February 17, 2015 
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For those of you that have followed me here, I thought I would share three things with you:
July 24, 2014 1 Comment
In case you haven’t been tracking specialty drug costs for the past decade, the recent news with Gilead’s Sovaldi ($GILD) is finally making this topic a front page issue for everyone to be aware of. I think Dr. Brennan and Dr. Shrank’s viewpoint in JAMA this week did a good job of pointing that issue out. They make several points:
If you haven’t paid attention, here’s a few articles on Sovaldi which did $5.7B in sales in the first half of 2014 and which Gilead claims has CURED 9,000 Hep C patients.
But, don’t think of this as an isolated incident. Vertex has Kalydeco which is a $300,000 drug for a subset of Cystic Fibrosis patients. In general, I think this is where many people expected the large drug costs to be which is in orphan conditions or massively personalized drugs where there was a companion diagnostic or some other genetic marker to be used in prescribing the drug.
The rising costs of specialty medications has been a focus but has become the focus in the PBM and pharmacy world over the past few years. This has led to groups like the Campaign for Sustainable Rx Pricing. Here’s a few articles on the topic:
Of course, the one voice lost in all of this is that of the patient and the value of a cure to them. Many people don’t know they have Hepatitis C (HCV), but it can progress and lead to a liver transplant or even ESRD (end state renal disease) which are expensive. 15,000 people die each year in the US due to Hep C (see top reasons for death in the US). So, drugs like this can be literally and figuratively life savers. These can change the course of their life by actually curing a lifetime condition.
This topic of specialty drug pricing isn’t going away.
At the end of the day, I’m still left with several questions:
And, a few questions that won’t get answered soon, but that this issue highlights are:
June 27, 2014 0 Comments
After Aetna, Cigna, and Wellpoint all moved into different PBM relationships with CVS Caremark, CatamaranRx, and Express Scripts, it certainly marked the end of much of the debate on whether a captive PBM (i.e., owned and integrated with the managed care company) could compete with the standalone PBMs. There are really only a few big integrated models left including Humana, OptumRx (as part of UHG) and Kaiser with Prime Therapeutics having a mixed model of ownership by a group of Blues plans but run as a standalone entity. Regardless of where the latest Humana rumors take them, it made me think about what the market has become with these new relationships.
While I’ve been beating the drug of the risks of commoditization to the market for years, I’m going to make a nuanced shift in my discussions to say that there is still a risk of commoditization and driving down to the lowest cost, but we may be quickly approaching that point. What I’m realizing is that there can be a two tier strategy where you commoditize certain areas of the business and let the other areas be differentiated. And, that this can be a survival tactic where you either outsource the core transactional processes to one of these low cost providers or figure out how to be one of them while creating strategic differentiation in other areas.
Maybe you can eat your cake and have it too!
June 24, 2014 6 Comments
When I was at AHIP last week in Seattle, I had a chance to see Alan Lotvin from CVS Caremark present on specialty pharmacy. It was one of the best presentations that I’ve seen in a while.
It was good because I actually heard things that I’d never heard discussed around specialty pharmacy before. And, as he pointed out, specialty will represent 50% of the pharmacy spend and about $235B in total spend by 2018. This is where everyone is focused and the opportunity for differentiation exists.
So, what does all this mean? Let me share some highlights:
o This article says that CVS Caremark is working on a formulary with 200 brand drugs excluded.
But, the most important thing was their strategy to get clients to ZERO TREND for specialty pharmacy. (It reminded me of the program I developed at Express Scripts where we actually guaranteed a 3-year zero trend…if you followed our very aggressive recommendations.) He outlined the following:
He also went on to talk about the consumer experience. I think a lot of specialty pharmacies are thinking about the same things, but there were several things he shared that were new to me. It was exciting.
As I’ve said before, as specialty pharmacies really start to think about the patient and focus on the experience over time, we will start to see more coordination with pharma about going beyond the pill and driving lower total costs.
June 6, 2014 0 Comments
This was just one of the really great data points I got from the Medication Adherence Clinical Reference page from the American College of Preventative Medicine. It’s worth a read.
But, let me highlight a few other points:
I think this is important because a lot of the industry solutions focus on the pharmacy and the consumer. They don’t (IMHO) go back to the initial discussion with the provider. How are we helping to enable those conversations to last longer than 99 seconds in the average encounter in which time they have to explain the medication, the side effects, and help the patient feel like the medication is going to make a difference? (Of course, this always make me think of my favorite placebo effect video.)
Additionally, this chart from the Adult Meducation publication was a great list of factors reported to impact adherence. (Sources: Miller et al., 1997; Nichols-English and Poirier, 2000; Vermiere et al., 2001; World Health Organization, 2003; Krueger et al., 2005; Osterberg and Blaschke, 2005)
They also share this chart (which I’ve seen a version of many times):
[Source: National Association of Chain Drug Stores, Pharmacies: Improving Health, Reducing Costs, July 2010. Based on IMS Health data]
May 31, 2014 0 Comments
First CVS Caremark began offering mail order (90-day Rxs at lower cost) at retail stores (aka Maintenance Choice), and now with Specialty Connect, they are doing the same thing in specialty pharmacy.
Specialty Connect was a pilot program that won the PBMI Innovation Award this year. What it does is to allow consumers the choice of getting their specialty medications at either the CVS Caremark specialty pharmacy or picking them up at a local store. This is a change since: (1) many pharmacies don’t typically stock specialty medications; (2) many PBMs require use of a specialty pharmacy (i.e., mail); and (3) specialty medications typically require some addition handling and counseling which may be difficult to do at a local store level.
But, this is a very consumer friendly solution, and it has had some positive initial success. Here’s a quote and some data from their press release: (some additional data in the original PBMI document)
“Specialty Connect helps specialty patients with these critical therapies by helping to eliminate common challenges they had often faced and by offering them flexibility and choice,” said Alan Lotvin, M.D., Executive Vice President of Specialty Pharmacy for CVS Caremark. “The program makes it easier and more convenient for patients to submit and receive their specialty prescriptions either through CVS/pharmacy or by mail. What’s more, it increases medication adherence, improves outcomes and lowers overall health care costs for specialty patients and payors.”
Specialty Connect has demonstrated high levels of patient satisfaction as well as improved adherence for specialty pharmacy patients. In fact, pilot program results demonstrated a 13 percentage point increase (from 66 to 79 percent) in patients who were optimally adherent to their medication. Early program results also show that the program is improving upon the patient experience and reducing traditional barriers to getting started on medication, with 97 percent of patients successfully starting on therapy after only their first interaction at a CVS/pharmacy store. In addition, more than half of patients, many of whom were existing mail service pharmacy customers, chose to pick up their specialty medications at CVS/pharmacy.
Hopefully, this and many of the other CVS Caremark successes will make people wonder why they ever wanted to break the company up into different business units. As I’ve said for years on the blog, in the press, and to many Wall Street analysts, the integration of the business units can offer huge value once the synergies are realized and the consumer experience is integrated.
The other interesting things that I thought about when reading about Specialty Connect were:
May 5, 2014 2 Comments
The creation of the “softer, gentler” PBM is one of my predictions driven by the rise in specialty pharmacy. While generic fill rates and mail order penetration still matter to earnings, the focus across the industry is on specialty.
This will bring back a focus on how pharma and the PBMs work together which has had a bumpy past. Initially the two were very close. Then, with the rise of generics and more trend programs like prior authorization and step therapy, the PBMs and pharma butted heads frequently.
Of course, the situation for pharma has changed also. They are trying to figure out how to go “beyond the pill” and create new consumer relationship and make money. (Here’s a good article about pharma and digital from the other day.)
In case you missed them, here’s a few other things that are relevant:
And, I think this screenshot from the Barclays Global Healthcare Conference Presentation given by Express Scripts shows that they are focused on this care and delivery intersection by continuing to show the success from the Therapeutic Resource Centers.
So, what do you think? Will the PBMs become more care management focused? Will they integrate with the other care providers? Will this be the beginning of their focus on working with ACOs and PCMHs? Will this change their approach? Will we see PBMs differentiating around key, chronic diseases like the specialty pharmacies have done? Will this create an opportunity for integrated PBMs (i.e., Humana, Cigna, Aetna) to differentiate?
April 24, 2014 2 Comments
The CVS Caremark publication Insights 2014: Advancing The Science Of Pharmacy Care came out the other day. They took a different approach than the detailed trend report which Express Scripts put out. Their document is more of a white paper about “7 Sure Things”.
The 7 Sure Things are to help you know what to do with your pharmacy benefit and cover:
If you’re managing a pharmacy program and you’re surprised by any of these, I would suggest you look for another job.
So, let’s drill down into the report to see what it shows us:
o 0.8% for traditional (non-specialty) drugs
o 15.6% for specialty drugs (down from 18.3% in 2012)
o 3.8% overall
o They hint at an interesting question of whether utilization is growing due to an improving economy. (correlation or causality?)
o Simpler labels
o Synchronizing refill dates
o Reminder devices
o Digital / mobile tools
At the end, they give 5 sure strategies that clients should do.
Overall, this was certainly the easiest “trend report” to read. It tells a clear story which is probably great for the average client and would drive more discussion with your account manager.
April 23, 2014 3 Comments
I just finished reading the 2013 CatamaranRx Drug Trend Report (2014 Informed Trends: Moments of Opportunity) and wanted to share some of the things that caught my eye. (BTW – CatamaranRx was formed by the merger of SXC and CatalystRx.)
One of the early comments in the document caught my eye. While simple, it is still so true in healthcare.
“Bringing consistency through a national perspective on best practices, a “local” understanding of how health care is practiced and deep insights at the individual level, to promote the very best outcomes.”
“The looming pharmacy demand is also driving the healthcare market toward expanded cost containment and coordinated care measures. Industry estimates are projecting more than 30 million new PBM customers as a result of the ACA. This influx of new customers will stimulate creative cost management paradigms and entice new entrants into the PBM sector.”
o Over what time period?
o Is this all members prescribed an Rx?
o Is this all members with one Rx?
o What is the percentage of members with over 80% PDC (versus the average PDC)?
o (Note: These are the same questions for every PBM that shows you adherence numbers.)
o Member risk scoring and personalized interventions.
o Tailored clinical programs, including step therapy, quantity limits and prior authorization.
o Aggressive management of controlled drugs to reduce misuse and abuse.
o Formulary management tailored to address client-specific, high-cost medication classes.
o Exclusive specialty through BriovaRx, a high-touch, patient-centric model.
o Plan designs with copay differentials that promote cost-effective choices.
o Multi-channel communications that engage members in their healthcare.
o The need for the right message.
o The need for targeting algorithms.
o The need to vary channel based on preference.
Two miscellaneous comments here:
April 10, 2014 4 Comments
I always enjoy reviewing the PBM Drug Trend Reports. Even though these past two years I’ve been focused more on the care management side of healthcare, I continue to see these two paths colliding in interesting ways in the near future.
Here’s my big takeaways from the report some of which you can get in their Executive Summary:
(I’d also encourage you to look at Adam Fein’s review…where he unfortunately beat me to the punch again.)
“Specialty medications include injectable and noninjectable drugs that are typically used to treat chronic, complex conditions and may have one or more of the following qualities: frequent dosing adjustments or intensive clinical monitoring; intensive patient training and compliance assistance; limited distribution; and specialized handling or administration. – See more at: http://lab.express-scripts.com/drug-trend-report/appendix/methodology#sthash.dhJhFIZs.dpuf”
January 23, 2014 10 Comments
It’s been a few years since I’ve worked on medication adherence solutions. It seems to have become a big focus again in the industry both with the Medicare Star Ratings program and with all the emphasis on waste.
As I started thinking about adherence, I thought it would be good to create a list of solutions and vendors. I couldn’t find one anywhere on the web. So, here’s my initial list of almost 100 companies.
I’ll make this a dynamic list so please comment or send me suggestions to add.
Here’s some old posts on adherence that I think are still relevant here:
I’ve divided the list of solutions and vendors into the following:
Devices
Mobile / Digital
Platform
Communications
Big Data
Tools / Enablers
Medicare focused
Condition specific
Packaging
Pharma
International (recommendations send to me without English sites)
What other companies am I missing? Send them to me directly or add them in the comments section here. Thanks.
January 17, 2014 4 Comments
By now, the idea of a PBM and who they are is much more of a household item than it was a decade ago. We’ve seen massive consolidation in the industry. We’ve seen PBMs grow in the specialty PBM space. The question I often ponder is what’s next. Here’s some of my thoughts.
Which path plays out…I don’t know, but I think it’s getting close to time that you’ll see another shift in the market as they try to secure their next 10 years of growth by expanding into something that builds on their core competencies.
I think the other question would be if they focus on differentiation by really showing material differences in outcomes and engagement rates and look at how they show an overall health ROI not just Rx specific. That would be where I would place my bets and look at which of these options support that. Maybe we’ll see a PBM X (like Google X) doing some strategic long-term deals to change the overall healthcare roadmap.
November 29, 2013 2 Comments
With the new JD Powers survey, the gap between retail pharmacy satisfaction and mail order has widened. The average mail order satisfaction score was 797 for mail versus 837 (out of 1,000) for retail.
I think one key comment from Scott Hawkins, director of the healthcare practice at JD powers was:
“One of the key things we’ve seen in the data is that if someone is feels compelled to use a mail-order [pharmacy] their satisfaction score is going to be lower than someone who chooses to use it on their own.” (From Nov 2013 Employee Benefits News article by Andrea Davis)
If I was still at a PBM, I’d push to see the results broken out both ways so I could compare apples to apples the then say the drag was from clients choosing mandatory mail.
The rankings for mail order were:
Kaiser – 868
Humana – 845
Walgreens Mail – 812
OptumRx – 798
Prime Therapeutics – 794
Express Scripts – 783
Aetna – 778
Cigna – 771
Caremark – 760
The two I find the most interesting are Prime Therapeutics and OptumRx as both of them have moved their mail order services in house in the past few years and seem to be doing well with it. Aetna has outsourced their solution to Caremark and Cigna just recently outsourced their mail order to Catamaran which wasn’t on the list (but may be in the survey).
November 25, 2013 0 Comments
This is an interesting dilemma. At this point, I think everyone is pro e-prescribing even if it’s simply for the benefit of reducing errors. But, I think the original intent of the solutions were to do a lot more than reduce errors.
The hope was to improve adherence (which I think may have been too lofty). The idea was that e-prescribing would reduce the abandonment rate at the pharmacy. I’m not sure picking up a prescription is the same as taking a prescription. And, taking a prescription once isn’t the same as staying adherent over time.
Another hope was that the use of e-prescribing would drive formulary compliance and increase generic utilization. The idea was that putting this information in the hands of the prescriber would allow them to make more real-time decisions that were aligned with the consumer’s interests (i.e., lower out-of-pocket spend). The latest report doesn’t seem to support this at all. It also echos my prior posts about whether e-prescribing was aligned with pharma at all.
Fewer than half (47.5%) of the 200 PCPs polled said they have access to formulary information when e-prescribing, and fewer than a third said they have access to prior authorization (31.0%) or co-pay (29.5%) information. Among physicians with formulary information access, that information was available 61.1% of the time and was said to be accurate 68.6% of the time.
Physicians with an EMR (54.1%) were more likely to have access to formulary information than physicians without an EMR (29.6%). And differences were seen depending on the EHR vendor: Allscripts physicians (32.2%) were less likely to have access to this information than “All Other” software suppliers (60.5%), Epic physicians (62.5%) and eClinicalWorks (68.8%).
Another big effort that e-prescribing and integration with EMR was going to have was to push utilization management (UM) to the POP (point of prescribing) rather than having the pharmacy and the PBM dealing with it. I never really thought this would work. If the information isn’t there or they don’t trust the information, the prescriber isn’t going to want to deal with this. It’s already work that they let their staff handle and isn’t something they want to deal with during the patient encounter.
While e-prescribing is definitely here to stay and becoming the norm, the question is whether it’s creating simply a typed “clean” Rx to transmit electronically or whether it’s actually an intelligent process which will enable better care.
Given multiple studies and surveys recently about transparency in healthcare billing and the general push with Health Reform to drive to outcomes, I’m not sure the “dumb” system process can be a sustainable value proposition.
November 20, 2013 0 Comments
Is anyone really surprised here? We saw CVS Caremark make some changes a few years ago that caught everyone’s attention. (You can see a good list of 2013 and 2014 removals and options here for CVS Caremark.) This year, it’s Express Scripts (ESRX) who’s caught the attention of the press.
Why do this? I think Dr. Steve Miller did a great job of explaining it in a recent interview. The most interesting thing to come out of this was the possible link to copay cards.
Pharmalot: Where to from here?
Miller: We obviously have a long-term strategy. This has sent a loud message to the marketplace that we have got to preserve the benefit for patients and plan sponsors and do things to rein in costs. As there are more products in the marketplace that are interchangeable, we’ll do more to seek the best value for our members. This is just the beginning of a multi-step process over the next several years.
Will there be more to come? Of course. The PBMs have to make a significant show of lowering the number of formulary drugs especially in the oral solid (traditional Rx) space to make the point to the pharmaceutical manufacturers that they control market access. This is critical for them to create more opportunities in the specialty Rx space around rebates. (Here’s the 2014 Express Scripts exclusion list)
Additionally, this is a low risk strategy for several reasons:
November 8, 2013 0 Comments
PBMs (or Pharmacy Benefit Managers) are big business. Just look at a few of the names and their place on the Fortune 500 list:
Not surprisingly, none of those are non-profits. There is real money being made here. It’s all part of the mark-up game in healthcare. The question of course is does the money being made justify the profits. For example, I’m happy to pay my banker lots of money as long as he’s earning me more than he’s making (and significantly more).
This is a complicated question. (see past posts on What’s Next, Why People Don’t Save With Mail, and Growing Mail Order) I’ve also presented on this topic several times in the past pointing out that the model needs to change, and re-iterating the fact that PBMs made a mistake by putting all their profits in the generic space. I’ve always said that disintermediation would happen by focusing on generics at mail which is where all the money was at Express Script (8 years ago). [People remind me that some of this has changed and is different across PBMs.]
The new Fortune article by Katherine Eban called “Painful Prescription” certains shows a dark story. It focuses exactly on one of these scenarios which is the gap between acquisition cost and client cost. The article talks about paying $26.91 for a drug but selling it to the client at $92.53. I’m always reminded of the fact that at one time we used to buy fluoxetine (generic Prozac) for about $0.015 per pill. On the flipside, we had brand drugs that we bought for more than we got reimbursed and lost money. It was strange model.
So, here’s my questions:
I’m sure there’s more since I’ve been out of the industry for a few years, but while I don’t intend to be the defender of the industry, I do like to bring some balance to the conversation.
November 2, 2013 0 Comments
No one who works with consumers or who studies adherence should too surprised that people are different in how they fill their medications. I think companies are finally getting a better handle on longitudinal member records and ways of studying those patterns to determine how and when to intervene.
Our past behavior is always a great place to learn from about our future behavior but at the same time, people view different drugs and conditions differently. For example, I might be very likely to take my pain medication everyday since it’s a symptomatic condition versus my cholesterol medication since it’s an asymptotic condition. I also may take a different approach yo medications that have significant side effects.
At the same time, these data is well known so the quest for the “best” segmentation approach and behavior change model continues.
With that in mind, I finally got a chance to look at some research from September that researchers at CVS Caremark and Brigham and Women’s Hospital published in the journal Medical Care. They used trajectory modeling to follow statin users for 15 months and came up with six groups:
They also identified some characteristics associated with adherence:
Troyen A. Brennan, MD, MPH, Executive Vice President and Chief Medical Officer of CVS Caremark:
“The use of trajectory models could help us more accurately identify patients at risk for medication nonadherence so we can develop and implement targeted interventions to help them stay on their medications for chronic health conditions.”
October 9, 2013 0 Comments
Prime Therapeutics is a PBM owned by the Blues. Several years ago, they insourced their specialty pharmacy operations from Walgreens. This has been part of their transformation which was a result of new leadership under Eric Elliott who used to run Cigna’s PBM.
As a PBM that’s owned by the Blues, I’ve talked about them before as an interesting cross of a standalone PBM (ala Express Scripts) and an integrated PBM (ala Humana Rightsource).
As everyone in the industry knows, the shift in pharmacy has moved from innovator drugs in the traditional space to innovation in the specialty or biopharmaceutical space. This includes both branded products and biosimilars. This is critical path for employers, payers, and PBMs.
A traditional strategy of promoting generic drugs and mail order or preferred pharmacies just doesn’t cut it anymore. Although specialty drugs are still only used by about 1% of the population, they are the fastest growing area in healthcare. According to Prime Therapeutics Drug Trend Report, their clients saw a 19% increase in specialty spending last year. And, specialty drugs now account for over 30% of all the drug spend.
If you look at the drug pipeline, this is going to continue to explode. I just met with a series of specialty pharmacies to discuss their offerings and strategies. There are several drugs coming that claim to “cure” some of these specialty conditions are at least meaningfully impact the patient outcomes in ways that weren’t even envisioned years ago. And, I think we all know that’s not going to come cheap!
So, tomorrow (10/10/13), Prime is releasing a new report – “Specialty: Today & Tomorrow” which highlights Prime’s specialty drug trend over the past year and recommends strategies that high-performing plans use to manage the steady rise in these costs. [My comments in brackets.]
1. Bridge the benefit divide: use combined pharmacy and medical benefit data to see the full scope of specialty spending and seek solutions. [Critical. IMO – No one is doing this well yet, but this is something that everyone’s trying to figure out.]
2. Focus on the biggest issues: use combined data to target the most urgent issues and focus on the areas that can provide the greatest return on investment. [I’d expand this to be an integrated set of data – medical, pharmacy, lab, patient reported, EMR, etc. This has to then be integrated with tools for depression screening and others to make sure the patient is supported.]
3. Narrow the specialty network: use cost-effective distribution channels and limit the number of distributors to secure lower prices. [Fairly obvious. I think many people are doing this. I would expand on this to include looking at site of distribution for savings.]
4. Embrace a management mindset: make sure the right specialty drugs are used properly by those who will benefit the most. [Agree. I’ve talked about this before. Some of these drugs still have huge adherence issues which limits their effectiveness leading to massive cost issues. This is why some people are using only 14-day fills.]
5. Promote preferred drug use: build plans that encourage desired behaviors. [I think we’re finally at a point where we’ll see specialty formularies, more rebating, and with bio-similars there may be more utilization management programs.]
6. Protect members from high costs: limit members’ out-of-pocket costs and use available tools to reduce the burden on highly vulnerable members. [Critical. The specialty pharmacy has to help the member limit their financial exposure.]
7. Pick the right partner: select a trusted advisor with comprehensive capabilities and deep connections to help anticipate and address specialty drug challenges. [Agree. An aligned philosophy and strategy to work with these critical patients is fundamental. This small group of patients drives most healthcare costs.]
A copy of the specialty report is now available on Prime’s website and short videos about each of the seven steps can be found on Prime’s You Tube channel. This new report is the first specialty-focused report published by Prime. It follows Prime’s 2013 Drug Trend Insights infographic released in May. Visit the Industry Insights of Prime’s website for more drug trend information.
August 5, 2013 0 Comments
The recent press from Walgreens and Express Scripts is interesting on several fronts:
Here’s some language from the Walgreens’ press release.
Under the new option, plan sponsors that choose to include Walgreens as part of the Smart90 program for their pharmacy benefit will provide their members who have chronic conditions such as high cholesterol, high blood pressure and diabetes, the choice to receive 90-day supplies of maintenance medications through home delivery from Express Scripts or directly at a Walgreens retail pharmacy for the same copayment. Pending adoption by benefit plan sponsors, plan members could access Smart90 Walgreens as early as January 2014.
“Working together with Express Scripts, Smart90 Walgreens will offer more pharmacy locations and better member access coverage than any single retail chain 90-day maintenance medication solution in the nation,” said Kermit Crawford, President of Walgreens Pharmacy, Health and Wellness. “Through Smart90 Walgreens, our more than 8,000 Walgreens retail pharmacies will provide plan sponsors with cost savings and will offer their members safe, easy and convenient access to important in-person pharmacist consultations and a wide-range of health and wellness services that can further improve medication adherence and lower overall healthcare costs.”
“Members will be able to continue to receive the safety, convenience, cost savings and care offered from Express Scripts home delivery pharmacies,” said Glen Stettin, M.D., senior vice president of research and new solutions at Express Scripts. “Our data are clear: 90-day prescriptions delivered to a member’s home improve medication adherence and health outcomes, lower the cost of care and add convenience when compared to 30-day prescriptions. Over the past few years, our Smart90 program has driven more 90-day prescriptions for participating clients, and we’re pleased to now offer this additional option.”
June 12, 2013 1 Comment
Not a big shock to anyone, but Cigna announced yesterday that they were signing a 10-year deal with Catamaran (formerly SXC) to outsource the operations of their pharmacy (PBM) business. (see WSJ article or the story on Adam Fein’s blog)
This PBM industry has been full of change over the past 5 years as I’ve discussed many times. So, the question is why is this deal relevant or just another yawner.
Let me give a few reasons:
So, if I read between the lines here, I come to a few quick thoughts:
The interesting times in the industry continue. It’s a head scratcher of what comes next!
June 11, 2013 2 Comments
While I’ve moved most of the infographics I find to my Pinterest account, I wanted to capture and share this one from Stephen Wilkin’s blog since it hits so many of the points that I try to make with people.
May 22, 2013 1 Comment
Those of you who know me know that I’ve been a huge advocate for generic prescriptions since the early part of my PBM/pharmacy career in 2001. It wasn’t long ago that I talked about unresponsible reporting when slamming generics and scaring the population. But, we all enjoy a good conspiracy theory which is about the only thing that makes sense reading the new Fortune article – Dirty Medicine – about Ranbaxy. Both articles are written by the same author, but this one scares me a lot more than the other one. This article reads like a fiction book but appears to be true. It should scare you also and put a spotlight on the FDA.
Here are a few things from the article.
On May 13, Ranbaxy pleaded guilty to seven federal criminal counts of selling adulterated drugs with intent to defraud, failing to report that its drugs didn’t meet specifications, and making intentionally false statements to the government. Ranbaxy agreed to pay $500 million in fines, forfeitures, and penalties — the most ever levied against a generic-drug company.
The company manipulated almost every aspect of its manufacturing process to quickly produce impressive-looking data that would bolster its bottom line. “This was not something that was concealed,” Thakur says. It was “common knowledge among senior managers of the company, heads of research and development, people responsible for formulation to the clinical people.”
It made clear that Ranbaxy had lied to regulators and falsified data in every country examined in the report. “More than 200 products in more than 40 countries” have “elements of data that were fabricated to support business needs,” the PowerPoint reported. “Business needs,” the report showed, was a euphemism for ways in which Ranbaxy could minimize cost, maximize profit, and dupe regulators into approving substandard drugs.
But, we know that generics have worked. People have gotten better so one has to assume this isn’t a massive fraud especially when 50% of generics have traditionally been made by the brand manufacturers themselves who would never risk their companies to do what Ranbaxy did. So, it made me wonder about the Placebo Effect. Did some drugs work simply because of that? Is there anything else that would make sense for why this wasn’t discovered more quickly?
I’ve talked a lot about the Placebo Effect. There’s now even an app to make you feel better using the Placebo Effect.
I’m shocked that the PBMs, pharmacies, manufacturers, associations, wholesalers, and others aren’t out talking about this. I would want to let the public know that this isn’t a systemic problem, but is one contained to one instance and that quality will be maintained…but maybe no one cares?
March 17, 2013 0 Comments
We all talk about the challenge of consumer engagement in healthcare. If we can’t get consumers to engage, we’ll never get them to change behavior or be preventative.
But, as the recent Times article highlights, sometimes engagement still leads to failure which can be very frustrating. As I think about my recent experience within the pharmacy system, I’m reminded of a comment that I re-tweeted yesterday.
@reginaherzlinger asks why you need to have connections to get clear information about cost and quality if care.
— Liz Boehm (@LizBoehm) March 16, 2013
In this case, I have connections which I suppose I could escalate this to, but it seems wrong that the only way to resolve my customer service issue is to call in personal favors from Express Scripts and CVS.
@expressscripts #rx #fail. Refill rejected due to @cvs refill I never picked up 3 mo ago. Why is it my issue 2 resolve?Call pharmacy #cx
— George Van Antwerp (@gvanantwerp) March 9, 2013
But, maybe that’s what I’ll have to do. At this point, the only way I seem to be able to get my medication is to pay cash which seems like a total system failure. (Thankfully, I can use the GoodRx app to figure out which pharmacies have the lowest cash price for me.)
So, here’s the scenario…
Who knows when this will resolve itself, but everyone seems to be able to blame someone else here. Never mind that the patient (me) can’t get their medication. As someone who tries to look at this from the average consumer’s perspective, this is a nightmare and total customer experience failure. I understand the system. I understand plan design. I know the pharmacists. I know the teams at Express Scripts and CVS. Even with all that, I’m stuck having to go outside the system, pay cash for my prescription, and hope that my paper claim will get processed and hit my deductible in my plan design.
February 19, 2013 0 Comments
Today, I’m giving my presentation at the PBMI conference in Las Vegas. This year, I choose to focus on the idea of shifting from fee-for-service to value-based contracting. People talk about this relative to ACOs (Accountable Care Organizations) and PCMHs (Patient Centered Medical Homes) from a provider perspective. There have been several groups such as the Center For Health Value Innovation and others thinking about this for year, but in general, this is mostly a concept. That being said, I think it’s time for the industry to grab the bull by the horns and force change.
If the PBM industry doesn’t disintermediate itself (to be extreme) then someone will come in and do it for them but per an older post, this ability to adapt is key for the industry. While the industry may feel “too big to fail”, I’m not sure I agree. If you listened the to the Walgreens / Boots investor call last week or saw some of things that captive PBMs and other data companies are trying to do, there are lots of bites at the apple. That being said, I’m not selling my PBM stocks yet.
So, today I’m giving the attached presentation to facilitate this discussion. I’ve also pre-scheduled some of my tweets to highlight key points (see summary below).
February 11, 2013 1 Comment
12 Of 23 Companies
As I mentioned a few weeks ago (2/2/13), I wanted to test and see if healthcare companies would respond to consumers via Twitter. To test this, I posted a fairly general question or message on Twitter to see the response (see below). Of the 23 companies that I sent a message to, only 12 of them ever responded even after 6 of them received a 2nd message. Those results are shared below. What I also wanted to look at was the average time to respond along with which group was more likely to respond.
I will admit to being surprised. I’m sure all of these companies monitor social media so I’m not sure what leads to the lack of response. [I guess I could give them the out that I clearly indicated it was a test and provided a link to my blog so they could have chosen not to respond.]
Regardless, I learned several things:
From a time perspective, I have to give kudos to the Prime Therapeutics team that responded in a record 2 minutes. Otherwise, here’s a breakout of the times by company with clusters in the first day and approximately 2 days later.
| Company |
Response Time (Hrs:Min) |
| Prime Therapeutics |
0:02 |
| Aetna |
1:12 |
| LoseIt |
1:19 |
| Healthways |
2:07 |
| Walmart |
3:01 |
| Express Scripts |
8:35 |
| Kaiser |
29:22 |
| BCBSIL |
47:32 |
| OptumRx |
47:39 |
| BCBSLA |
48:18 |
| Sanofi |
53:30 |
I guess one could ask the question of whether to engage consumers via Twitter or simply use the channel more as a push messaging strategy. The reality is that consumers want to engage where they are, and there are a lot of people using Twitter. While it might not be the best way to have a personal discussion around PHI (Protected Health Information) given HIPAA, it certainly seems like a channel that you want to monitor and respond to. It gives you a way to route people to a particular phone number, e-mail, or support process.
As Dave Chase said in his Forbes article “Patient engagement is the blockbuster drug of the century”, this is critical for healthcare companies to figure out.
The CVS Caremark team told me that they actively monitor these channels and engage with people directly. I also talked with one of the people on the Express Scripts social monitoring team who told me that they primarily use social media to disseminate thought leadership and research, but that they actively try to engage with any member who has an actionable complaint. They want to be where the audience is and to quickly take the discussion offline.
If you want to see the questions I asked along with the responses, I’ve posted them below…
January 30, 2013 0 Comments
While prescription adherence continues to be a $290B+ problem, we still address the problem in a drug by drug approach due to silos within our healthcare value chain.
For example:
Additionally, there is additional effort made to keep you adherent if:
For those of us that have studied adherence, you know that this is a multi-factorial issue meaning that there are numerous things that impact your adherence. Some people will respond to nudging. Some people need to better understand their disease. Some people need co-pay relief or patient assistance programs. Some people need a different medication.
But, the two things we don’t need are:
So, what’s the answer. There isn’t a silver bullet (which is what we’d all like). I believe the best alternative is to drive adherence through the disease management and case management companies. These nurses are treating the patient. They are discussing their multiple co-morbidities with them. They are talking about and understanding their barriers. They should be able to help “prescribe” information and tools to help them with their adherence.
Of course, the issue here is engagement. If we’re only getting 10% of the patients with chronic illnesses to participate in our programs (which is about the national average – I believe), what about the other 90%. This is where a care coordination program that incorporated the provider and the pharmacy into a technology solution which pushed gaps-in-care and messaging through the EMR and pharmacy system to drive coordinated solutions is the answer.
I don’t know when this will happen, but I don’t believe we’re going to put a dent in adherence until we think differently about this problem.
January 22, 2013 0 Comments
A new study funded by CVS Caremark as part of their ongoing research into medication adherence was recently published.
“Association Between Different Types of Social Support and Medication Adherence,” December 2012 issue of American Journal of Managed Care
In this, researchers reviewed 50 peer-reviewed articles about studies which directly measured the relationship between medication adherence and four categories of social support, including:
- Structural support – marital status, living arrangements and size of the patient’s social network
- Practical support – helping patients by paying for medications, picking up prescriptions, reading labels, filling pill boxes and providing transportation
- Emotional support – providing encouragement and reassurance of worth, listening and providing spiritual support
- Combination support – any combination of the three support structures detailed above
According to the study, greater practical support was more often linked to improved medication adherence, with 67 percent of the studies evaluating practical support finding a significant association between the support and medication adherence.
It drives some interesting questions as you dig into the actual research. I sent several questions to Troyen A. Brennan, MD, MPH, who is the Executive Vice President and Chief Medical Officer of CVS Caremark, and heads the research initiative that conducted the study. Here are his responses:
1. How will this research change CVS Caremark’s approach to medication adherence such as your Adherence to Care program?
CVS Caremark’s Adherence to Care program is all about engaging patients more consistently and directly to ensure they are following their medication regimes. We understand that our patients’ social networks and communication preferences are diverse, and we know that multi-dimensional interventions help to change behaviors. Given these factors, this research can be an important reference point as we develop new approaches to our adherence programs, challenging us to look beyond traditional engagement strategies in an effort to most effectively support patients on their path to better health. We are planning to test some interventions along these lines in 2013. As a pharmacy innovation company, we want to make sure we are anticipating patient needs and remaining relevant to them especially given the changing face of social communication and networks.
2. The data points required to assess these support factors aren’t readily available in the eligibility file or claims file. Are you collecting that data at the POS or during the enrollment process and using it in any way to determine the correct intervention cadence or level of effort at an individual level?
While this may not be the standard today, it is clear from the research that a patient’s social network and resulting support can be important factors in helping them take their medications as directed. This research can help us and others in the industry think about how best to incorporate new approaches to identify and leverage social networks for greater medication adherence. For now, we will rely on POS as a way to collect this type of information.
This study relied on a comprehensive analysis of current literature linking medication adherence to social support networks – so we recognize that there are limitations in being able to draw concrete conclusions on certain factors, such as disease-specific conditions. Regardless, we still believe these findings – which look at clinical, peer-reviewed studies – contribute to the knowledge base in our field. As with all of the research we conduct, we challenge our teams to consider how we might be able to use the information to find practical supports for patients, while at the same time contributing to awareness about the implications of adherence on the broader health care landscape. The best way to understand this research is as hypothesis generating, which we can use in the design of real interventions that we can then test definitively in subsequent studies.
4. Some of these social factors might be correlated with depression. Was there any screening done to look at how depression as a co-morbidity might have affected adherence rates?
The methodology of this study relied on literature review and analysis of fifty peer-reviewed research articles which directly measured the relationship between medication adherence and forms of social support. A full review of the medical conditions associated with these studies can be found in Appendix 1. While depression, alone, was not one of the conditions featured in these studies, several did look at mental health conditions and the linkage between adherence and social networks. We did not however stratify by existence of depression—it may be a factor we have to take into account in future studies.
5. The one thing that I read between the lines was the need for a caregiver strategy. This has been missing in the industry for years. Does CVS Caremark have an approach to engaging the caregivers?
Our study found that practical support such as picking up prescriptions, reading labels and filling pill boxes – all within the realm of a given caregiver’s role – were the most significant in driving greater adherence. Considering this finding, and acknowledging the role caretakers have in the lives of our patients, there is certainly space for us to develop solutions that engage caretakers more effectively. Recent analyses of “buddy” programs do suggest such interventions do work- -we just need to consider how to scale it.
The role of social media has changed the way we communicate and connect with one another dramatically over the past decade. What we can say, based on this particular study, is that the more practical the support, the more significant the impact on medication adherence. Perhaps further studies looking into solutions that effectively combine online/social media platforms to complement practical support would help clarify their impact on medication adherence.
If interested, here are some of their other presentations on adherence:
January 10, 2013 1 Comment
When you think of potatoes, where do you want them to come from? Idaho
When you think of citrus, where do you want it to come from? Florida
When you think of US wine, where do you want it to come from? Napa Valley
When you think of generic drugs, where do you want them to come from? [company?, geography?]
This vacuum is a big problem in terms of commoditization. People don’t think of Teva or Ranbaxy or some other generic company. The average consumer probably doesn’t know who they are. And, they’ve competed based on price for years. If I was the CEO of Teva, this would be the number one challenge I would pose to my staff which was how do I get consumers to ask for my generic version of the drug. The next question should be what would we do to justify this?
For the first time, I think that they have a similar problem that brand pharma does which is how to create an offering not just a pill. The quote below from the CEO of Novartis, tees it up well.
“I also started to shift our business away from a transactional model that was focused on physically selling the drugs to delivering an outcome-based approach to add value beyond just the pill. I really believe that in the future, companies like Novartis are going to be paid on patient outcomes as opposed to selling the pill.”
And, I think this reflects what Sanofi has been experimenting with in terms of diabetes for several years. They launched their iBG Star Blood Glucose Meter to get into the meter space. Sanofi also has heavily invested in social media to give them direct engagement and feedback from consumers. Both of these begin to create more consumer branding for them as an entity.
I’ve talked about this several times over the years based on a book that one of the E&Y partners wrote when I was there called BLUR which was about blending products and services to create offerings. I think this notion combined with the lessons learned that commodities like potatoes have gone through in branding their products offer some insights into what pharma has to do to shift their positioning in the value chain. This is part of what I’ll be discussing at the upcoming PBMI conference where this shift to outcomes based contracting and focus for the industry is critical to long-term survival and differentiation.
December 26, 2012 2 Comments
The short answer is that a PBM is the company hired by your employer (either directly or through your health insurance company) to manage your pharmacy benefits. When you use your pharmacy card at the retail pharmacy to get a prescription, the pharmacy interacts with your PBM electronically to find out if the drug is covered and the copay to you the consumer.
*****************
Back when I first started blogging, I used a lot of my experiences at Express Scripts to shape some of my perspectives about the PBM or Pharmacy Benefit Manager industry. It took me a few months before I realized that some people reading the blog didn’t know what a PBM was. That led me to my all time most popular blog post – “What Is A PBM?”
Since that was over 5 years ago, I figured it was time for an update.
The market has shifted in the past 5 years especially with Express Scripts purchase of Medco to become the largest player in this space. Walgreens has also divested their PBM to CatalystRx which was then bought by SXC and the new entity renamed CatamaranRx. At the same time, you’ve seen United Healthcare insource their PBM business from Medco to combine it with their old Pacificare PBM to create OptumRx. You’ve also seen Humana’s PBM business and mail order business – RightSourceRx – grow significantly.
There are other big PBMs which I didn’t mention such as CVS Caremark which after years of rumors about them splitting back up seems to have proven their case as an integrated, retail-owned PBM. There is MedImpact which has 32M lives according to the latest PBMI market share report, and Prime Therapeutics which is a PBM owned by several of the BCBS plans. Additionally, Aetna, Cigna, and several other managed care companies also have their own PBMs.
While I would have argued that the PBM wasn’t typically known to consumers 5 years ago, I think that the very public dispute between Walgreens and Express Scripts has changed some of this.
But, what a PBM does is relatively simple:
The PBM’s clients are employers who are self-insured, government entities (i.e., state employees, Department of Defense), unions, TPAs (third party administrators), and managed care companies (i.e., BCBS of).
PBMs are sometimes referred to as middlemen, but I will point to a few other posts on this:
In general, if you’re looking for more information on PBMs, I would point you to several sources:
The only other blogger who really offers any coverage of this space is Adam Fein which his blog – Drug Channels.
November 9, 2011 0 Comments
I was watching a YouTube video on Starbucks’ augmented reality cup which got me thinking. Why not do the same with the prescription bottle?
What a great way to engage the tech savvy consumer.
Perhaps you could provide a plain language summary of information about the medication. You could give a list of side effects. Or show how to take the medication.
Perhaps it could have an embedded survey that you complete weekly.
And, it seems like an easy opportunity for someone to offer an augmented reality applications for all medications. Hold up the phone to a pill and get information on it. (maybe a little harder)
I think there is a lot more here as companies like Lamar continue to evolve.
WSJ Health Blog Drug Channels KevinMD Blog Health Populi e-Patients
Contact me at gvanantwerp @ mac.com.
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