Pharmacy Management
Market Update
Mona Chitre, PharmD, CGP
Vice President, Pharmacy Management
Quiz
This “purple pill” helps your stomach not
spontaneously combust after that latenight spicy dish you should not have
eaten…
2
Quiz
A. Prozac
B. Nexium
C. Motrin
D. Premarin
3
Quiz
This pill helps you “when the
moment is right.”
4
Quiz
A. Speed
B. Solodyn
C. Viagra
D. Caffeine Pills
5
Quiz
This pill helps you climb out from
under a rock to face the world.
6
Quiz
A. Allegra
B. Prozac
C. Zoloft
D. Diovan
7
Quiz
You’ve done it all in
one night:
You’ve eaten spicy
food.
The moment is right.
You’ve crawled out
from under that rock.
Now it’s time to say
“night-night.”
8
Quiz
A. Ambien
B. Lunesta
C. Albuterol
D. Advair
9
Drug CostsGREAT
and Use
Increasing
JOB!!
…However this proves that the pharmaceutical
companies have done a great job as well.
10
Pharmacy Management: Market
Landscape
• Impact of Prescription Benefits
• Specialty Medications
• Price Increases
• Appropriate Care
• Trend Management Opportunities
Why are Prescriptions important:
•#1 Benefit: Most commonly used benefit
• 67-70% use the drug benefit each year
• 12-15 prescription fills per person per year
•#1 Cost: Drugs are the top cost driver
Service Bucket
PMPM Allowed: Rx extracted from
buckets and consolidated
Drug (Rx and Medical Benefits)
$ 94.03
Physician
$ 93.44
Outpatient
$ 70.93
Inpatient
$ 60.96
How does Rx affect benefit plans?
Medical Benefit
•
•
•
•
•
•
•
Hospital
Physician Office
Outpatient Facility
Clinics
Infusion centers
Home Infusion
DME
• Drug Costs: 5-8% of total
medical cost ($20-$25 pmpm)
Pharmacy Benefit
• Retail Pharmacy
• Mail Pharmacy
• Specialty Pharmacy
• Drug Cost : 20-25% of total
health care cost ($75-$85
pmpm)
Prescription Benefit
Medical Benefit
Cancer
Diabetes
Antidepressants
Hypertension
Rheumatology
Psoriasis
Contraceptives
Hemophilia
Vaccines
Multiple Sclerosis
Immunoglobulins
Hyperlipidemia
Osteoarthritis
PPIs
Asthma
Enzyme
Replacement
Glaucoma
Pulmonary Arterial
Hypertension
Today’s pharmaceutical benefit reality
$20 – generic Rx
$200 – brand Rx
$2,200 – specialty Rx
SPECIALTY PHARMACEUTICALS
16
New Technology: Specialty Drugs
General Description:
• High Cost
• Biologics
• Pharmacy or Medical Benefit
(Oral, Injectable, Infusion)
• Monitoring Required
• Targeted
• Chronic or genetic
conditions with still an
unmet need
Drug
Condition
Annual Cost
Vectibix
Cancer
$100,000
Enbrel
Rheumatoid
Arthritis
$16,000
Cinryze
Hereditary
$450,000
Angioedema
Juxtapid
Familial
High
Cholesterol
$1,000,000
Top Ten Drug Projections
Specialty Drug: Employer Impact
Employer: 200 employees (450 total with coverage)
• 5300 Prescriptions/ year
• Average employer cost/Rx: $60
• Total Annual Rx cost for employer: $320,000
Specialty Drug Impact: Tykerb
• Oral drug used in combination for breast cancer.
• Incremental Added Cost: $55,000/ year
15% increase in Rx expense that year
19
Specialty Drug: Employer Impact
Large multiple employer coalition:
•
•
•
•
41,000 covered lives
Medical Drug PMPM: $14.47 (07-08)
Medical Drug Trend: 50% over 2 years
Specialty Drug Impact:
– 2 of the covered members treated with Fabrazyme
– Annual cost of > $518,000
This drug accounted for 8% of the medical expense
20
Cancer Costs and Responsible Behavior Questioned
“Cancer Trends Demand Call To Action”
The Tipping Point
“At Memorial Sloan-Kettering
Cancer Center, we recently
made a decision that should
have been a no-brainer: we
are not going to give a
phenomenally expensive new
cancer drug to our patients”
• Zaltrap v. Avastin
– Same Efficacy
– $11,000 difference
Cost Trends
More than 90 percent of
cancer therapies approved
in the last five years cost
more than $20,000 for a 12week course of therapy.
Significant price increases in oncology
products have not necessarily shown a
correlation between overall survival or
progression free survival.
2012/2013 Sample Specialty Rx Approvals
Drug
Manufacturer Route
Approval
Launch
(est)
Annual Cost
Oral
Advanced renal cell
carcinoma
1/27/2012
2/1/2012
$75,000/yr
Genentech
Oral
Basal cell carcinoma
1/30/2012
2/7/2012
$75,000/yr
Vertex
Oral
Cystic Fibrosis
1/31/2012
2/7/2012
$294,000/yr
Corcept
Oral
Cushings Disease
2/17/2012
5/1/2012
$180,000/yr
Pfizer/Protalix
IV
Gaucher Disease
5/2/2012
5/3/2012
$180,000/yr
Genentech
IV
HER2-positive Breast CA
6/11/2012 6/25/2012
$71,000/yr
Oral
Familial High Cholersterol
12/21/201
2
Inlyta (axitnib) Pfizer
Erivedge
(vismodegib)
Kalydeco
(ivacaftor)
Korylm
(mifepristone)
Elelyso
(taliglucerase
alfa)
Perjeta
(pertuzumab)
Juxtapid
(pertuzumab)
Kadylca
(traztuzumab
emtansine)
Indication
Aegerion
Genentech
IV
HER2-positive Breast CA
2/22/2013
2/1/2013
$1,000,000
$94,000
Trend Management: Specialty
•
•
•
•
•
•
•
Pipeline Review and Planning
Use Management (to ensure safety and appropriateness)
Manufacturer Contracting (where applicable)
Waste Management
Collaboration with Specialists
Clinical Outreach: Adherence, Side Effect Management
Off-Label Use Management
Pricing and Price Increases
Case Study: Multiple Sclerosis
New Technology:
2010: 2 New agents - 1st Combination drug and 1st Oral Agent
Significant Price Increases:
• 2006 Price - $ 15,000
• 2010 Price - $37,000
METRIC
EHP 2 year Trend
COST
40%
USE
16%
Mean Ingredient Cost Copaxone Compared with CPI
$3,000
$2,800
$2,600
$2,400
$2,200
COPAXONE
$2,000
Consumer Price Index
$1,800
$1,600
$1,400
$1,200
2004Q1
2004Q2
2004Q3
2004Q4
2005Q1
2005Q2
2005Q3
2005Q4
2006Q1
2006Q2
2006Q3
2006Q4
2007Q1
2007Q2
2007Q3
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
$1,000
27
Drug Cost Trends: Upstate New York
$250.00
$208.38
Average brand name drug cost *
$185.89
$200.00
$167.74
$155.04
$135.58
$150.00
$120.05
$190 Difference
$100.00
$100 Difference
Average generic drug cost *
$50.00
$19.63
$18.30
$19.12
$18.68
$19.28
$18.16
2006
2007
2008
2009
2010
2011
$0.00
Trend Management: GENERICS
“Ask your doctor if a generic is right for you”
Employer Impact: Case Study
• Employer: 200 employees (450 total with coverage)
•
•
•
•
Avg 12 Rx/person/yr: approx. 5,300 Rx
Avg employer cost/Rx: $60
Generic Fill Rate: 65% (3,445 of the Rx are for generic)
Total Annual Rx cost for employer: $318,000
• Generic Opportunity: Increase GFR to 70%
•
•
•
•
265 brand drug Rx changed to a generic option.
Cost saving per Rx: $100
Savings to employer: $26,500 (8% of spend)
Savings to employee: 200-$400+/year
Each 1 point increase in GFR can reduce Rx spend by 2-3%
Medication Management
Medication Errors – National Data
 Medication Errors are estimated to account for $21 billion in
wasteful medical spending annually.


Inpatient preventable medication errors cost $16.4 billion annually.
Outpatient preventable medication errors cost $4.2 billion annually.
 70% of Medication Errors occur due to prescription mistakes.



Dosing errors – 37%
Drug allergies or harmful drug interactions – 11%
Medication reconciliation errors during admission – 22%
 Fragmentation of Care

Survey shows only 13% of primary care physicians communicated with
a pharmacist regarding new prescriptions.6
Medication Non-adherence
50% of all prescriptions are not taken correctly
• Human toll
– About 125,000 preventable deaths/year
– Diabetics: 699,000 ER Visits, 341,000 hospitalizations
• Financial toll
– Additional $290 billion dollars of health care costs
– 13% of the total healthcare spend in this country
– $8.3 billion in annual healthcare costs for diabetics
Adherence rates across conditions
• * 1 year after
initiation of both
antihypertensive and
lipid-lowering
therapies; proportion
of days covered
≥80%.
• † 1 year after initiation
of therapy;
medication possession
ration (MPR) ≥80%.
• ‡ MPR 80%-110% of
days eligible for MediCal.
• § MPR >80% for
patients with at least
90 days of
observation.
Trend Management: Adherence Improvement
Social/
Economic
• Age & race
• Socioeconomic
status
• Illiteracy
• Cost of
medications
Patientrelated
Therapyrelated
Conditionrelated
The Five Dimensions of Non-Adherence*
• Forgetfulness
• Treatment
anxiety
• Misunderstood
instructions
• Fear of
dependence
• Complexity
of regimen
• Duration of
treatment
• Side
effects/
ADR
• Changes in
therapy
• Comorbidities
(depression)
• Level of
disability
• Severity of
symptoms
• Drug/alcohol
abuse or use
HealthCare
System
• Patient- provider
relationship
• Overworked
HCP
• Lack of
incentives
• Lack of
knowledge