Can generic discount programs save you money?

This publication suggests that generic discount programs (e.g., $4 generics) results in ~10% fewer levothyroxine prescriptions being submitted to the PBM for adjudication.  Sounds good until you balance the savings against the loss of data for clinical programs.  Saving 10% on inexpensive medications will have a very limited impact on your medication costs and trends.

Not having these claims will weaken your point-of-service programs (e.g., interaction) checking and other clinical programs such as care gap alert systems (e.g., poor adherence) and care management services.  It doesn't take many patients with a potentially avoidable hospital admission to wipe out the savings.

Consider making these same drugs a $4 co-payment or less with your benefit.  Then inform your beneficiaries that they have a comparable program available through their benefit program and can be used at any pharmacy in your network.

When Generic Intros Drop Price by 60% Why Doesn't Utilization Increase?

Real interesting report from the Manhattan Institute.  They looked at generic introductions from 2000-2004 and found essentially no change in utilization at the specific drug or drug category level.  Lots of data in this report and I strongly recommend you take a look.  They even looked at sampling and the impact of therapeutic substitution following generic introductions (e.g., impact on Lipitor when Zocor went generic).

"And then she presented this card"

NPR reports on the use of drug company coupons to subsidize the cost of brand drug co-payments.  But what's the big deal if the drug company makes up the difference between their drug and the generic alternative?  Here's the payments for the Solodyn example:

Patient:  $10
Drug company (Medicis):  $154.28
Insurance:  $462.84 (est.)

Most of the insurance payment goes back to the drug company.  They probably made over $300 for a one-month supply of a once-daily version of generic minocycline (~$40).  But my favorite part of the story was when the doctor didn't offer the savings card until AFTER the patient complained about the price.  How many people get to pay the $154 or even the full price?

Some plans now use reference pricing to counter these efforts.  This requires the patient to pay the full amount above what the insurance would have paid for the higher value alternative.  Another method would require the patient to pay the full amount up front, like indemnity insurance, then get reimbursed for the covered amount.  This helps patients understand the true costs of their treatment.

What do you get for an extra $600 per month?  Because Solodyn results in lower blood lets it MAY cause less vestibular effects (e.g., dizziness, tinnitus).  Maybe that extra money will go towards a direct comparison to prove that possibility.

 

IMS reports 2006 drug sales up 8.3%

View the press release and related charts here: http://www.imshealth.com/ims/portal/front/articleC/0,2777,6599_3665_80415465,00.html
Obtain the latest Retail Drug Monitor at http://www.imshealth.com/vgn/images/portal/cit_40000873/31/60/80273141IMS%20Retail%20Drug%20Monitor%20for%20December%202006.pdf

Some interesting tidbits:

• Utilization grew at 4.6% compared to 3.2% for 2005, with Medicare Part D increasing utilization by 1-2%
• They expect 2007 drug sales to increase by 6-9%
• Biotech sales grew 20% to $40.3 billion, (14.7% of total sales)
• Chain pharmacy Rxs grew 5.8%, independent pharmacy Rxs grew 1.9% and mail-service Rxs grew 4.2%

The biggest challenge to payers remains how to manage the 20% growth in biotech drugs. I believe that payers will need to start restricting coverage to select indications in order to help maintain affordability of their health benefit programs. You may want to review how Britain's National Institute for Health and Clinical Excellence (NICE) deals with these issues. http://www.nice.org.uk/guidance

Free generics from doctor's offices give N.C. Pharmacy Board heartburn

Doctors frequently give out free samples of brand name drugs without a special license, so why not generics? The kiosks also help maintain much better records than notes in the chart. However, the 30 day supplies bypass pharmacist review and may hinder efforts to improve quality through better computerized clinical review. Keep in mind that the costs associated with drug therapy problems may cost more than the drugs themselves.

http://www.ronlyon.com

News & Observer, The (Raleigh, NC) (November 28, 2006)

Nov. 28--North Carolina's largest health insurer has gotten on the wrong side of state regulators.

The N.C. Board of Pharmacy has told Blue Cross and Blue Shield of North Carolina that it is concerned about the insurer's latest effort to get cheaper, generic drugs to patients: computerized kiosks that allow doctors to dispense free, 30-day samples.

Blue Cross has contracted with a San Diego company, MedVantx, to set up, stock and maintain the kiosks statewide. Six Triangle physicians already have them. But Blue Cross and MedVantx fell short of fully explaining the program to the pharmacy board, said Jay Campbell, executive director of the regulatory body. The board makes sure prescription drugs are dispensed without putting public health and safety at risk.

"There may not be any problem," Campbell said. "But finding out details [about the program] in the newspaper is not the way I like to do my job. I need to know what the heck they're doing."

A lawyer and pharmacist, Campbell advises the six-member board on legal issues and sets the board's agenda. He has asked Blue Cross and MedVantx to answer questions at the board's next meeting on Jan. 16.

Campbell said the board is concerned about regulatory oversight and the sample size being given to patients.

Can a 30-day supply be called a sample, Campbell asked. Prescription drug samples are usually for a three-day supply.

He also questioned whether program participants lack state licenses. North Carolina requires a license to dispense drugs. Pharmacists make sure that patients taking multiple medications aren't running the risk of dangerous drug interactions. Campbell said it's unclear who takes on that responsibility under the Blue Cross program.

Blue Cross and MedVantx representatives will provide regulators with the requested information at the January meeting, Blue Cross spokesman Lew Borman said. But Borman denied that the partners tried to sidestep regulators.

Borman said participating doctors are neither charged nor paid for using the kiosk. The free samples can be given to any patient, regardless of health insurance. Both Blue Cross and MedVantx argue that because physicians aren't compensated for the drugs, the physicians don't have to register for a dispensing license.

Blue Cross said it pays MedVantx a fee for each time a kiosk dispenses a sample. The insurer has declined to release the amount of the fee but says it will be less than the amount the insurer pays for brand-name drugs. Blue Cross projects savings of about $300 per sample.

When Blue Cross introduced the program last week, Borman said MedVantx had met with the pharmacy board before installing the first kiosk, and no concerns came up.

"That is not true," Campbell told board members in an e-mail message sent Nov. 22, the day The News & Observer reported Blue Cross and Blue Shield's plans.

Campbell remembered talking with a MedVantx representative. But "the rep did not explain the context of the question, much less describe the full scope of the program they were contemplating," Campbell's e-mail read.

Susan Hogue, MedVantx's director of account management, said she met with Campbell July 21 and presented information about the sampling program.

"We're really not trying to stimulate ill will," Hogue said. "Our goal is to work this out."