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Archive for May, 2012

Skin Cancer Awareness Month

May 23, 2012 By: Nadia Category: HealthCare, Medtipster Source: PartnersRx – 5.23.12

Do you know that 59,695 U.S. adults were diagnosed with melanoma, and 8,623 died from the disease in 2008 (the most recent year for which data is available)?

May is Skin Cancer Awareness month and, with summer right around the corner, the ideal time to increase awareness of the importance of the prevention, early detection, and treatment of skin cancer.

Click here to receive “Are You Protected From The Sun?” written by the PartnersRx Clinical staff for even more information on how you can prevent skin cancer.

Specialty Drug Management, Spending and Trend Explored

May 14, 2012 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News Source: Ha T. Tu, Divya R. Samuel, Health System Change, April 2012

Spending on specialty drugs — typically high-cost biologic medications to treat complex medical conditions — is growing at a high rate and represents an increasing share of U.S. pharmaceutical spending and overall health spending.

Absence of generic substitutes, or even brand-name therapeutic equivalents in many cases, gives drug manufacturers near-monopoly pricing power and makes conventional tools of benefit design and utilization management less effective, according to a new qualitative study from the Center for Studying Health System Change (HSC).

Despite the dearth of substitutes, cost pressures have prompted some employers to increase patient cost sharing for specialty drugs. Some believe this is counter-productive, since it can expose patients to large financial obligations and may reduce patient adherence, which in turn may lead to higher costs.

Utilization management has focused on prior authorization and quantity limits, rather than step-therapy approaches — where lower-cost options must first be tried — that are prevalent with conventional drugs.

Unlike conventional drugs, a substantial share of specialty drugs — typically clinician-administered drugs — are covered under the medical benefit rather than the pharmacy benefit.

The challenges of such coverage — high drug markups by physicians, less utilization data, less control for health plans and employers — have led to attempts to integrate medical and pharmacy benefits, but such efforts are still in early development.

Health plans are experimenting with a range of innovations to control spending, but the most meaningful, wide-ranging innovations may not be feasible until substitutes, such as biosimilars, become widely available, which for many specialty drugs will not occur for many years.

High and Rising Specialty Drug Spending

Specialty drugs — typically high-cost biologic medications used to treat a variety of serious, complex conditions ranging from cancer to rheumatoid arthritis to blood disorders — are an increasing concern for employers and other purchasers.

  • While specialty drugs are prescribed for only one in every 100 commercial health plan enrollees, these drugs account for an estimated 12% to 16% of commercial prescription drug spending today.
  • The monthly spending per patient for a specialty drug typically exceeds $1,200.

Spending on specialty drugs is expected to rise dramatically as drugs currently in development come to market during the next decade and beyond.

Benefit Design Strategies

Mainstream commercial insurance products rarely exclude specialty drugs from their formularies. Once a new specialty drug receives approval from the Food and Drug Administration (FDA) and the health plan’s pharmacy and therapeutics (P&T) committee, its addition to the formulary is typically assured. P&T committee review typically focuses on ensuring safe and appropriate use and preventing off-label use, rather than restricting access to specialty drugs. The rare exceptions to this pattern of comprehensive formulary inclusion are found in the few specialty drug classes where many close substitutes exist — for example, growth hormone — and some niche insurance products aimed at individual and small-group purchasers that provide limited benefits to achieve much lower premiums.

Four-tier pharmacy benefit design. For specialty drugs covered under the pharmacy benefit, some employers choose to transfer a portion of the high costs to patients by adding another, higher cost-sharing tier to the standard three-tier pharmacy benefit design. While it is hard to generalize about the multitude of four-tier designs, the practice of transitioning from flat-dollar copayments in the lowest three tiers to coinsurance, where the patient pays a percentage of the total drug cost, in the fourth tier is quite common.

  • A typical design might require a generic copayment of $15,
  • a preferred brand copayment of $30,
  • a nonpreferred-brand copayment of $60, and
  • specialty drug coinsurance in the range of 10% to 25 percent.

Within the fourth tier, some employers — especially large employers — retain a degree of financial protection for patients by applying out-of-pocket maximums per prescription fill — for example, $100 to $250 — or per year — perhaps, $5,000.


Obtaining lowest unit price. For specialty drugs covered under the pharmacy benefit, health plans take different approaches to obtain discounted prices from specialty drug manufacturers. It is common for smaller health plans to turn to one of the major PBMs — which all have acquired or developed their own specialty pharmacy divisions — to negotiate unit prices on their behalf, since the largest PBMs are best able to leverage their high volumes to obtain the steepest discounts from manufacturers.

Health plans with high volumes overall — such as the major national plans — or large regional market shares — such as some Blue Cross Blue Shield plans — often find it more advantageous to negotiate prices with manufacturers directly rather than relying on a PBM. Whatever their approach to price negotiations, when it comes to the distribution of specialty drugs to patients, most health plans contract with specialty pharmacies, since these entities have expertise on such matters as special drug handling and patient education.

Some specialty drugs are eligible for rebates on top of the discounted prices. These rebates are typically negotiated by whichever entity — PBM or health plan — is responsible for setting up the formulary and are paid to that entity after the drug has been purchased. Manufacturers are much more likely to offer rebates in drug classes where substitutes are available — for example, rheumatoid arthritis, multiple sclerosis and growth hormone deficiency. The size of rebates typically depends on the PBM or health plan’s willingness to grant the drug preferred-product status and place it in lower cost-sharing tiers.

Utilization and Care Management

Utilization management. Specialty drugs covered under the pharmacy benefit are subject to more pervasive and stringent utilization management (UM) than those under the medical benefit. Prior authorization, for example, is widely practiced — “nearly universal,” according to one respondent — under the pharmacy benefit but far less prevalent under the medical benefit, where retrospective review remains more common. One benefits consultant estimated that specialty drugs under the medical benefit are subject to prior authorization only about 5% of the time.

A major reason is that most contracts between health plans and providers contain no provisions for prior authorization or other UM protocols for specialty drugs under the medical benefit. Health plans are concerned that pushing to add a prior-authorization provision will result in provider resistance and perhaps provider exit from health plan networks. As with provider payment methods discussed previously, respondents suggested that implementing prior authorization under the medical benefit appears to be easier for regional Blue Cross Blue Shield plans whose large market shares give them leverage over providers.

Care management. Experts viewed strong clinical care management as critical to promoting both good health outcomes and cost containment. Key challenges include very sick patients with complex chronic conditions requiring complicated drug regimens, the need to adjust drugs or fine-tune dosage, and strong side effects leading patients to abandon drug regimens. Experts cited cancer and hepatitis C as examples where medications caused such unpleasant, sustained side effects that keeping patients compliant over time was particularly difficult. Several respondents emphasized the importance of a “high-touch” approach to care management, where staff not only has clinical expertise but also the ability to “form personal connections with patients” and motivate them to adhere to demanding drug regimens.

Key Takeaways

Among the common themes that emerged from interviews with industry experts, the following stand out:

Key drug management strategies that have proven effective for conventional drugs often are less applicable to specialty drugs: The lack of close substitutes for most specialty drugs greatly reduces, or eliminates altogether, the ability of tools like cost-sharing tiers and step therapy to steer patients and providers to cost-effective alternatives. It also sharply limits incentives for drug manufacturers to offer substantial price concessions. In contrast, other tools, such as prior authorization and quantity limits — which can help curb unnecessary or inappropriate use, improve patient safety, and reduce waste — are emphasized more in the management of specialty drugs.

Biosimilars are expected to lead to key breakthroughs in specialty drug management, but their impact won’t be seen for many years: The introduction of generic substitutes should allow payers to broaden the use of preferred drug tiers and step therapy, thereby exerting downward pressure on prices. However, achieving therapeutic equivalence — for biosimilar manufacturers — and assessing therapeutic equivalence — for regulators — are likely to be difficult, given the complex nature of biologics. Also, the expensive manufacturing process means that biosimilars may not yield savings as sizable as those achieved by conventional generic drugs. And, it will be an uncertain number of years before biosimilars can make an impact on competition and cost, because (1) innovator products are granted 12 years of market exclusivity and often are protected by patents lasting years beyond that; and (2) the FDA approval process — which has yet to be finalized — is expected to be rigorous and lengthy.

Integration of medical and pharmacy benefits is a goal worth pursuing, but how to achieve it isn’t clear: Efforts to overhaul the currently fragmented benefit structure — which can misalign incentives for patients and providers and result in uncoordinated patient management — are in the early stages of development, and results are uneven at best. Equalizing patient cost sharing for specialty drugs regardless of whether they are covered under the pharmacy or medical benefit is probably the most straightforward dimension of integration. Other aspects of integration present tougher challenges. The ability to track utilization and spending under the medical benefit remains limited, which in turn hinders the ability to manage a large segment of specialty drug utilization. Real-time integration of utilization data remains hampered by limitations in claims and billing systems. Also, as office-administered drugs are moved out of the medical benefit’s buy-and-bill approach, health plans will have to deal with fallout from physicians who see both their margins and clinical autonomy eroding.

Patient adherence is critical to good health outcomes: As one pharmacy consultant observed, “Price tags and performance guarantees [from PBMs] are one thing, but if you [can’t achieve] compliance, it’s all a waste.” Both financial factors — high out-of-pocket costs — and nonfinancial factors — strong side effects — pose formidable barriers to patient adherence and positive health outcomes. A combination of non-punitive cost sharing and strong care management may reduce these barriers. One benefit design approach that can help make financial burden more manageable is an income-based cost-sharing structure.

Employers should ensure that their specialty drug strategies are aligned with their overall benefits and business strategies: Decisions on specialty drug coverage require tough trade-offs between cost and access. Which cost-access combination an employer chooses will be heavily influenced by competitive conditions in the industry and the geographic and labor markets where an employer operates. Short-term cost containment can have unintended consequences — for example, increased cost sharing leading to reduced adherence to drug regimen, in turn leading to high-cost complications. Such negative impacts come more into play for employers with low worker turnover and those still offering comprehensive retiree health benefits, as these are the employers likely to be paying the bill in the long term for patients currently taking specialty drugs. Cost-benefit comparisons of different drug coverage options will be more accurate if they are able to account for impact on employee productivity — which is hard to measure — as well as direct medical costs.

PBMs’ interests may not align with employers’ interests: Some employers may be relying heavily on their PBMs to set specialty drug policies, determine specialty drug lists, and pass through discounts from manufacturers, without independently verifying whether their own needs are best served in these arrangements. Employers need to recognize that PBMs’ interests can diverge sharply from their own interests, as PBMs don’t have the same incentives as employers to limit the volume and the prices of drugs. Because the specialty drug sector is complex and the vast majority of employers lack the in-house expertise to deal with PBMs on an equal footing, many employers likely would benefit from having independent experts assess their PBM contract terms and audit compliance with those terms.

Employers Grapple With Birth Control Mandate

May 09, 2012 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News Source: Employee Benefit News, 5/1/12 – By, Lisa V. Gillespie

Federal contraception coverage mandate raises ire among insurers, may raise premiums for health plan members

The intersection between religion and business is a heated one, with the most recent flare-up sparked by a provision in the Patient Protection and Affordable Care Act that mandates employers cover the cost of contraception in their health plans. Although the Obama administration exempted houses of worship from the rule, it still requires coverage be made available to employees of religiously affiliated organizations such as hospitals and universities.

The administration has said insurers should ultimately make up any initial costs by avoiding expenses associated with unintended pregnancies. But a survey of 15 large health plans shows they are dubious of such savings.

Asked what impact the requirement will have on their costs in the year to two years after it goes into effect, 40% of insurers said they expect the requirement will increase costs through higher pharmacy expenses.

The survey of pharmacy directors at the health plans was conducted by Reimbursement Intelligence, which advises pharmaceutical, medical device and other companies on reimbursement issues. The firm did not name the insurance plans it surveyed.

Of the health plans, 20% said costs would even out because they already budget for contraception in the premium, 6.7% said it would drive up pharmacy costs but decrease medical costs, while 33.3% weren’t sure. None said it would lead to net savings.

“[Insurers] think it will raise pharmacy costs and won’t lower medical costs,” says Rhonda Greenapple, chief executive officer of Reimbursement Intelligence. “The idea that preventive care is going to reduce overall health care costs, they don’t buy it.”

In addition to health insurance companies, lawmakers also have questioned the precedent set by Obama’s plan that would force insurers to pay for coverage with no clear way of recouping the expense. “The idea that insurance companies are going to provide free coverage for items contained in the administration’s order reflects a misunderstanding of the business of insurance,” says Rep. Dan Lungren (R-Calif.). “Under its ‘accommodation,’ the religious employer continues to pay premiums that contribute to the revenues of the insurers. The money paid by religious employers for what will inevitably be higher premiums thereby frees up insurer funds to pay for abortion-inducing drugs, sterilization and contraception in violation of their strongly held beliefs.”

The guidelines require insurers to do away with copayments on coverage of preventive care services for women in all new plans beginning in August. A poll from the Kaiser Family Foundation in February showed nearly two-thirds of Americans favor the policy requiring birth control coverage for female employees, including clear majorities of Roman Catholic, Protestant evangelical and independent voters. Sixty-three percent of Americans overall supported it, according to the data.

But Catholic leaders, Protestant evangelical groups, Republicans and other social conservatives rejected the compromise, saying it still violates religious freedom under the U.S. Constitution and would cause economic hardship for self-insured institutions. The controversy has spawned a rancorous debate in Congress as well as a handful of Catholic lawsuits, including a federal suit in Nebraska joined by seven U.S. states.

Employer response

Some employers have voiced support for the rule, including one reader of EBN’s blog Employee Benefit Views, who said his/her employee population consists mainly of lower-income employees “who make $10 to $15 an hour who may not use birth control – not because of religious reasons, but because they cannot afford the cost of the birth control and keep a roof over their heads. I work for a self-funded employer, and this would create additional costs for us. However, these could possibly be off-set with the savings from births, disability leaves and the like.”

That cost savings may be attractive to employers constantly looking to reduce health care cost burdens. “I understand the issue of ‘religious freedom’ here, but just because this coverage is offered by your insurance company, does not mean that you have to use it,” wrote another EBV commenter. “I would think that each adult can make their own choice on whether or not this is a benefit [they] want to use. But the coverage is there, then, for those individuals who want and need that coverage. Better than the alternative of unwanted pregnancies, abortions and the like.”

Other readers likened the coverage of contraception to coverage to treat chronic conditions. “I do understand the perspective of the employer not wanting to pay for a benefit they do not condone,” a third EBV commenter wrote. “I don’t condone many of the activities that lead to diabetes or heart disease. But I still have to pay for the people that have those habits.”

Majority of Painkiller Abuse Starts with Friends and Family

May 07, 2012 By: Nadia Category: HealthCare, Medtipster, Prescription News Source:  Office of National Drug Control Policy, via The White House, 4/25/2012, White House Study Release

People who abuse painkillers get their start with pills they received (or took) from friends or relatives according to a study published by Office of National Drug Control Policy.

The ONDCP findings from the Substance Abuse and Mental Health Service Administration’s NSDUH covered the periods 2009 and 2010. The study focused on the growing problem of addiction to prescription opiod (narcotic) drugs. These pills include oxycodone, hydrocodone and others.

Study findings

  • 71% of persons used pain relievers in some fashion from friends and family:
    • 55% of persons who used pain relievers non-medically obtained the pain relievers from a friend or relative for free
    • 11% bought them from a friend or relative, and
    • 5% got them from a friend or relative without asking
  • The more frequently prescription pain relievers are used, the more likely these pain relievers were obtained from doctors or purchased, rather than by getting them for free.
  • 17% were prescribed by one or more doctors, and
  • 9% were purchased from a friend, dealer, or the Internet.

The pattern was different for long-term abusers.

  • 41% got pills through friends or relatives, and
  • 26% through doctors.
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