patients how they can save money
What types of member incentives are most effective in driving optimal drug mix
- You’re saving $50 times all their refills…share some of it – points, coupons, copay waivers, gift certificates
How plan sponsors can evaluate drug mix
- Not easy. There are no apples to apples.
How contractual mechanisms can ensure accountability for achieving drug-mix goals
- Look for a trend guarantee or a GFR guarantee tied to beating the overall market
- Or look for an average price per Rx guarantee holding your copays constant
How other factors, including drug pricing and discounts, must be evaluated by plans and PBMs at the same time as drug mix
- Discounts are important
- Rebate share is important…at this point you should be getting 100% of rebates
- Understand how your PBM makes money

I am not in the business anymore so I don’t have all my traditional back-up slides to cover it, but there are some simple tools that will really drive your savings. Set-up the right plan design and then communicate and promote the lowest cost solution to your patients in a convincing way that they take action.

Events, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Value Propositions

90-Day versus Mail

February 20, 2008 by George Van Antwerp 0 Comments

For those of you that are academics, here is a classic business school case type situation. If you are a PBM who owns their own mail, what do you do if a retailer offers you a 90-day retail rate where you could make high margins with limited costs?

Here are a few options:

Implement a new custom network which includes the retailer’s 90-day pricing. Assuming you make spread, this allows you to make money with much lower support costs per Rx and limited infrastructure. The downside is that as your mail decreases then you lose some negotiating leverage in the future. (I.e., The implied politics here are that by having a strong mail order presence you can negotiate with retail for better retail rates. Is this true? Not sure.)
Don’t implement the 90-day network. This allows you to continue driving mail order, but it doesn’t allow you to make more spread on patients that don’t want to go to mail but want 90-day scripts. But, you also leave money on the table for your clients who should be saving money with the 90-day network.

This is where the business model gets tangled up with the financials. Obviously, there is some optimal mix to create the best win-win, but the retailers and mail order pharmacies are often in disagreement with limited apples-to-apples data.

But, while we are at it, why limit prescriptions to 90-days. Depending on the drug (i.e., maintenance, risk of abuse) and the probability of the patient not being covered, it certainly makes sense to a mail order company to offer 180-day fills (for example). From a retail perspective, you want the continuous foot traffic so longer is not better. 90-day (I believe) is only as a response to mail. It is not an optimal situation.

Obviously, I could debate the merits of patient choice here. The patient should be able to get their desired prescription at whatever channel especially if their copayment amount keeps the payor whole. (For example, if it costs the plan $5 more per month to get the drug at retail, why shouldn’t the patient pay for that privilege.) I wonder what would happen if we reversed the market positioning not to say you save money with mail, but to say you are penalized if you use retail for maintenance drugs. Not required…just pay more. (Today, everyone is conditioned that they get a 90-day supply at mail for the price of a 30-day supply at retail versus paying an additional $5 to get a 30-day supply at retail.)

Consumerism, Healthcare, Marketing / Communications, PBM / Pharmacy

Is Pharmacy Volume An Issue?

February 18, 2008 by George Van Antwerp 1 Comment

Here is a recent headline from USA Today that is guaranteed to capture your attention. Is it sensationalism? The Angry Pharmacist certainly thinks so although I think he/she is being a little harse when they say things like:

If you read the article, it plays on the emotion of the poor kid who got the wrong medication, and the poor baby who got 5x the amount of amoxicillin and would ‘writhe in pain’ (give me a f**king break, a 16 day old baby isn’t even developed enough to know it even exists, let alone what pain is). Wah wah wah. The kid probably was colic or had some gas and was fussy.

Those of us with kids certainly would care and believe that our kids feel pain. I don’t think I would trivialize someone’s individual experience like that.

The USA Today article says that retail pharmacy error rates run less than 1% which seems lower than some numbers I have seen depending on what you count as an error. Is it errors reported to the state board? Is it errors that cause harm? Is it errors that are made by humans but caught by the computer system?

An Auburn University pharmacy study in 2003 projected the odds of getting a prescription with a serious, health-threatening error at about 1 in 1,000. That could amount to 3.7 million such errors a year, based on 2006 national prescription volume.

Obviously pharmacists are over-worked. I know the head pharmacist at my pharmacy works almost 80 hours a week year round. At some point, fatigue will influence a manual job. Additionally, I was shocked when I first realized that in many states all that is required to be a pharmacy technician is a high school diploma. They aren’t highly trained individuals although many with years of experience know a ton and are key pieces of the process. There are some efforts to require certification of technicians across states such as the Institute For The Certification Of Pharmacy Technicians.

Job stress for pharmacists has been documented numerous times and given their salaries, many pharmacies push them to drive down the cost to fill (i.e., the more scripts filled divided by the salary = less cost per Rx).

Daniel Hussar, a pharmacy professor at the University of the Sciences in Philadelphia, offers a more critical view. He says staffing policies have made pharmacy chains stressful workplaces. “The emphasis on speed is counterproductive. It’s an invitation for error,” says Hussar, editor of The Pharmacist Activist, an online newsletter.

The time expectations for the pharmacist are very tight as USA Today reports.

Walgreens’ budget guidelines for work hours, never previously publicized, say a pharmacist at a typical store might have as little as two minutes to verify the accuracy of a drug, its dosage and directions. [And include counseling?]

With a huge shortage of pharmacists and utilization of drugs going up rapidly, this issue isn’t going away.

Books / Articles, Healthcare, PBM / Pharmacy, Weblogs

Sweating The Small Stuff and Corporate DNA

February 17, 2008 by George Van Antwerp 0 Comments

Although I agree with the book on Don’t Sweat The Small Stuff for your personal life, I would disagree from a patient communication perspective. I believe most healthcare people dislike the word marketing. They don’t want to think about communications as marketing (which of course has some HIPAA implications if they did). But, the fact is that you are competing for mindshare and trying to get the patient’s attention to do something (otherwise you are just communicating to fulfill some checkbox).

Let’s just think about a few key points in communications:

Choosing the right word. There are lots of examples of how industries and/or companies have reshaped a single word or phrase to have new meaning and new positioning. It matters. Telling stories that evoke emotion and create a call to action have power. There are the classic bad examples such as calling a car a Nova which when exported to Spanish speaking countries means “no go”. And, traditionally, a lot of our health care terms are more negative such as prior authorization or only mean something to someone in the industry such as network.
- Used cars have become pre-owned vehicles.
- Online forums have become communities.
- Generics have become unadvertised brands.
- Mail order has become home delivery.
- Employees have become associates.
- Members have become patients.
- Is formulary better than preferred drug list?
Determining when to communicate. Depending on your family and your conditions, it is possible that you get at least one communication per month (if not more) from some entity within the healthcare process – managed care, hospital, primary care, specialist, retail pharmacy, mail pharmacy, specialty pharmacy, pharmacy benefit manager, employer, disease management company. The reality is that you are going to pay the most attention to a communication when it is timely. For example, telling me that some group of physicians will no longer be in my network doesn’t matter to me if I don’t go to them today. When I go to choose an allergist and find out that the best one in the state is no longer in network, then it matters, but I have long forgotten that communication.
Coordinating multiple channels. Thinking through a communication and where people will look for information – website, inbound IVR, live agents, employer. It is important (to optimize success) to think about how patients receive and digest information and coordinating information. Nothing is more frustrating than hearing one thing but getting a different answer in another mode of communication.
Using personalized preferences. You make yourself “sticky” and create loyalty by learning about your patients…and using that in how you interact with them. What do they do with information? How do they use information? How do they use healthcare? When do they respond to calls? Do they use the Internet?

It’s not easy, but it is essential. From a healthcare perspective, the industry continues to march down a path where differentiation is going to be in the way the company treats and interacts with the members and patients. Which brings me to the question of corporate DNA.

Are there things embedded into the culture of a company that all things being equal make the experience or outcomes with one company different from that with another? It is an important but difficult to prove question. We did a lot of analysis at Express Scripts to try and prove this. For example, if plan design and population was exactly the same, would a company have a different generic fill rate with us than another PBM?

This is where the small stuff matters. How people answer the phones at the call center. How patients perceive the company and the type of experience they have. How logic is coded in the system. Additionally, this is where I think you see the link between corporate culture and company results. Positive cultures where people love their work, enjoy coming to work, and want to make the company successful have a spillover effect on the customers.

Books / Articles, Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research

Are You Going To PBMI or Health 2.0?

February 15, 2008 by George Van Antwerp 4 Comments

If you are going to either the PBMI conference in Phoenix (2/26-2/29) or the Health 2.0 conference in San Diego (3/3-3/4), I will be there. Drop me a note ahead of time or look me up when you are there. Thanks.

Consumerism, Events, Healthcare, PBM / Pharmacy

Wal-Mart Expanding Clinics

February 15, 2008 by George Van Antwerp 2 Comments

Conceptually, I think the walk-in clinics are great. They are convenient. You go when you feel bad and don’t have to plan ahead. The copay is less than the urgent care or ER.

Of course, the question is how many can we sustain and of course, whether the level of care is any different. On paper, if you are going there for the right reasons (i.e., not for a heart attack), the care should be equal. I found the article on Wal-Mart’s expansion in this space to leave me with more questions than answers. Here were a few:

I don’t understand the Wal-Mart branding here. They talk about wanting to have their branded clinics. They also talk about partnering with RediClinics, a Revolution Health company. They also talk about having local partners with a trusted brand (e.g., local hospitals).
It says that clinics aren’t profitable and take up to 3 years to recover the start-up costs. I see the upside for Wal-Mart of foot traffic and potentially more prescriptions. What do these other constituents get?
I also have to question this as a fast follower strategy (which can sometimes be a great strategy). Walgreens and CVS have both gone into the PBM market. Wal-Mart is considering the same. Walgreens and CVS have both gone into the clinic market. Will Wal-Mart acquire a company and do the same?
It is also confusing that one of their vendors (for almost 25% of their clinics) went out of business due to bankruptcy and is now supposedly raising funding to re-open them within Wal-Mart. Didn’t they say earlier that they were going to be branding them as their own? If the clinic company isn’t financially stable, why are they working with them? If they already had 23 clinics that closed, why was that – no customers, wrong financials? And, why didn’t they just buy the assets to jump start their clinic model?

“We have learned that people are willing to receive their health care from the front of a store or the back of a drugstore,” said Dr. John Agwunobi, a medical doctor who is a Wal-Mart senior vice president. “But customers also have said they would rather it be delivered by a trusted name, a local health care practice, a trusted local provider of care.”

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

Clinics, PBM, Wal-Mart

Will eRx Reach The Tipping Point

February 15, 2008 by George Van Antwerp 0 Comments

The concept of the tipping point made famous by Malcolm Gladwell’s book is (in my words) the inflection point at which the market begins to adopt something and everyone jumps on the bandwagon.

So, with CMS saying that eRx (electronic prescribing) could eliminate as many as 2M prescribing errors per year, and Congress considering a bill to link Medicare payments to use of technology, will it make a difference. (I am pulling a few of these facts from Medco’s recent announcement about launching a Medicare Part D eRx initiative.) Only 3% of physicians use the technology today, and from my experience working with the vendors and physicians, there are still several big issues. Maybe this will address some of them.

Standards – Will all the payors and PBMs share some standard such that a physician can move from system to system or from office to hospital without having to relearn a new application? Can they write prescriptions for the majority of their patients from one system or have to keep using different applications?
Stability – Is there a vendor that they can trust? There have been several great concepts that were either before their time or had a flawed model. Time and money wasted on a system that isn’t supported leaves a bad taste in their mouth.
Workflow – Does the system fit into their current office workflow? If not, why should they change behavior? Is it less expensive and disruptive for them to have the pharmacy or PBM contact their staff to address the issues after the fact? What percentage of the 2M errors wouldn’t be caught further upstream?
Incentives – What’s in it for the physician? You are asking them to do more.
Division of Labor – Who has what responsibility? For the PBMs, MCOs, and pharmacies, it is great to resolve issues at the point-of-care (POC) with the physician. Drug-drug interactions. Formulary issues. Brand to generic opportunities. Retail to mail opportunities. The physician could easily get overwhelmed with all the requests and go from a quick process to a difficult process.
Support – What IT responsibilities come with the system? Who is supporting it? Does it impact the rest of their practice? Does it integrate with their practice management system? If they come to depend on the solution, what happens when it goes down?
Cost – Who pays – physician, MCO, PBM, pharma (not likely these days)?

I know many of these are addressed in different ways today. I think we may be able to systemically force some of this into the office, but in general, until there is a generational transition in the physicians office (i.e., those in their 30s today are the high prescribers), I don’t think wide spread adoption will happen.

The value is clearly there. Even looking at the pilot statistics from the Medco pilot in Michigan, you see that there are issues and opportunities which can be addressed. These don’t even take into account the handwriting issues and other safety issues which occur.

A severe or moderate drug-to-drug alert was sent to physicians for more than 1 million prescriptions (33 percent), resulting in nearly 423,000 (41 percent) of those prescriptions being changed or canceled by the prescribing doctor;

More than 100,000 medication allergy alerts were presented, of which more than 41,000 (41 percent) were acted upon; and

When a formulary alert was presented, 39 percent of the time the physician changed the prescription to comply with formulary requirements.

I personally think one of the most interesting opportunities will be to see who received a prescription and didn’t fill it and subsequently determining which of those estimated 30% of people should be filling the claim. The value of driving that initial compliance should be significant in avoiding more costly issues down the line.

Books / Articles, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research, Technology, Value Propositions

Peeling The Healthcare Onion

February 14, 2008 by George Van Antwerp 1 Comment

I think an onion is the right analogy for healthcare for three reasons: (1) it can make you cry; (2) every time you pull off a layer you learn more; and (3) what you see from the outside is a lot different than what you see from the inside.

It can make you cry.

When you have the Congressional Budgeting Office projecting the healthcare costs will be 49% of GDP by 2082, you know things have to change. This is a front page topic almost everyday across the country. But, like an onion, if we don’t handle this right, it will make you cry out of frustration and pain. Change is not easy especially in a complex system that we have today. Finding the right mix of push and pull is going to be important.

Quality is still an issue across the system. Biting a bad onion or having a quality issue with your care can make you cry. Look at the USA Today article from the other day about Too Many Prescriptions, Too Few Pharmacies or an entry on my blog about the Institute for Healthcare Improvement.

Every time you pull off a layer you learn more.

This applies so many ways to healthcare given our system, but I think of this from two perspectives – data / information and process. We have so much data in healthcare, but without the right model to make it into information, it just sits there. And, as we layer data (e.g., medical plus pharmacy plus lab) or integrate healthcare data with demographic data, we can learn so much more about our patients and how to care for them. This ranges from simple questions such as how to motivate behavior (e.g., cost savings versus loss avoidance) to how to deliver information based on their learning style.

Every question you ask (or layer you pull off) reveals a new set of data that can be transformed into information while at the same time creating new questions. Does the relationship you found in the data simply indicate correlation or is there actual causality there? I look at the data that CVS/Caremark presented around saving 30% of healthcare costs by driving compliance and adherence and wonder why people aren’t jumping up and down trying to capture this savings.

What you see from the outside is very different than what you see from the inside.

There is a concept in Six Sigma about designing the process from the outside-in. Imagine sitting in the middle of the onion…all you see is onion all around you. That is a common pitfall when solving problems in the industry that we work in. We are too close to the problem and the historical solution. If all we see is the onion, those on the outside (our patients / members / employees) see the onion in relation to other food options. Their expectations for healthcare are produced by other companies that they interact with. They expect web solutions that work. They expect excellent service. They expect to be valued as a customer and of course need the power to walk away and chose another option.

This is a common problem in healthcomm (healthcare communications). We present information in a channel that we believe is effective based on our experience and paradigm (i.e., written, verbal, kinetic). We use language that we think is helpful. A few of my favorite examples from my PBM days are:

(1) Telling patients that they need a renewal (prescription). They don’t know what that means. It means they need a new refill since their original prescription refills have run out.

(2) Telling a physician to consider prescribing lisinopril and giving them sample bottles that say lisinopril. [Because, of course, they would know the chemical name for Zestril.]

But, this happens all the time. Telling a person that wants all the facts a lot of qualitative information will fall on deaf ears. Providing a person with lots of options when their looking for an expert opinion will frustrate them. One way to frame this is based on personality type. (Of course, that information isn’t sitting in a database somewhere for us to tap into.)

The reality is that people are different. As you think about your healthcare process, try to be the patient. As one of my bosses used to say, give it to your grandmother and see what she thinks. Can she understand it? Can she make sense of the process?

It’s not easy finding the right amount of onion to use in your recipe, but it is important to continue trying to improve.

Consumerism, Healthcare, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Technology, Value Propositions

Total Value; Total Return

February 13, 2008 by George Van Antwerp 0 Comments

I came across a new website today for the Center for Value Based Health Management. Their definition of Value-Based Health Management is below.

“The planning, design, implementation, administration, and evaluation of health management practices that are grounded in evidence-based guidelines across the healthcare continuum.”

It is a great concept. The question always is how to do this without confusing the patient. There are lots of plan designs out there that could be used, but become so confusing that patients don’t know how to meet the payor’s goals while minimizing their out-of-pocket spend.

The site also talks about a publication called Total Value Total Return which has seven rules for developing a value-based solution for your employees. They seem like good fundamentals:

The Health of Your Organization Begins with Your People.
To Realize Total Value, You Must Understand Total Costs.
Higher Costs Don’t Always Mean Higher Value.
Health Begins and Ends with the Individual.
Avoid Barriers to Effective Treatment.
Carrots Are Valued Over Sticks.
Total Value Demands Total Teamwork.

The Carrots Over Sticks comment made me think of all the press about forcing wellness down the throats of employees. I have a recent article on that that I will post on later.

Books / Articles, Business Tools, Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy

Data Access Issue

February 11, 2008 by George Van Antwerp 0 Comments

For those of you that ever wonder how easy it is for big technology companies to get to internal data, the WSJ blog highlights an issue that Vioxx litigants are having with Express Scripts. They want to charge for the data access since it will take 420 hours (or one person for over 10 weeks fulltime) to pull the data at a cost of $150/hr for a total cost of $63,000. [Not a bad job for someone…$300K per year to run a bunch of queries.]

Healthcare, PBM / Pharmacy, Value Propositions, Weblogs

Myers-Briggs in Healthcare: Part 2 of X

February 10, 2008 by George Van Antwerp 1 Comment

I was looking for a book the other day to read on some of my flights and came across Health Care Communication Using Personality Type by Judy Allen and Susan A. Brock. I have just started reading it, but I related very well to their key assumptions:

People prefer to communicate in different ways.
Most people have a preferred style of communication.
It is easier to communicate with some people than it is with others.
A system exists which provides a simple framework for understanding these differences.

As I have mentioned before, I think that Myers-Briggs is a good framework for understanding people. I often pull up my notes about my personality type and can see that I respond as predicted to certain situations.

Applying some of their initial thoughts with my perspective, it would seem like there are some basic hypotheses that you could make in talking with patients.

Extraversion: People that like to talk things out. Probably more likely to respond to verbal outreach.
Intraversion: People that like to think things through. Probably more likely to respond to print (e.g., letter or web).
Sensing: People that like the specifics and the details. Probably more responsive to a detailed message (e.g., you can save exactly $X by doing this). Probably want to see the path of exactly who needs to do what.
Intuition: People that see the big picture. Probably more responsive to a communication that helps them understand the impact of their decision on overall healthcare trend. Probably want to understand their options versus being guided down a path.
Thinking: People who are very logical. They should respond well to automation and would want an if/then type of message.
Feeling: People that are more emotional. They would likely respond best to live agents where they could empathize with them and potentially even respond to a “peer pressure” type of message (e.g., most people are now using generic prescription drugs).
Judging: People that are organized, punctual, and focused on getting things done. They would likely respond to messages about how to save time and money delivered in the quickest format possible.
Perceiving: People that are flexible, don’t plan ahead, and are often more disorganized. They would likely respond to a just-in-time message, a compliance reminder, and a communication process that did everything for them (e.g., you should go in for a colonoscopy…would you like us to schedule that for you).

Obviously, one framework doesn’t solve everything, but I expect that there is a lot more to gain from this book as I read through it. I was just so excited after the first section given my interests that I wanted to post this quick entry.

Books / Articles, Business Tools, Consumerism, Healthcare, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research

Why Consumerism Matters For Pharmacy

February 7, 2008 by George Van Antwerp 0 Comments

I found this Hewitt data in a presentation by UHPS (United Healthcare Pharmaceutical Services) which is the subsidiary of United Healthcare that manages the Medco relationship (they still outsource their pieces including mail and claims adjudication) and the RxSolutions (former Pacificare PBM). It was from a slide deck given by their National Sales Director at an AeA Seminar on 9/20/07.

[On an interesting side note, UHPS recently won a 1M life competitive contract for PBM services which I believe is one of their biggest wins as a PBM selling outside their existing base.]

I think the key point from this image is that patients have the most influence over the drugs they utilize. With multiple drugs for any therapy and lots of information out there, patients can have an intelligent dialogue with their physician about their choices. This becomes much harder for certain medical situations.

If you get fascinated by the space, they talk about a few of their differences:

A different formulary strategy – evidence based, real-time changes, place drugs on any tier (e.g., generic on 3^rd tier if appropriate)
They recommend a $35 differential between Tier 2 and Tier 3 (which probably means that their clients are price neutral if the patient chooses Tier 3…they may even be better off as the rebates to be at Tier 2 are probably much less than $35)
They recommend a 2.5x to 3x multiplier for mail order (i.e., take your 30-day copay and multiply it by2.5 or 3 to determine your 90-day copay). This probably means very little mail adoption, but that patients that use mail will save the payor money on brands. They probably save on generics no matter what.

It is interesting to see the different models emerging in the PBM space. For a while the companies were highly clustered and faced with a price path. Now, you have a few key differences:

CVS / Caremark has the play of integrating retail and mail
Medco is going down the path of disease state differentiation
Express Scripts latest presentations have focused on consumers and engaging them
United is talking about their different approach along with the benefit of an integrated data set and captive PBM working with the managed care entity. If they figure out the evidence-based strategy and convince their clients of the value of this, they may be able to get a jump start on the market from a clinical perspective.

The one constant for all of them is communications and engaging the consumer. Interesting. A friend of mine who works with benefit consultants told me that that is the hot topic he hears everywhere today. They want to know how to engage them, what the value is, and how to prove it.

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

Glass Ceiling for Adoption of New Programs

February 6, 2008 by George Van Antwerp 1 Comment

A common discussion point that I have had with many people is why don’t companies adopt more cost control mechanisms. Some typical programs from a pharmacy perspective would include:

Limited formulary (cover less drugs)
Percentage copay versus flat dollar copay
Mandatory generics (you have to get the chemically equivalent generic if available or pay the difference)
Mandatory mail order (you have to fill any maintenance drug at mail after the 2nd fill)
Limited retail network (you can only use certain preferred retail pharmacies)
Step therapy
Prior authorization
Quantity level limits
Intervention programs (you are taking a brand name drug with a therapeutically equivalent generic. if you switch to the lower cost drug, with your physician’s approval, we will waive your copayment for the next 6 months.)

Since the reality is that the most effective programs have traditionally been programs that contain a hard edit or reject at the pharmacy or ones that clearly transfer cost to patients if they don’t take the preferred route, these programs cause disruption. Some people hate that word, but it is the reality. People call into the call center. They call HR. They log onto the website. They talk with their friends. They have to call their physician to get a new script. It is not business as usual.

So, in a theory proposed by Larry Zarin (Chief Marketing Officer at Express Scripts), you could visualize a glass ceiling which blocks adoption of new programs. So the question is how to raise the glass ceiling such that those paying the bill would be willing to be more aggressive in managing their drug trend. (The same theory applies to managed care also.)

I agree with the null hypothesis that says that education is the key. The question is how to drive information at a broad scale when you don’t know who will be affected necessarily. And, the reality is that those that aren’t immediately impacted will likely ignore the general educational message. We want targeted, personalized messages that are timely and come exactly when I am about to be impacted.

You are likely to be going to refill your prescription for ABC in the next 3 days. If you continue using this drug, your copayment will have increased from $25 to $50 as the drug has moved to the third tier of our formulary. Please say help to talk to a live agent or log on to our website at www to see your alternatives.

So, it is really a question of creating generalized information and then having a communication campaign that is triggered by events – a claim, a diagnosis, logging into the website, calling a call center agent, etc. Something has to happen that tells you the person is a likely target and receptive to the message. Then, you can target them with a personalized communication.

Healthcare, Marketing / Communications, PBM / Pharmacy

Information Latency: Why Don’t We Change?

February 4, 2008 by George Van Antwerp 2 Comments

I have had this note to self for a while so I am finally going to put a quick entry out here on the topic.

The issue is data latency or more appropriately information latency. The data often exists right away, but the challenge is how to you get the data into a usable form, with context, and with enough data to make decisions.

In communications, this manifests itself in healthcare in two ways that immediately jump to mind:

In a traditional letter program:
- You send a letter to a patient (7-10 days from data targeting to mailbox)
- Patient opens the letter and has to contact their physician (if they choose to do anything)
- Patient trades messages with physician and/or has to schedule an appointment
- Patient meets with physician who (for example) writes them a new prescription
- Patient waits for medication to run out then refills with new drug (e.g., generic, on-formulary drug)
- Claims get aggregated and reports run
- Best case – 30+ days to see if program had any effect (most likely 6 months)
In a traditional survey:
- Company prints a survey and mails it to 10,000 people hoping for a 10% response rate to get a statistically valid sample size of 1,000
- Patients fill out the survey over the next month and mail them to a data entry company
- Data entry company manually enters them, aggregates the data, and creates a report
- 45-60 days later the company has information from the survey

Of course, the issue with both of these is that you have lost a huge window of time especially if you need to make changes to your program or the survey tells you that you need to gather more information.

Why don’t more companies talk about on-the-fly program changes and how to use modern technology to get real-time feedback for programs where they can pause the program, make change (e.g., change the message, add a new question), and then continue the program?

Business Tools, Healthcare, Innovation, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Technology, Value Propositions

Generic Changes: Patient’s Confused

February 3, 2008 by George Van Antwerp 0 Comments

Typically these things play out behind closed doors or in court and don’t always impact the patient, but I think the latest Protonix saga will have a brief impact on patients. Primarily causing some confusion.

The basic scenario:

Teva decided to challenge Wyeth’s patent and launches generic Protonix early (this means that they are going at risk and if they lose the patent fight that they owe Wyeth 3x the revenue collected from the product)
Teva ships about $300-$400M worth of generic Protonix in December and January
Wyeth fights them in court and decides to bring its own generic version of Protonix to market
Now, Teva has decided to stop shipping generic Protonix (see WSJ blog on this)

If you’re a United patient, you likely just got a letter telling you that they have moved the generic to the third tier (i.e., highest copay) and moved the brand to the first tier which is typically for generics. They obviously worked a deal directly with Wyeth. But, the consumer has to deal with issues such as state mandatory generic laws that require the pharmacy to fill a brand drug that has a chemically equivalent generic available with the generic unless the physician has checked DAW (dispense as written) for the brand drug.

Good business logic saving everyone money, but this may burden the consumer and the pharmacy and the physician. Hopefully, they have an effective communication strategy to drive patient behavior.

So, your prescription history might look something like this (while staying on the same drug):

November – brand Protonix (2nd tier)
December – generic Protonix from Teva (1st tier)
January – generic Protonix from Teva (1st tier)
February – brand Protonix (1st tier)
March – generic Protonix from Wyeth (1st tier)

Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Value Propositions, Weblogs

Single Answer or Multiple Answers

January 31, 2008 by George Van Antwerp 3 Comments

I was having an interesting discussion yesterday about how to solve a problem. The two opinions were whether there is a best answer or whether there are multiple best answers. It’s a great question.

Let’s frame it this way. Is there a message that is most likely to drive compliance for a group? I gave them the benefit of the doubt that they aren’t crazy enough to suggest that one message works generally with no segmentation. (McKinsey‘s article “Getting Patients To Take Their Medication” has some good research around creating segments and showing how some of the segments vary in what they want.)

The other person was presenting a case that they could do lots of research on linguistics and other topics and suggest one optimal message that would work across broad segments of the population. I was of the opposite opinion that a personalized message that had certain core research but varied by geography, condition, age, income, benefit type, prior interactions, etc. was better. And, that what is good today may change both generally and individually over time.

I would rather get all the micro-niches of people to their highest compliance and adherence level versus getting a better average across all group.

Basically, my position is that there are multiple optimal solutions to the problem not just one. It triggered a memory for me of when I first went to business school. In architecture school, design is somewhat subjective. (There are some logical rules such as the Fibonacci Sequence which serve as guiding principles of scale…for example.) We were taught to always bring three solutions to our initial presentations to let the judges decide which one we should push to finalize. We had to pick one for a deliverable, but it was always a tradeoff. In business school and the hard sciences, there is often only one answer that is valid. (1+1 always equals 2.)

But, for communications, marketing, and other things, it seems obvious to me that companies are best served by dynamic flexibility that allows them to bring multiple solutions to the market in parallel that adapt to different patients and change over time to respond to the market and the patient.

Here is a quick snapshot of the segmentation from the McKinsey report…

Books / Articles, Consumerism, General Thoughts, Healthcare, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Value Propositions

Call Center Metrics – JD Powers

January 30, 2008 by George Van Antwerp 0 Comments

As you know, I love metrics. I began my business career in that space working on Balanced Scorecards and Data Warehousing. I got a press release announcement the other day about CVS/Caremark winning a JD Powers Call Center Award. It caught my attention. Obviously, I haven’t dug into all the data, but from how it is described, it appears that they are focused on the right metrics and winning an award for this would be meaningful.

In order to qualify for certification, a call center must perform within the top 20th percentile of all centers evaluated nationwide, based on benchmarks established by J.D. Power and Associates for courtesy; knowledge, concern for the customer; usefulness of the information provided; convenience of operating hours; ease of reaching a representative and timely resolution of issues. Call centers must also successfully pass a detailed audit of their recruiting, training, employee incentives, management roles and responsibilities, and quality assurance capabilities. As part of its evaluation, J.D. Power and Associates conducted a random survey of Caremark’s customers who recently contacted its call centers.

Consumerism, Healthcare, Marketing / Communications, PBM / Pharmacy, Research

Excellent Versus Very Good Service

January 29, 2008 by George Van Antwerp 0 Comments

On my vacation, we took the kids on a Disney Cruise. We also went last January.

For the first time, I think I can actually differentiate between very good and excellent on the survey. I always struggle with that and tend to grade down. In general, we love the Disney experience and the cruise is very well run. We are already booked for next year and will be going with several other families.

Anyways, on the boat, you go to a different restaurant each night and your wait staff follow you. This year, they were attentive. No food was messed up. They were polite. They did magic for the kids each night at the table. They engaged us in conversation. It was very good service. Better than almost any restaurant.

BUT, since we were there last year, we had a very high expectation. Last year, the wait staff learned each day. After day one, they knew what drinks my kids liked and had them waiting for them when we arrived for dinner. By day three, they knew my son was a picky eater and had one of his favorite foods on the table. And, they knew that my daughter wanted some snack other than the typical appetizers and they had that waiting. Basically, they learned, adapted, personalized, and acted proactively. The difference was amazingly clear within very tight parameters.

Of course, it took someone else to point out to me that this was an example to share since this is the key point for my healthcare companies. You need to learn from your communications. You need to adapt to today’s technology and your patient’s expectations. The patient experience has to be personalized (in scale) to be in a message they respond to, in a channel they like, at a time that is convenient to them, and based on previous interactions. And, you have to act proactively. The patient doesn’t always know when to act.

Since traditional differentiators are basically null (i.e., network size, plan design), it becomes all about communications and service. How do you drive the patient experience? It is worth looking at the Forrester data on customer experience index. Healthplans score incredibly low in terms of usefulness, ease of use, and being enjoyable. The highest (that they looked at) was Kaiser at 63% with the lowest being Aetna at 49%. [60-69% meant that the customer had an “okay” experience with the company.]

General Thoughts, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Value Propositions

Diagnosis Code Plus Rx

January 29, 2008 by George Van Antwerp 2 Comments

In a WSJ Blog article about sound alike drugs, they have a potential solution about having the physician add information about why the drug is being used. Obviously, the low hanging fruit here is to move to electronic prescribing where the clinical information (i.e., diagnosis code) is in the same file as the drug and technology can be utilized to look for potential issues.

In the short-term, adding the diagnosis code (aka ICD-9 code) to the prescription would have lots of benefits.

Avoid getting some point-of-sale rejects when a drug is used off label. Or vice-versa, avoid off-label use by rejecting claims.
Avoid getting suggestions you change prescriptions only to find out that you should not do it given your diagnosis.
Development of proactive algorithms (e.g., macros) in the technology where whenever a doctor diagnosed diabetes then it would pull up their typical regiment of drugs based on formulary status and other inputs.
Better tailor / personalize information based on disease and drug to help the patient and their care team drive successful outcomes.

The issue of sound alike drug names is a real issue. Obviously, any time you have multiple human handoffs in a process then you increase the likelihood of error. As I think I have talked about before, I remember my MD prescribing an eye drop. I picked up a prescription and the pharmacist clearly told me to put one drop in each eye twice a day. At the end of the second day, I read the label in detail and realized that it said to put the drops in the ear only. When I called them back, they talked to the MD and realized that they had heard the wrong name when they listened to his voicemail.

Healthcare, Methodology, PBM / Pharmacy, Technology, Value Propositions, Weblogs

Factoid: Off-Label Use

January 28, 2008 by George Van Antwerp 1 Comment

I cut this from one of the many e-mail clipping services I use. It said that “20% …of the 725 million U.S. prescriptions written in 2001 went to treat conditions not approved on the drugs’ labels” according to a study published in Archives of Internal Medicine.

I always wonder:

How do physicians know to use a prescription off label?
How is that information shared? (I think drug reps are prohibited from promoting off-label use.)
How do patients and pharmacists respond to off-label use?

Books / Articles, Healthcare, Managed Care, PBM / Pharmacy, Research

Concise Summary of Compliance Reality

January 28, 2008 by George Van Antwerp 3 Comments

I have shared other facts with you on compliance. This is a hot topic in healthcare right now. I thought pulling this one graphic out of my entry on Caremark’s trend report made sense. This really gets to the point. Take this in light of the following quote from WHO (World Health Organization) and you can understand why.

“Increasing the effectiveness of adherence interventions may have a far greater impact on the health of the population than any improvement in specific medical treatments.”

They have a good chart in the document about speciatly medications and the impact of medication management services.

Books / Articles, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research, Value Propositions

Increasing GDR

January 28, 2008 by George Van Antwerp 0 Comments

I love reading healthcare articles which have acronyms that not everyone knows. (Maybe it was defined earlier, but I didn’t see it.)

Another nugget from the Caremark trend report is on programs and plan design components to drive generic dispensing rate (GDR) which is the number of prescriptions filled as generics divided by the total number of prescriptions filled. (Versus generic substitution rate which is the number of prescriptions filled as generics divided by the total number of prescriptions filled for which a chemically equivalent generic is available. I can’t remember whether we used only A-B rated generics or all generics, but that is a technical discussion for another time.)

This is great. It tells you the impact (on average) of implementing a plan design or some of their clinical programs on your GDR. (BTW…a good rule of thumb is that an increase of 1% in GDR is worth about 0.75-1.5% savings in your overall prescription spend.)

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

Caremark’s TrendsRx Report 2007

January 28, 2008 by George Van Antwerp 1 Comment

Well…I better get this posted before all the 2008 reports start coming out. I have started it a few times, but there is so much good content in here that I haven’t finished. I am determined to get this done tonight. As you may know, all of the PBMs publish very well done annual research reports on the trends in the industry and what they have learned from their data. I have talked about Express Scripts research and reports (here, here, and here) and Medco’s report (here). [Note: For simplicity sake, I am not going to put all the sources here. They are in the Caremark
document.]

Healthcare coverage and costs are the top domestic issue among consumers. (Kaiser Family Foundation)

“Consumers experience the [healthcare] system as complex, impersonal, disconnected, reactive, and increasingly unaffordable.”

In 2006, the average number of retail Rxs per capita was 12.4.
59% of those <65 had an Rx in 2004 and 92% of those >65.
With consistent use of effective prevention, early intervention, and adherence strategies, they estimate that 30% of current healthcare spending could be eliminated. Image the impact of that on MLR (medical loss ratio) which is a key metric for managed care companies on how much of each premium dollar they actually spend on healthcare costs.
They layout a very logical vision that would take advantage of their unique set of assets with CVS, Caremark, and MinuteClinic.
- Preference based consumer access.
- Patient focused view within their systems and communications.
- POC (point-of-care) connectivity. (i.e., pushing relevant information real-time to physicians and pharmacists to optimize care)
- Personalized health advocacy (“make the healthcare experience less disconnected and impersonal”)
The price of brand drugs (on average) increased by a rate of 3x the CPI (consumer price index) in 2006…the highest since 2002. [In my opinion, this will continue as they face more price pressures with the government being the largest buyer now with Medicare Part D and with the majority of claims now being filled with generics.]
At the same time, the price of generic drugs decreased by 1.2%.
With Medicare, Medicaid, and other public payer, the government now pays 40% of the total drug spend in the US.
They are working with the Coalition for a Competitive Pharmaceutical Marketplace (CCPM) to reduce patent expiration “loopholes” (aka ways that brand manufacturers extend their patent lifecycles which are often perceived to not add any additional value).

Some of the graphs and charts that I found interesting and helpful are below. (I pulled one of my favorites out in its own posting.)

(BTW – If you don’t know who BOB is, it stands for Book of Business which means the payors whose data was included in the analysis.)

(They make the point that 5 of the 10 drugs face patent expiration by 2010 so as expected prices are increased in the years prior to maximize return.)

I haven’t talked a lot about specialty drugs here on the blog. Here is a good list of the top classes. Typically these drugs are either high cost and/or require special care (mostly meaning injection). The average specialty drug would typically cost $1,500 per 30-day supply versus more like $80 for a non-specialty drug.

Books / Articles, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research, Value Propositions

Quick Update – Zyrtec OTC

January 25, 2008 by George Van Antwerp 0 Comments

Getting back into the swing of things today, I decided to run out and buy some Zyrtec OTC. It should be out this week from everything I know. But, my grocery store didn’t have any. The first Walgreens I tried had received some, but it had sold out. The second Walgreens had some but had sold out of several sizes. And, it had a stack of $3 off coupons.

I paid $7.99 (less $3) for a pack of 5-tablets of 5mg chewables. Seems like a lot ($1 per tablet) until I realize that I was paying $50 in copayments for a 30-day supply for my kids.

For me, I bought a 45-day supply of the 10mg for $28 (less $3) which seems like a bargain compared to the $75 copayment I would have had for an equal supply of the Rx or even the $45 copayment, I would have had for a formulary agent (aka brand drug that was covered at a $30 copay for 30-day supply).

Healthcare, PBM / Pharmacy

Nuclear Medicine – What???

January 25, 2008 by George Van Antwerp 3 Comments

I compare what I know about nuclear medicine today to what I knew about genomics back in 1998. [I remember my boss calling me and telling me to pull together a presentation for our team at E&Y to give to Jay Geller (CEO of Pacificare at the time) on e-business with a focus on how the Internet would effect genomics.]

Nuclear medicine is a branch of medicine and medical imaging that uses the nuclear properties of matter in diagnosis and therapy. More specifically, nuclear medicine is a part of molecular imaging because it produces images that reflect biological processes that take place at the cellular and subcellular level. Nuclear medicine procedures use pharmaceuticals that have been labeled with radionuclides (radiopharmaceuticals). [Wikipedia definition]

I don’t know a whole lot about nuclear medicine today, but after seeing that Dom Meffe who was the CEO of Curascript, a specialty company we bought at Express Scripts, is now CEO of Triad Isotopes, it caught my eye. He was an incredibly charismatic leader and seemed very passionate about driving patient care.

But, even reading the definitions of nuclear medicine and skimming the site, I feel like I need to go back to school.

A nuclear pharmacy is a pharmacy that compounds and distributes radiopharmaceuticals used primarily in imaging procedures for cardiac and cancer diagnosis. Cyclotrons are utilized to produce FDG (Fluorodeoxyglucose) a short-lived positron-emitting isotope suitable for PET (Positron Emission Tomography), an imaging technology that can be used to assess tissue biochemistry. [Triad Isotopes press release]

Healthcare, Innovation, PBM / Pharmacy, Technology

Freakonomics on Pharma

January 25, 2008 by George Van Antwerp 1 Comment

The Freakonomics blog has an interesting piece on pharmaceuticals. It basically asks five experts what is the best secret in the industry. Here were a few of the quotes from the posting…

“Events are revealing that many pharmaceutical companies, along with their consulting academic physicians, have engaged in practices that obscure or misrepresent information about their products.”

“The United States is subsidizing prescription drug prices for the rest of the world.”

“The obscene profits made on generic drugs by the large chain stores.”

“While most people understand in a vague way that modern biomedical science is advancing at a remarkable pace, many people are less aware that we have been far less successful at translating science from the laboratory bench to the clinic. This is not to say that the pharmaceutical industry has been quiescent; total spending on health related research by the drug industry has increased from about $6 billion in 1980 to about $39 billion in 2004. During that period, basic science research has increased the number of potential drug targets (the biological site on which a drug is intended to act) from 500 to more than 3,000.”

“Underpinning many of the marketing strategies of big drug companies is a very sophisticated and comprehensive plan to widen the boundaries of illness, and create an environment in which more and more formerly healthy people are defined as ‘sick.'”

Books / Articles, Healthcare, Marketing / Communications, PBM / Pharmacy, Research, Weblogs

Paying MDs to Switch

January 25, 2008 by George Van Antwerp 1 Comment

Another WSJ article that I caught on the plane ride home last night was about Doctors Paid To Prescribe Generic Pills. When I read the WSJ Health Blog about this, I was shocked by the comments. It would appear that the blog is followed by people that don’t believe generics make sense. That perspective is a little outdated now that most therapy classes have one of the most popular drugs available as a generic.

Yes, in some cases there have been minor improvements, but I don’t think anyone can (with a straight face) get up and talk about how Nexium is clinically superior to generic or OTC Prilosec (see general comments about category of PPIs). There has been numerous research showing that the probability of having success with any anti-depressant is the same regardless of what drug you begin therapy with (so why not start with a generic). And, generic drugs have been around for a long time so all their side effects and drug-drug issues are well known and documented. There has never been a generic drug pulled from the market.

Here was what I posted there.

Wow! There seem to be a lot of the glass is half-full people out here. What if the generic (which often was the most prescribed drug in the class before the patent expired) is clinically appropriate.

There are 10,000+ drugs out there. Physicians can’t be expected to know and monitor the comparisons on each one. That is what technology and pharmacists are focused on. So, if companies can identify a way to help the patient save money, what’s wrong with switching drugs.

The exact process of paying the physician seems suspect, but some incentive to reward them for their time (perhaps regardless of outcome) makes sense. You are asking them to pull the patient’s file, look at a different drugs and perhaps some clinical information provided by the payor, and determine if a switch makes sense.

Physicians today rarely have an incentive linked to drugs so why not prescribe the most expensive, most heavily sampled, most advertised drug. That’s the easy path.

I don’t disagree that more sharing of the benefits might make sense, but the market has changed. Generics and therapeutic conversions can make a lot of sense.

The issue of incentives is a broader one. Paying physicians directly per switch seems a little suspect. But, incenting them to save money for plans and patients makes a lot of sense. But, like any incentive system, it has to be balanced. Health outcomes balanced with cost management. Patient satisfaction balanced with simplicity of the process. I won’t get on my soapbox here. Metrics are difficult, but the system today doesn’t always align the parties correctly.

Books / Articles, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Weblogs

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