Is The PBM A Fiduciary? I Don’t Think So.

June 20, 2011 by George Van Antwerp 2 Comments

I’m not a lawyer, but with the potential repealing of the Maine law regarding PBMs, it’s time to think about this question.

Here’s a definition from USLegal.com:

A fiduciary duty is an obligation to act in the best interest of another party. For instance, a corporation’s board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust’s beneficiaries, and an attorney has a fiduciary duty to a client.

A fiduciary obligation exists whenever the relationship with the client involves a special trust, confidence, and reliance on the fiduciary to exercise his discretion or expertise in acting for the client. The fiduciary must knowingly accept that trust and confidence to exercise his expertise and discretion to act on the client’s behalf.

Just looking at this definition, it raises a few eyebrows:

  1. Can the PBM be responsible to its shareholders and to the clients?
  2. Does the PBM act on behalf of the client?

The fiduciary relationship basically makes the PBM into a cost-plus model where profits and costs are know. There are already lots of transparency standards for clients to leverage in designing their PBM contracts.

I struggle to see a comparable fiduciary business relationship out there. Suggestions?

On the second point, the whole PBM model around benefit design and interventions has been set up as consultative where the PBM provides ideas and models for the payer to select from. They don’t get to chose what’s best for them. I’m not sure that the lobbyists for the original plan would want this. If I’m a PBM with a mail order pharmacy, I believe that this is the best model to save money, drive adherence, and avoid errors. So, as a fiduciary, wouldn’t I have to put in a mandatory mail program with mandatory generics lots of utilization management programs and a closed formulary? That’s what’s best financially in most (all cases).

I’m all in favor of disclosure of conflicts of interest. PBMs should explain how they make money to their clients so it’s clearly understood.

In this older post on another blog, a physician talks about physicians having some fiduciary responsibility, but I don’t think this goes far enough. If the physician has a fiduciary responsibility to the patient, wouldn’t they have to disclose their profit based on different choices:

  • If you choose this medication and fill it from my in-office dispensing, I make $X versus you choosing this other drug.
  • If you get this procedure done, I get a referral from my colleague plus I make $X on performing the surgery.

Of course, maybe the issue is that Maine (and others) have tried to use fiduciary to focus on the financial controls around the PBM business model instead of the business practices about helping payers understand their decisions (the legal breakdown on MDs seems more business focused):

  • This will affect X% of the population.
  • This will save you $X compared to your other options over here.
  • This will be a win-win for us because we make money as your GFR goes up.
  • We charge manufacturers an administrative fee for managing the rebate contracts and will keep that.

When the DC regulation around PBM fiduciary responsibility went to court, it was struck down. Will Maine finally end up in the same bucket? Will others follow?

I guess the question for people to ask is what has happened to Maine’s pharmacy costs in the past few years. Has there been an advantage (or disadvantage) to this law?

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

A Few Emergency Department Facts

June 20, 2011 by George Van Antwerp 0 Comments

I found this quick list of facts in HealthLeaders (May 2011) which I thought was worth sharing:

  • In 2008, 124.9M people visited an ER in the US.
  • More than 9 out of 10 ED visits were related to acute conditions.
  • Injuries comprised 1 in 4 ED visits for adults.
  • ED visits for people ages 65-74 have increased the most over the past decade and are projected to double from 2005 to 2013.
  • In 2007, 10% of the population under age 65 visited the ED for reasons that were considered non-urgent.
  • ED visits increased by nearly 22M between 1997-2007 (23% faster than the US population grew).

So, what’s the issue here:

  • Lack of access to care
  • Difficulty getting into a PCP or clinic during regular hours
  • A lack of understanding of how and when to use the ER
  • Increased anxiety about conditions
  • Putting off care until the last minute

Or, I guess the flipside of the coin is that this is ok. My impression has always been that the ER is overused and has lots of inappropriate use.

Books / Articles, Healthcare, Research

Forrester On Automated Customer Service

June 17, 2011 by George Van Antwerp 0 Comments

I was reading a report that Nuance commissioned a few years ago with Forrester Consulting about using automation for customer service. It’s worth a read (and publicly available here) if you work in the customer service space and get questions from your clients about automation versus agents. Here are a few things that caught my eye:

  • Consumers who use cell phones to call into customer service are relatively more interested in using automated telephone systems for customer service interactions. (Hint: You could probably reverse that logic also to say that they are most receptive to outbound IVR also.)
  • Consumers rate automated customer service higher than live agents for certain straightforward interactions (including Rx refills).
  • Once they engage with automation, 74% of consumers typically stick with the process.
  • 12% liked automation because of privacy and not having to divulge information to a person. (Something we’ve seen at Silverlink in multiple healthcare scenarios.)
  • 81% of people surveyed were interested in proactive notifications around healthcare via automation (e-mail, voice, SMS).
  • People prefer being steered to answers versus just being able to respond and have the system understand them. (i.e., give me a list of options)

Very interesting. It maps well to a lot of our best practices and how we consult with our clients in designing healthcare engagement strategies. (Of course, you have to make sure you use create engaging, personalized messaging in these channels to optimize success. Van Antwerp household is the same as Dear Resident to me…and if I have 5 drugs and 3 conditions, a generalized call to action won’t get much response.)

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

What I Learned In PharmaVOICE

June 16, 2011 by George Van Antwerp 0 Comments

I’ve been reading the magazine PharmaVOICE for the past year or so. I really enjoy it. I occasionally pull a few articles out.

I was reading the March 2011 version on the plane and found a ton of interesting information. I thought I would share some of the nuggets from it:

  • In 2010, 112M people (48% of US adults) were e-pharma consumers (individuals who went online to find pharma information). (Manhattan Research)
  • Fewer than 20% of consumers who go online for pharma information mistrust pharma websites (branded and unbranded).

“We found the degree to which consumers are open to online content from manufacturers surprising, considering the common perception that consumers are generally critical of pharma generated information.” (Manhattan Research Healthcare Marketing Analyst Maureen Malloy)

  • Top Prescribing-Driving Sites (Manhattan Research):
    • Levitra
    • Chantix
    • Cialis
    • Nexium
    • Yaz
    • Lyrica
    • NuvaRing
    • Symbicort
    • Viagra
    • Lunesta
  • Talk about how research is now “peer reviewed” via social media – original article.
  • Talk about the Sanofi-Aventis blog – Discuss Diabetes – which enables two-way conversations with patients in public.
  • Talk about how Merck is helping patients engage with consumers using online videos and checklists.
  • Talk about a text messaging service focused at teens and young adults for adherence – www.ireminder.com.
  • An interesting article by Ogilvy about 8 Health Engagement Zones and 7 things to keep in mind about public and individual communications:
    • Technology is not a panacea…it has to be adopted and incorporated into everyday behavior.
    • Information must be communicated and interpreted effectively to change behavior.
    • To cut through the “clutter”, information will increasingly be communicated via story-telling and visualization.
    • Technology will allow us to create the right message with the right tone in the right place at the right time. [or already does allow for this with the Silverlink Platform]
    • Health messaging will become personalized. [already happening]
    • Highly targeted, persistent, positive messaging will be needed to help overcome fear and embarrassment.
    • Although health is a serious matter, we don’t always have to take ourselves seriously when it comes to health communications. (e.g., gaming)
  • In the year ending Oct. 2010, $4.4B was spent on DTC advertising around pharmaceuticals.
    • Pharma 3.0 success will be “based not on how many drug units are sold, but on how well pharma’s market offerings improve health outcomes, putting patients and payers at the center of the model”.
    • Pharma investments in condition support tools – smartphone apps, websites, devices, and social media – was up 78%.
  • In a recent Harris poll, only 11% of respondents perceived the pharmaceutical industry as generally honest and trustworthy.
  • According to SDI, there’s been a shift in spending from 2007-2009:
    • 30% decrease in print
    • 32% increase in online activities targeting physicians
    • 29% decrease in magazine DTC advertising
    • 300% increase in internet advertising
  • Learned about a physician “hotlink” (my name) by AstraZeneca where they can connect with the AZ medical affairs team by a feature on their iPhone – formulary status, adverse event reporting, request samples, …
  • Similarly, learned about an “Ask Pfizer” button in Sermo.
  • According to the Manhattan Research’s ePharma Consumer v10.0 study – almost 3/4th of the people visiting pharma websites take a product related action afterwards. (That’s amazing!)

“When pharma is thought of as a health-services industry, the possibilities for growth in revenue, engagement, personalization, and freedom from pipeline dependency are almost endless.” (Paul Simms, eyeforpharma)

  • A list of manufacturers and what percentage of their portfolio is at risk in the next 3 years for patent expiration:
    • #1 Pfizer with $53.6B and 68% of their portfolio
    • #2 Lilly with $20.8B and 66% of their portfolio

“The industry has to address the consumer population across multiple channels with information that is timely, easy to understand, accurate, and actionable.” (Deborah Schnell, Health Advice Networks)

  • There was an article discussing a great question about whether “brand equity” exists after patent expiration.
  • There was talk about the shifting “customer” of pharma from the physician to the consumer and the formulary committee.
  • There were some statistics from a Tufts study on REMS where 75% of people thought the program needed a major overhaul.

I shared a lot here to make a point…this is a monthly magazine packed with interesting content. If you’re in this space, you should be reading it.

Books / Articles, Consumerism, Healthcare, Innovation, Leadership, Marketing / Communications, PBM / Pharmacy, Research, Social Media, Technology

Will Copay Cards Doom Rebates?

June 15, 2011 by George Van Antwerp 0 Comments

Only 20% of the people I surveyed believe that copay card success could ultimately be the end to pharmaceutical rebates, but I think it’s a fascinating discussion topic.

If you’re a manufacturer, you have a finite budget to drive sales of your product. That budget can go to DTC advertising, market access (i.e., rebates), samples, copay cards, adherence programs, physician education, detail reps, and a few other areas.

The question of course is what do you get for your rebate dollar. Would I rather pay a $10 rebate to the PBM based on formulary status or would I rather offer a $10 “coupon” to the consumer to fill my drug?

This leads to a lot of questions:

  • What does formulary status gain you in terms of increased market share above national market share?
  • Could formulary status with Medicare / Medicaid get you trickle down effects that make you care less about formulary status within a plan or PBM?
  • Do copay cards work to gain new marketshare, get new starts, reduce primary adherence, reduce abandonment, or improve MPR?
  • Will your drug be affected utilization management programs?
  • Which builds better long-term brand equity?
  • Will health reform change anything in terms of the individual’s ability to access drugs (i.e., PBM of one)?
  • Which is more likely to influence a physician – formulary status or copay relief?
  • If there are less “me-too” drugs will the majority of relevant drugs be “on-formulary” due to clinical reasons so you can’t gain much?
  • How will personalized medicine impact the formulary concept in the long-term?

I’m in the middle of researching the topic of copay cards for my AIS webinar on July 13th. It has uncovered a few nuggets about changing PBM and manufacturer relationships, support for these programs, proof points, and other items I’ll share then.

Of course, if it became clear that these cards were being used for market access not for adherence and improving outcomes, that would put these two on a head-to-head collision course. Or, if these tools slow down the generic adoption curve post patent-expiration, that could also draw some attention across the industry. (I believe Lipitor will be a big test of this since the increased margin from generic Lipitor is already factored into the PBM valuations and impacting that would impact stock price which would be a big deal.)

Events, Healthcare, PBM / Pharmacy, Value Propositions

Positive Germs And Their Long-Term Impact

June 15, 2011 by George Van Antwerp 0 Comments

I’ve always found this study of kids in the Philippines very interesting.  It focuses on the question of whether we oversanitize our kids and whether creating a lack of exposure to germs has any long-term effect.  It suggests that early encounters with bacteria and microbes may help build a stronger immune system.  Other studies have shown that lack of exposure to pathogens early in life can lead to asthma and allergies later.  I’m sure their is some line of how much exposure is good, but where is that line?

“In the U.S. we have this sort of hyper-sanitary culture, hyper-hygienic environment, with antibacterial soaps everywhere and cleaning products. And we might want to reconsider the application of some of those products,” said Northwestern University anthropologist Thomas McDade, lead author of the recently-published study.

“Now for the first time in the history of our species, our bodies are being deprived of exposure to those everyday germs because we live in such a sanitary environment,” McDade said.

This makes me think of a few stranges things I’ve seen recently.  The first was cicada ice cream.  If you don’t know what cicada’s are, they are these large, annoying bugs that come out occassionally. 

 

 

And yesterday, the guy at the “reptile party” that my son was at shared that he had just earned a Guinness Book Of World Records for holding a live scorpion in his mouth for 17 minutes and 17 seconds.  Why would someone even try to do that?

Healthcare

Walgreens Program For Splitting Fills Of Oral Oncolytics

June 14, 2011 by George Van Antwerp 0 Comments

Walgreens Specialty Pharmacy has a program for oral oncology drugs that saves clients between $2K-$4K PMPM based on a study released last year.  So, what do they do?

They split the monthly fill to make sure patients are getting their clinical assessments done midway through the regimen.  They were doing this for 3 drugs (Nexavar, Tarceva, and Sutent) for the first 3 months of therapy.  According to the study shared in the December 2010 Drug Benefit News publication, the program increased compliance from the 60% range to the 70% range. 

The program also includes monthly reports back to physicians.  It was supposed to expand at the beginning of the year.

As far as I know, this is a unique program.  I don’t know of others doing anything like this.

Healthcare

How Close Should Your Pharmacy Be?

June 13, 2011 by George Van Antwerp 0 Comments

The question of limited networks continues to be a hot topic with mandatory mail, Maintenance Choice, Restat’s Align, Humana / Walmart, and OptumRx’s new Value Network.  So, the core question is what are reasonable expectations for access. 

Most people look to the “TRICARE access standard” which the Department of Defense uses:

  • 90% of the members in an urban area must live within 2 miles of a pharmacy
  • 90% of members in a suburban area must live within 5 miles of a pharmacy
  • 70% of members in a rural area must live within 15 miles of a pharmacy
Healthcare

DAW Rxs Impacts Adherence

June 12, 2011 by George Van Antwerp 0 Comments

5% of the prescriptions analyzed by CVS Caremark in a study were DAW (or Dispense As Written).  Obviously, for SSBs (single-source brands) this doesn’t matter since there isn’t a chemically equivalent generic drug.  But, for MSBs (multi-source brands) this can make a difference since the patient is often required to pay significantly more based on either (a) the drug being on the 3rd tier or (b) the plan design requiring the patient to pay more for “chosing” the brand over the chemically equivalent generic.

I guess one easy answer would be to get rid of DAW, but there are NTI (narrow therapeutic index) drugs where DAW is much more  relevant or the rare consumer who has some allergy to the fillers in the generic. 

So, why does it matter?  It mattes because the researchers found that

“chronically ill patients just starting critical therapies were 50% to 60% less likely to fill prescriptions for expensive brand name drugs” (Drug Benefit News, 4/1/11)

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

Which PBMs Have Highest Mail Penetration? 2010 data

June 11, 2011 by George Van Antwerp 0 Comments

For the companies in the AIS Pharmacy Benefits Survey, the mail order penetration in Q1-2010 was 22.76%.  The top mail order pharmacies (based on percentage of overall adjusted Rxs) were:

  • Pequot Pharmaceutical Network at 76.79%
  • Maxor National Pharmacy Services Corporation at 48.40%
  • 4D Pharmacy Management Systems at 39.60%
  • Medco at 34.34%

If you look based on number of mail order Rxs:

  • Medco
  • Express Scripts
  • CVS Caremark
  • ACS

Overall, mail order usage has continued to decrease from its peak in 2006 of 18.83% of Rxs to 16.80% at the time of this survey last year.

Healthcare

400 Orphan Drugs In Development

June 11, 2011 by George Van Antwerp 0 Comments

A report from PhRMA looks at rare diseases and orphan drugs.

An orphan drug is a pharmaceutical agent developed to treat a disease that affects less than 200,000 people in the US.

While individually this may not seem like a big market, it is estimated that 25-30M Americans suffer from a rare disease.  And, developing therapies for these unique conditions can allow for price premiums. 

At the end of the document, they have some FAQs and suggest some websites.  Here’s one FAQ:

How can you find out about clinical research on rare diseases?

There’s a web site that was just set up a few years ago by the federal government. It’s called www.clinicaltrials.gov.  It’s important to remember “.gov” because there are some commercial sites that have similar names. Every research project receiving any money from the U.S. government must be listed on this site. It’s a requirement. You can type in the disease name and find all sorts of information about the studies, where they’re being conducted, what is needed to be eligible, and who to contact to learn more about participating. If you don’t have a computer, ask your local librarian to help you search on that web site.

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

$15 Compound Vs. $1,500 Injection – Price Gouging?

June 11, 2011 by George Van Antwerp 0 Comments

You don’t often get to see outrageous pricing examples like the one around KV Pharmaceutical’s Makena product.  Specialty pharmacies have been compounding and making a version called 17P for years.  17P sells for around $15 per shot and patients typically take 15-20 injections during pregnancy to help prevent pre-term birth. 

“As far as I know, most physicians are using the compounding pharmacies for 17P,” said Dr. George Saade, president of the Society for Maternal-Fetal Medicine. “If we feel there’s no extra advantage of a more costly treatment, then our obligation is to prescribe the less costly treatment … It’s not right to abuse the health care system by prescribing an astronomically more costly medicine when there’s no evidence that it’s better.”

KV Pharmaceuticals came out with a branded version of the compound to create easier access to the drug.  They initially priced it at $1,500 but had already dropped it to $590 per shot when an article with the above quote appeared at the beginning of May. 

For those of you less familiar with compounding, here’s a statement from an FDA study in 2006:

FDA regards traditional pharmacy compounding as the extemporaneous combining, mixing, or altering of ingredients by a pharmacist in response to a physician’s prescription to create a medication tailored to the specialized medical needs of an individual patient. Traditional compounding typically occurs when an FDA-approved drug is unavailable or a licensed health‑care provider decides that an FDA-approved drug is not appropriate for his or her patient’s medical needs.  By definition, pharmacy compounding involves making a new drug for which safety and efficacy have not been demonstrated with the kind of data that FDA requires to approve a new drug.  In virtually all cases, FDA regards compounded drugs as unapproved new drugs.

The unapproved status of compounded drugs notwithstanding, FDA has long recognized that traditional pharmacy compounding serves an important public health function.  FDA has historically exercised enforcement discretion and generally has not taken enforcement action against pharmacies engaged in traditional compounding.  Rather, FDA has directed its enforcement resources toward firms that manufacture large quantities of unapproved new drugs under the guise of traditional compounding, and whose compounding practices result in significant violations of the new drug, adulteration, or misbranding provisions of the FDCA.

Will managed care, managed medicaid, and PBMs aggressively limit the use of Makena or will they leave it to physicians?

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

CatalystRx Mobile Is “Health Entertainment”

June 10, 2011 by George Van Antwerp 0 Comments

I talked about this months ago after I saw Catalyst speak at a conference.  The mobile application is now fully deployed, and you can watch a video about it.  They describe it as health entertainment.

Here’s an example of their refill reminder:

(Note: In the spirit of disclosure, I do own some individual shares of Catalyst stock.)

Healthcare, Marketing / Communications, PBM / Pharmacy, Social Media, Technology

“Disorder” Is A Dirty Word?

June 10, 2011 by George Van Antwerp 1 Comment

In the spirit of my “words matter” theme, I found it interesting that the military has stopped using the term “posttraumatic stress disorder” and changed it to “posttraumatic stress” arguing that “disorder” ‘unnecessarily stigmatizes soldier’s natural response to the emotional and violent experience of battle’. 

“I drop the d.  That word is a dirty word.”  General Peter Chiarelli, US Army (Time Magazine, 6/20/11)

Books / Articles, Words Matter

Healthcare Lessons From Car Shopping

June 10, 2011 by George Van Antwerp 0 Comments

Someone in the past month used a car analogy for healthcare reform. They were pointing out that you can’t have it all. You’re not going to find the most comfortable car with the best radio that gets great gas mileage and is reasonably priced. Their point was that that is what we’re looking for in healthcare reform.

Then, Ford came out with its press release around working with Welldoc to develop an allergy and diabetes solution that integrates with its SYNC platform in the car. It’s definitely intriguing. I get the allergy part, but I’m not sure I see monitoring diabetes while driving. It will be interesting to see where this goes.

Now, I’ve been out car shopping and learned a few things. First, it’s important to say that I’ve never really car shopped. We’ve bought Ford cars from the same dealer for the past 20 years. After the first time, I simply faxed him a request and told him to call me when it was on the lot for me to drive. Since we buy under the employee plan, there’s no negotiating.

My guy retired so I decided this was a good time for me to shop around (as my car just passed 100,000 miles). It’s been an experience which (as always) I can translate to healthcare.

  1. Overwhelming – At one place, the sales person talked the entire time and just kept showing me options. The technology was too overwhelming and distracting while I drove. To me, this is how I am sure many patients feel when presented with too much data to make a decision.
  2. Focusing on the wrong information – At almost every dealership (5 so far), no one has asked me what matters to me and how I will make a decision. They want to talk to me about their features. One guy actually showed me how clean the repair garage was as if that was a reason to buy a car from them. Again, I am sure many patients want different information then they receive in the process. Ideally, we would understand how they evaluate information and present it in that way.
  3. Not taking you seriously – At another dealership, they passed me off on the 22-year old kid in the corner as a lead. He knew very little about the car that I was interested in. He couldn’t even pronounce the car color. I know sometimes people write off the obese patient as someone that won’t ever change which is something we have to be careful of as part of the care team. It also reinforced the point of trying to match providers and patients which is a difficult and whole other discussion.
  4. Not considering the entire family – At another dealership, the salesperson almost yelled at my son when he touched the electronics and again when he sat on the edge of the seat. I immediately wondered how the car would hold up over time if it was going to break in 5 minutes of him touching it. This reminded me of going to a provider’s office or hospital and the importance of the staff and how they engage the patient and family.
  5. Not giving you time to evaluate options – At another dealership, the guy actually asked what it would take for me to buy the car today. I was immediately put off. Everyone else wanted me to come back and drive it again or encouraged me to do some research. When we present information to consumers, are we giving them enough information and opportunities to weigh their options?

Why do I tell this story? Because I think the consumer experience in healthcare is complex. We need to think about where it breaks down. We need to think about the entire family. We need to think about the physical facilities. We need to think about how information is presented and consumed. This car shopping process has reinforced that for me.

Healthcare

Infographic: The Cost of Care

June 9, 2011 by George Van Antwerp 0 Comments

Here’s another great infographic on healthcare premiums and the cost of care.

 

Source – Carrington College

Books / Articles, Healthcare, Research

Domestic Medical Tourism and Telemedicine

June 9, 2011 by George Van Antwerp 3 Comments

The idea that local healthcare in a physical setting doesn’t work seems to be the crux of many solutions for leveraging limited resources (MDs) and addressing the geographical pricing differences which exist.  Given what we know about engagement and the value of the physical and personal relationship, there should be a better way.

BUT, without trying to solve for that…I thought I would share a few things that I recently saw.

BridgeHealth Medical is a Colorado based company that is focused on domestic medial tourism.  We’ve all heard about international medical tourism (i.e., flying someone to India for a surgery) and the savings there.  The key (and interesting) question is whether there is some middle ground within the US. 

At least according to the brief story I read in Inc. Magazine, they are getting some traction:

  • 40% savings on a total knee replacement
  • 22% savings on a spinal fusion surgery
  • 13% savings on a prostate surgery

I was amazed that the article said that Americans spend $2.1B outside the US today.  Will this replace that or will it be a new category of spend to track?

And, it will be interesting to track outcomes here and see whether savings translates to better survival rates or improved quality of life.  There will be challenges to the model as I’m sure there have been for international medical tourism.

Cisco on the other hand has rolled out their telemedicine initiative called HealthPresence which uses videoconferencing and high-tech medical equipment to share data.  Obviously, telemedicine has been a tool that’s been tried several times over the years with varying levels of success.  Can Cisco’s efforts and model finally push this from a fringe technology approach to mainstream? 

It’s certainly possible.  Timing may be right.  We’ve seen some success with AmericanWell’s efforts.  The question is how will the consumer respond.  Will they appreciate the easier access?  Will it impact the caregiver / patient relationship? 

Who knows…there is still a lot to learn especially in a country where we’ve been traditionally over-served with our access to healthcare.

Books / Articles, Consumerism, Healthcare, Innovation, Leadership, Technology

Medco Follow-up On Questions RE: 2011 Drug Trend Report

June 7, 2011 by George Van Antwerp 0 Comments

In my post a few weeks ago, I had four questions which my initial read of Medco’s Drug Trend Report had generated. I just got the answers to them…

Q: ADHD trend continues to increase.  With the new DSM-5 proposal, it looks like there will be more teens and adults diagnosed with adult ADD.  Do you see this accelerating the trend in this category even more? 

A: The proposed changes to the diagnostic criteria for ADHD / ADD in the DSM-V include changing the age of onset limit (on or before age 12, instead of age 7) and lowering the required number of symptoms which effectively will “loosen” the criteria and permit doctors to more easily diagnose the condition. If this indeed takes place, we would expect some further acceleration of the ongoing upward trend in ADHD drug use.

Q: As generics get closer to 80%, the remaining brand drugs will have to try new strategies to sustain utilization.  One of the growing tactics is copay coupons or cards.  Do you see this as an issue?  Are there tactics that you intend to use to address these through POS programs or other programs?  

A: Medco believes the best way to manage costs for both patients and payors is through the use of clinical and managed care programs that incentify the use of lower cost alternatives when clinically appropriate.  

Q: You talk about clients spending less PMPM on members age 0-18 which seems to run counter to the focus from last year on more, younger patients using maintenance drugs.  What do you attribute that drop in spending to? 

A: Because the prevalence in the pediatric category is so much lower than that of the adult population utilization/prevalence can trend higher than adults, but spend could be down, especially since there is much heavier use of specialty medications in the adult population. It’s a trend versus spend look.

Q: You bring up biologics.  It’s unlikely that biologics will generate large price drops as we’ve seen from generics.  What do you estimate will be the savings associated with biologics and will we see therapeutic interchange programs or will you manage the biologics more like a step therapy program? 

A: The industry is awaiting the final FDA guidance for approval and possible interchangeability of biosimilars. The estimates are that biosimilar will be priced in the range of 15% to 30% of branded product pricing. And as with generics, it is anticipated as biosimilars become increasing more accepted and completion begins within the biosimilar market itself, saving may increase overtime. 

Books / Articles, Events, Healthcare, Marketing / Communications, PBM / Pharmacy, Press, Research

Up To 200,000 MDs Require eRx Exemption From CMS

June 7, 2011 by George Van Antwerp 0 Comments

Electronic prescribing has been an effort for at least the past decade and significant progress has been made (see Surescripts latest report). That being said, we all know that changing behavior in the office setting is difficult. It has been the bane of many a technology vendor in the healthcare space.

On the one hand, I’m not surprised to see that lots of physicians might apply for an exemption from CMS around electronic prescribing.

BUT, I was surprised by several things in this article:

  1. Some physicians simply used electronic prescribing to write the 10 scripts required and then turned it off.
  2. The fact that there could be so many doctors that fit the approved exemptions.

The exemptions are for physicians who:

  1. Practice in an area with limited high speed Internet access.
  2. Work in an area where a limited number of pharmacies accept electronic prescriptions.
  3. Cannot prescribe enough drug orders electronically due to local, state, or federal laws (e.g., controlled substances).
  4. Have limited prescribing activity. [but yet still see a lot of Medicare members]
  5. Have insufficient opportunities to report the e-prescribing measures because of their patient type.

I didn’t think that could get you to 200,000 physicians (who were actively working with Medicare patients). The one that seems most feasible is for physician who register to participate in the Medicare or Medicaid EMR incentive program AND both adopt and use the technology by the 2011 deadline. They can also get exemptions.

Physicians care because they have to:

  • Prescribe electronically 10 times before June 30th to avoid a 1% penalty on all Medicare payments in 2012 or
  • Prescribe more than 25 times before Dec 31st to earn a 1% bonus in 2012.

Depending on your patient base, this seems like a pretty good business case to at least get a system in; write for 26 prescriptions; and collect your bonus.

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

Less Likely To Take Your Statin After Surgery

June 7, 2011 by George Van Antwerp 0 Comments

A recent study looked at people who were hospitalized for heart disease. It then tracked people’s use of statin medications (e.g., Lipitor) for the next year and looked at their adherence based on whether they had surgery or were simply discharged with a prescription.

SURPRISE – 70% of people who had surgery stayed on their statins for a year while 79% of those who didn’t have surgery stayed adherent. (thanks to Box Cutters for sharing this)

This begs a whole lot of questions:

  • How did they get the people to be so adherent in the first place? (this seems higher than the national statistics)
  • Did the surgery patients feel like they were “cured”? (see post on similar issue)
  • Was the statistical difference true at a location or prescriber level also? (i.e., was it simply that some locations or prescribers always wrote a script and talked about adherence or was it really a patient difference?)
  • Were the patients who had surgery sicker to begin with and therefore on more medications (which would reduce their likelihood of being adherent)?

On the other hand, this is perhaps another warning flag on the whole hospital readmissions issue where we have to address issues of health literacy, follow-up, discharge process, support network, and medication reconciliation.

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

New Moran Bill Uses Legislation As Business Model

June 3, 2011 by George Van Antwerp 1 Comment

The Moran bill in Kansas is another example of localized politics for independent pharmacies trying to legislate competition rather than find ways to differentiate their business.  I’ve talked about this before in:

This is focused (I believe) on the whole issue of limited networks and preferred networks as you can see from the NCPA letter about Maintenance Choice.  They throw everything but the kitchen sink at this model…why?  Because it works.  Maintenance Choice is saving consumers money and payers money.  And, it’s moving market share to CVS stores. 

This is the future.  This is what Walmart is focused on.  This is what Restat is focused on.  OptumRx (Prescription Solutions) just launched their limited network.  Humana is leveraging this in Medicare with Walmart. 

At the end of the day, isn’t it the payer’s option to decide how to design a benefit plan to offers a clinically effective solution at the lowest cost posible? 

Given that there are way too many pharmacies in the US today, someone (unfortunately) has to lose.  That is reality.  Based on the fact that there are more than 5x as many pharmacies as McDonalds in the US, we’re saturated.

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

10,000 Steps, 5 miles, 30 minutes of Exercise, Diet…

June 3, 2011 by George Van Antwerp 1 Comment

First off, whoever framed this idea of 10,000 steps per day was a genius.  It’s a much simpler metric to tell people.  Since I run (on my good days) a few miles, I had to translate that to miles to understand what I needed to do.  10,000 steps is 5 miles.  If companies were going around telling everyone they had to walk (or run) 5 miles a day, they would lose people quickly.  [One likely question here is whether running and walking burn the same calories.]

It seems like everyone is pushing 10,000 steps per day right now – Here’s Kaiser’s Program.

Of course, on the flipside, this can be confusing since you have this program.  You have the government’s recommendation of 30 minutes of exercise a day (which isn’t 5 miles for most people).  You have advertisements for supplements.  You have workout commercials.  You have diet information.  What works?

(In searching for 10,000 steps information, I found this Dr. Oz video which I’ll share on weight loss tips.)

As an interesting side note, I was wearing my pedometer the other day talking with a physician.  He asked what it was.  When I told him it was a pedometer, he asked why I wore it.  I talked to him about measuring my steps to get to 10,000 a day.  He’d never heard of the concept.

exercise, Healthcare

The Customer Experience Matters Healthcare Nuggets

June 2, 2011 by George Van Antwerp 1 Comment

Are you focused on the customer experience?  If yes, then you should know who Bruce Temkin is and look at his research.

I follow his research mostly through his blog, and you can find teasers of information on healthcare by what he posts.  I thought I’d pull together a few of those things here:

1. In his loyalty ratings, Walgreens was one of the top 20 companies recommended to friends while Cigna, Aetna, Humana, Anthem, and BS of CA were all in the bottom 20.  [I’m not sure this should surprise us.  I would expect CVS was close to the top with Walgreens.  I’d assume many people don’t “recommend” their insurance companies in general.  I’ll have to try to find out if the PBMs appear on here.]

2. In his forgiveness rankings, retailers like CVS, Walgreens, Walmart, and RiteAid scored well.  TriCare scored very well.  Medicare and Medicaid had good scores, and Kaiser was the only health plan in the top 70.  [This is a key issue for retention and important in the retailization of healthcare…you will make mistakes so the question is how much good will you have to overcome those mistakes.]

3. In his loyalty rankings, you find out that African Americans are much more loyal to their health plans than Hispanics or Caucasians.  [How does this change your engagement strategy?]

4. Bruce even goes on to quantify the value for different industries.  For healthcare, he estimates that a $1B company could improve it’s topline by $179M / year by improving its customer experience.

5. In his experience ratings, he shares some specifics on health plans (see below):

And, I suggest you read some of his thoughts on changing how we analyze data.  I think his points about “contextual insights” make a lot of sense.

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

Pew: 13% of Online Users Use Twitter

June 1, 2011 by George Van Antwerp 0 Comments

Pew just released some new data on who uses Twitter.  It shows that the biggest users are Hispanics and African Americans and the fastest growing age group is 25-44.  Here’s two charts from the report:

 

Research, Social Media, Technology

Diabetes SMS Program AND Key Measures Of Success

June 1, 2011 by George Van Antwerp 0 Comments

Aetna recently announced that they were launching an SMS (text messaging) program targeting diabetics. I’m excited about the program not only because Silverlink is partnering with them on it, but because they’ve laid out some key metrics to focus on.

In a lot of SMS pilots, the size of the program has been small (<1,000) or the metrics haven’t been clear. I’m hoping this will be very different. Here are the metrics they laid out:

  • Received regular A1C screenings which measures blood glucose levels
  • Received an annual LDL screening which shows the level of bad cholesterol and cardiovascular risk
  • Followed instructions for taking medications
  • Enrolled in a disease management, nurse and health coaching program

Finding out who participates, which messages are effective, and how they respond is going to be a great study. Stay tuned for more.

Healthcare

The Cost Of Being Fat

May 29, 2011 by George Van Antwerp 0 Comments

With over 60% of Americans overweight or obese, this is a real issue for us as a nation.  You see more and more focus on it on TV, in our schools, and in the overall healthcare system.  So, what are the costs of being overweight:

I could go on about linking depression and obesity and to talk about genetics, but I think you get the point.  While it’s not easy (from personal experience), it’s an important topic for us all to continue to focus on.  For us to fix healthcare in the US, we have to think outside the system itself.
Books / Articles, exercise, Healthcare, Research, Value Propositions

Pharmacy Reimbursement Needs To Be Re-Aligned With Effort

May 28, 2011 by George Van Antwerp 0 Comments

I know this is not a popular topic, but I really believe that reimbursement on a per Rx basis in misaligned.  Today, a pharmacy (retail, mail, specialty) is paid based on either a discount off a standard price (e.g., AWP) or based on a MAC (maximum allowable cost) list.  They may also receive a dispensing fee.  According to the latest PBMI Benefit Design Report, those dispensing fees are:

  • $1.62 retail
  • $2.33 mail (noting that only 21% of their surveyed employers pay dispensing fees at mail)
  • $3.26 specialty

And, the reimbursement rate is the same whether it’s a new Rx or a refill.  Does anyone out there believe that the amount of effort to fill a new Rx and a refill is the same?  Why not pay differently?

An industry number that has held up anecdotally when I’ve talked to lots of people is that 40% of new Rxs require some type of work to become a “clean Rx”.  That might mean that they are subject to a utilization management program (step therapy, prior authorization, quantity level limit).  It might mean that there is a DUR issue such as a drug / drug interaction which has to be addressed.  It might mean that the drug isn’t covered.  It might mean that the cost is too much based on formulary tier.

Additionally, the first few times a patient fills a drug is when they have questions.  When do I take the drug?  Are there any side effects?  Should I avoid any foods?  Should I eat with my meal?  Are there alternatives?

Once the patient has titrated to the right strength and is taking their medication on a regular basis, the job is pretty much to count the pills and get them to the patient in a timely manner.  It has been my argument for a while that if we could fix this reimbursement misalignment then you would see a better coordination between retail and mail order.

The right model in my mind shifts reimbursement dollars through dispensing fees or some other payment structure to compensate for these cognitive services on the initial fill and acknowledge where the effort is.  I believe this would allow for a “mail at retail” type model of central fill or a kiosk model at the store or encourage retailers to better support mail order efforts when appropriate.

Everyone is aligned (at some level) with getting patients to:

  1. Start on the appropriate medication
  2. Understand their medication and their condition
  3. Make appropriate choices that lower overall costs to the payers
  4. Stay on their medications
With that said, it seems like there is an opportunity here.  It won’t be easy, and I don’t hear anyone talking about it…but I’ll continue on my soapbox for now.
Healthcare, Leadership, Methodology, PBM / Pharmacy, Research

Short Survey On Copay Cards

May 27, 2011 by George Van Antwerp 0 Comments

Are they good?  Are they bad?  Are there times when they should be used?  Will they replace rebates?  When are they used?  Do they work?

AIS (Drug Benefit News) has asked me to do a webinar on copay cards in early July.  This is a hot topic area with limited information out there.  Rather than simply offer my opinion, I thought I would reach out to those of you that work in pharma, PBMs, retail pharmacies, and health plans to capture your opinions.  I put together two brief (<10 question) surveys, but I’m also happy to talk live if you’d prefer. 

 If you don’t feel like you’re the right person or you feel like you know others that would respond, please feel free to forward this to others.  I’m happy to share the results back with those of you that participate.  Thanks.   

 The survey for physicians and manufacturers is here – http://www.surveymonkey.com/s/ZQVM7DK.

 The survey for pharmacists, PBMs, and payers is here – http://www.surveymonkey.com/s/ZSBS32Y.

 Have a great holiday weekend!

Events, Healthcare, Marketing / Communications, Research, Silverlink

Highlights From The CVS Caremark Insights Report 2011

May 26, 2011 by George Van Antwerp 0 Comments

CVS Caremark has been on a roll lately releasing lots of research especially in the adherence area. They just released another study this week that said:

In a study published online this week in the Journal of the American Pharmacists Association (JAPhA) the researchers said,”Approximately one-half of caregivers reported they are more likely to forgo their own medications than the medication needs of their caregivees, especially if cost was a problem, and that caring for their family members was more important than caring for themselves.” The researchers added, “Our findings indicate care-giving status may be an important characteristic for providers to identify and that caregivers may represent a fertile target for adherence interventions to improve chronic disease management and prevent chronic disease.”

But, today, I want to focus on their drug trend report called Insights which was released a few weeks ago. The report begins with a focus on change pointing out a few facts which will change our healthcare experience. Here’s part of the introductory letter by Per Lofberg, the President of Caremark Pharmacy Services.

We all know change is a constant, in this industry and in life, but the change we face over the next several years is monumental and unprecedented. The sweeping nature of the health care reform legislation makes it difficult, as even the government admits, to predict how the system and its stakeholders will respond. Regardless of how much is unknown and “still to be determined” about reform, all of us continue to face the urgent, ongoing need to reduce health care spending and simultaneously improve health outcomes.

They take a different approach than Express Scripts (see review of this year’s drug trend report) and Medco in their drug trend reports which are more encyclopedic in their breakdown of class by class. CVS Caremark poses questions by group and then presents data to address those questions.  They focus on health reform and overall changes to the market dynamic.  [Both Adam Fein and I review most/all of these reports every year so I’d encourage you to look at both of our blogs if you want historical facts or comments about comparing the drug trend reports.]

  • Employer: Benefit costs are hurting our profitability. Something’s got to change.
    • Only 6% of employers believe their company will be better off as a result of healthcare reform.
  • Health Plan: How do I compete, comply, and control costs in this new world?
    • 120M members will be seeking or changing coverage between 2012-2016.
  • Physician: My practice is already stretched to the limit.
    • The US will have about 159,000 fewer doctors than it needs by 2025.
  • Consumer: Where do we go from here?
    • In 2010, 1 in 4 households reported having trouble paying medical bills.

Key Statistics:

  • Overall trend = 2.4%
  • Non-specialty trend = 0.8%
  • GDR for 2010 was 71.5%
  • Specialty trend = 13.7%

Specialty now makes up 14.2% of their BOB (book of business) overall spending…[something that some people are predicting will be close to 40% in under 5 years].

I really like how they breakout the charts by type of client (employer, health plan, and TPAs) since they have different approaches to trend management. Here’s the health plan one:

They talk about some of the future trend influencers:

  1. Economy
  2. Aging population
  3. Chronic condition prevalence
  4. Changing condition guidelines
  5. Health care reform
  6. Adherence
  7. Generic launches
  8. Specialty growth
  9. Brand price increases
  10. Less predictable events – weather, flu impact

Like others…they are saying that GDRs (generic dispensing rates) of 80% are now possible by 2012! Talk about a change in the past decade and why there is so much pressure on the manufacturers.

They mention it in the publication, but they’ve also issued some press about their effort to target the specialty spend that happens under the medical benefit. They estimate that 80% of the drug spend in the medical benefit is from specialty drugs with cancer representing 46% and three other categories representing more than 2%:

  • Anemia and neutropenia
  • Osteoarthritis and RA
  • Immune disorders

Given their broad footprint, they pose an answer rather than a question from the next constituent – the pharmacist:

I know I can make a real difference for people.

One of the big areas of focus for leveraging that F2F relationship is adherence:

They provide an updated statistic on average Rxs PMPY of 12.6.

One of their big studies from the year was the one that was published around savings related to adherence:

I’ll end with a statement they highlight at the end:

“Every member interaction is an opportunity to improve outcomes for the plan and the member.”

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

The Information Blanket: Design Meets Health Literacy

May 25, 2011 by George Van Antwerp 0 Comments

Another story from Fast Company June 2011 that I found really interesting was about the Information Blanket. This is a tool being used in Uganda to address their infant mortality rate.

It includes information on:

  • Vaccinations
  • Breast feeding
  • Doctor’s appointments
  • Fever
  • Growth rates
  • Symptoms to monitor

I think this is a few cool and creative solution.

Books / Articles, Healthcare, Innovation, Leadership, Marketing / Communications
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