Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

[Click to Enlarge]

Yet physicians, pharmacists and researchers have been frustrated for decades at patients’ inability to follow such simple instructions and remain on their medication regimens. Twenty to 30 percent of prescriptions are never filled, according to research published in the journal Annals of Internal Medicine, and half of all people do not follow their drug instructions, even when that is critical to keeping them alive.

The reasons for medication non-adherence, as it is known, are many: For the poor, it is often cost; for some elderly people, it is confusion over the 14 or more prescriptions they receive each year, according to a report from the Food and Drug Administration. Others say they have trouble understanding what their doctors want them to do.

But even understanding all that, “the amount of non-adherence is staggering,” said Meena Viswanathan, director of the RTI-UNC Evidence-based Practice Center, a public-private institute that analyzes health care and health policy.

As much as $289 billion is spent annually on needless hospitalizations, emergency room visits and other costs for people who don’t follow their drug regimens, research shows.

One study, now 30 years old, attributed 125,000 deaths annually to non-compliance – about the same number of people who die each year from strokes.

Publisher Comment:  In addition to making sure PBMs and TPAs aren’t hiding cash flows, payers must measure outcomes based upon every healthcare dollar spent. One metric, patient medication adherence, is oft-ignored.  Would you hire 1,000 people and provide them with no leadership?  In other words, you tell these new hires to grow revenue by 30% and the only tool offered is an employee handbook.  Just as employees require a roadmap to success so do people taking multiple prescription medications. When properly prescribed and administered, prescription drugs are a cost offset opportunity.       

A wide variety of attempted solutions – including free medicine – haven’t helped much. But with the Obama administration keen to control medical costs and improve the quality of health care, a round of experiments funded by the Affordable Care Act is winding to a close.

All three were part of the $1 billion in “health care innovation awards” handed out in 2012 under the new law. Other efforts, by public and private sector groups, are ongoing.

One project applies behavioral economics to the problem. Researchers at the University of Pennsylvania gave 1,000 people “electronic pill bottles” when they left the hospital after heart attacks. If they forgot to take their medicine, the cap would light up and beep. If they didn’t comply for a few more days, a designated friend or relative, as well as their doctor, were notified.

If they took their medications, however, they became eligible to win small lotteries that offer $5 and $50 prizes.

David Asch, director of the Center for Health Care Innovation at the university’s medical school, said full results are not yet in, but preliminary data from the study suggest a big improvement in adherence when compared with other efforts involving similar patient populations.

“We designed it with the foibles of human nature in mind, not with the rational person in mind,” he said. “Because the rational person would have been taking their meds in the first place.”

In Hawaii, another project, the $14.3 million “Pharm2Pharm” experiment, seeks to connect doctors and pharmacists who dispense medication to patients leaving hospitals with community pharmacists who will continue giving out those medications as those people resume their daily routines.

Community pharmacists often complain that they have no idea which medications their patients are taking, especially when they leave hospitals with new ones and can’t guard against dangerous interactions.

In Wisconsin, more than 25 percent of the state’s pharmacists took a 12-hour training course, then sought out 100,000 people who appeared to be failing to refill their prescriptions or taking incorrect drugs based on data provided by insurers under a $4.1 million project run by the state’s Pharmacy Society. Most were poor or elderly. After working with the patients, the pharmacists relayed their findings to prescribers.

“Cost is a factor, convenience is a factor,” said Chris Decker, the organization’s chief executive officer. “Lack of recognition of importance or need, health literacy and understanding” all contribute to non-adherence, as well, he said.

By Lenny Bernstein
Washington Post

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

[Click to Enlarge]

The trends are clear: patients and institutions across the nation are concerned about skyrocketing drug prices. This post offers some information about drug pricing, explores the notion of market intervention, and proposes a series of responses to high pharmaceutical costs.

A few jaw-dropping facts quickly illustrate the pattern of rising drug costs. The average annual cost of cancer drugs increased from roughly $10,000 before 2000 to over $100,000 by 2012, according to a recent study in Mayo Clinic Proceedings. Several breakthrough specialty medications and orphan drugs recently approved by the Food and Drug Administration (FDA) have subsequently entered the pharmaceutical market with hefty price tags. Consider Biogen Idec’s multiple sclerosis drug, Tecfidera, which costs $54,900 per patient per year; hepatitis C cures from Gilead Sciences, with a sticker price of $84,000 per patient; and Orkambi, a cystic fibrosis drug from Vertex Pharmaceuticals approved this month, priced at a whopping $259,000 per year.

If specialty pharmaceutical prices are dropping jaws, generic drug prices have at least managed to raise eyebrows. In 222 generic drug groups, prices increased by 100 percent or more between 2013 and 2014, according to Forbes. As generic drugs have long provided payers some respite from other more expensive products and services, rising prices in generics like Mylan NV’s albuterol sulfate—which increased about 4,000 percent from 2013 to 2014—are well worth the concerns.

The increase in drug costs—projected by the Centers for Medicare and Medicaid Services Office of the Actuary to be 12. 6 percent in 2014—has far outpaced inflation, which has hovered between zero and 2 percent over the last three years; it has also outstripped growth in other medical costs. Pricewaterhouse Coopers (PwC), in its 2013 annual medical cost trend report, projected overall cost growth to be 6.5 percent in 2014 in the large employer market. In stark contrast, a recent Express Scripts analysis declared a 13.1 percent increase in prescription drug spend in the same period.

On the surface, it appears as if drug manufacturers are unduly milking the udder of American health care reimbursement, even as it runs dry for insurers and providers.

Yet, this is hardly a crime. The behavior of the pharmaceutical industry is tolerated, suggesting that drugmakers have sufficient rationale for pricing products. In contrast, a Kaiser Health Tracking Poll last month found that 73 percent of Americans find the cost of drugs to be unreasonable, and most blamed drug manufacturers for setting prices too high. Some particularly high cost medications for hepatitis C have even forced insurers and Medicaid programs to limit usage of the drugs.

The financial success of Big Pharma, medical innovations brought by its investments, absence of price intervention, public concerns, reactionary measures that affect clinical care — together these phenomena paint a puzzling picture.

Pricing Drugs

While research and development can indeed carry large costs and span multiple years, there is simply more to pricing drugs. Many modern-day assessments cite the value that a new drug brings to patients, along with savings incurred by the health system, as more relevant factors that drive drug price. BloombergView columnist Megan McArdle says that drugmakers set prices based on whatever the market will bear, especially since demand for some therapeutic drugs is relatively inelastic — in other words, demand does not change much in response to price changes.

Pharmacoeconomic studies may seek to quantify the value of a drug by calculating the estimated cost of an intervention per quality-adjusted life year (QALY) added by the drug. Cost savings resulting from a drug are often calculated through the cost of clinical services, hospitalizations, and other less effective medications that untreated patients would otherwise incur.

Since the main buyers of the drugs are private insurances and the government, pricing decisions do not generally consider an individual’s purchasing power. On the contrary, manufacturers offer many expensive medications free of charge to patients with inadequate insurance coverage, which has earned Big Pharma some applause.

If rare value and lack of alternatives drive high cost for specialty drugs, what could cause increases in generic drug prices? One reason could be drug shortages brought about by facility issues and production slowdowns due to tightened quality controls. Another theory is that consolidation among drugmakers or the departure of existing manufacturers is limiting competition in the generic drug market.

Other theories about price-setting are more cynical. Bloomberg’s Robert Langreth writes that some desperate pharmaceutical companies are raising prices on products still under patent to offset losses from former blockbuster drugs that have lost patent protection.

Perhaps the words of the former CEO of Genzyme ideally sums up the method of setting drug prices: “It is not a science. It is a feel.”

To read more click here.

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

Pharmacy-benefit managers for the state-employee health insurance program are challenging an attempt to require them to repay $39.2 million to the Florida Department of Management Services.

Medco Health Solutions, Inc. and Express Scripts, Inc., which are subsidiaries of the same holding company, have filed a series of legal petitions that were sent this month to the state Division of Administrative Hearings.

The documents indicate the Department of Management Services is seeking to recoup $39.2 million in what it considers “plan overpayments” and that it decided to withhold payments to the companies as a result.

Medco Health Solutions entered into a contract in 2011 to manage prescription-drug benefits for state employees and in 2012 was acquired by Express Scripts Holding Company, according to the documents.

Pharmacy-benefit managers analyze prescription-drug requests and determine whether they should be filled. The department alleges, at least in part, that the companies refilled prescriptions too soon, according to the documents. Refilling prescriptions before necessary can increase costs.

Publisher Comment:  This is a new one!  Typically, PBMs authorize refills when a patient has used 75% or more of their initial supply.  Having said that, at what point (e.g. 50%, 65% or > 70%) did ESI permit refills?  Remember, traditional PBMs hire and train people specifically to drive incremental revenue, at the account level, deploying similar tactics. It would not surprise me if ESI saw this as an opportunity to hide cash flow.  If proven true this is nefarious.  Plan sponsors should stipulate in contracts that refills are permitted only when a patient’s remaining supply is 25% or less.  Of course, a fiduciary contract would prevent this sort of thing from happening or at the very least provide a means for indemnification.  

Medco Health Solutions and Express Scripts dispute the allegations and that they should be required to reimburse the department.

“(Even) if the department were correct that refills were filled too soon, the remedy is not for Express Scripts to reimburse the department for the total costs of these prescriptions,” company attorneys wrote.

“The department is not asserting that the refills should have never been provided, just that they were provided a few days early. The members still received their proper medications; still used their medications; and it is only proper for the state to continue to pay for those proper medications.”

By News Service of Florida

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

A survey released last week by the National Business Group on Health found that benefit cost increases are expected to remain firm next year as a result of changes many employers are making to benefit plans. Meanwhile, almost half of the 140 large national employers surveyed indicated that if additional measures to control costs are not taken, at least one of their health plans will reach the benchmark that triggers the “Cadillac” excise tax under the Affordable Care Act in 2018.

“The need to control rising health care benefits costs has never been greater,” said Brian Marcotte, president and CEO of the National Business Group on Health. “Rising costs have plagued employers for many years, and now the looming excise tax is adding pressure. Employers only have 2 more years to bend the cost curve before the excise tax goes into effect in 2018. And while employers are pursuing several strategies to keep their plans under the excise tax threshold, they estimate their actions will only delay the impact by 2 to 3 years.”

The survey found that employers project health care benefit costs to increase 6% in 2016, which would mirror the increase employers would have seen this year if there were no changes made to their plan design. Many employers project increases to remain at 5% for the third consecutive year through these plan changes, which include greater cost-sharing provisions, the adoption of consumer-directed health plans (CDHPs), and increased wellness initiatives.

The survey found that by 2020, nearly 72% of employers anticipate one of their plans to trigger the excise tax, as the benefit plan with the greatest enrollment could only lag one year behind. To delay the impact of the excise tax, 76% of employers said they will add or expand CDHPs and consumerism tools, with 70% stating they will expand current wellness programs.

The survey results showed that for 43% of employers, the top driver of rising health care costs is high cost claimants. Meanwhile, the growing cost of specialty pharmacy, specific diseases or conditions, and overall medical inflation were also implicated for spending increases.

None of the employers said they plan to eliminate health care coverage and pay the penalty for it, but some indicated they will continue to examine whether private exchanges are viable. By the end of 2015, 3% of employers will have moved active employees to a private exchange, the study noted.

– See more at: http://www.specialtypharmacytimes.com/news/specialty-drug-costs-prompt-employers-to-tighten-their-belts#sthash.0yfRbyBl.dpuf

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

More than half of large employers in 2016 will aim to more tightly manage employees’ use of high-priced specialty drugs, one of the fastest-growing expenses in their health plans.

Despite those efforts, companies still expect the cost of specialty drugs that are carefully administered to treat conditions such as cancer, HIV and hepatitis C to continue rising at a double-digit annual rate — well ahead of the pace for traditional pharmacy drugs or companies’ overall spending on health benefits, according to the National Business Group on Health.

The group released a survey Wednesday that found 55 percent of employers next year plan to direct employees to specialty pharmacies if they need drugs that can cost thousands of dollars for a single treatment. That share was up from a third in the group’s survey a year ago on companies’ plans for 2015 health plans.

More companies also say they will require employees to get prior authorization before buying specialty drugs under the employer’s health plan — 53 percent vs. 29 percent a year ago.

The survey, conducted May 19-June 24, reflects the plans of 140 employers who insure more than 10 million people in total, including employees and their families.

What’s driving companies’ focus on the price of specialty drugs is the anticipated 2018 arrival of a federal excise tax on high-cost health plans. Under the Affordable Care Act, employers could be subject to a 40 percent tax on the amounts by which the costs of their sponsored plans exceed government-set thresholds. Revenue from the so-called “Cadillac Tax” is meant to help pay the cost of providing health insurance under the health law to previously uninsured Americans and curb growth in health care spending.

Nearly half of employers surveyed by the National Business Group on Health said at least one of their health plans will exceed the excise tax threshold in 2018 if they did not make any changes. The majority of employers said they expect overall health plan costs in 2016 to rise by 5 percent on average after health plan changes are made.

Click here to continue reading.