✯
✯
2003 National Health Policy ✯Conference
January 22-23, 2003
J.W. Marriott
Washington, D.C.
Pharmacy Challenges:
What Is the Right Prescription???
Prepared for
National Health Policy Conference
Ray Hanley
Washington, DC
January 23, 2003
Client Executive, EDS
501.374.6608
Drug spending surges
Between 1990 and
1998, spending for
prescription drugs far
outstripped spending
for hospital care and
physician services.
Drug spending now
totals more than $90
billion a year.
Percentage increase in spending 1990-1998
139.5%
Hospital care
49.6%
57.5%
Source: Health Care Financing
Administration
Physician
services
Prescription
drugs
In Addition, Medicaid Eligibility Has
Grown Substantially…
Medicaid Beneficiary Growth, Fiscal Years
1977-2001
45
40
(Millions)
35
30
Due largely to state
expansion efforts and
economic shortfalls, the
number of Medicaid
recipients has climbed to
44 million
25
20
15
1977
1981
1985
Source: HCFA 2082 data, Kaiser Family Foundation
1989
1993
1997
2001
Unlike commercial insurance, Medicaid
covers the frailest, the sickest. Medicaid
has no pre-existing–condition exclusions.
Aging is a pre-existing condition…
and the impact on Medicaid bears a very
large price tag.
Soaring drug
costs are driving
up employer
health premiums.
Do direct-to-consumer ads for Rx drugs
cost Medicaid money?
Washington Post
March 29, 2002
“For the fourth straight year,
prescription drug spending rose more
than 17% in 2001, driven in large
measure by a few heavily advertised,
high priced medications.”
-research from the nonpartisan National Institute for Health Care Management
On the prospects of a new
anti-obesity drug. . .
“This is just what America
needs. You go to McDonald’s,
eat a Big Mac and pop a pill.
No problem.”
-Jean-Pierre Garnier, Glaxo CEO
as reported by CBS MarketWatch, March 2001
No meaningful co-payment, no price
sensitivity to name brand vs. generic
Essential, in part, because
regulations instill little cost
sensitivity with Medicaid
patients… Private-sector,
tiered cost-sharing is not an
option.
States can do little if anything about
drug prices in the short run without
major federal action.
Appropriately containing
drug costs without forcing up
other health care costs,
navigating a sea of special
interests, and finding the
resources to get it done are
huge challenges.
Quality suffers if health care dollars
support higher-than-necessary
Medicaid drug expenditures.
Various interests have different
preferences for addressing the issues of
cost and access.
Like the drugs in question, most
proposals have budgetary, political, and
logistical side effects.
Counter Detailing: A
developing tool to help
physicians make costeffective prescribing
decisions.
¾Laminated cards showing
differences in prices of drug
choices
¾Letters to targeted physicians
¾Follow-up visits with doctors
A Medicare drug benefit could free up many
millions of dollars to address unmet Arkansas
health care needs.
The pharmaceutical companies have
stepped up to help – but underutilized to
date:
¾TOGETHERx
¾Share Card
¾Florida’s coming Common Application
Technology is vital to managing
Medicaid – in pharmacy especially.
EDS’ Decision Support Systems in
Arkansas and other states are
making management possible.
To manage the budget you have to
know what you are buying and for
whom.
Arkansas has installed a software
program in its claims processing
system to ID patients abusing
narcotics…with a $100,000 grant
from Purdue Pharma, maker of
OxyContin.
Case study—drug therapy
Baseline
Recommendations
•
•
•
•
•
•
• D/C Buspar, Seroquel, Ativan,
and Propranolol
• Decrease Zyprexa to 5 mg/day
• Continue Depakote
• Begin vitamin E
• Vistaril prn agitation
Buspar, 5mg tid
Zyprexa, 10 mg qd
Seroquel, 100 mg qd
Depakote, 500 mg bid
Propranolol, 10 mg tid
Ativan, 1 mg prn
Total, 6 drugs: $585/month
Total, 4 drugs: $400/month
After changes in drug therapy, patient was alert,
pacing much less, less agitated, and not combative.
Patient is eating better and allowing the staff to feed
him.
Asthma
¾40% of Arkansas children are insured
though Medicaid/SCHIP.
¾Asthma is the leading cause of hospital
admission and ER visits.
¾A prime candidate for partnership
technology solutions
If not for the many millions invested in R&D,
what would be on the shelves or your corner
store?
For all of us in the health care industry,
the future is filled with tough decisions
and many challenges.
And, in closing…
Slippery slopes are ahead for healthcare. But if
we didn’t like challenges, wouldn’t we all be
elsewhere?
Ray Hanley
Client Executive, EDS
501.374.6608