Posts by linda

Your Plan CAN Decrease Its Costs (but you need to act for it to do so)

We’re thrilled to report yet again that our National Prescription Coverage Coalition has achieved striking savings for our Coalition Members.

Based on year-end analyses, our Coalition Members decreased their prescription coverage costs by approximately 20% to 30%. 

Sound too good to be true?

It’s not. Read this article to learn how our Coalition Members achieved their savings, and to obtain specific facts about just how much they saved.

Your Plan CAN Decrease Its Prescription Coverage Costs (but you need to take action for it to do so)

We’re thrilled to report yet again that our National Prescription Coverage Coalition has achieved striking savings for our Coalition Members. Based on year-end analyses, our Coalition Members decreased their prescription coverage costs by approximately 20% to 30%. 

Sound too good to be true? It’s not.

These savings resulted from our Coalition Members implementing dozens of ongoing recommendations provided by our Coalition experts, such as:

  • Excluding coverage for numerous high-cost drugs that can be appropriately replaced with inexpensive over-the-counter drugs or low-cost prescription generics
  • Updating and improving their customized Formularies
  • Implementing customized Prior Authorization protocols drafted by our Coalition experts
  • Taking advantage of Specialty Drug coupons not only to offset Plan Beneficiaries’ costs but also to reduce our Coalition Members’ costs
  • Improving Benefit Plan Designs to incentivize beneficiaries to pay attention to drug costs

Our Coalition experts also continuously monitored:

  • Brand drugs that lost their patent protection, and recommended the immediate replacement of all such drugs with lower-cost generics
  • Marketplace changes in the prices of all drugs, and recommended specific actions in connection with certain drugs whose costs increased dramatically
  • The FDA’s approval of all new-to-market drugs, and recommended the exclusion of all copy-cat and other drugs that provide little new value but carry high prices

We also note that all our recommendations were implemented with the cooperation – and extensive work effort – of Envision, the PBM that was selected by the Coalition after a nine month RFP conducted by our firm.

Here’s an example of the cost decreases achieved by one Coalition Member after it implemented a host of recommendations on January 1, 2017:

As an example of the ongoing savings we achieve: Another Coalition Member joined our Coalition in April 2015 and obtained immediate savings. Given our ongoing recommendations, costs continued to decrease in 2016, and fell even further in 2017, bringing about the following savings when compared with the entity’s costs under its previous PBM:

Thus, given our ongoing and continuous recommendations, this Coalition Member’s costs continuously decreased. And almost three years after joining our Coalition, this Coalition Member’s costs were far lower than before it joined our Coalition.

Because this Coalition Member was located in a metropolitan area, we also knew it could achieve savings by eliminating one of the two high-cost retail pharmacy chains – CVS or Walgreens – and getting stronger discounts from the other chain.

Working with Envision, we determined the chain pharmacy that would provide the greatest discounts if the other chain was excluded, verified that all plan beneficiaries would still have strong access to retail pharmacies within a few miles of their homes, and created a customized Limited Pharmacy Network for this Coalition Member.

The Experience of Other Plans

In contrast to the decreased costs of our Coalition Members, last year virtually all other Plans in the nation experienced increased prescription coverage costs. In fact, according to one analysis, prescription coverage costs increased on average for those under age 65 by 11.6 percent, and for those 65 and older by 9.9 percent.

Thus, while our Coalition Members’ costs were decreasing by 20% to 30%, other Plans’ costs were increasing by 10% or more.

Why the difference?

  • Most Plans have PBM contracts in place that are stuffed with loopholes that allow PBMs to charge essentially whatever they want for many drugs. Our Coalition contract is free of all loopholes.
  • Under most Plan’s PBM contracts, PBMs can retain a large portion of the monies they collect from manufacturers, as long as the PBMs label the monies with names other than “Rebates”. Under our Coalition contract, all third party monies must be passed through to our Coalition Members.
  • Most Plans rely on their PBMs’ “standard” Formularies and “standard” Prior Authorization and “standard” Step Therapy Programs, notwithstanding PBMs’ conflicts of interest and secret relationships with manufacturers. Under our Coalition contract, we have the right to individually customize each Coalition Member’s Formulary and Programs, and Envision works with us to do so.
  • Most Plans are without the resources to pay any attention – let alone respond – to marketplace changes, such as dramatic drug price increases, brand drugs that lose their patents, and new high-cost drugs that are approved by the FDA but offer little in new value. Our Coalition experts provide all these services on an ongoing and continuous basis to every Coalition Member.

If your Plan is relying on another consulting firm – or your Plan is a member of another Coalition – what cost trends have you experienced?

Have you achieved the cost decreases that our Coalition has provided to our Members?

Can Your Plan Continue To Absorb Increased Costs?

Recent government projections reflect prescription costs will increase by 6.3 percent annually through 2026. Several actuarial firms project mid- to steep increases for prescription coverage this coming year and beyond.

If your Plan can’t absorb ever-increasing prescription coverage costs, we urge you to consider joining the National Prescription Coverage Coalition.

We have a proven track record that demonstrates we can – and will – decrease your Plan’s costs, and sustain lower costs for your Plan over time.

To Read Other RxAlerts, go to the top Menu Bar and click on RxAlerts. 

Control Your Compound Drug Costs

Rx Alert – May 2014 

Careful monitoring of new clients’ claims data reveals an abundance of new, high cost Compound Drug creams. The creams – purportedly to address problems like pain or scarring – have never been approved by the FDA  and have no proven efficacy! But our analyses of new clients’  data reveal the creams are now being dispensed in large number, and often at costs of $1,000 or more. We’re even seeing scripts of thousands of dollars per cream.

Our investigation into the problem reveals that Compound-creating Specialty Pharmacies have figured out a new way to generate revenue: They are taking an existing drug that’s been approved by the FDA to treat certain specific problems, and mass producing a powder version of the drug that they’ve combined with other drugs to create an unapproved custom cream. And then the pharmacies are marketing their new creams to doctors, just as Snake Oil Salesmen used to market drugs in the late 1800s before the first FDA Act was approved!

What are some examples of the new Compound Drugs that we’re seeing in our claims data analyses? There’s a pain cream – with one of the core ingredients being gabapentin (which the FDA approved as an oral treatment for shingles pain and seizures). There’s a new scar treatment cream – with one of the core ingredients being fluticasone (which the FDA approved as an anti-inflammatory for asthma). Other commonly used ingredients are flurbiprofen and ketamine (the horse tranquilzer and party drug).

Please note: Just because a drug may effectively address shingles pain – or asthma caused by inflammation –  when taken by mouth – does not mean it will have any effect on muscle or joint pain – or scars – when rubbed into the skin. And no one knows whether it’s safe to use these creams topically since they’ve never been tested in clinical trials. Moreover, there’s no basis for the price tags that are being placed on these new creams.

Accordingly, every Health Plan needs to address this new development. A first step should be to analyze your claims data to determine the number of Compound creams that have already been dispensed, and at what cost. Thereafter, you should consider  creating a Prior Authorization for Compound Drugs, and setting a dollar amount that will automatically trigger the Prior Authorization. But beware of setting the dollar amount too high: Our review of claims data reveals that Specialty Pharmacies are frequently adjusting their prices to $499, just to avoid Prior Auth’s of $500, or $299 to avoid Prior Auth’s of $300! You’ll also need to write a protocol to identify requirements for your PBM if a Prior Auth is triggered: Consider creating a NDC block and prohibiting the dispensing of Compound creams containing gabapentin, fluticasone, flurbiprofen and ketamine.

Here’s the bottom line: Keep a watchful eye on your claims data to detect new Compound Drugs. If you don’t, you’re likely to find your costs dramatically higher. And the extra dollars you’ll be paying may be for drugs with no proven utility.

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.

# # #

To Read Other Rx Drug Alerts, go to the top Menu Bar and click on RxAlerts.