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2010-09-01T10:21:00.000-07:00

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Pro Pharma's Youtube

2010-06-30T14:45:00.000-07:00

Check out our YouTube channel at http://www.youtube.com/user/ProPharmaRx.

The videos on this channel are informative and include:

Ø Pharmacy Benefits 2007 Overview and Updates

Ø JCode Calculator™ Introduction Demo

Ø With more videos to come!

Biotech industry showing resilience despite challenging conditions

2010-06-23T12:36:00.000-07:00

We found this of interest because it has benchmark statistics on the use of specialty injectables worldwide. Specialty is an international issue and has reached mainstream treatment for many chronic conditions including cancers, rheumatoid arthritis, blood disorders, etc.

World’s established centers of biotech activity reach aggregate profitability for first time

New York, 28 April 2010 – The global biotechnology industry was able to weather the continued worldwide economic turmoil and deliver a strong financial performance in 2009, with the world’s established biotech centers reaching profitability for the first time in history. However, the gap between the “haves” and “have nots” in the industry continued to widen in 2009, posing new challenges for emerging companies in accessing the capital needed for R&D. These and other findings were released today in Beyond borders: global biotechnology report 2010, Ernst & Young’s 24th annual report on the biotech industry.

“Biotech companies have long confounded predictions on their ability to survive difficult economic conditions and 2009 was no different,” said Glen Giovannetti, Ernst & Young’s Global Biotechnology Leader. “Companies will continue to face a challenging funding environment for the foreseeable future. The firms best poised for success are those that can seize the opportunities latent in the near-universal need for increased efficiency — from capital efficiency to new approaches to R&D and creative models for funding and partnering.”

Key financial results:

Companies in the industry’s established biotech centers of the US, Europe, Canada and Australia had an aggregate net profit of US$3.7 billion in 2009, an improvement from the US$1.8 billion net loss in 2008 marking the first time ever that these markets have reached aggregate profitability. This improvement was driven by a dramatic increase in net profit in the US market due largely to the adoption of new cost-cutting and efficiency measures.
Revenues of listed biotech companies fell by 9% to US$79.1 billion in 2009 from US$86.8 billion the prior year. The bulk of this decline was due to the exclusion of Genentech in 2009 as a result of its acquisition by large pharmaceutical company Roche. If Genentech is excluded from both years, industry revenues would have grown by 8%.
Capital raised increased sharply in 2009. Companies in the US, Europe and Canada raised US$23.2 billion in 2009, a 42% increase compared to 2008. A significant portion of this capital was raised by a handful of established public companies in follow-on offerings, as access to capital for many companies remained scarce.
Strategic alliance activity remained robust — in line with the record-breaking totals seen in the last couple of years. On the M&A side, with the exception of the Genentech transaction mentioned above, there were only three acquisitions larger than $US1 billion, due in part to several mega-mergers in big pharma, the buy side of most biotech deals.

“The European biotech community showed great fortitude in meeting the challenges of the economic downturn, with only a small reduction in the number of public companies,” said Jürg Zürcher, Ernst & Young’s Biotechnology Leader for Europe, Middle East, India and Africa. “With R&D funding essentially flat in 2009, European biotechs and their counterparts globally need to balance the need for cost cutting with ensuring they do not impair their ability to be drivers of innovation in the future.”

Adapting to the “new normal”

Biotech companies are now operating in a new normal, where access to capital will remain difficult. With less available capital, venture capitalists are being more selective and reserving funds for existing portfolio investments. Some funding is being directed to finance R&D assets or projects, with potentially faster returns, instead of starting new companies. IPO investors are primarily seeking more mature, de-risked investments, and IPOs are pricing below companies’ expectations. Other public funding is increasingly concentrated in a smaller number of companies. Big pharmaceutical companies still need to acquire promising products for their pipelines, but recent mega-mergers and efforts to exit therapeutic categories have reduced the number of potential buyers for any given biotech asset.

The biggest opportunities in this new normal will come from increasing efficiency: more efficient ways to fund innovation and achieve returns for investors, better outcomes for every dollar of health care spending, and more efficient R&D and operations at drug companies. The Beyond borders report identifies five guiding principles for biotech companies operating in the new normal:

Seizing funding opportunities. Companies need to broaden the search for capital to include nontraditional (and non-dilutive) sources of funding. Many will need to reset valuation expectations for today’s markets and take funding when it is available.
Boosting capital efficiency. Companies will need to use scarce capital efficiently. This includes designing studies and trials to “fail faster,” prioritize pipeline assets and work with third parties to unleash operational efficiencies.
Focusing on reimbursement. The end goal in product development is no longer marketing approval but payor acceptance. Companies need to invest early in pharmacoeconomic analysis to inform R&D decisions.
Collaborating creatively. The report identifies several innovative partnering structures. Companies’ use of creative partnering approaches could free them from turbulent public markets and give them much-needed resources.
Developing differentiating assets. There are fewer potential buyers and they are distracted and have fewer resources. To attract partners, biotech firms need to demonstrate what truly differentiates their products or platforms.

Key regional findings:

United States

The US industry’s net income skyrocketed from about US$400 million in 2008 to a record US$3.7 billion in 2009. The improvement in industry profitability was driven by revenue growth, cost cutting and a change in the accounting rules for acquisitions. The 2009 figures exclude the net income of Genentech, which was acquired by Roche.
Revenues of US public companies fell to US$56.6 billion in 2009, a 13% drop compared to 2008. When adjusting for the acquisition of Genentech, industry revenues would have instead increased by 9.5%, comparable to 2008 industry growth.
The value of merger and acquisition (M&A) transactions involving US-based biotech companies (excluding the Roche-Genentech transaction) decreased by half in 2009 to a total of US$14.1 billion. Only three transactions had a value in excess of US$1 billion.
Total US capital raised by the industry increased by 39% in 2009 to an aggregate of US$18.0 billion.
Venture capital raised in the US reached US$4.6 billion in 2009 – the second-highest total in history, behind only the record US$5.5 billion raised in 2007.

Europe

Revenues of European public biotechs grew 8% to €11.9 billion, well below the 17% growth seen in 2008.
The combined net loss for biotechs in the region fell from €913 million in 2008 to only €288 million in 2009, driven by cost cutting, the elimination of unprofitable companies and strong net income growth at some large European biotechs.
The value of M&A activity in Europe declined from €3.1 billion in 2008 to €1.8 billion in 2009
Total funding for the European industry increased 48% in 2009, to €2.9 billion.
Venture capital raised in Europe totaled €800 million, a 21% decrease from the previous year, and the lowest level since 2003.

Canada/Australia

The Canadian biotechnology industry raised more than US$733 million in 2009, an increase of $US255 million.
Revenues of the Australian publicly traded biotech industry reached US$3.72 billion, a 7% increase from 2008 but significantly lower than the 26% growth rate achieved in 2008.

About Ernst & Young’s Global Life Sciences Center
Ernst & Young’s Global Life Sciences Center brings together a worldwide team of professionals to help life sciences companies address their challenges at every stage of development. From the emerging biotech or medtech firm to the well-established, global pharmaceutical company, our industry teams bring deep experience in providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify implications and develop points of view on relevant industry issues. Whether it’s forming innovative alliances, improving operations, new regulations or exploring new markets, we can give you a clear perspective on how to drive value in an increasingly complex, competitive and risk-driven environment. It’s how Ernst & Young makes a difference.
For more information, please visit www.ey.com/lifesciences or email globallifesciences.center@ey.com.

About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com

This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients.

Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

Norway conquers infections by cutting use of antibiotics

2010-06-23T10:15:00.000-07:00

We found this article to be of particular interest, because it describes a program that actually works. We have advocated for a long time that drugs are not the answer to every problem, and too many drugs are harmful. Antibiotics are a case in point. This article was also referenced in our Pharmacy Benefit News, Issue 132.

BY MARTHA MENDOZA AND MARGIE MASON

ASSOCIATED PRESS

OSLO, Norway -- Aker University Hospital is a dingy place to heal. The floors are streaked and scratched. A light layer of dust coats the blood pressure monitors. A faint stench of urine and bleach wafts from a pile of soiled bedsheets dropped in a corner.

Look closer, however, at a microscopic level, and this place is pristine. There is no sign of a dangerous and contagious staph infection that killed tens of thousands of patients in the most sophisticated hospitals of Europe, North America and Asia last year, soaring virtually unchecked.

The reason: Norwegians stopped taking so many drugs.

Twenty-five years ago, Norwegians were also losing their lives to this bacteria. But Norway's public health system fought back with an aggressive program that made it the most infection-free country in the world. A key part of that program was cutting back severely on the use of antibiotics.

Now a spate of new studies from around the world prove that Norway's model can be replicated with extraordinary success, and public health experts are saying these deaths -- 19,000 in the U.S. each year alone, more than from AIDS -- are unnecessary.

``It's a very sad situation that in some places so many are dying from this, because we have shown here in Norway that Methicillin-resistant Staphylococcus aureus [MRSA] can be controlled, and with not too much effort,'' said Jan Hendrik-Binder, Oslo's MRSA medical advisor. ``But you have to take it seriously, you have to give it attention and you must not give up.''

The World Health Organization says antibiotic resistance is one of the leading public health threats on the planet. A six-month investigation by The Associated Press found overuse and misuse of medicines has led to mutations in once curable diseases like tuberculosis and malaria, making them harder and in some cases impossible to treat.

Now, in Norway's simple solution, there's a glimmer of hope.

ANTIBIOTICS MISSING

Dr. John Birger Haug shuffles down Aker's scuffed corridors, patting the pocket of his baggy white scrubs. ``My bible,'' the infectious disease specialist says, pulling out a little red Antibiotic Guide that details this country's impressive MRSA solution.

It's what's missing from this book -- an array of antibiotics -- that makes it so remarkable.

``There are times I must show these golden rules to our doctors and tell them they cannot prescribe something, but our patients do not suffer more and our nation, as a result, is mostly infection free,'' he says.

Norway's model is surprisingly straightforward.

• Norwegian doctors prescribe fewer antibiotics than any other country, so people do not have a chance to develop resistance to them.

• Patients with MRSA are isolated and medical staff who test positive stay home.

• Doctors track each case of MRSA by its individual strain, interviewing patients about where they've been and who they've been with, testing anyone who has been in contact with them.

``We don't throw antibiotics at every person with a fever,'' says Haug. ``We tell them to hang on, wait and see, and we give them a Tylenol to feel better.''

U.S. REACTION

Dr. John Jernigan at the U.S. Centers for Disease Control and Prevention said they incorporate some of Norway's solutions in varying degrees, and his agency ``requires hospitals to move the needle, to show improvement, and if they don't show improvement they need to do more.''

And if they don't?

``Nobody is accountable to our recommendations,'' he said, ``but I assume hospitals and institutions are interested in doing the right thing.''

Around the world, various medical providers have successfully adapted Norway's program with encouraging results. A medical center in Billings, Mont., cut MRSA infections by 89 percent by increasing screening, isolating patients and making all staff -- not just doctors -- responsible for increasing hygiene.

In 2001, the CDC approached a Veterans Affairs hospital in Pittsburgh about conducting a small test program. It started in one unit, and within four years, the entire hospital was screening everyone who came through the door for MRSA. The result: an 80 percent decrease in MRSA infections.

The program has now been expanded to all 153 VA hospitals, resulting in a 50 percent drop in MRSA bloodstream infections, said Dr. Robert Muder, chief of infectious diseases at the VA Pittsburgh Healthcare System.

``It's kind of a no-brainer,'' he said. ``You save people pain, you save people the work of taking care of them, you save money, you save lives and you can export what you learn to other hospital-acquired infections.''

``So, how do you pay for it?'' Muder asked. ``Well, we just don't pay for MRSA infections, that's all.''

Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

ONDCP Releases President Obama's 2010 National Drug Control Policy, APhA Referenced

2010-06-23T10:03:00.000-07:00

The new 2010 National Drug Control Policy may affect all healthcare professionals—in other words, increase our work loads. Pharmacies may be required to increase and/or add to their record keeping. Pharmacists may be held legally and criminally responsible for additional issues. Non-licensed pharmacy personnel may be held to a higher standard; which as we all know is another way of saying increased salaries. Other healthcare providers and personnel may also be similarly affected.

We recommend that all healthcare professionals monitor developments in the new drug policy closely. Changes in all systems and procedures may be necessary and budgets may be adversely affected.

Source: APhA Legislative and Regulatory Update - May 19, 2010

On May 11, President Obama and Director R. Gil Kerlikowske of the Office of National Drug Control Policy (ONDCP) announced the release of the Obama Administration's first National Drug Control Strategy. The goal of the 2010 Strategy is to use a comprehensive approach to reduce drug use and its consequences through a balanced policy of prevention, treatment, recovery, enforcement, and international cooperation. The Strategy was developed with input from law enforcement, health care professionals and associations, drug treatment providers and corrections professionals, individuals in recovery, parents and support groups.

The Strategy focuses on the following key objectives:

Strengthen efforts to prevent drug use in communities;
Seek early intervention opportunities in health care;
Integrate treatment for substance disorders into health care and expand support for recovery;
Break the cycle of drug use, crime, delinquency, and incarceration;
Disrupt domestic drug trafficking and production;
Strengthen international partnerships; and
Improve information for analysis, assessment, and local management.

APhA provided comments to ONDCP in September 2009 and is pleased that ONCDP referenced APhA and pharmacy in the report. Specifically, the following action steps are of interest of pharmacy:

Educate physicians about opiate painkiller prescribing (page 30);
Expand prescription drug monitoring programs and promote links among state systems and to electronic health records (APhA is referenced as a stakeholder to include in this process, page 31);
Increase prescription return/take-back and disposal programs (community pharmacies are referenced, page 32);
Assist states to address "doctor shopping" and "pill mills" (page 32);
Drive illegal Internet pharmacies out of business (page 32);
Crack down on rogue pain clinics that do not follow appropriate prescription practices (page 33); and
Inform public health systems on implementation of needle exchange programs (page 40).

For additional information, read press statements, highlights, and the complete report on the 2010 Strategy Web site.

Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

Tit for Tat: CVS Caremark Kicks Walgreens Out of Its Network

2010-06-16T12:32:00.000-07:00

Some of our clients have asked about the rationale for the Walgreens/CVS-Caremark issue. Clearly money is the primary rationale. However, the National Community Pharmacist Association (NCPA) is providing some other rationale from their viewpoint. We thought that you would find this of interest.

NCPA eNews Weekly | June 15, 2010

Two days after Walgreens announced that it would not participate in any future CVS Caremark network plans, CVS Caremark responded by terminating Walgreens' participation in all its network effective July 9. The giant chain pharmacy/PBM/ mail order conglomerate said it would drop Walgreens from its Medicare Part D network effective Jan. 1, 2011.

When Walgreens announced its decision June 7, it cited many of the same problems experienced by independent pharmacies and prompted NCPA 18 months ago to launch a campaign for a Federal Trade Commission investigation of CVS Caremark's business and patient privacy protection practices. Last November, CVS Caremark disclosed that it was under FTC investigation. In addition, 24 states are probing the company created by the merger of the pharmacy chain with a PBM/mail order firm. NCPA members have had a number of meetings with FTC officials about their experiences since the 2007 merger.

Those experiences largely mirror those cited by Walgreens:

CVS Caremark limits patient choice by requiring patients in Maintenance Choice and other plans to use CVS retail pharmacies or Caremark mail order facilities.

CVS Caremark provides little or no information when a CVS Caremark prescription drug plan is transferred to a different and differently-priced CVS Caremark pharmacy network, or when CVS Caremark acquires a new prescription drug plan as a client."

CVS Caremark reimbursement rates are unpredictable and payments for certain drugs often don't reflect the market."

"If a large, publicly traded chain with the clout of Walgreens finds the business practices of CVS Caremark untenable, then it's easy to understand how much greater the problems have been for independent community pharmacists and their patients," commented Joseph H. Harmison, PD, NCPA president. "The concerns expressed by Walgreens echo and further validate the concerns expressed by independent community pharmacists and their patients."

"Unfortunately, for most independent pharmacies, simply telling CVS Caremark 'no' isn't a viable business option," Harmison continued. "The evidence is piling up and hopefully corrective action will be taken that either erects substantial walls between CVS and Caremark or rescinds the merger so that the market can operate equitably without one company abusing the system for its enrichment at the expense of patients and fair competition among pharmacies."

Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

Health Insurance Answer Book, 9th edition

2010-06-15T11:06:00.000-07:00

Check out the latest chapters, 9th edition is now available!

Eisai cuts Aricept prices to foster Asian sales

2010-06-02T15:45:00.000-07:00

The PhRMA argument is that the US should pay for R&D in order to allow them to sell drugs at a discount in other countries. The opposing argument is that R&D is being done in other countries such that the US should not have to carry the load for the world. Of interest is the article below that indicates that PhRMA applies the same marketing economics to building markets in other countries that they do in the US. We expect that an international market for information will make the differences between prices in various countries more transparent and drive price concessions. The drug market is now very much international and must be viewed through a prism that is wider than the US experience.

Eisai has become the latest drugmaker to cut prices in an effort to push sales in emerging markets. On the heels of similar moves by GlaxoSmithKline and Sanofi-Aventis, the Japanese company is cutting prices on its Alzheimer's remedy Aricept in at least six Asian countries.

The idea is to ratchet up demand by opening the door to less prosperous patients, says Eisai's Yasushi Okada, who heads up operations in Asia, Oceania and the Middle East. "With the current prices, only a part of the wealthy people can afford to buy our products," Okada tells Bloomberg. "I want to increase the patient accessibility of the medicines in Asia."

Okada tells the news service that he expects growth in sales volume to outweigh the price cuts, delivering overall sales growth. And that's the aim of GSK and Sanofi as well. GSK has announced major price cuts in emerging markets, with prices tiered according to the target population.

In some GSK markets, prices will be less than two-thirds of those in Europe; in the 50 poorest nations, they'll be 25 percent of Western prices, Bloomberg points out. Meanwhile, Sanofi announced early this year that it would follow suit, cutting prices in Southeast Asia by as much as half.

Okada wouldn't say just how much Eisai plans to cut the price tags on Aricept. In the coming quarters, however, we'll be able to see how the cuts affect sales in those markets. For 2008, Aricept's global revenues amounted to $3 billion; the company loses patent protection in the U.S. in November, so it stands to lose revenues here to generic competition. All the more reason to grow sales in emerging markets.

Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

Medical Interests Spent $876 Million on Reform

2010-05-18T15:37:00.000-07:00

The following article is of interest to us because it shows that lobbying interests have a significant impact on the results of health care legislation. Although this is not surprising, the amount of money spent to move legislation to a particular interest group is huge. Perhaps the new emphasis on social networks will change the economics of lobbying and allow smaller interests to make an impact as large as PhRMA and other lobbyists. Time will tell.

When President Barack Obama declared in his first address to Congress that health care reform “must not wait,” he sparked a lobbying spree that kept medical stakeholders hustling while fattening the bottom lines of K Street firms.

Medical interests alone shelled out more than $876 million in lobbying expenses during the 15 months beginning in January 2009 and ending in March, when Congress passed the sweeping overhaul.

Those stakeholders, including the drug industry, doctors, hospitals and manufacturers of medical products, were responsible for one out of every five dollars doled out on lobbying during that period, according to a CQ MoneyLine analysis of lobbying disclosure reports filed with Congress.

While health care has historically been an issue that has drawn intense lobbying, even some veterans of Capitol Hill expressed astonishment at the big bucks lavished during the 15-month slog.

“That is an astounding amount of money,” said Ralph Neas, president of the National Coalition on Health Care, which pushed for passage of the overhaul. Neas, who began his career in Washington in the 1970s as an aide to then-Sen. Edward Brooke (R-Mass.), said that in his time here, “I can’t think of anything that remotely comes close to that amount of lobbying.”

But there was much at stake for medical interests as lawmakers put together the bill, which will affect millions of Americans and their employers in the years ahead.

“This is the most important domestic legislation in at least 45 years,” Neas said, referring to the creation of Medicare and Medicaid in the mid-1960s.

Tony Podesta, president of the Podesta Group, which ranked second among K Street firms in fees paid to work on health care reform during this period, said lobbying on the issue is far from over.

Podesta said his firm was still picking up clients with a stake in how the measure is implemented and in any corrections Congress might make. Even companies that are not directly involved in health care are affected by the new law, which includes corporate tax changes related to retirees’ health benefits, sets up insurance exchanges and mandates all individuals purchase health insurance.

“We just did a briefing for non-health care clients on the bill,” Podesta said. “We had really good attendance.”

Prescription for Reform

Within the health care industry, drug companies racked up the biggest lobbying tab, spending $253 million. They were followed by hospitals, which spent $108 million, and doctors and surgeons, who spent $59 million.

Thomas Mann, a political scholar at the Brookings Institution, said one difference between this health care push and the last time the issue came up, during the Clinton administration, was that many in the health care industry supported the overhaul legislation.

“A good percentage of that lobbying budget was spent on behalf of reform,” Mann said.

Indeed, the drug companies, led by the Pharmaceutical Research and Manufacturers of America, early on reached a deal with Democrats that involved providing tens of billions of dollars in drug subsidies for seniors. In return, name-brand drug companies protected their right to exclusively market groundbreaking biologic drugs over a 12-year period.

The hospital associations also reached a deal with the Democrats to provide $155 billion over 10 years to defray costs for uninsured Americans. The American Medical Association, with a $26.2 million lobbying budget for the stretch, endorsed the legislation, although many medical specialists opposed the overhaul efforts.

Smaller health care interests also joined in on the lobbying. Medical laboratories spent $1.5 million, and acupuncture advocates paid $34,000 to sway lawmakers to include the ancient treatment in the reforms.

Health insurance companies criticized the legislation as not doing enough to control costs. The industry’s chief lobby, America’s Health Insurance Plans, spent $11.5 million on lobbying over the five quarters.

Rolling in Capital

The health care industry’s lobbying easily outpaced other sectors with interests on Capitol Hill, including energy and natural resources, finance and insurance, and communications and technology, the CQ MoneyLine analysis found.

Even as other sectors scaled back during the recent economic downturn, health companies continued to pump big bucks into influencing Congress.

During 2009, health care lobby spending peaked in the fourth quarter, when both the House and Senate approved their separate versions of the legislation.

At the beginning of this year, health care spending dipped as prospects of passage seemed doomed after the Jan. 19 election of Republican Sen. Scott Brown (Mass.) to replace Democratic icon and health care champion Sen. Edward Kennedy.

However, Democrats regrouped, and two months later Congress approved the sweeping health care bill along party lines.

The health care industry was not alone in its interest in the legislation.

During the 15-month stretch, about 2,700 clients, ranging from big-box stores such as Wal-Mart to high-tech firms such as Microsoft, listed health care as one of their lobbying issues, the analysis found.

The U.S. Chamber of Commerce spent $148 million on lobbying activities during this period, much of it on an aggressive media campaign to defeat the Democratic health plan.

Companies and trade associations that named health care as one of their priorities paid $333 million to outside firms to advocate on the issue. As big as they are, the health care lobbying expenditures do not reflect the millions of dollars spent by many outside groups on grass-roots and television ads both for and against the health care bill.

“The real winners in the health care debate were the lobbyists who were laughing all the way to the bank, even in a tough economy,” said Steve Ellis, vice president of Taxpayers for Common Sense.

‘Drinking From a Fire Hose’

For K Street firms, the health care measure allowed them to expand their business.

The law firm Holland & Knight, which ranked ninth among firms in health care fees, fortuitously purchased in early 2009 a small shop that specialized in health care.

“We’ve been drinking from a fire hose,” said firm partner Rich Gold, noting Holland & Knight’s $4.7 million in health care lobbying fees over the past 15 months. He said business has slowed since the bill was signed, but he expects it to pick up as clients seek information about the new law. He said the firm had already prepared webinars for medical device companies and hospitals explaining the new law.

“It’s been a while since we’ve seen something of this scope and magnitude,” said Linda Tarplin, a founding partner of Tarplin, Downs & Young. Her firm ranked 10th among lobbying shops in health care business during the five-quarter period, collecting $4.5 million in revenues.

But Tarplin also noted that her firm, which is different than the others on the top 10 because it specializes exclusively in health care, finds health care issues “are always important and will remain front and center as the new health care reform law is implemented.”

Serdar Tumgoren contributed to this report.

Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

Diabetes Drugs Raise Risk of Fractures in Women

2010-05-06T11:47:00.000-07:00

The issue of TZD (e.g., Avandia, Actos) and their link to bone fractures has been discussed for several years. It seems to be a class issue, meaning that no drug in the category is exempt, although some may produce more fractures than others. A recent utilization study by Henry Ford Health System further emphasizes this problem. Below are excerpts published by Healthcare Daily Data Byte in regards to this issue.

A Henry Ford Hospital study finds women with type 2 diabetes who take a commonly prescribed class of medications to treat insulin resistance may be at a higher risk for developing bone fractures. To determine the relationship between thiazolidinedione (TZD) use and in patients with type 2 diabetes, researchers conducted a retrospective study from January 2, 2000 to May 31, 2007 of 19,070 Henry Ford patients. During the study period, 4,511 patients had at least one prescription filled for a TZD. The researchers used electronically maintained medical claims data to identify non-traumatic bone fractures. The increased risk in women appeared after approximately one year of TZD use. TZDs, such as pioglitazone and rosiglitazone, help keep blood glucose levels on target by decreasing insulin resistance and making body tissues more sensitive to insulin's effects. TZDs also cut down on the amount of glucose made by the liver in patients with type 2 diabetes.

"Fractures are just one of a growing number of problems associated with these medications. Henry Ford and other researchers have previously found that this class of medications also can increase risk of congestive heart failure hospitalization," says study senior author L. Keoki Williams, M.D., M.P.H., center for health services research and department of internal medicine at Henry Ford Hospital. Dr. Williams also notes that there are other medication options available to treat insulin resistance in patients with type 2 diabetes. "TZDs may put some patients at increased risk for other health issues, and I encourage patients to talk with their physician about other suitable options," says Dr. Williams. "If the physician feels the patient should be placed on a TZD, routine screening for bone loss and prophylactic therapy to prevent bone loss and fractures may also be needed."

Research Study Source: http://www.henryfordhealth.org/body.cfm?xyzpdqabc=0&id=46335&action=detail&ref=1056

Accountable Care Organizations: A New Health Care Delivery Model That May Improve Quality and Affordability

2010-04-30T18:02:00.000-07:00

ACO’s require quality management with a high degree of data analytics targeted to applicable populations of patients. It is of note that the Pro Pharma Quality Management Program™ has had 6 years of remarkable success achieving the outcomes of an ACO without the formal trappings. For those who are interested in the Pro Pharma Quality Management Program™, we are posting a separate blog with slides used by Dr. Stern in a national presentation in San Antonio last year.

At the heart of the ACO issue is the notion that the continuum of care can be managed. The organization able to do so would be rather large and complete with most specialties and facility types. Ingenix is pushing the consultancy from their unique ability (part of United Health's empire that has United Health and Redden Anders actuaries among other assets) to manage data and reporting from their SLC location.

I've had chats with Pivot Health and others....most are wondering how an ACO would function and if it would be much different than an HMO; perhaps a new model will be forthcoming. On the other hand, experience shows we are certainly able to assist with the issues of managing patients along the medical axis of the care continuum.

Be well out there,

Paul Ridgely
Senior Field Management Consultant
Pro Pharma Pharmaceutical Consultants, Inc.

"Most of our assumptions have outlived their uselessness."
— Marshall McLuhan

Now law, the Patient Protection and Affordable Care Act of 2010 provides new incentives to stakeholders across the health care system – from health plans to physicians and hospitals – to consider new care delivery models that have the potential to both enhance the quality of care and reduce costs.

One promising idea – the creation of Accountable Care Organizations (ACOs) – is facilitated under the Medicare Shared Savings Program provision of the health reform legislation. ACOs are comprised of groups of providers that share the risk and assume accountability for their patients’ health across the continuum of care. These organizations also monitor treatment outcomes and costs, and receive incentives for efficiency and adherence to evidence-based medicine protocols.

“Studies have shown that medical errors in our current system contribute to 100,000 preventable deaths annually, with billions in associated costs,” according to Eric Cahow, senior director, Government Programs Management and Strategy at Ingenix Consulting. “Currently, more than half of chronically ill patients in the United States do not receive care consistent with evidence-based guidelines. With more than 16 percent of our gross domestic product consumed by health care services, it is clear that we need to consider new ideas.”

The Patient Protection and Affordable Care Act of 2010 states that an ACO “promotes accountability for a patient population and coordinates items and services under [Medicare] parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.”

Under the statute, ACOs may include group practices, individual practitioners, hospitals, partnerships or joint venture arrangements between hospitals and ACO professionals, as well as other groups deemed appropriate by the Secretary of the Department of Health & Human Services. To serve Medicare recipients, ACOs are required to have a minimum of 5,000 Medicare fee-for-service beneficiaries; those that meet quality-of-care goals and reduce patient costs receive a share of the savings they earn for the Medicare program.

ACOs provide needed incentives to promote change

ACOs can help participating organization achieve their clinical and financial performance objectives. However, before joining or forming an ACO, providers should have a clear understanding of where and how they fit into the health care system.

Fee-for-service is the predominant model in the U.S. health care system. This means providers are paid for every unit of service, similar to piecework in a garment factory, Cahow explained, and a provider’s revenue increases as utilization increases. As such, there are few incentives to coordinate across the silos of primary care, specialty care and hospital care.

“The ACO model creates different incentives for primary care physicians to drive proactive care management,” said Cahow. For example, if reducing utilization is the goal, he noted, an ACO may incent providers – including hospitals – with bonus payments when they achieve a pre-determined benchmark such as lower hospital admissions while sustaining or improving the quality of patient outcomes.

All can benefit from ACO model :

All participants in an ACO – health plans, employers, providers and patients – are accountable for their own contributions to health and wellness, treatment decisions and payment. In Cahow’s view, “health plans and insurers must commit to tracking quality outcomes, establishing fair measures of those outcomes and rewarding providers for achieving them. Employers must consider programs and working conditions that optimize employee health. And individuals must commit to taking more responsibility for their own health-related behaviors and the costs associated with them. All of this can be built into the ACO’s structure.”

However, moving to an ACO model can be challenging. Adversarial relationships between some stakeholders are one of the primary obstacles to ACO success. “For ACOs to work well, each organization has to operate on a foundation of trust, transparency and good communication,” Cahow suggested.

Performance measurement is one of the linchpins to building this foundation, equalizing relationships between provider participants and payers, who can access qualitative and quantitative clinical performance and utilization data on their ACO partners. For example, ACOs can provide reports on the utilization of MRI services or the percentage of diabetic patients admitted through the hospital. “Facilitating access to this type of data across a group of ACO participants may support collaborative solutions to achieving group objectives,” said Cahow.

“Transformational improvement is the foremost objective to establishing an ACO,” said Cahow. “This requires committed physician leadership, an enduring culture focused on quality and a strong level of comfort with innovation and systems integration.”

Establishing an ACO requires planning, support

Evaluating whether or not an organization is a good fit for ACO participation involves careful planning, analysis and technical and management support. Ingenix Consulting already is supporting number of ACO development projects, with advanced analytics to assess clinical and financial performance in the current system, and consulting expertise to inform design, implementation and operation.

“Ingenix Consulting provides management consulting to help players determine if an ACO is right for them,” Cahow said. “If so, we can help them establish the right relationships and provide the actuarial, financial and care management support they need to get started.”

Although health care reform may seem daunting, he continued, now is the time to engage and evaluate opportunities to participate in health care delivery models that may become part of the backbone of the future health care system.

“Participating in an ACO involves taking some risks,” noted Cahow. “Investment choices are always difficult. But with the legislative call to action, change is no longer just over the horizon. Ingenix Consulting can help clients decide where they want to go and how to take those first steps toward achieving their long-term goals.”

===============

1 Sec. 3022, Patient Protection and Affordable Care Act, Pub. L 111-148.

Article location: http://www.ingenix.com/thoughtleadership/innovations/04292010/

Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

Rx per 1000 Patient Ratios are Greatest for Those with Part D Coverage

2010-04-30T15:26:00.000-07:00

The following table identifies benchmark utilization for Medicare Part D. The data is from SDI and applicable to 2009. The data may be useful to compare plan utilization /1000 for the MMA Part D book of business. We would be interested if others have compared their numbers to these and found agreement/lack of agreement.

Note: There is no way to vet or validate this information, but we have no reason to believe that it is inexact. The Total column is directly from SDI and does not appear to sum all of the values in each row.

U.S. prescription drug sales hit $300 bln in 2009

2010-04-30T08:08:00.000-07:00

This article provides benchmarks for drug spend 2008/2009. Be aware that you can find different benchmarks depending on the source. For example, the IMS figures come from sterilized ambulatory prescription data, while AARP and the National Association of Chain Drug Stores (NACDS) often provide different information from other sources. It is a good practice to ask for the source of data before quoting the results.

(Reuters) - U.S. prescription drug sales climbed by 5.1 percent to $300.3 billion in 2009, easily outpacing the 1.8 percent growth rate seen in 2008, according to data collected by IMS Health.

HEALTH

While the growth rate was far stronger than that seen the previous two years, it still represents historically low levels, said IMS, a leading provider of prescription drug data.

Over the past 50 years, the U.S. prescription growth rate dipped below 5 percent only three times, including in 2007 and 2008.

"Despite the severity of the economic environment, the demand for prescription pharmaceuticals remained strong," Murray Aitken, senior vice president of IMS Healthcare Insight, said in an interview.

"Patients continued their therapies, perhaps more than many had expected, and as a result we saw an increase in spending, taking the market to $300 billion," Aitken added.

Helping to fuel the growth was a 7.5 percent rise in demand for specialty pharmaceuticals used to treat complex, chronic conditions that now make up 21 percent of U.S. market value.

Sales of targeted biotechnology medicines, such as Roche's cancer drugs Avastin and Herceptin, grew by 9 percent in 2009.

Prescriptions dispensed through retail channels, such as pharmacies, through mail-order and at long-term care facilities, grew 2.1 percent - twice as fast as in 2008 - to 3.9 billion prescriptions.

Tempering the total dollars spent on U.S. prescriptions was a rise in the use of cheaper generic medicines, which in 2009 accounted for 75 percent of all dispensed prescriptions, up from 57 percent five years earlier. Despite their relatively inexpensive cost, generics still accounted for $74 billion in 2009 sales.

The total number of generic prescriptions dispensed in the United States increased 5.9 percent in 2009, while those for branded drugs fell by 7.6 percent

The shift toward generics is likely to accelerate by 2012, when several major products, including the world's two biggest-selling medicines - the cholesterol fighter Lipitor and the blood clot preventer Plavix - face competition from cheap generics. Lipitor is sold by Pfizer Inc and Plavix by Bristol-Myers Squibb Co and Sanofi-Aventis.

"We still see that when a product goes generic almost all of the prescriptions, 90 percent or so, are dispensed in their generic form," Aitken said.

Antipsychotics remained the top-selling class of medicines in the United States with $14.6 billion in sales, about equal to 2008 revenue.

Acid reflux drugs, such as AstraZeneca's Nexium, were the second-biggest therapeutic class by sales at $13.6 billion, with prescriptions up 5 percent.

Lipid regulators, which include cholesterol and triglyceride lowering drugs, were still the largest class by prescriptions, growing 5 percent to 212 million prescriptions dispensed. But U.S. sales declined 10 percent to $13.6 billion as the majority of cholesterol fighters are now available as generics, pushing the class to third in sales.

Antidepressants ranked fourth in 2009, growing 3 percent to $9.9 billion, IMS said.

"The thing that surprised us compared with what we might have expected a year ago was how the overall demand held up during a year that in many other parts of the economy we saw declines in demand," Aitken said.

"The higher growth than the prior year we think is notable and underscores the resilience of pharmacotherapy in today's healthcare equation."

COMMENTS

Apr 01, 2010 2:54pm EDT

Consumers of health and life insurance should understand that prescriptions purchased at the drugstore could harm your chances of getting insurance coverage.

According to BusinessWeek, an untold number of people have been rejected for medical coverage for a reason they never could have guessed: Insurance companies are using huge, commercially available prescription databases to screen out applicants based on their drug purchases.

https://www.annualmedicalreport.com/prescription-analytics-corporate-databases-track-whats-in-your-medicine-cabinet/

Health experts, like Doctor Kate Atkinson of Amherst, worry that insurance companies make incorrect assumptions by analyzing prescription records, because many drugs have multiple uses. Dr. Atkinson told the Washington Post, “I had a patient on Amitriptyline for migraines and they were denied life insurance because it’s also an antidepressant. I had to explain it wasn’t being used for depression.” Another patient was on Prozac — not for depression, but for menopausal hot flashes. “I wrote an appeal letter, and they still wouldn’t give it to her.”

“When an insurer makes an online query about an applicant, Ingenix or Milliman’s servers scour the data and within minutes or less return reports to a central server at the company. The server aggregates the information going back as far as five years, including the drugs and dosages prescribed, dates filled and refilled, the therapeutic class and the name and address of the prescribing doctor. Then comes the analysis. One software tool provides insurers a “pharmacy risk score,” or a number that represents an “expected risk” for a group of people, such as 30- to 35-year-old women who have taken prescription drugs…Higher scores imply higher medical costs.”

We commonly receive questions about average pricing contract language. The following is a response to the usual contract language.

2010-04-15T16:07:00.000-07:00

PBM contract language often refers to the use of average, rather than per-claim, pricing for drugs. The average pricing issue does not preclude the fact that there are other pressing and relevant issues that need to be addressed from both the contract and audit/accounts payable screening of invoices pre-payment. These issues are the plan/purchaser’s (“plan”) responsibility, and are not open to the discretion of the PBM, but rather to how the plan/purchaser requires implementation of the business rules for claim adjudication. The following summarizes those issues that are not resolved regarding the average pricing language.

Ø Average pricing does not address contract requirements for –

o Situations where the AWP is inflated above Medicaid, above manufacturer published AWP, and above the reference database published AWP – all of these lead to both individual and average higher costs while discount guarantees are met.

o Situations where the generic MAC price is inflated above the FUL and the Medicaid MAC. This makes the average a larger number, but allows for the discount guarantees to be met.

o Drugs coded as brand that should be generic, generic drugs that should be on the MAC, multisource that don’t exist in benefits – these all implicate generic pricing as they are incorrectly priced so they affect all generic average prices.

o Situations where the U&C (e.g., $4 programs) is inflated above pharmacy published prices. This results in the plan paying more than a cash paying patient and improves the average making it easier to meet the AWP guarantee.

Ø Formulary coding, quantity limits, early refills, and COB for Medicare are responsibilities assigned to the plan. The amendment for average pricing does not implicate these benefit issues. The responsibility for benefit definition and what the PBM should use as business rules for claim adjudication are also assigned to the plan. As a result, the PBM cannot modify or apply rules that are other than what the plan requires without plan approval.

Ø Invalid claim administration where claims include invalid identifiers for doctors, pharmacies, drugs, and expired drugs

Ø Retrospective audits do not remove the responsibility for reviewing and remedying plan ongoing issues with the above listed items. Further, issues identified in the bimonthly/monthly invoices require reconciliation at each invoice period, and do not allow for future settlements for claim history outside of the invoice period. The plan has the discretion and the authority to define and ensure that the PBM is complying with plan current business rules for claim adjudication. This is not applicable to average versus per-claim pricing. As the fiduciary, the contract does not allow the PBM to make those decisions without the express approval of the plan.

Ø The retrospective audit process does not address the following issues that are not applicable to average pricing – reconciliation of each invoice, performance guarantees and applicable financial penalties (e.g., level of satisfaction with account client management, pharmacy network training to Count benefits and business rules), rebate reconciliation, network pharmacy audit results, and review of pharmacy network agreements for validation of pass-through pricing.

Note: The lack of oversight of average pricing allows a Pharmacy in the retail network to be paid at different AWP discounts and dispensing fees for brand drugs. This applies across the retail network and disadvantages a pharmacy for some drugs and advantages them for others. While this is not a direct contract with the plan, this is the source for potential pharmacy complaints and lack of compliance with the COB claims. This results in a decision for the plan to determine what parity rules they require for management of their retail network.

Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

The price of generic drugs can vary widely from one pharmacy to the next.

2010-04-13T15:47:00.000-07:00

The price of generic drugs can vary widely from one pharmacy to the next.

This email has been circulating in cyberspace for some time. The contention is that Costco is much cheaper than all other pharmacies. Costco does advertise that they charge Cost + $1 which would make them cheaper than most other pharmacies, other than, perhaps, some of the discount $4 programs. However, this email confuses the raw drug material cost with the finished product tablet/capsule cost. The two are not equal any more than the cost of materials to make a suit is equal to the cost of a suit. The article should compare the direct price (DP), wholesale acquisition price (WAC), common third party contract price, and the pharmacy sales price (or usual and customary, also U&C) to compare pharmacy prices. At the end of the day, the third party contract prices are the same across all pharmacies in their networks, while the pharmacy U&C sales price is probably different.

At the end of the day, comparison shopping is always beneficial. However, what is more beneficial is to ask for a generic, or a generic or brand in the same therapeutic category at a lower price. This strategy provides the same clinical benefit at a lower out-of-pocket cost and a lower cost to the purchaser.

The Story

On Monday night (July 22), Steve Wilson, an investigative reporter for channel 7 News in Detroit, did a story on generic drug price gouging by pharmacies. He found in his investigation, that some of these generic drugs were marked up as much as 3,000% or more. Yes, that's not a typo . . . three thousand percent!

Mr. Wilson did a thorough research, and checked out all the major drugstore chains, discount chains, independent pharmacies, and even checked on some Canadian pharmacies. So often, we blame the drug companies for the high cost of drugs, and usually rightfully so. But in this case, the fault clearly lies with the pharmacies themselves.

For example, if you had to buy a prescription drug, and bought the name brand, you might pay $100 for 100 pills. The pharmacist might tell you that if you get the generic equivalent, they would only cost $80, making you think you are "saving" $20. What the pharmacist is not telling you is that those 100 generic pills may have only cost him $10!

At the end of the report, one of the anchors asked Mr. Wilson whether or not there were any pharmacies that did not adhere to this practice, and he said that Costco consistently charged little over their cost for the generic drugs. They gave the link to Costco, which I will include here, so that you can go and check prices for yourself. www.costco.com Costco Online pharmacy

I went to the Costco site, where you can look up any drug, and get it's online price. It says that the in-store prices are consistent with the online prices. I was appalled. Just to give you one example from my own experience, I had to use the drug, Compazine, which helps prevent nausea in chemo patients. I used the generic equivalent, which cost $54.99 for 60 pills at CVS. I checked the price at Costco, and I could have bought 100 pills for $19.89. For 145 of my pain pills, I paid $72.57. I could have got 150 at Costco for $28.08.

I would like to mention, that although Costco is a "membership" type store, you do NOT have to be a member to buy prescriptions there, as it is a federally regulated substance. You just tell them at the door that you wish to use the pharmacy, and they will let you in.

Origins: As the popularity of this e-mail attests, the fact that one can find a wide disparity in drug prices from one pharmacy to the next was apparently surprising news to many people. And there's probably some truth to the notion that because we tend to view generic drugs as great "money-saving" alternatives to brand drugs, we often don't consider that the mark-up on generics can vary widely from one retailer to the next.

The basic facts laid out in the message quoted above are true. Steve Wilson, a reporter with WXYZ-TV in Detroit, conducted an investigative study into the cost of generic drugs at various pharmacies and other retail drug outlets and found quite a disparity between the highest and lowest prices

charged for certain generic drugs. For example, the Prescription Drug Price Comparison Chart available in conjunction with Wilson's report shows that a one-month supply of Fluoxetine HCL (the generic for Prozac), which wholesales for $1.48, varied in retail price from a high of $92.24 to a low of $9.69 just within the Detroit area.

Comparison shopping applies to generic drugs just as much as it does to food, clothing, DVDs, automobiles, or any other product. Those willing to do some hunting around get the best prices, and many drug comparison sites are available on the web to help consumers compare the costs of various drugs at different retail outlets before submitting their prescriptions (although medical insurance or HMO restrictions may limit which pharmacies a covered patient can use). Price differences between pharmacies can't necessarily be chalked up to nothing more than mere greed, however — some pharmacies offer additional levels of service (such as staying open 24 hours a day) and have to recoup the costs of those additional services by charging higher prices.

Although we can't guarantee that Costco always has the lowest prices on generic drugs, it is generally true that their pharmacy will fill prescriptions for non-members (but be prepared to pay by cash or ATM card rather than check).

Later versions of this message had the following table added to the beginning:
BIG RIP-OFF

The Cost of Prescription Drugs

Did you ever wonder how much it costs a drug company for the active ingredient in prescription medications? Some people think it must cost a lot, since many drugs sell for more than $2.00 per tablet. We did a search of offshore chemical synthesizers that supply the active ingredients found in drugs approved by the FDA. As we have revealed in past issues of Life Extension, a significant percentage of drugs sold in the United States contain active ingredients made in other countries.

In our independent investigation of how much profit drug companies really make, we obtained the actual price of active ingredients used in some of the most popular drugs sold in America. The chart below speaks for itself.

This chart is of dubious accuracy and has little relevance (other than an inflammatory one), as far more goes into the retail pricing of drugs than the raw cost of their active ingredients. Pharmaceutical companies expend money on the research and development costs of creating the drugs, plus the overhead costs of manufacturing, marketing, and shipping them; as well, pharmacies must sell drugs for more than their wholesale prices in order to cover the overhead costs of store operations (including pharmacists' salaries).

Response to Pharmacy Benefit News, Issue 127

2010-03-17T10:59:00.000-07:00

Below is an article we published in March, 2010 and a response it solicited from one of our subscribers (published with his permission). We welcome feed back on all of our publications!

AWP CHANGES
On September 26th 2009, the Average Wholesale Price (AWP) for over 95% of brand medications changed. "The New England Carpenters vs. McKesson & First Data Bank" ruling required that effective September 26th 2009, the Average Wholesale Price (AWP) of 1442 specific National Drug Codes (NDC), be reduced from a Wholesale Acquisition Cost (WAC) mark up of 1.25% to 1.20%.
First DataBank & Medi-Span also announced a voluntary roll back of all brand medications that had an AWP markup greater than 1.20%. This voluntary AWP adjustment from First DataBank increased the effected number of NDCs to over 20,000.
Finally, AWP is expected to be replaced by WAC in 2011.
COMMENT: AWP is the basis for PBM payments to pharmacies. Consider changing contracts to WAC now to prepare for 2011. Payers and purchasers are not receiving compensation for the inflated AWPs that they have been paying on for years. Pharmacies, PBMs, Health Plans, etc., don’t want to be disadvantaged so they requested the previous prices be based on AWP = WACx1.25. If you wish to pay a more cost-based price, then consider contracts based on a cost of WACx1.2.

From: John Cronin
Sent: Thursday, March 11, 2010
To: Dr.Craig Stern
Subject: RE: Pharmacy Benefit News #127

Craig:
Couldn’t help but notice the comment in this newsletter that “Payers and purchasers are not receiving compensation for the inflated AWPs that they have been paying on for years.” As you are aware, PBM contracts with pharmacies were quickly adjusted over the years to compensate for the “inflated AWPs” with reimbursements falling from AWP -12% to AWP -17% on average. When the First Data Bank case was settled, many, but not all, PBMs re-adjusted their reimbursement rates to keep pharmacies whole – something that was necessary in order to maintain the pharmacy networks. The major payer who did not make that change in California is the Medi-Cal program, which has had two federal lawsuits challenging their (in)action.
Despite what the federal judge in Mass. has to say on the matter, the reality is that most PBMs were not paying pharmacies based on “inflated AWPs”; how the PBMs dealt with payers is a matter you know better than I. I’m not sure this distinction is clear from your comment and hope you’ll clarify it in a future newsletter.
Thanks
John A. Cronin, Pharm.D., J.D.

Questions and Answers for Healthcare Professionals: CRESTOR and the JUPITER Trial

2010-03-03T11:32:00.000-08:00

The following information was released related to the JUPITER trial. The JUPITER study ostensibly demonstrated that the cholesterol lowering agent Crestor was effective in reducing the risk of stroke, heart attack, angioplasty, and revascularization. It will be interesting to see what the evidence-based reviews think of this study since there were a greater number of drop outs in the Crestor group, than in the placebo group, and the increased incidence of diabetes in the Crestor study group. It is unclear if the reduction is cardiovascular risk is a class effect for all statins, including the generic Simvastatin and Lovastatin; however, the increased diabetes was considered by the authors to be a class effect, so it would be difficult to argue that the reduction in cardiovascular risk is not a class effect. Time and additional scientific studies will tell.

Q1. What is FDA announcing today?

A. FDA is approving a new indication for the cholesterol lowering medication CRESTOR (rosuvastatin). CRESTOR will now be indicated for the primary prevention of cardiovascular disease to reduce the risk of stroke, heart attack, and the risk of arterial revascularization procedures (including coronary artery bypass graft, or bypass grafting of a peripheral artery or carotid artery, or angioplasty or stent placement) in individuals who have no clinically evident heart disease but are at an increased risk of heart disease due to the combined effect of the following risk factors:

* Age (> 50 years in men; > 60 years in women), and

* An elevated high-sensitivity C-reactive protein level (> 2 mg/L), and

* Presence of at least one additional cardiovascular risk factor (e.g., high blood pressure, low HDL-C, smoking, or a family history of premature heart disease).

CRESTOR is in a class of drugs called "statins." Statins work by stopping an enzyme called HMG-CoA reductase from making cholesterol. High cholesterol is a known risk factor for heart attacks and strokes.

Q2. How is this new indication different than CRESTOR's previous approved indication(s)?

A. CRESTOR already has an approved indication to lower cholesterol and triglycerides in combination with diet and exercise in patients with high cholesterol and/or triglycerides, and an indication to slow the progression of atherosclerosis. This is the first time CRESTOR has been approved for use in the prevention of heart disease in individuals with "normal" low-density lipoprotein (LDL) cholesterol levels and no clinically evident heart disease.

Q3. What information is today's approval based on?

A. The approval is based on results from a trial called the Justification for the Use of statins in Prevention: an Intervention Trial Evaluation Rosuvastatin (JUPITER). The trial compared the safety and the effectiveness of CRESTOR 20 mg versus placebo in the time to first occurrence of cardiovascular events (cardiovascular death, nonfatal heart attack, nonfatal stroke, hospitalization for unstable angina, and arterial revascularization). This trial included approximately 18,000 individuals with no clinically evident heart disease and low-density lipoprotein (LDL) cholesterol levels below 130 mg/dL. Table 1 below summarizes the eligibility criteria for individuals in the JUPITER trial.

Table 1. Eligibility criteria for the JUPITER trial

Characteristic Criteria

No clinically evident heart disease All patients

Increased age men > 50 years or women > 60 years

Elevation in high-sensitivity C-reactive Protein > 2 mg/L

LDL-C level <130> 2 mg/L.

* The JUPITER trial did not establish a particular goal of therapy for CRESTOR with respect to hsCRP levels.

Based on the limitations above, CRESTOR should only be used for the primary prevention of cardiovascular disease to reduce the risk of heart attack, stroke, or arterial revascularization procedures in individuals without clinically evident coronary heart disease who meet the following criteria:

* Men > 50 years old or women > 60 years old, and

* hsCRP > 2 mg/L, and

* Presence of at least one additional cardiovascular disease risk factor such as high blood pressure, low HDL-C, smoking, or a family history of premature coronary heart disease.

Q5. Did any safety concerns arise during the JUPITER trial?

A. The JUPITER trial confirmed the known safety profile of statins, including muscle-related adverse events and increases in liver transaminases. There were slightly more patients who discontinued CRESTOR compared to placebo due to adverse reactions; with myalgia (muscle pain) being the most common adverse reaction leading to discontinuation of CRESTOR.

An unexpected safety finding in the JUPITER trial was an increase in the number of individuals receiving CRESTOR compared to those receiving a placebo who developed diabetes. Previous meta-analyses have suggested that this is an effect of all statin drugs and is not unique to CRESTOR. It is important to note that an analysis of individuals in the JUPITER trial who had impaired fasting glucose at baseline did show a 34% reduction in major cardiovascular events with the use of CRESTOR.

GAO Releases Report on Medicaid Pharmacy AMP Reimbursement Formula

2010-01-22T15:47:00.000-08:00

Pharmacy reimbursement based on AWP has suffered constant criticism, not the least due to the fact that AWP is fiction. Now average manufacturer price (AMP) has been introduced to replace AWP.

It has been criticized by pharmacy groups because it doesn't pay enough, and by others for its definition. The fear is that AMP will become as fictitious as AWP; however, AMP may be manipulated by various stakeholders, but it will hopefully have a standard definition that arguably AWP does not.
Since this is a critical issue for pharmacy the American Pharmaceutical Association (APhA) provided updated information about AMP and how it is being defined by the various health care bills. I present this as a stimulus for discussion.
Please click on link to get more information
http://r.listpilot.net/c/aphanet/4tswaz9/244d2

Craig S. Stern, PharmD, MBA

Is Flat Fee A New Trend?

2010-01-19T14:48:00.000-08:00

Payers understand that one of the major advantages of a PBM (Pharmacy Benefit Manager) is their pharmacy network. PBMs sign up pharmacies, approve and monitor pharmacy claims in real time, set up formularies, and send the pharmacies checks for prescriptions filled.

Most pharmacies expect to get paid for dispensing prescriptions based on a formula that is outlined in their network contract.
Most payers expect to pay their invoice for dispensed prescriptions based on the formula that they agreed upon in their contract.

It is understandable that pharmacies may be paid a different price in one network. One would expect urban dispensers to compete for the network and drive the dispensing fee down. Conversely, a rural pharmacy (possibly the only drugstore in town) would probably get a higher price for filling a small community’s prescriptions.

Networks also contain other dispensers such as mail order pharmacies, specialty products pharmacies, and preferential pharmacies. Each group would probably have a different contract and a different payment formula.

What about government pharmacies that fill prescriptions in a non-government network? The VA (Veterans Administration) is such a network.

Government pharmacies buy drugs at special government prices. Many prices are 50-75% below the community pharmacy cost.
(The government doesn’t need to buy drugs from Canada because it already gets a very special low price.)
The government, because of their buying advantage, is not supposed to compete with community pharmacy. In many cases, the government gives away prescriptions to the disadvantaged and has many programs to assist states in covering the medical needs of those that can not afford care.

Based on the government’s goals and purpose in the health care system it is understandable that they would get a special low price on drugs. It is also understandable that the government can dispense drugs for a much lower price than can retail pharmacy. But what about the reverse? What if the government charges a payer more than retail pharmacy – in a flat fee system?

One network (XYZ) that is of interest is with one PBM and the VA on the east coast. Instead of charging a low price for drugs, they are paid $51 for each prescription they fill no matter what the cost. How could this happen? More importantly, why did this happen? Community pharmacy is paid on a cost plus a dispensing fee formula and the VA on the east coast is paid on a flat fee formula?

We called several VA pharmacies and tried to find out if they knew that they were being paid much more than retail pharmacies on each prescription and no one knew what we was talking about. When the PBM was asked we were told that this is what the VA demanded.

Should community pharmacy ask for a flat fee too? Is this a new trend in contracting? And even more complicated, should the government give payers the advantage of their lower cost of drugs?

Please let us know if you have seen any of these issues. We are interested in your comments and opinions.
Developed by Barry Pascal, PharmD, Pro Pharma Pharmacist

Medicare Drug Programs

2010-01-18T16:37:00.000-08:00

We have set up a list of sites for Medicare Drug Programs that may be useful. We make no representations about currency or the public/private nature of these sites. Caveat emptor, but use when needed!

=> Drugs in at least one Retailer Discount Drug Program: http://www.q1medicare.com/PartD-DrugSearchBrandGenericEquivalent.php?letter=RxSavings

=> Top 200 Drugs:
http://www.q1medicare.com/PartD-DrugSearchBrandGenericEquivalent.php?letter=200

=> Top 100 Medicare Drugs:
http://www.q1medicare.com/PartD-DrugSearchBrandGenericEquivalent.php?letter=100

=> PDP- Facts 2010 Medicare Part D Plan Statistics – Region (State) and National: http://www.q1medicare.com/PartD-MedicarePartDPlanStatisticsState.php

=> PDP- Facts 2010 Medicare Part D Plan Statistics – Region California: http://www.q1medicare.com/PartD-MedicarePartDPlanStatisticsState.php?crit=CA

=> Discount Drug Programs Search List:
http://www.q1medicare.com/PartD-DrugSearchBrandGenericEquivalent.php?letter=Retailer

=> Compare Medicare Part D Plan 2009/2010: http://www.q1medicare.com/PartD-SearchPDPCompare-PartDPlanFinder.php

How Drugs are Developed and Approved

2010-01-13T14:58:00.000-08:00

For those of you, who are interested in finding out when generics will be available, please consider looking at the following site.

=> FDA First-Time Generic Drug Approvals
http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/DrugandBiologicApprovalReports/ANDAGenericDrugApprovals/

Also, some of the Pharmacy Benefit Managers (PBMs) publish this information as well. Check out.

=> Patent expiration and First Time Generics: https://www.prescriptionsolutions.com/RxsolHcpWeb/news/rxnews.html?type=19

=> Estimated Dates of Possible First Time Generic/RX-to-OTC Market Entry: http://www.medcohealth.com/art/corporate/anticipatedfirsttime_generics.pdf

Government Accountability Office report on Average Manufacturer's Price (AMP)

2009-12-18T17:47:00.000-08:00

On November 30, 2009, the U.S. Government Accountability Office (GAO) released a report http://r.listpilot.net/c/aphanet/4tswaz9/244d2 on the effect of average manufacturer's price (AMP) reimbursement formula on Medicaid outpatient prescription drugs for the second quarter of 2008.

The purpose of this report was to compare the federal upper limits (FULs) for reimbursement with average retail pharmacy acquisition costs. The GAO report found that "if AMP-based FULs had been in place in the second quarter of 2008, they would have been lower than average retail pharmacy acquisition costs, in general".

Specifically, the GAO found that for the second quarter of 2008:

* The median AMP-based FULs would have been lower than average retail pharmacy acquisition costs for 54 of the 83 drugs in the GAO sample;

* 44 drugs, from the GAO sample, had FULs that would have been at least 25% below acquisition costs;

* In the aggregate, the FULs would have been 17% lower than acquisition costs, though the difference varied significantly by state, from 57% lower to 49% higher;

* 64 drugs had at least one therapeutically equivalent version with acquisition costs below the FUL, indicating that pharmacies may be able to substitute lower-priced therapeutic equivalents to bring their costs below the FUL;

* For 38 drugs, AMP-based FULs varied significantly throughout 2008, and in some cases exceeding the average retail pharmacy acquisition cost one month and falling below it in another month; and

* Variation occurred because manufacturers did not report AMP data each month for 11% of the therapeutically equivalent versions of the drugs in the GAO sample.

The Centers for Medicare and Medicaid Services (CMS) provided written comments on the draft of this report, disagreeing with the report's findings and noting that:

* GAO's data source used to estimate average retail pharmacy acquisition costs did not take into account discounts and rebates that drug manufacturers may provide to retail pharmacies; and

* There were methodology and inconsistencies between GAO findings and the findings of a Health and Human Services (HHS) Office Inspector General (OIG) report (which was provided to the GAO by HHS but has not been released to the public yet).

APhA (American Pharmaceutical Association) continues to work with National Association of Chain Drugs Stores and the National Community Pharmacists Association to ensure appropriate pharmacy reimbursement in the Medicaid program. In particular, both the House and Senate health care reform bills include provisions to modify the AMP reimbursement formula, and while imperfect, we support the Senate's version of these provisions.

APhA's complete comments to the House and Senate Leadership on merging the health care reform bills http://r.listpilot.net/c/aphanet/4tswaz9/244ti are available.

Pro Pharma will provide updates on any new developments.

Craig S. Stern, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

The Employers Health Care Coalition of Los Angeles

2009-11-17T17:15:00.000-08:00

The Employers Health Care Coalition of Los Angeles now has a web site! Please visit us at http://www.lahealthcoalition.org/

A Pharmacist’s Plan

2009-11-16T18:19:00.000-08:00

A pharmacist jumps into the health care debate with a series of ideas and proposals to both improve health care and lower costs.

In the current economic environment, healthcare reform is front and center; especially among the uninsured, and those who have to pay for insurance or care (high costs and accelerating costs). While other healthcare stakeholders have presented their programs to improve care and control cost, pharmacy has been strangely silent. Yet, pharmacists are drug experts and have at least three times more face time with patients than any other healthcare specialist. As a pharmacist and a healthcare professional, I would like to offer a program where pharmacists offer their expertise to improve care and lower costs.

The elements of this plan are:

1. Initiatives to improve care and provide optimal outcomes:

a. Identify issues of coordination of care due to multiple treating practitioners and notify the practitioners involved with a simplification plan

b. Identify and decrease the use of redundant and multiple drugs, that lead to adverse effects and unnecessary drug interactions

c. Identify issues with compliance in therapy and implement training programs for patients to improve their overall compliance with their therapeutic regimen.

d. Establish systems to identify and correct medication errors.

e. Establish systems to identify and correct problems with dosing, and how drugs are taken. Pharmacists have a multitude of anecdotes of direct patient improvements in these areas and these examples can, and should, be teaching moments for patients and practitioners.

f. All of the above are elements of clinical pharmacy practice and within the expertise and skill level of every Doctor of Pharmacy.

2. Initiatives to provide cost savings on every prescription by educating the patient and the practitioner on:

a. Switches to generics of the prescribed drug if possible, or to a generic in the same therapeutic category so that the patient avoids brand copay and the health plan/employer purchaser pays a lower fee.

b. Switches to a lower cost brand in the same category if a generic is not available.

3. Let patients know about lower cost options.

a. Establish a usual retail price for cash paying patients that is based on cost as an understandable and reasonable measure for the health plan/employer purchasers and patient. Publicize the “transparent” benefits to purchasers, patients and practitioners.

b. Provide the discounted generic retail price and publicize the avings to health plan/employer purchasers, patients and practitioners.

c. Publicize examples of improved outcomes and risk avoidance to demonstrate that lower cost initiatives result in better quality care.

All of the above actions are available today and can be implemented with minimal effort. The onus is on the pharmacist to declare to patients, purchasers/employers that the pharmacist who was sensitive to your costs is the same person who can solve your therapeutic problems. When patients and purchasers demand these initiatives, the solutions will follow.

How the 9/26/09 AWP Calculation Change Affects Pharmacy Profit

2009-10-30T18:36:00.000-07:00

Click on chart to enlarge picture

As you can see from the chart above a pharmacy submitting a claim for a drug with a $1000 AWP before the 9/26/09 AWP calculation change (WAC x 1.25) would make a $30 profit above WAC. If their contract discount does not change, after the conversion to the WAC x 1.20 calculation, they would lose $3.33 (below WAC). In order to keep the pharmacy profit approximately the same the discount off of AWP would have to change to about 13.568%.

This primarily affects Brand Name drugs since most generics are priced at lesser of MAC, U/C, or advertised discounts. The pharmacy would be affected on a generic drug that was not priced at “lesser of” but the profit structures on generics are vastly different than brands. Actual costs or WACs of generics are much, much less than the chart above indicates. Pharmacies were allowed to gain a profit advantage on generics in order to initiate, promote and reward switching.

Developed by Barry Pascal, PharmD, Pro Pharma Pharmacist

AWP update

2009-10-30T18:27:00.000-07:00

Several clients have asked about what to do with the change in AWP when they receive calls from pharmacies complaining about reimbursement. Many clients have signed amendments to their agreements that allow the PBM to change the AWP or to change the AWP discount. Please consider the following when you receive complaints from pharmacies:

Ask the PBM to review the pharmacy/PBM agreement (possible in pass through contracts) to ensure that the AWP change is consistent between what was promised by the PBM and what is being paid to the pharmacy; namely, if the pharmacy is to be kept whole, then the pharmacy contract should reflect the same language and AWP calculation as in the amendment that the purchaser signed with the PBM.
Make sure that you have the specific telephone number at the PBM to refer pharmacy complaints.
Ask the PBM for a report every month of the number and nature of pharmacy complaints regarding AWP changes, and determine if the complaints are being handled to your satisfaction.
Ensure that the formulas used by the PBM for calculating AWP are fixed and does not change for the term of the contract with the purchaser.
Please remember that the only gold standard for the AWP is the one that is published by the manufacturer. Everything else is a calculation and may not reflect the same AWP. As a result, the pharmacy computer system may, or may not, have the same AWP as the PBM.
Closely monitor your invoices and supporting claims for the impact on cost inflation.

Please call if you require clarification or need assistance.

Be well,
Dr. Craig Stern

Patient Savings Ideas

2009-10-29T12:25:00.000-07:00

1- Time savings
…..a) Trips to Pharmacy –
……….i) Order refills 5 days early
……….ii) Go to pharmacy in the off hours not the busy hours
……….iii) Ask if pharmacy has free delivery
……….iv) Ask pharmacy to call MD to get new RX as early as possible
…..b) Ordering
……….i) Auto refills
……….ii) Asks the pharmacy to get refill OKs from the MD for you
……….iii) Write order date in calendar when you pick up your medicine
……….iv) Ask MD to fax new RX to your pharmacy
2- Dollar savings
…..a) Switch to Generic
…..b) Switch to less expensive generic (i.e. Levothroid to Levothyroxine)
…..c) Pill splitting
…..d) Buy discounted category of drugs
…..e) Ask your pharmacy if they will match prices
3- Good Medicine
…..a) Ask the MD when Patient needs next blood test due to meds and make appt
…..b) Ask when MD needs to see patient re-next MD appointment
…..c) Ask MD what are the side effects and what to do about them/or reduce them
…..d) Ask Pharmacist what are the side effects and what to do about them/or reduce them
…..e) Educate
……….i) Look up drug on the internet and become familiar with dosages, side effects, effects, etc
……….ii) Read about condition and/or drug
……….iii) Know the symptoms of common recurring diseases like cold vs flu
…..f) Take steps to reduce condition
……….i) Specific Steps
……………1) Dry skin- use moisturizer, take <5 min showers
……………2) Diabetes- monitor protein and sugar intake
……………3) Overweight – gym, walk, etc
……………4) Diabetes- blood tests
……………5) Asthmatics use Aero Chamber
……….ii) Call MD as soon as possible when conditions worsen
……….iii) Wash Hands-
……………1) sneeze in sleeve
……………2) Avoid crowds
……………3) Use hand cleanser
……….iv) Take medicine as prescribed
…..g) Take steps to reduce side effects
……….i) If makes sleepy take at night
……….ii) If increases appetite- monitor intake or diet

Pictures from PBMI AWARD

2009-06-17T18:42:00.000-07:00

Pro Pharma Pharmaceutical Consultants receive prestigious
Best In Class Award at PBMI (Pharmacy Benefit Manager’s Institute)

Award at PBMI: Craig Stern, PharmD gives
acceptance speech at PBMI Awards ceremony

PBMI Award Recipients – left to right:
Danny Moriarity (Peabody Energy)
Mary Kohlmiller (Patriot Coal)
Carol Stern, RN(Pro Pharma CEO)
Craig Stern, PharmD (Pro Pharma President)

New Pro Pharma Web Flash Site

2009-06-17T18:40:00.000-07:00

Welcome to the Pro Pharma Blog!

2009-06-08T18:12:00.000-07:00

Welcome,

In the coming days you will meet the professor of Pro Pharma Pharmaceutical Consultants, Inc. Dr. Craig Stern will update you on current Pharmacy Benefit news and trends. Most importantly, you will be able to ask him any questions related to this topic and receive a quick and accurate answer! Please feel free to leave your questions and comments!