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Compliance For Donations?

January 25, 2011 by George Van Antwerp 0 Comments

Would you be more compliance with your medications if you knew that every time you took a pill or refilled that a donation was made in your honor to a certain charity?  It’s an interesting hypothesis being put forth in this article – Leveraging Altruism To Improve Compliance… BUT I personally am fairly skeptical. 

Let’s just look at the barriers identified in one recent barrier survey we did at Silverlink Communications for patients who had not refilled their statin medications. 

What do you see?

  1. Significant literacy issues.  People didn’t even know they were supposed to refill. 
  2. People don’t understand the medication and remember what the physician told them.
  3. Convenience…an easy to address opportunity.  These are key targets for a retail-to-mail or 90-day retail program.
  4. Side effects…this is harder to address but some of it can be managed by setting expectations up front.

Are those going to be addressed because a donation is being made?  I don’t think so.

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

Lipitor Going Generic

January 25, 2011 by George Van Antwerp 0 Comments

If you work in pharmacy, this has been on your radar since Zocor went generic years ago. Lipitor has been the biggest drug worldwide, and I believe the spend in the US is still almost $7B a year even with generic Zocor available. (See Consumer Reports on statins)

Now, it appears that generic Lipitor (atorvastatin) will be available 11/30/11 according to the Pfizer site. It looks like Ranbaxy who was first to file the ANDA will get the 180-day exclusivity (but I know several other generic manufacturers have challenged the patent).

So, what does this mean?

  1. Lipitor will likely move to the 3rd tier either immediately or at the next formulary update period once the generic is available on the market.
  2. Atorvastatin will become a part of statin step therapy programs.
  3. Pharmacies in states that have mandatory generic laws will begin auto-substitution of atorvastatin for Lipitor prescriptions unless there the script has a Dispense As Written (DAW) indication.
  4. Depending on the pricing of the generic, PBMs and pharmacies will be very aggressive about encouraging use of the generic version (as allowed with the AG settlements from years ago).

We’ve already seen Pfizer take some action which is to promote a $4 copay card (or 30-day sample) for patients. This is to protect market share, but it also makes me wonder if they won’t do something like Merck did by pricing the generic below the Ranbaxy price (see WSJ article).

Given that Pfizer owns a generic company (Greenstone), I have to imagine that they plan to sell atorvastatin thru that company. But, I think the big question that I would be focused on is whether there will be an “authorized generic” (look at the FTC interim report on this topic). This is a big topic in the industry. It allows the manufacturer who owns the patent to allow a generic manufacturer to make and produce a generic version outside of the ANDA process. Right now, it appears that Watson may get to bring an authorized generic of Lipitor to market.

Will you see the same energy around this as you did around Zocor? I remember having a whole “control room” that we developed at Express Scripts to encourage utilization of generic Zocor. It was built around several key things:

  1. What were all the channels that a patient communicated with the PBM and how did we educate them around the new generic? [And which could we do at what time so as not to limit the short term rebates that our clients were getting on brand Zocor which kept the prices down until the generic was available?]
    1. Member portal
    2. Mail order invoices / stuffers
    3. Inbound IVR messaging while on hold
    4. FAQs
    5. Training call center reps
    6. Formulary notification programs
  2. How did we inform physicians?
    1. Academic detailing – fax, letter, phone consultations, face-to-face visits
  3. What plan design changes did we encourage?
    1. Step therapy
  4. What could be done at the POS with the retail pharmacies?
  5. What could be done at mail?
  6. How would we track success?

Personally, as a PBM or pharmacy, I’d be trying to lock in a period of exclusivity with Watson or Pfizer to have the limited distribution of the generic Lipitor for a period of time. That would be a huge deal (if it could be pulled off).

Healthcare, Marketing / Communications, Methodology, PBM / Pharmacy, Silverlink, Value Propositions

Get Wellness Article in Time – Silverlink, Aetna, Hypertension

January 14, 2011 by George Van Antwerp 0 Comments

The recent issue of Time magazine includes an article called “Get Wellness” about wellness.  It talks about having MDs “prescribe” wellness (think Information Therapy or Ix) and the fact that Medicare enrollees will be eligible for wellness visits begining 1/1/11. 

The new wellness benefit tasks doctors with creating “personalized prevention plans,” which ideally will be tailored to each patient’s daily routine, psyche and family life. And if that sounds more like a nanny-state mandate than medicine, consider that some 75% of the $2.47 trillion in annual U.S. health care costs stems from chronic diseases, many of which can be prevented or delayed by lifestyle choices.
The article goes on to talk about the challenge this may create for physicians.  Can they act as nutritionists?  Can they change behavior? 
 
Of course, MDs won’t be the only one’s focusing here (although some of that could change with ACOs and PCMHs).  Disease management companies and managed care companies have focused here for a long time.  The focus in many ways these days is how to reduce costs in these traditionally nurse-centric programs with technology but without impacting outcomes and participation.  There is one example in the article from some work we are doing at Silverlink around hypertension. 
 
Some firms, in trying to bring down health care costs, have hired health coaches to reach out to the sedentary or overweight to get them moving more. Others use interactive voice-response systems to keep tabs on participants’ progress. In a study, Aetna set out to see whether it could reduce hypertension — and the attendant risks of stroke, heart attack and kidney failure — among its Medicare Advantage members. More than 1,100 participants were given automated blood-pressure cuffs and told to call in with readings at least monthly. They also got quarterly reminders to dial in. When they did so, an automated system run by Silverlink Communications provided immediate feedback, explaining what the readings meant and where to call for further advice. Alerts were also sent to nurse managers when readings were dangerously high. The result: of the 217 people who started out with uncontrolled hypertension and stuck with the program for a year or so, nearly 57% got their blood pressure under control.
Books / Articles, Healthcare, Innovation, Leadership, Managed Care, Marketing / Communications, Methodology, Research, Silverlink, Technology, Value Propositions

Walgreens To Focus on 90-Day Rxs

January 13, 2011 by George Van Antwerp 0 Comments

I’m not sure I see this as new news since Walgreens has traditionally had more 90-day claims between retail and mail than anyone other than Medco (per data from a few years ago), but I think it’s a good supportive message for the general trend.  Walgreens has had 90-day networks for most of the past decade.  I remember them offering mail order pricing to us at Express Scripts years ago. 

“We think this is going to be one of the fastest-growing parts of the Walgreen’s pharmacy business for several years to come.”  comment by Colin Watts, Walgreen’s Chief Innovation Officer in article yesterday

The more interesting things to me in the article were:

  1. It says that filling 90-day Rxs is more profitable.  You certainly save on supplies, but I don’t think that savings would outweigh the additional margin on foot traffic.  They didn’t talk about central fill which would certainly be one way of saving by filling 90-day offiste and delivering them to the store.  That leaves me with the assumption that they view the cost of the script using only the variable cost of the pharmacist’s time.  (A perspective I see from both sides – direct cost versus the pharmacist as a fixed asset until you reach a certain volume of drugs per store per day.)
  2. It says that filling 90-day Rxs improves adherence which has certainly been the biggest push by the PBMs regarding mail order for the past 12-18 months.  No longer is the biggest advantage on saving money…it’s all about adherence.

The one interesting question I would have is what do they see as the theoretical maximum on 90-day utilization.  If they were close to 40% penetration a few years ago, do they believe they can get that to 45%, 50% … more?  Knowing that would create an interesting industry discussion about benchmarking and upside in this space for both 90-day retail and mail order. 

There’s a section about Walgreens90 in their 2010 Drug Trend Report (pg. 12) which talks about a 10% improvement in adherence and the savings they saw with 90-day prescriptions for diabetics.  This new press release certainly increases that improvement in adherence and also seems to apply broader. 

I think it’s the one time you can see all the industry focused on 90-day prescriptions.  The interesting thing will be how Medco and Express Scripts try to partner (or if they try to partner) with retail to offer a choice option like Maintenance Choice by CVS Caremark. 

The new Walgreen’s tagline is “Go 90″…”Get three refills in one, and for three months you’re done.”  Going back to their original press release, here’s a quote from Kermit Crawford (President of Pharmacy Services):

“The role of the pharmacist in the health care system has steadily evolved for some time, and it’s clear if people have questions or concerns about their medications, they want to be able to rely on the pharmacist they know, trust and are confident talking to about their health. We also know that an approximately 15 percent increase in adherence to medications occurs for consumers receiving a 90-day prescription versus those receiving a 30-day supply. So our Go 90 program can improve health outcomes and reduce overall costs to the health care system through better adherence while providing patients the choice they want.”

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

Pharmacy Customer Experience

January 10, 2011 by George Van Antwerp 0 Comments

When most people start to this about segmentation in the pharmacy space, it becomes quickly overwhelming:

  • Age
  • Gender
  • Plan design
  • Geography
  • Income
  • Condition
  • Drug
  • New to therapy or ongoing therapy
  • Co-morbidities
  • Depression
  • Physician relationship
  • Support system
  • Education
  • Literacy
  • Etc.

I want to spend some time over a few posts beginning to break this down.  Today, let’s look at the five logical customer types:

  1. New Nancy:
    • Newly diagnosed
    • Not very familiar with her condition, the medication, the pharmacy process, or the PBM
    • Needs lots of hand-holding and education
    • Need to address gaps in the physician-patient encounter
    • Need to help her build a routine
  2. Caring Carin:
    • Caregiver for either dependents or parents
    • Picking up prescriptions for them and responsible for translating (sharing) information with them
    • Important to educate, but not the patient
    • Likely to be the “e-patient” but also stressed out (see sandwich generation)
  3. Sporatic Sam:
    • Someone who gets some acute medications occassionally (e.g., antibiotic)
    • Understands the healthcare system somewhat but not overly interested or engaged in the semantics
  4. Forgetful Frank:
    • Chronic medication user
    • Likely to have or develop multiple conditions
    • Not great with adherence to therapy
    • Understands their condition, but not worried about it (even if they should be)
  5. Steady Suzy:
    • Chronic medication user
    • One or more conditions
    • Understands the value of medication
    • Feels better when taking her medications
    • Actively managing her health
    • Generally adherent
    • Engaged with MD and pharmacist

I guess I could add Corrupt Cindy to talk about patients that abuse the system (a pharmacist friend of mine was telling me about a patient they caught this weekend with 6 different names across different pharmacies and a fake prescription pad). 

From a basic segmentation framework, are there others without getting into demographic attributes?

Consumerism, Healthcare, Marketing / Communications, PBM / Pharmacy, Silverlink, Value Propositions

New Pharmacy Whitepaper: Innovate Or Be Commoditized

January 7, 2011 by George Van Antwerp 2 Comments

In early 2009, I published an initial whitepaper on the PBM industry.  With all the changes going on in the industry, it seemed relevant to put out a new whitepaper although the total impact of reform and the definition of MLR is still TBD.  As I did before, I’m putting a summary here, and I welcome your comments.

You can download the whitepaper by registering on the adherence site at Silverlink Communications.  Thanks.  [If you’re a regular reader but not a logical client, you can request the whitepaper by contacting me.]

I think a quote from Larry Marsh (Managing Director, Equity Research) at Barclay’s Capital does a good job of summarizing it:

“Innovation will be increasingly important in the PBM world, as these companies seek to solve a greater set of pharmaceutical cost issues for their customers over the next 10 years.”

[BTW – If you want to get updates e-mailed to you as I post them, you can sign up here.]

************************

Innovate Or Be Commoditized: The PBM and Pharmacy Challenge for 2011

Doing more with less; dealing with constant change; and having technology be a part of everything…  Those are things that the next generation will take for granted.  For the rest of us, those are dynamics that are changing our personal and professional lives.  We’re constantly bombarded with information and decisions to make.

While the pharmacy industry has generally avoided the collapse of the automotive industry and the radical change of the health insurance industry, we’ve seen unprecedented change in the past few years.

It’s almost impossible to go a few days now without seeing information about prescription drugs in the mainstream news.  You might hear a financial analyst talking about the lack of blockbuster drugs in the pipeline.  You might read about a drug recall in USA Today.  You might see a new report talking about the $290B cost of non-adherence[ii] to the country.  Or, it might simply be water cooler discussions around how more than 25% of kids[iii] now take a prescription medication or how non-adherence can lead to hospital readmissions[iv].

This has raised the average consumer’s awareness of the industry and continues to push the trend of consumerism with which the entire healthcare industry is dealing.  Most of us in the industry already knew that pharmacy was the most used benefit (12 Rxs PMPY for PPO members[v]) and believed that pharmacists were a critical part of the care continuum.

The challenge now is for the industry to demonstrate their value beyond simple trend management.  The growth in generics will slow down while specialty spending grows.  Pharmacy and pharmacists have to become critical path in the care continuum and demonstrate how they engage consumers to improve outcomes.  It will become increasingly important to link outcomes and reimbursement as CIGNA Pharmacy did in their diabetes deal with Merck[vi].

[i] “Still More Pharma Jobs Go By The Wayside”, Pharmalot blog, posted on Nov. 3, 2010, http://www.pharmalot.com/2010/11/still-more-pharma-jobs-go-by-the-wayside/

[iii] Berkrot, Bill, “Prescription Drug Use By Children On The Rise”, Reuters, accessed on 1/4/11, http://www.reuters.com/article/idUSN1924289520100519?type=marketsNews

[iv] Leventhal MJ, Riegel B, Carlson B, De GS., Negotiating compliance in heart failure: remaining issues and questions, Eur J Cardiovasc Nurs., 2005;4:298–307 (abstract online at http://www.escardiocontent.org/periodicals/ejcn/article/S1474-5151(05)00038-1/abstract)

[v] Managed Care Digest Series: Key Findings, last updated Nov. 2010, http://www.managedcaredigest.com/KeyFindings.aspx?Digest=HMO

[vi] “CIGNA and Merck Sign Performance-Based Agreement”, CIGNA Press Release from April 23, 2009, http://newsroom.CIGNA.com/article_display.cfm?article_id=1043

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

CVS Caremark: Causal Link Between Adherence And Overall Costs

January 6, 2011 by George Van Antwerp 2 Comments

I’ve argued many times that prescription costs should (in many cases) go up not down.  But, the evidence to support that has often been anecdotal or from studies that people have struggled to replicate. 

CVS Caremark just released the results of their study “Medication Adherence Leads to Lower Health Care Use and Costs Despite Increased Drug Spending” in the January issue of Health Affairs.

  • Looked at pharmacy and medical claims
  • 135,000 patients
  • Patients with with one of more of the following – congestive heart failure, diabetes, hypertension, and dyslipidemia

“There have been many studies through the years that suggest adherence can save on health care costs, but the issue has not been central to health care cost discussions because those studies did not establish a causal link. We took the research further and what we found is that although adherent patients spend more on medications – as much as $1,000 more annually – across the board they spend significantly less for their overall health care costs”  by Troyen A. Brennan, MD, MPH, EVP and Chief medical Officer of CVS Caremark (source)

The savings associated with being adherent were:

  • Congestive heart failure = $7,823
  • Diabetes = $3,756
  • Hypertension = $3,908
  • Dyslipidemia = $1,258

It will be interesting.  Will this replace the “Sokol study” that everyone has historically quoted?  Will this lead to a rush of adherence programs for key conditions such as those studied here?  Will others try to replicate this study? 

I for one hope this changes the conversation from “prove the ROI” to show me how to best improve adherence across categories and segments of the population.  (To learn more about how Silverlink works with clients on adherence, you can go to our microsite.)

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

Humana and Concentra

January 4, 2011 by George Van Antwerp 0 Comments

I’d forgotten about this deal until someone sent me a note about 2010 earnings for Humana and the fact that this was Humana’s 11th acquisition over the past 5 years.  (Can you name them all?)

Given the push for ACOs and PCMHs and clinics, I think the acquisition of Concentra which owns 300 clinics and almost 250 on-site facilities is an interesting one.  It will give Humana another tactic for managing care and creating stickiness with employers.  I also think that clinics have a lot of opportunity to coordinate with pharmacy and improve adherence, therapeutic conversion, and use of mail order.  (See some of Joe Paduda’s comments here.)

With the Concentra staff, I’d be interested in seeing a deal with American Well or another company where they could be leveraged further in a virtual consultation setting with the option of driving them to a physical facility for follow-up. 

The other potential here is to leverage the clinics to improve HEDIS scores and STAR ratings. 

I think there is more to come here and with similar deals.

Blogroll, Healthcare, Leadership, Managed Care, Value Propositions

CVS and Universal American – 2 Additional Facts

January 4, 2011 by George Van Antwerp 1 Comment

Well, two things I didn’t know yesterday came out as everyone returned from vacation and started analyzing the acquisition.

  1. Adam Fein pointed out the close relationship that NCPA has with UA’s PDP plan and the fact that that is different from their prior relationships with CVS Caremark.  Will that change anything?
  2. Carl Mercurio points out that this now makes CVS Caremark the second largest PDP plan after United.

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

CVS Buys Universal American PDP Plan

January 3, 2011 by George Van Antwerp 0 Comments

I guess everyone’s on vacation since I haven’t seen much talking about this deal that was announced at the end of last year – CVS buying Universal American’s PDP plan.  The one post I saw was from someone who didn’t seem to have a clue. 

The reality here is that this is a good deal (IMHO).  I’m not speaking specifically on the price since I haven’t looked the financials, but more from the business strategy.  CVS Caremark has been actively moving forward over the past few years with new management (Per Lofberg and others), organizational changes, big wins (Aetna), success with their plan design, and many other research studies supporting their value proposition. 

Doubling down in one of the big areas of growth from both a population and a reform perspective makes a tons of sense.  Why wouldn’t you?  And, with the Star Ratings creating bonus opportunities, this is the time to jump in and focus on improving your quality metrics to get the bonus. 

[Note: I both work with CVS Caremark and own their stock.]

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

Predictors of Non-Adherence

December 29, 2010 by George Van Antwerp 0 Comments

From the literature…(NEJM 353:5 August 4, 2005, page 491) with my comments about how to address them.

  • Predictor: Presence of psychological problems, particularly depression
    • Study: vanServelien et al., Ammassari et al., Stilley et al.
  • Predictor: Presence of cognitive impairment
    • Study: Stilley et al., Kino et al.
  • Predictor: Treatment of asymptomatic disease  [Need aggressive reminder system to initial create habit]
    • Study: Sewitch et al.
  • Predictor: Inadequate follow-up or discharge planning.  [Educational follow-up]
    • Study: Sewitch et al., Lacro et al.
  • Predictor: Side effects of medication  [MD or RPh education of patient]
    • Study: van Servellen et al.
  • Predictor: Patient’s lack of belief in benefit of treatment
    • Study: Okuno et al., Lacro et al.
  • Predictor: Patient’s lack of insight into the illness  [New to therapy educational content]
    • Study: Lacro et al., Perkins
  • Predictor: Poor provider-patient relationship  [Tips to patients on how to interact with MD]
    • Study: Okuno et al., Lacro et al.
  • Predictor: Presence of barriers to care or medications  [Barrier survey and personalized info to address barriers]
    • Study: van Servellen et al., Perkins
  • Predictor: Missed appointments  [Appointment reminders]
    • Study: Servellen et al., Farley et al.
  • Predictor: Complexity of treatment  [MTM type services]
    • Study: Ammassari et al
  • Predictor: Cost of medication, copayment, or both  [Value based plan design]
    • Study: Balkrishnan, Ellis et al.
Books / Articles, Consumerism, Healthcare, Marketing / Communications, PBM / Pharmacy, Research, Silverlink, Value Propositions

Save $30B in Medicaid (over next decade)

December 28, 2010 by George Van Antwerp 1 Comment

The big assumption around savings is always that you’ll have to cut benefits. What if that wasn’t true? Why wouldn’t the government be making those changes?

A new report by The Lewin Group explores this. 73% of Medicaid spending is based on fee-for-service plans that are administered by state officials. Not a big surprise to those of us that believe in the private market over big government, but they leave a lot of money on the table compared to Medicare and managed Medicaid.

The savings come from four areas:

  1. Generic Drug Dispensing: Medicaid FFS is less effective at encouraging the dispensing of generic drugs in place of brands. The generic dispensing rate in Medicaid FFS averages 68%, compared to an average 80% generic dispensing rate in Medicaid MCOs. While some of this difference is attributable to demographic differences between the Medicaid FFS and MCO populations, much of the generic dispensing difference persists when looking within each demographic subgroup.
  2. Dispensing Fees: At $4.81 per prescription, the national average dispensing fee that Medicaid FFS programs pay to retail pharmacies is more than double the average dispensing fees paid by Medicare Part D payers, Medicaid managed care organizations (MCOs), or health plans in the commercial sector.
  3. Ingredient Costs: The rate at which retail pharmacies are reimbursed for the actual medication ingredients (pills, capsules, etc) is also higher, on average, in Medicaid FFS programs than in Medicare Part D or the commercial sector.
  4. Drug Utilization: The number of prescriptions dispensed per person is typically higher for similar demographic subgroups in Medicaid FFS programs than in Medicaid MCOs for similar demographic subgroups due to less effective controls on polypharmacy, fraud, waste, abuse, and other factors in the FFS setting.

Their study estimates that converting all the FFS Medicaid to a Managed Medicaid model that relies on the typical PBM process would save almost 15% (or about $30B over the next decade).

The report also includes lots of comparative data (state by state) which shows the discrepancies across the US in terms of cost of FFS Medicaid.

Books / Articles, Healthcare, Leadership, Politics, Research, Value Propositions

Is the Male “Customer” a Red Herring (in Healthcare)?

December 26, 2010 by George Van Antwerp 0 Comments

If you haven’t paid attention, the gender inequity in salaries in some areas seems to be broken.  For city-dwelling single people in their 20s, females median full-time income is 108% of their male counterparts (Reach Advisors research of 2008 Census Bureau data).

And, if you look at the statistics from “The Rise of the Sheconomy” in Time (11/22/10), the statistics paid a clear picture of change:

  • 35% of women (vs. 27% of men) ages 25-29 hold a bachelor degree or higher
  • Women hold 49.6% of non-farm jobs in the US
  • Women own 29% of companies
  • 64% of women with children under age 6 also work outside the home
  • Women make up 58% of online retail dollars spent
  • Women make 80% of healthcare decisions
  • Women purchased 45% of electronics
  • Women make up 44% of NFL fans
  • Women control 51.3% of the private wealth in the US
  • 35% of wives earn more than their husbands
  • 9 out of the 10 occupations predicted to add jobs in the next 8 years are dominated by women

You shouldn’t be surprised by this.  I personally have several friends that are the stay-at-home dads.  I worked for a women who had “never” been to a grocery store.  And, I know a lot of women who could tell you more about professional football than I could.  (Here’s an older list of facts.)

“Get the guy right and you’ve made a sale; get the woman right and you have a customer.”  (From Marti Barletta in the Time article)

So, will that play out in healthcare or has that ship sailed a long-time ago?  If females make 80% of the decisions, do you really need a male strategy?

Females accounted for 57 percent of all personal healthcare spending in 2004, although they made up just 50 percent of the U.S. population. Across all payers and services, females spent about $1,448 more per capita on healthcare than males in 2004. The greatest disparity was in nursing home care, where females spent nearly twice what males spent.

The gender divide in share of total spending should not come as a complete surprise, because women have a longer life expectancy (80.4 years compared to 75.2 years for men).

The estimates were based on administrative data from Medicare’s National Claims History Files, the Medicaid Statistical Information System and the Medicaid Analytic Extract System. (Source)

At the same time, we know that…

Men Frequently Ignore Symptoms and Are Reluctant to Seek Care Until There Is a Crisis

“Health, United States, 2009,” reports that men from ages 18-44 years were 70 percent less likely to visit a physician in 2007. The report also indicates that men were 80 percent less likely to have a usual source of health care, as compared to women. (source)

So, what does this all mean?  It means that males still represent about 1/2 the healthcare costs although it appears their use of the system is either prompted by a female in their live (wife, mother, sister, friend, caregiver) or by the fact that there is a crisis.  This plays well into the quote about targeted “shopping” versus looking for a relationship.

One could assume that means that males are more likely to use urgent cares and/or clinics…but I couldn’t find that data.

Getting males to be more preventative is one challenge.

Getting them to view a health plan or pharmacy as more tailored to their needs is another.

Is it worth the money and effort or should you (as a healthcare company) appeal only to the females?  I’m not sure I know the answer, but the data certainly points you in a direction.  It would be interesting to look at conditions that are primarily male or drugs that are tailored to male conditions and understand how females drive those decisions and utilization (knowing that a lot probably has to do with whether it’s asymptomatic or not.

Books / Articles, General Thoughts, Healthcare, Marketing / Communications, Research, Value Propositions

Does Playing Sports Mean Your Kids Get Enough Exercise?

December 22, 2010 by George Van Antwerp 0 Comments

I would have thought so.  If my kids were signed up for soccer or baseball, I would imagine that when they practiced that they met the daily expectations for kids.  (I’m pretty sure that the 1 mile run plus 75 minute swim practice for my daughter meets the requirements, but…)

The government’s guidelines for physical activity are that children get 60 minutes a day of moderate to vigorous activity.

What do you think?  In a 90-minute practice, would your kid get 60 minutes of activity? 

Unfortunately, the answer is no.  In a study published in the Archives of Pediatrics and Adolescent Medicine:

  • Kids were only getting 45 minutes of moderate to vigorous activity (which was 46% of their practice time).
  • Only 24% of those monitored met the goal.
  • Soccer was more active than baseball which is more active than softball.

In another study in Medicine & Science in Sports & Exercise, it showed the there are only 16 minutes of exercise seperates fit and unfit kids and that boys get more exercise than girls. 

Should you plan differently?

Should coaches train differently?

I’m not sure, but it puts an interesting spotlight on something that I for one would have taken for granted.

Books / Articles, Healthcare, Research, Value Propositions

Alternative Pharmacy Network Whitepaper

December 16, 2010 by George Van Antwerp 2 Comments

Milliman recently put out a whitepaper commissioned by ReStat on “Alternative Pharmacy Network” savings. My general opinion is that they use a lot of data and analysis mixed with some sensationalist statements to make the very obvious point that creating a limited or closed pharmacy network will save you money. (I hope they didn’t charge much for this.)

Net-Net: Limited or tier pharmacy networks are a great idea.  ReStat is building on their experience with Caterpillar which is a great program.  But, the whitepaper was flawed. 

Their conclusions were:

  • Potential Savings – The analysis shown in this report suggests that APN programs can offer a significant savings to employers relative to traditional networks. For an assumed range of consumer use of participating pharmacies, an employer with 10,000 lives could save $200,000 to $620,000 per year, depending on benefit design, without changing cost-sharing structures (see Table 3). Benefit design changes could increase or decrease the savings. A closed APN network (no coverage for non-APN pharmacies) would increase savings for a given benefit design.
  • Sources of Savings – In our analysis, the APN model can achieve lower cost because the PBM and retail pharmacy retain less revenue.
  • The Value of Limited Networks for Pharmacies -For medical benefits, health plans use network providers as part of overall quality and efficiency programs and are promoting network programs such as medical homes and pay-for-performance. Sponsors and PBMs can extend the advantages of networks to the pharmacy benefit. However, the ability to obtain value in a locale depends on the willingness of some pharmacies to participate as network members.
  • Plan Design Changes – Plan sponsors may need to change their plan designs to encourage use of the limited network. For example, the copays for limited network pharmacies may need to be decreased (from current levels) and/or the copays for non-network pharmacies may need to be increased to create a benefit differential between the network and non-network pharmacies. These plan design changes could reduce or increase the projected savings of a limited network, depending on the specific change.

 

My comments about their analysis:

  • They assumed that retail pharmacies would reduce their spread on generics by 44% (and brands by 78%) to be part of a limited network. That might be true for a large client with geographic concentration and for a retailer with low market share, but I think that’s a leap. (see chart below on brand pricing assumptions)

 

  • They say that spread for retail claims for PBMs can be 10-15% of AWP. I’ve seen plenty of deals that were negative (at least on brand drugs). In many cases, spread pricing doesn’t even exist.
  • They claim that PBM’s make money “(as part of a typically Drug Utilization Review program) actively encourages patients to switch to different medications as a core part of its business.” Really. That went out with the AG settlements back around 2004. Chemical substitution to generic equivalents certainly happens, but using DUR to push therapeutic conversion. I don’t think so.
  • They claim that PBM’s will buy drugs and repackage them to get a higher reimbursement rate at mail. I’ve never seen it (but that doesn’t mean it’s not done).
  • MAC pricing at mail. Yes. PBMs do make most of their money on generics at mail, and I’ve talked about the need to align your MAC lists at retail and mail before.
  • They also say “While mail order presents the opportunity to save sponsors money, attempts to encourage mail order by reducing copays could increase sponsor cost if the benefit plan is poorly designed (e.g., copays are reduced too much), utilization increases, or generic dispensing decreases.” I’ve talked about why clients lose money at mail before, but I’m pretty sure that there have been plenty of studies that show adherence improves (not unnecessary utilization). Studies have also shown that if you adjust for acute medications at retail then the generic dispensing rates are very comparable at retail and mail (or explained thru population differences).
  • They claim that the PBM’s make 10-15% on specialty drugs that they dispense (which seems high to me) and then use $5,000 per month as a number when the average 30-day supply of a specialty drug is more like $1,500.
  • They claim “Different manufacturers offer different rebates, which may factor into a PBMs decision making.” I think if you read the P&T process documents you would see that decisions about in or out are made based on clinical decisions and then a formulary can be broad or narrow based on the net price to the plan sponsor which does (and should) evaluate rebate impact.
  • They quote a source saying that 35% of rebates are kept by PBMs. Again, that seems really high. In my experience, there was an administrative fee equal to several percent of the AWP of the drug that was kept but the rebate dollars were passed to the plan sponsor.

 

While I like the simplicity of the flat fee payment model (i.e., I pay my PBM $3.00 per claim), it certainly creates no incentive for them to do better year over year in improving their negotiating with pharma and retailers or to worry much about trend management.

They talk briefly and seem to encourage ReStat’s Align product which seems like a very logical approach (used by other PBMs also).

Restat configures custom retail networks and benefit designs that create incentives to encourage member use of alternative in-network pharmacies and allows consumers the ability to shop based on price as well as service. Non-network pharmacies are also available but at a higher copay or costs.

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

My AHIP Podcast On Adherence

December 14, 2010 by George Van Antwerp 0 Comments

I did a podcast with AHIP on adherence.  I was hoping to embed it here, but I couldn’t so here’s the link.

http://www.ahiphiwire.org/Innovations/Feature.aspx?doc_id=722249

Consumerism, Healthcare, Innovation, Leadership, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Silverlink, Social Media, Value Propositions

The 11 Dimensions Of Non-Adherence

December 10, 2010 by George Van Antwerp 0 Comments

I found this nice summary document on MAPS (Medication Adherence Profiling System) which was part of the Boehringer Ingelheim Pharmacy Satisfaction 2009 Medication Adherence Study.  Here are the dimensions and key issues:

  1. Reminder tools to address memory and confusion
  2. Enhance communications to address perceived ineffective communications
  3. Financial assistance to address monetary concerns
  4. Heighten transparency to address distrust of healthcare providers
  5. Promote regimen to address not taking medication as prescribed
  6. Practice discretion to address interpersonal discomfort and social barriers
  7. Empower the patient to address perceived negative consequences
  8. Confront avoidance to address denial and fear
  9. Demonstrate efficacy to address the perception that medication doesn’t work
  10. Allay concerns to address negative attributes of medication
  11. Continue touchpoints to address the lack of belief in the importance of ongoing therapy

The document goes on to give sample strategies and tactics for each dimension.

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

Express Scripts To Grow The “Select” Programs

December 10, 2010 by George Van Antwerp 0 Comments

It looks like the concept of “Select” Home Delivery which has been one of the products to come out of the Consumerology approach at Express Scripts is about to get some cousins such as Select Step Therapy, Select Networks, and Select Specialty.  Obviously, the concept of Active Choice has legs.  (I understand the networks and specialty, but I’m not sure what the step therapy product will look like.)

(Here’s a good article from the Brookings Institute on choice architecture for healthcare enrollment.)

The concept of choice has to do with the decision framework with which options are presented.  Making it active choice typically refers to the requirement of the consumer having to make a decision.  They can’t do nothing.  This doesn’t mean that the company can’t select a default recommendation, but it can’t implement that option without the consumer verifying it.  (See the book Nudge for more details on this concept.)

The example that is often used for choice architecture is enrollment into 401K plans.

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

The Not-So-Secret Handbook Of Pharmacy Facts

December 8, 2010 by George Van Antwerp 0 Comments

Adam Fein from Drug Channels just published his newest report – 2010-11 Economic Report On Retail And Specialty Pharmacies. If you’re going to spend money on a report, I would suggest you consider this one. You couldn’t Google the information and format it for the price.

He does a great job of aggregating data, looking at trends, creating great charts, and providing an informed perspective on the industry. Let me just pick out a few things to highlight from the report:

  1. He predicts four trends:
    1. Market growth and shift to specialty
    2. Boom-to-bust for generic drugs
    3. Cost-plus pharmacy reimbursement
    4. Preferred pharmacy networks
  2. He talks about the concentration of specialty pharmacies and the fact that 81% of health plans require their members to use 1-2 specialty pharmacies.
  3. He talks about the shifting market share among retail pharmacies and the fact that while only 31% of urban and suburban pharmacies are independents that number jumps to 65% in rural areas.
  4. He talks about the AWP discount that plan sponsors realize at retail compared to mail and how that gap has 58 basis points in 2010. (A key fact in understanding why you have to have the right plan design to save at mail.)
  5. And, one point that I often make (without the exact data) is that people paying cash for prescriptions pay too much. He shows that the gross margin for cash patients at independent pharmacies is a whopping 54% compared to 20% of less for other 3rd party and government reimbursed scripts.

Here’s an example of one of his charts (exhibit 34).

My final commentary on the report is that this should be a read for people trying to work in the industry or new hires in the PBM or retail management. I’m pretty sure all the analysts on Wall Street already read it.

Enjoy!

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

How Donald Trump Would Evaluate Vendors?

December 5, 2010 by George Van Antwerp 0 Comments

I often get asked the question of how to best evaluate two vendors especially when I am out in a sales role for Silverlink.  People often see so many marketing pitches that they start to look the same.  Some people just want to do an RFP which often ends up just focusing on the cost lever.  Others get so focused on “cute” demonstrations.  What really matters is how they perform in a real scenario and what results they achieve.

I’ve talked about this for years after a client of mine did this with two vendors years ago (see old post from 2008), but after watching the Apprentice the other night, it helped me frame this.  Donald Trump has this great way of sorting thru lots of smart people.  It’s not perfect since I know as an INTJ that it probably wouldn’t be the best forum for me, but it’s a great analogy.

The resume is the marketing pitch.

The interview is the demonstration.

You can hit both of those out of the park, but it still may not be the right fit.  The question is how does the candidate work with others.  How does the candidate perform under pressure?  What are the end results?  How do they perform over time?

It’s obviously hard to duplicate that in a corporate world, but I always encourage our clients to put us head-to-head with the competition.

  1. Identify a challenge (e.g., increase use of mail order pharmacy).
  2. Ask each company to design their best solution.  (Focus on what questions they come back to you with…that tells you a lot.)
  3. Pull your target population and randomize them into one group for each competitor plus a control group.
  4. Make a few last minute changes to your program (which is reality) to see how the company deals with that.
  5. Have the company implement the solution.
  6. Look at their execution process.
  7. Look at their reporting.
  8. Compare their outcomes with the competition and against a control group.
  9. Ask them for recommendations on how to improve the program.

Now you’re at a point to make an informed decision.  You’ve seen how their team works.  You understand their process.  You’ve seen actual results.  You’ve seen how they think.

The money spent to get this decision right and the learnings you will have will pay for itself in the long term.  Everyone is always short staffed, but it’s worth it.

At the end of the day (IMHO), you want to find partners not vendors.  A few key partners that understand your business, challenge your assumptions, and improve your outcomes is always better than a lowest cost player.  Focus on substance not glitz!

(And another hint I often tell people is to do reference checks with people who work with the company on a day-to-day basis not the executives who may be removed from the first hand experience.)

General Thoughts, Silverlink, Technology, Value Propositions

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

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

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

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

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

Express Scripts Model – DBN Article

October 29, 2010 by George Van Antwerp 0 Comments

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

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

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

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

However, attempting to change behavior in the top 10% of patients likely to be nonadherent will be tough, Van Antwerp contends. “The industry is still waiting for that proof,” he maintains. “If we can predict that patients are adherent but can’t change behavior, then the model doesn’t do us much good.”
Books / Articles, Healthcare, Innovation, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Silverlink, Technology, Value Propositions

Total Medical Costs Lower For Diabetics At Mail

October 15, 2010 by George Van Antwerp 0 Comments

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

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

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

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

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

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

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

Press release about it here.

Here’s a slide showing the values:

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

Why Mail Order Is Better (ESRX)

October 15, 2010 by George Van Antwerp 0 Comments

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

Healthcare, Marketing / Communications, PBM / Pharmacy, Research, Value Propositions

Some Social Media Videos

October 12, 2010 by George Van Antwerp 1 Comment

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

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

Healthcare, Innovation, Marketing / Communications, Silverlink, Social Media, Software, Technology, Value Propositions

Predicting Non-Adherence

October 12, 2010 by George Van Antwerp 0 Comments

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

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

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

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

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

Healthcare, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Silverlink, Value Propositions
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