2015
ANNUAL
MEETING
Paul Meyer - Welcome
2014 Accomplishments
• Membership Growth
• New “Classic Plan” for Fast Implementation of Smaller
Members
• New Ability to Access Data In House
• Continued Financial Stability
• Updated Computer Systems
• New, Easier-to-Navigate Web Site
CEO Search
• Started Search in Late Autumn 2014
• Currently in Discussions with Prospects
• Hope to Announce New CEO by Summer
Open Board Seats
• Three Openings
• Three Qualified Candidates
– Joy Matthews
– Valarie Wunderlich
– Judy Peirick
• Voting Closes at 10:00 AM Today
• New Board Members Announced During Lunch
2015
ANNUAL
MEETING
Deb Thomsen – Cooperative Update
National CooperativeRx
Update
1.
2.
3.
4.
5.
6
Welcome and Introductions
Cooperative Growth
Financial Achievements
Successful Clinical Programs;
Great Trend Numbers for 2014
Market Check
Welcome
Without YOU,
Our Members,
Prospective Members,
Consultants and TPAs,
We Would Not Exist!
7
Introductions
National CooperativeRx
– Chris Schanz Strategic Account Executive
– Deb Thomsen Vice President
– Deb Sonnenberg Director of Operations
– Jen Dickman Communications
– Kyle Kapusta Sales Manager
– Mike Sugden National Sales Leader
– Patti Tews-Ruehle Sales Manager
– Penny Mandt Administrative Assistant
– Wayne Salverda, R.Ph. Senior Director of Clinical Services
8
Introductions
Board Members
– Fred Brown
– Jim Malicki Secretary
– Judy Peirick
– Larry Richardson Treasurer
– Paul Meyer Board Chair
– Robin Mullins Vice Chair
9
Introductions
CVS Health
– Adam Jones
– Deb Zuelke
– Keith Sadowsky
– Larry McCoy
– Laura Sterling
– Paschal Haywood
– Shawn Young
– William Ashmore
– Wilson Samuel
10
Coalition Growth
(January 2014 – January 2015 Effective Dates)
19 new Plan Sponsor Members
with 29,786 Participants
11
2014 Financial Achievements
• 2014 Year-end Financials (unaudited)
Revenue:
$2,276,255
Expenses: $1,956,460 (10% under budget)
Net Earnings: $319,795 (member dividends)
• Member Equity: $1,824,397
• Cooperative Patronage Dividends
2014:
$319,795
2013:
$208,000 (100% cash)
12
Money Returned
to Members In 2014
• Rebates Distributed:
$10,142,821
• Rebate True-up:
$ 2,989,665
• Patronage
$
208,000
• Equity Released
$
323,000
$
228,766
(2006-07)
• Audit Returns
(2010-12)
TOTAL
13
$13,892,252
Audit 2013
Annual review of all claims, pricing discounts off AWP,
dispensing fees, and rebate guarantees. This money will be
returned to Members in the next Audit Distribution.
• $10,983.04 reimbursement for discrepancies:
– Lower-Of / Per Claim Pricing: $10,789.04
– Dispensing Fees: $194
• No discrepancies regarding:
–
–
–
–
–
14
Aggregate Pricing Guarantees
Claims Data Verification
MAC Pricing Assessment
Specialty Pricing
Rebate Guarantees
Impact of Cooperative
2013
2014
• Clinical Programs:
$ 440,000
—
• Annual Drug Spend:
$176,493,597
$177,806,848
• Annual # of Rx’s:
1,850,182
1,654,007
Clinical Programs to
Contain Costs
• National CooperativeRx has negotiated many clinical programs at
reduced or no cost (Rx Savings Guide)
• Dedicated dollars to purchase the programs/services that include a
Caremark fee (Safety and Monitoring, PA and Appeals, Historical Claims)
• Client specific plans to match your appetite for aggressiveness
• Ability to customize and modify Caremark Clinical programs
(Compound PA at 500.00)
• Unique Clinical Opportunities as large coalition client (Adherence Pilot
Opportunity)
16
Plan Participants with
Telephone Contact Information on File
National CooperativeRx
70%
62%
66%
60%
50%
44%
40%
30%
20%
10%
0%
June 2013
17
February 2014
February 2015
Generic Utilization
Generic Dispensing Rates (GDR) 2014
90.0%
86.5%
85.0%
81.3%
81.4%
CVS/caremark
National CooperativeRx
80.0%
75.0%
NatRx Best In Class
For each 1% increase in Generic Dispensing Rate (GDR), gross pharmacy
spend is estimated to decrease 1% up toward 2.5%.
18
Bending the Trend
Book of Business
National
CooperativeRx
CVS/caremark
Employer
Express-Scripts
Commercially Insured
Trend
NonSpecialty
Specialty
Trend
Trend
8.2%
41.2%
-0.6%
12.7%
31.6%
7.0%
13.1%
30.9%
6.4%
National CooperativeRx overall Trend and Non-Specialty Trend less than
CVS/caremark and Express Scripts
Source: WisconsinRx/National CooperativeRx CVS/caremark RxInsights 2014 report and ad-hoc claims analysis
http://lab.express-scripts.com/drug-trend-report/?utm_source=corpbanner&utm_medium=banner&utm_campaign=dtr201
19
Hepatitis C
3-5 Million Infected
3 of 4 may not even be aware they’re infected
4 new drugs approved in 2014
$84,000-150,000 for a 12 week treatment
Hep C accounted for 4.2% of overall trend
Over half of the increase in specialty cost (11.6 M) was
accounted for by Hep C cost (7M)
• HCV prevalence varies widely from state to state: 1.3% to
0.4%
•
•
•
•
•
•
20
HCV Disease and Cost Progression
$500,000
$84,000 $150,000
$115,000
$24,000
12 Week Treatment Annual Costs for
Course
Paitents with HCV
For Every 100
People
Infected with
HCV
75-85 Will
Develop
Chronic
Infection
$60,000
Annual Cost for
Annual Costs for
Patients with End Patient with Liver
State Liver Disease
Cancer
Transplant Costs
Per Patient
60-70 Will
Develop
Chronic Liver
Disease
1-5 Will Die of
Cirrhosis or
Liver Cancer
5-20 Will
Develop
Cirrhosis
Source: www.PhRMA.org Twenty-Five Years of Progress Against Hepatitis C: Setbacks and Stepping Stones, December 2014
21
Incidence of Acute Hepatitis C
USA by Race/Ethnicity Years 2000-2011
Reported cases/100,000 population
1.4
American Indian/Alaskan Native
Asian/Pacific Islander
Black
White
Hispanic
1.2
1
0.8
0.6
0.4
0.2
0
2000
2002
2004
Source: http://www.cdc.gov/hepatitis/Statistics/2011Surveillance/Slide4.4.htm
22
2006
2008
2010
Compounds
Compounding: When a licensed pharmacist combines, mixes or alters
ingredients in response to a prescription. This tailors medication to the
medical needs of a patient.
• Safety and efficacy
• 7,500 pharmacies specialize in compounding services
• 2,500 of these added since 2009
• HIPPA required reimbursement
• Compounds can be warranted for various reasons
Source: CVS Caremark White Paper Compound Medications for Topical Use, March 2014
23
Bending the Trend
Book of Business
National
CooperativeRx
CVS/caremark
Employer
Express-Scripts
Commercially Insured
Trend
NonCompounds
Specialty
Trend for
Specialty
Gross Cost
Trend
Compounds
Trend
PMPM
8.2%
41.2%
-0.6%
93.1%
$1.47
12.7%
31.6%
7.0%
374.0%
$3.95
13.1%
30.9%
6.4%
128.4%
$3.84
National CooperativeRx member-owner groups potentially avoided more than
$5,000,000 in drug spend for compounds compared to benchmarks.
Source: WisconsinRx/National CooperativeRx CVS/caremark RxInsights 2014 report and ad-hoc claims analysis
http://lab.express-scripts.com/drug-trend-report/?utm_source=corpbanner&utm_medium=banner&utm_campaign=dtr201
24
National CooperativeRx
Market Check
Our current 3 year agreement contains language to evaluate
agreement for market competitiveness.
•
•
•
Changing Market Dynamics – especially in a 3 year
agreement
Market Review is underway and we will report results
Potential adjustments will be agreed to contractually by
9/1/2015 and become effective 1/1/2016
Results will either demonstrate that we have the strongest
contract available, or will show room for negotiation and the
Cooperative will work on your behalf while closing any gaps.
25
Thank You!
“Together we control our
collective success…
Individually we surrender
control of our destiny”
YOU are that Strength!
26
2015
ANNUAL
MEETING
Thank you!