Rx Matters. In This Issue:

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1 July-August 2007 Volume 11, Number 4 Rx Matters A newsletter for employee benefit consultants, TPAs, and coalitions, delivering a mix of news and trends in healthcare, and up-to-date information about Walgreens Health Initiatives products and services 5.31 Percent Trend: One Small Number, One Great Suite of Programs Behind It In this year s issue of Walgreens Health Initiatives Outlook, Trend Report 2007, you can see how our cost-containment solutions held our clients 2006 drug trend to a single digit for the third year in a Walgreens Health Initiatives Outlook shows how Walgreens Health Initiatives trend management solutions helped our clients navigate the complex 2006 healthcare landscape, and looks ahead for opportunities to maximize cost savings while optimizing patient care row: 7.68 percent. For clients who chose to take advantage of our many clinical programs and plan design options it was even lower: only 5.31 percent. Some strategies that helped our clients achieve these excellent results in both improved member health and plan savings include: Advantage90, complementing mail service by allowing members to obtain up to a 90-day supply of maintenance medications through a select network of retail pharmacies Clinical prior authorization programs, designed to get members the most appropriate and cost-effective medications In This Issue: MTM First-Year... 2 PBM Receives Top Honors... 4 Walgreens Wins Adherence Award... 4 Flu Program... 4 Outcomes...5 Medication Management.6 Rx Drug Update... 6 New Rx Indications...7 Mark Your Calendar...7 continued on p. 2 Rated No. 1 in overall member satisfaction by: Certified By 2007 Walgreens Health Initiatives, Inc., a wholly owned subsidiary of Walgreen Co. All rights reserved. Page 1

2 5.31 Percent Trend... (continued from p. 1) Step care therapy programs, leading members through the appropriate steps toward effective first-line agents before covering more expensive, second-line alternatives Tiered formulary, categorizing preferred medications into three copay levels Besides illustrating how Walgreens Health Initiatives trend management solutions helped our clients maximize cost saving opportunities while optimizing patient care, Walgreens Health Initiatives Outlook also analyzes national healthcare trends, primary drivers of healthcare costs, and factors influencing future drug trends. Our trend report is also available online at In addition, for an overview of the specialty pharmacy industry, the premiere issue of the Walgreens Specialty Pharmacy State of the Industry Report, Outlook, is available at or from your sales director. This report should prove valuable in helping clients make informed decisions about the direction of their specialty pharmacy component, which, as more specialty medications are approved, will have an increasing impact on pharmacy expenditures. This report gives readers an overview of the current state of the specialty pharmacy industry, outlines new specialty pharmacy costsaving management strategies, and describes our specialty program s patient-focused care process that offers multiple levels of clinical care, based on patients needs in specific therapeutic classes. MTM s First-Year Results a Savings Success Story The Walgreens Health Initiatives Medication Therapy Management (MTM) Program s first-year results were outstanding, producing an overall client return on investment of 2.5:1 for MTM interventions throughout Pharmacy savings shared between members and clients were estimated at more than $50 per member per month (PMPM) for members receiving interventions. Three examples, analyzed in the summer of 2006, illustrate our polypharmacy intervention process, a key MTM component that our clients most frequently use, and its effect on healthcare expenditures. (See chart on next page.) All three cases resulted in shared member and client savings: These were estimated for year 1 at $4,413 in prescription savings only for Case 1; $1,019 in prescription savings only for Case 2; and $6,305 in overall prescription and medical savings for Case 3. In each case, the member was taking multiple maintenance medications for chronic conditions, inferred from the medication history. Our MTM pharmacists intervened with prescribers and made therapy recommendations such as decreasing the number of medications a patient takes (decreasing pill burden ), substituting expensive medications with less expensive alternatives, adjusting medications or dosages to be safer for elderly patients, eliminating duplicate therapies, promoting proper prescribing in accordance with national guidelines, and increasing patients adherence to medication therapy. continued on p Walgreens Health Initiatives, Inc., a wholly owned subsidiary of Walgreen Co. All rights reserved. Page 2

3 MTM First Year Results... (continued from p. 2) Case 3 is an example of how additional savings on overall healthcare spend may result from improved medication management and its impact on member health. In this example, an MTM pharmacist recommended adding an additional HIV medication for this HIV-positive patient in accordance with national guidelines. The MTM pharmacist also recommended encouraging adherence with a cholesterol-lowering therapy that the patient had not been taking regularly. The total annual added drug cost from these recommendations would be $3,695. However, since incorporating the HIV medication into the medication therapy could result in $10,000 per year savings in medical cost, the net savings in overall healthcare expenditures could be $6,305 per year. Number of Intervention Types Accepted by Prescriber Medications Intervened Upon Case 1 10 Combining multiple medications to a single medication Generic substitution Reduce dosage for elderly patient Stop duplicate medications Case 2 6 Combining multiple medications to a single medication Stop duplicate medications Estimated Annual Savings* $4,413 $1,019 Case 3 2 Add HIV medication according to national guidelines Education on adherence with cholesterol-lowering therapy -$3,695 in added drug costs $10,000 in potential medical savings $6,305 net savings *Cases 1 and 2 report estimated annual total prescription cost savings. Case 3 combines prescription costs with estimated medical cost savings based on medical literature. These recent outcomes illustrate the program s effectiveness at promoting appropriate medication therapy, improving patient therapeutic outcomes, and managing overall healthcare costs. In addition to polypharmacy interventions, our MTM services also include any or all of these components: appropriateness of therapy (AOT), inappropriate medications in the elderly (IMIE), and compliance and persistency (C&P). MTM has the flexibility to customize intervention type and volume per plan-specific parameters: the number of chronic disease states and maintenance medications, and annual drug spend. Our MTM interventions are also designed to promote proper physician prescribing in accordance with national guidelines and help patients understand and adhere to their medication regimens. Patients receive individualized counseling on their medications from their neighborhood pharmacist at the point of service or with one of the MTM pharmacists in our in-house clinical care center. Optimizing medication therapy in this way can increase patient care and decrease overall healthcare costs Walgreens Health Initiatives, Inc., a wholly owned subsidiary of Walgreen Co. All rights reserved. Page 3

4 Walgreens Health Initiatives Gets Top Honors in Independent Survey Wilson Health Information, LLC, an independent healthcare consumer research firm, named Walgreens Health Initiatives the highest rated PBM nationally in overall member satisfaction among the 18 major PBMs evaluated in the 2007 WilsonRx PBM Member Satisfaction Survey. The 2007 survey, the largest of its kind, is based on responses from 28,855 PBM members. We take pride in this reflection of our ability to balance plan savings and member satisfaction. It s what we specialize in for 6 million covered lives nationwide, one life at a time. (More information is available at or by ing info@wilsonrx.com.) Walgreens Wins Strategic Patient Adherence Award Walgreen Co., along with the manufacturer Amgen, received the award for Best Branded Adherence Program for the Persistency Program for Sensipar at the Strategic Patient Adherence Awards. The award was presented at the Sixth Annual Forum on Patient Compliance, Adherence and Persistency held April 23 in Philadelphia, Pa. These awards, co-sponsored by CBI Research, Inc. and PharmaVoice, are presented to pharmaceutical organizations that have been deemed exceptional in their medication adherence initiatives. Organizations medication adherence programs are evaluated on criteria that include: innovation; quality; patient recruitment, medication adherence, and acceptance; health practitioner acceptance; health outcomes; and marketing return on investment. Sensipar is indicated for the treatment of secondary hyperparathyroidism in patients with chronic kidney disease on dialysis and for the treatment of hypercalcemia in patients with parathyroid carcinoma. This award underscores our commitment to offering programs aimed at helping our clients achieve their cost-containment goals while providing superior patient care, which includes promoting medication adherence. Flu Program Set August 1 was the deadline for our clients to sign up for the Walgreens Health Initiatives Flu Program, offered in collaboration with Maxim Health Systems, one of the nation s leading providers of wellness services. An annual flu shot is the best way to prevent the flu and its sometimes life-threatening complications, which cause more than 200,000 hospitalizations annually. The flu affects an estimated 5 percent to 20 percent of the U.S. population each year, according to the U.S. Centers for Disease Control and Prevention (CDC). We offer a communitypharmacy-based coupon program or a worksite flu shot clinic to help keep members healthy and productive. Because the CDC recommends vaccinating high-risk people (for example, the elderly) in October, we will schedule worksite clinics after November 1. Requests received after August 1 will be considered on a per-client basis. In the event of a national vaccine shortage, worksite clinics will be canceled but vaccina- continued on p Walgreens Health Initiatives, Inc., a wholly owned subsidiary of Walgreen Co. All rights reserved. Page 4

5 Flu Program Set... (continued from p. 4) tions of coupon participants will continue in accordance with CDC recommendations. The coupons are valid at all Maxim-affiliated flu shot clinics, which are held at a variety of pharmacies, including Walgreens. In addition to flu shots, pneumonia shots are also available under the worksite program option. Outcomes In this new feature, we will share key findings from our Health Outcomes team. This team plays a vital role by assessing the effectiveness of our programs and services, using appropriate scientific research methodologies. Study Reveals Value of Laboratory Data in Healthcare Management A recent Walgreens Health Initiatives outcomes study, based on deidentified data to protect patients privacy, investigated the value of laboratory data as a supplement to medical claims, pharmacy claims, and self-reported information for identifying people at risk for common chronic conditions. This study shows that selected laboratory tests can help identify at-risk participants who may need to be targeted for medical intervention. These participants are likely to be at greater risk than those who are aware of their conditions and have been under some form of medical care. Early intervention with these people has potential cost-saving implications. In addition, by identifying abnormalities in the lab results of people with certain medical conditions or taking certain medication therapies, appropriate treatment interventions can be recommended to correct them, potentially preventing harmful effects. Study methodology and results are outlined below: Data: Two sources: the Walgreens Health Initiatives Healthful Living Risk Assessment Program, offered to eligible employees of a Walgreens Health Initiatives client, and Walgreens Health Initiatives claims data for the employees participating in the Risk Assessment Program. The Risk Assessment Program included a health risk assessment (HRA) questionnaire and selected laboratory tests. The Walgreens Health Initiatives claims data included pharmacy and medical claims. Methods: A retrospective claims analysis was conducted to identify participants with certain medical conditions inferred from pharmacy claims, medical claims, or laboratory data but who did not self-report a diagnosis of the inferred condition. Results: The results show that, combined with the HRA, pharmacy, and medical data, the laboratory data helped to identify 84 participants (24.6 percent) at risk for diabetes, 95 participants (27.8 percent) at risk for dyslipidemia (abnormal cholesterol or triglyceride levels), 24 participants (7.0 percent) at risk for hypertension, and eight participants (2.3 percent) at risk for kidney disease. These participants had abnormal laboratory values, but did not self-report the condition on the HRA or have pharmacy or medical claims for the condition. Our Risk Assessment Program can help identify the health needs of members and recommend appropriate follow-up solutions to minimize employee absenteeism and long-term healthcare costs Walgreens Health Initiatives, Inc., a wholly owned subsidiary of Walgreen Co. All rights reserved. Page 5

6 Medication Management Below is the latest enhancement to the Walgreens Health Initiatives Medication Management Programs clinical prior authorization (CPA) and step care therapy which provide patient-centric programs that promote clinically appropriate, cost-effective drug utilization: New Step Care Therapy Program Promotes Effective, Low-Cost Insomnia Medication Walgreens Health Initiatives has developed the Nonbenzodiazepine Insomnia Agent Step Care Therapy Program, designed to promote the safe and appropriate use of zolpidem, the generic form of Ambien. This program is designed to help ensure the appropriate dosing of the targeted nonbenzodiazepine insomnia medications Ambien, Ambien CR, Lunesta, Rozerem, and Sonata, and also offers a quantity limitation to help prevent over-utilization. The program promotes the treatment of insomnia with effective, low-cost generic agents, while approving brand-name agents for patients who have tried and failed zolpidem or for whom zolpidem is not an appropriate therapeutic option. Rx Drug Update The Food and Drug Administration (FDA) recently approved the following new medications: Drug Name Company/ Availability Indication(s) Dose Form(s) Regimen AWP as of July 2007 Altabax (retapamulin) ointment GlaxoSmithKline Treatment of impetigo 1% ointment Applied twice daily for five days $41 per 5 gm tube $69 per 10 gm tube $84 per 15 gm tube AzaSite (azithromycin) ophthalmic solution Inspire Treatment of bacterial conjunctivitis 1% ophthalmic solution One drop twice daily for two days, then one drop daily for five days $53 per dropper bottle Veramyst (fluticasone) nasal spray GlaxoSmithKline Treatment of nasal allergy symptoms Nasal spray Two sprays in each nostril $94.70 per 120-dose actuator Neupro (rotigotine) transdermal system Schwarz Pharma Treatment of early-stage Parkinson s disease 2 mg per 24-hour, 4 mg per 24-hour, and 6 mg per 24-hour patches One patch $9.62 per patch Seroquel XR (quetiapine) extended-release tablets AstraZeneca Treatment of schizophrenia 50 mg, 200 mg, 300 mg, 400 mg tablets One tablet $7.67 per 200 mg tablet $10.06 per 300 mg tablet $11.82 per 400 mg tablet Lybrel (levonorgestrel/ ethinyl estradiol) tablets Wyeth Combination product for prevention of pregnancy 90 mcg/ 20 mcg tablets One tablet $1.96 per tablet 2007 Walgreens Health Initiatives, Inc., a wholly owned subsidiary of Walgreen Co. All rights reserved. Page 6

7 New Rx Indications The following medications have been approved by the Food and Drug Administration for new or expanded indications: Drug Name Original Indication New Indication Singulair (montelukast) tablets Invega (paliperidone) extended-release tablets Prevention of chronic asthma and relief of symptoms of allergic rhinitis Acute treatment of schizophrenia Prevention of exercise-induced bronchoconstriction Long-term maintenance treatment of schizophrenia Mark Your Calendar Stop by the Walgreens Health Initiatives booth at the following shows to learn more about our innovative solutions to pharmacy benefit management: Florida Health Care Coalition Second Annual South Florida Conference August 15, 2007 The Signature Grand Ft. Lauderdale, Fla. The Savvy Self-Funding Healthcare Conference & Expo August 20-22, 2007 Westin Crown Center Hotel Kansas City, Mo th Anniversary Benefits Management Forum & Expo (BMFE) September 16-18, 2007 Wyndham Anatole Hotel Dallas, Texas References Rx Drug Update and New Rx Indications American Society of Health-Systems Pharmacists. Accessed June Drugs.com. Accessed June Facts and Comparisons on-line Accessed June Food and Drug Administration. Accessed June Pharmaceutical News Harvest. Accessed June Pharmacy OneSource. Accessed June Top Honors in Independent Survey 2007 Wilson Health Information, LLC. New Hope, Pa WilsonRx Pharmacy Survey. Accessed June For general information about Walgreens Health Initiatives products and services, call , or visit mywhi.com. Editorial Board Editor Christiane Tiskus Consultant Patrick Smith, Pharm.D., B.C.P.S. Designer Rabel Shamuel Brand names are the property of their respective owners. This publication does not constitute professional advice. Although it is intended to be accurate, neither Walgreen Co., its subsidiaries and affiliates, nor any other party assumes liability for loss or damage due to reliance on this material. If you have a medical question, consult your medical professional. Articles in Walgreens Health Initiatives Rx Matters may be reprinted only by clients of Walgreens Health Initiatives or respective agents of clients. Please attach the following statement: Reprinted with permission Walgreens Health Initiatives, Inc., a wholly owned subsidiary of Walgreen Co. All rights reserved Walgreens Health Initiatives, Inc., a wholly owned subsidiary of Walgreen Co. All rights reserved. PBM Page 7