Posts by linda

Act Now – Block Lyrica CR Preemptively

If your Plan wants to control its prescription coverage costs – and minimize disruption to your plan beneficiaries – your Plan needs to act preemptively to block certain drugs before they even enter the market. Lyrica CR exemplifies why.

Read this article to understand Pfizer’s – and other manufacturers’ – ploys that prevent your Plan from saving money from generic drugs. And learn how you can counter manufacturers’ strategies by blocking certain newly-approved, but entirely unnecessary, drugs before your Plan beneficiaries start taking them.

Act Now – Block Lyrica CR

If your Plan wants to control its prescription coverage costs – and minimize disruption to your plan beneficiaries – your Plan needs to act preemptively to block certain drugs before they even enter the market. Lyrica CR exemplifies why.

Lyrica CR was just approved by the FDA and will soon be sold in the United States. The drug is the “continued release” version of Lyrica – the blockbuster drug that earned Pfizer $3.13 billion last year.

Check your list of “Top 50 Most Expensive Drugs” and it’s virtually certain you’ll find Lyrica on the list. Analyze your Plan’s claims data, and you’ll likely discover that this single drug represents somewhere between 0.5% and 1% of your Plan’s total costs. Dig deeper and calculate Lyrica’s average per script costs, and you’ll find your Plan is probably spending more than $400 per 30 day script.

Lyrica was initially approved to be sold in the U.S. by the FDA in 2004. Why did Pfizer suddenly obtain FDA approval for Lyrica CR approximately 13 years later? You guessed it – Pfizer expects to lose patent protection for Lyrica in December of 2018, and Pfizer wants to minimize the impact of generic competition on its blockbuster revenues.

By positioning itself to market Lyrica CR for approximately a year before generic competition arises for Lyrica, Pfizer will move as many Lyrica users as possible to Lyrica CR and thereby protect Pfizer’s revenue stream. Switching patients to longer-acting versions of a drug is a tried and true method for manufacturers to prevent generic competition from eviscerating sales.

Pfizer is a master of this strategy, moving patients from once daily Pfizer drugs to “continued release” and “extended release” Pfizer drugs, like Cardura/XL, Effexor/XR and Glucatrol/XL, to name a few. Other manufacturers routinely employ this strategy as well. Teva switched MS patients to a longer-acting version of Copaxone before Mylan gained approval for its copycat version. Actavis switched Namenda patients to Namenda XR, and even removed the older version from the market to preclude generic entrants until a court ended that ploy.

However, Plans – like yours – have methods to foil manufacturers’ cynical strategies. If you block Lyrica CR coverage before your beneficiaries start using the drug, you’ll position your Plan to encourage your beneficiaries to use lower-cost generic versions of Lyrica as soon as they become available. In so doing, you’ll not only decrease your Plan’s costs, but also your plan beneficiaries’ since they’ll finally have access to Lyrica via generic – not brand – copayments.

But to avoid plan beneficiary disruption, you need to act now – preemptively – and not wait until Lyrica CR enters the market. Why? Because as soon as Pfizer begins selling Lyrica CR, Pfizer is likely to promote Lyrica CR heavily and convert many Lyrica users into Lyrica CR users via several different marketing methods.

For example, expect Pfizer to make Lyrica CR coupons available immediately by distributing coupons similar to Pfizer’s coupons for Lyrica. Coupons are a manufacturer’s method for end-running your Plan’s copay structure. They reduce your plan beneficiaries’ brand copays to very little and thus encourage your beneficiaries to ignore lower-cost generics that are available.

Pfizer will also likely bombard the air waves with TV advertisements for Lyrica CR. After all, Lyrica was ranked #1 and #2 in TV advertisements in September and October 2017, with Pfizer spending $33.8 million and $23.7 million in those months respectively for Lyrica TV ads. (If you’re not a regular TV watcher and want to get a feel for how persuasive these TV ads can be, pause for a moment and watch Pfizer’s current ad about “Kenny” – an auto mechanic – who purportedly quelled his diabetic nerve pain with Lyrica.)

Following the pattern of many brand manufacturers with imminent generic competition, Pfizer may also raise the price of Lyrica again, and introduce Lyrica CR at a lower price to make the latter appear to be the lowest-cost alternative. Note that Pfizer already raised Lyrica’s price by 9.4% in January 2016, and raised Lyrica’s – and almost 100 other Pfizer Drug prices – again in June 2017 by an average of 20%.

Also, pay attention to how your PBM reacts to Lyrica CR’s entry into the market. Observe whether your PBM places Lyrica CR on your Formulary’s Preferred Brand tier or the Non-Preferred Brand tier. And don’t be surprised if Lyrica CR ends up as a preferred Brand! Why? Because it’s likely that Pfizer will offer to provide rebates – or other monies that your PBM will retain entirely for itself – to make Lyrica CR a Preferred Brand. Doing so provides Pfizer with a quicker pick-up in sales, and your PBM with potentially larger profits if it obtains money that it doesn’t pass through.

Is there any real need for your Plan to provide coverage for Lyrica CR? Not really. As a continued release pill, Lyrica CR is nothing but a “convenience drug” that enables your beneficiaries to take one pill a day, rather than one pill twice a day for most indications. The Chief Development Officer of Pfizer’s Global Product division admitted as much when he stated “Lyrica CR was developed to offer patients an …  option with the convenience of once-daily dosing.”

Also worth noting: In the clinical trial submitted to the FDA to gain approval, 73.6% of patients in the Lyrica CR group reported a reduction in pain intensity compared with 54.6% in the placebo group, meaning Lyrica CR appears to have helped 19% of users actually reduce pain. However, the clinical trials showed that 24% of users experienced dizziness, 15.8% experienced somnolence and 4% experienced weight gain, among other adverse events like increased suicidal tendency. Note, too, that Pfizer’s clinical trials compared Lyrica CR to a placebo, not to Lyrica or alternative drugs, and thus prevented anyone from learning whether Lyrica CR provides any benefits over existing drugs.

Finally, you should know that while Lyrica CR was only approved to treat 2 of the 3 main indications for which Lyrica has been approved – diabetic nerve pain and shingles pain, but not fibromyalgia – there’s nothing to stop doctors from prescribing Lyrica CR for fibromyalgia too. Accordingly, at the very least, your Plan should consider implementing a customized Prior Authorization to limit Lyrica CR use to its approved indications.

In sum, Pfizer – and other manufacturers – do all they can to ensure they are able to maximize their profits. Therefore, your Plan needs to do all it can to minimize its costs, while providing your Plan beneficiaries with access to all medical treatments that are useful.

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Drug Price Competition IS Possible (and so are continually decreasing drug prices)

If you think we’re all stuck with the current crummy prescription coverage system – with manufacturers and PBMs engaged in a two-step dance that continuously increases drug prices – think again!

In an article published by STAT, our own Linda Cahn describes how Amazon – or several other entities like Anthem or Walmart – could entirely transform our current system and create a functioning marketplace with real drug price competition.

Succinctly summarized, all we need is for a large entity to form a new type of PBM that —

  • Renounces the PBM industry’s secret deals with manufacturers that result in rebates and other hidden payments that drive up drug costs
  • Instead requires every manufacturer to simultaneously submit on a “Bid Day” its “net prices” for every drug for the following six month period (factoring in all price reductions)
  • Six months later, provides every manufacturer with the opportunity to change its drug prices for the next six month period
  • Continues to conduct Bid Days every six months thereafter
  • Publishes every price – by drug and by therapeutic category – on an App so everyone can compare the actual prices of every drug in every therapeutic category
  • Also assembles and disseminates on its App efficacy/safety/and side effect information on every drug – by drug and by therapeutic category
  • And thus enables all doctors and patients to search for the lowest-cost and best drugs to prescribe and take, as well as to avoid those drugs that are priced non-competitively or of little or no real therapeutic value

Cahn details how the above innovations will inevitably disrupt the entire marketplace, force manufacturers to reduce their prices repeatedly, and allow the disrupter to shatter and dominate the PBM industry.

Read the article, and circulate it to everyone you know! In so doing, you’ll help create the pressure for at  least one large player to create a new type of PBM and finally shake up and transform our malfunctioning prescription coverage system.

Plan Administrators: Limit Your Restasis Coverage

If you missed the latest example of drug manufacturer abuse, you need to learn about Allergan’s Restasis antics, understand your Plan’s resulting costs, and take action in response.

Why? Because you’ll not only save your Plan considerable money by acting on a single drug, you’ll also help teach Allergan a much-needed lesson and discourage other manufacturers from engaging in similar abuses.

Go here to read our full article.

It’s Time To Limit Your Coverage of Restasis 

If you missed the latest example of drug manufacturer abuse, you need to learn about Allergan’s Restasis antics, understand your Plan’s resulting costs, and take action in response.

Why? Because you’ll not only save your Plan considerable money by acting on a single drug, you’ll also help teach Allergan a much-needed lesson and discourage other manufacturers from engaging in similar abuses.

​A Brief History of Allergan’s Antics 

In September 2016, the CEO of Allergan, one of the world’s largest drug manufacturers, made headlines by announcing Allergan was creating a new “social contract with patients“. The CEO pledged that Allergan would limit its annual drug price increases to single digits, and Allergan would commit itself to provide drug “innovation, access and responsible pricing” for all its drugs.

Normally, single digit annual price increases wouldn’t be something to brag about. However, Allergan drew widespread praise given other drug manufacturers’ obscene price increases.

Tellingly, during the subsequent twelve month period, Allergan stuck to its single-digit-price-increase pledge, but did so in a manner that should have caused universal condemnation. Allergan increased the list price of its already-overpriced blockbuster drug Restasis by 9.9%. Unfortunately, almost no one noticed, let alone criticized Allergan for breaching its “social contract” to provide “responsible pricing” for all its drugs.

However, on September 8, 2017, Allergan engaged in conduct that did result in criticism: Allergan announced that it had entered into a deal to sell its patent rights on Restasis to the St. Regis Mohawk Indian Tribe. Experts quickly understood that Allergan’s deal might enable Allergan to delay generic competition for Restasis, since generic manufacturers might be unable to challenge Allergan’s Restasis patents given the Indian Tribe’s sovereign immunity.

Allergen’s deal likely represents a big win for Allergan, a smaller win for the Indian Tribe, and significant increased costs for all who pay for Restasis. Assuming Allergan is able to preclude generic competition for Restasis until 2024 –

  • Allergan is likely to make an additional $13.4 billion in net revenue
  • The Indian Tribe will realize $13.75 million upon execution of the contract, and approximately $15 million annually in royalties
  • But plans, consumers and government entities in the United States will spend an additional $10.7 billion in total costs. (1)

A Brief Background on Restasis   

Restasis was approved by the FDA in 2003 as a treatment for dry eyes. However, as is typically the case, the drug was not tested against existing treatments and shown to be more effective or with fewer side effects.

Moreover, in the four clinical studies submitted to the FDA to gain approval, the evidence on Restasis’ efficacy was weak: After using Restasis for six months, only 15% of the tested 1,200 individuals experienced wetter eyes, as opposed to 5% using a placebo. In addition, while 15% showed improved tear production, 17% experienced ocular burning while using Restasis.

Also, the active compound in Restasis is cyclosporine, a drug that was originally investigated and approved to suppress the immune system for organ transplants.  Although Allergan’s submitted trials did not tally up the adverse events associated with immune suppression, Allergan did report 1% to 5% each of a number of infections including pruritus, conjunctival hyperemia, and discharge.

Despite Restasis’ weak therapeutic showing and side effects, Allergan listed its new product at a high price and repeatedly raised the drug’s price over the years. Today, a 30 day Restasis prescription for just one individual typically costs a Plan approximately $380. As a result, Restasis is Allergan’s second best-selling drug after Botox, with global sales last year of $1.5 billion.

But here’s the truly shocking part of this story: There are many over-the-counter treatments for dry eye that your plan beneficiaries could instead be purchasing for just a few dollars, including Clear Eyes, Opti-Free Rewetting Drops, Refresh, Soothe, Systane, Tears Again and Visine Tears. Walk into any pharmacy and you’ll see them lined up on the shelf. Dry eye treatments are also easily purchased at very low cost from Amazon.

With weak therapeutic evidence, notable side effects and multiple alternative lower-cost treatments available, how did Restasis become a blockbuster drug? The simple answer: Marketing.

For years, Allergan has run extensive advertisements for Restasis inducing plan beneficiaries – like yours – to use Restasis. If you want to pause for a moment and see Allergan’s clever ads, watch here and here.

Allergen also incentivizes Restasis use by offering plan beneficiaries a coupon to eliminate their deductible and copayment costs. Here’s a snapshot of Allergan’s current coupon and accompanying website exhortation to buy more Restasis “for $0”:

Your Plan’s Likely Costs for Restasis

While Allergan is busy providing ways for your plan beneficiaries to end-run your deductible and copayment structure, it’s likely your Plan is spending a small fortune on Restasis. Below are two “high-to-low cost” claims data analyses that our firm generated recently for two new clients that came to our firm, reflecting each of the Plan’s most expensive to least expensive drugs by total annual Plan costs.

As reflected below, one Plan that had an existing contract with Express Scripts and total annual costs of approximately $39 million had spent $71,909 annually for 124 scripts of Restasis:

Another Plan that had an existing contract with Caremark and total annual costs of approximately $70 million had spent $228,896 annually for 468 scripts of Restasis:


No Plan should spend such large amounts for Restasis, especially because virtually all plan beneficiaries can purchase over-the-counter treatments for dry eyes for only a few dollars.

What Should Your Plan Do

As a plan administrator, your first step should be to determine the amounts your Plan is spending on Restasis. If you need help doing so, our firm can run a “high to low cost” claims data analysis quickly and inexpensively and provide important information about Restasis, as well as many other drugs on which your Plan should take action.

When you analyze your claims data, it’s almost certain you’ll discover your Plan is spending large amounts on Restasis. That’s especially true, because most PBMs continue to include Restasis on their standard Formularies and do nothing to control its use. For example, both Express Scripts and Caremark included Restasis on their 2017 standard Formularies. See Express Scripts and Caremark 2017 Formularies. Moreover, if your Plan intends to rely on either of those two PBMs’ standard Formularies in 2018, you’ll continue to squander large amounts on Restasis since neither PBM is excluding Restasis in 2018. See Express Scripts’ 2018 Formulary and Caremark’s 2018 Formulary.

Assuming you discover your Plan is incurring large costs for Restasis, you have two choices to steer your Plan Beneficiaries to use over-the-counter dry eye treatments instead. First, you can impose a customized Prior Authorization that requires your plan beneficiaries to try – and fail – at least two other dry eye treatments before they can obtain Restasis. Here’s a customized Prior Authorization you can use that establishes those criteria. Second, you can block Restasis coverage, and allow limited medical exceptions based on the same criteria identified in our customized Prior Authorization. Note that blocking coverage may be your only approach if your existing PBM contract requires your Plan to rely on your PBM’s standard Prior Authorization programs. Blocking coverage may also make more sense, since many PBMs simply rubber-stamp approvals and will fail to ensure that your customized Prior Authorization criteria are actually satisfied.

Regardless of which approach you implement, your PBM may indicate you will lose rebates if you implement a customized Prior Authorization or block Restasis coverage. However, assuming your PBM only reduces your rebates by the same amounts that your PBM was actually collecting and passing through in Restasis rebates, your Plan will come out ahead. Why? Because if you entirely – or largely – eliminate Restasis scripts, you’ll clearly save far more than you lose in Restasis rebates.

To determine if your PBM reduces your rebates appropriately, you should try to obtain information from your PBM on the actual amount of Restasis rebates that your PBM was collecting and passing through to your Plan. Unfortunately, it’s almost certain that your PBM contract does not require that your PBM provide such information. Accordingly, if your PBM won’t do so – and you don’t trust that your PBM has appropriately reduced your rebates – you should consider filing an accounting proceeding. We’ve written before about why an accounting  proceeding will be useful, and explained how your Plan can file such a proceeding at little or no cost.

Bottom line: It’s time for your Plan to pay attention to Allergan’s recent activities and take action on Restasis. You’ll reduce your costs significantly, and you’ll communicate to Allergan and other manufacturers that the marketplace will no longer tolerate manufacturers’ marketplace wrongdoing.

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1. See Silverman, Ed, “The U.S. would pay an extra $10.7 billion without generic Allergan drug”at