Pharmacy Costs: Can I Make a Difference?

Pharmacy Costs: Can I Make a Difference?

Pharmaceutical Market Dynamics What is driving Rx cost up? No New Blockbusters Patent Expirations OTC Market Dynamics Availability Pharmaceutical Companies Unfortunately, not all pharma company actions deliver value to the Health Care System. Increase utilization Drive preference Creative packaging New indications Price inflation Specialty drugs Frequent price increases New indications Patent extensions Slight modifications to: Dosage Delivery mechanism Dosage frequency Combination drugs Physicians Do not know Rx costs 80,000 Pharma Reps Sampling of brand drugs Employees Don t always know lower cost options Consuming $5 billion in pharma advertising Requests influence physician prescriptions Newer is better perception Employer Rx Cost Who is protecting your Rx investment?

2009 Generics The Calm Before the Storm $93.1 billion in Brand Drugs Off-Patent from 2008-2015 2008: Risperdal, Lamictal, Fosamax, Imitrex 2009: Adderall, Prevacid, Topamax, Valtrex $20.9 2010: Effexor XR, Flomax, Cozaar, Hyzaar $11.6 $18.5 $15.0 2011: Lipitor, Actos, Protonix, Zyprexa, Levaquin, Aricept 2012: Plavix, Singulair, Seroquel, Lexapro, Diovan, Avandia $9.3 $6.5 $7.3 $4.0 2013: Cymbalta, Celebrex, Aciphex 2014: Nexium, Vytorin, Zetia, Lyrica, Nasonex 2015: Abilify 2008 2009 2010 2011 2012 2013 2014 2015

Value Value = Outcome Cost

What is the # 1 diagnosis at ThedaCare?

Treatment of Hypertension Algorithm Source: JNC 7 (http://www.nhlbi.nih.gov)

Compelling Indications for Individual Drug Classes Compelling Indication Initial Therapy Options Heart Failure Postmyocardial infarction High CVD risk Diabetes Chronic kidney disease Recurrent stroke prevention THIAZ, BB, ACEI, ARB, ALDO ANT BB, ACEI, ALDO ANT THIAZ, BB, ACEI, CCB THIAZ, BB, ACEI, ARB, CCB ACEI, ARB THAIZ, ACEI THAIZ = thiazide diuretic; ACEI = angiotensin converting enzyme inhibitor; ARB = angiotensin receptor blocker; BB = beta blocker; CCB = calcium channel blocker; ALDO ANT = aldosterone antagonist Source: JNC 7 (http://www.nhlbi.nih.gov)

Lifestyle Modification Recommendations Modification Recommendation Average SBP Reduction Range* Weight reduction DASH eating plan Maintain normal body weight (body mass index 18.5 24.9 kg/m 2 ) Adapt a diet rich in fruits, vegetables, and lowfat dairy products with reduced content of saturated fat 5-20 mm Hg/10 kg 8-14 mm Hg Dietary sodium reduction Aerobic physical activity Reduce dietary sodium intake to <100 mmol (2.4 g sodium or 6 g sodium chloride) Regular aerobic physical activity (eg, brisk walking) at least 30 minutes per day, most days of the week 2-8 mm Hg 4-9 mm Hg Moderation of alcohol consumption Men: limit to <2 drinks t per day. Women and lighter-weight persons: limit to <1 drink t per day 2-4 mm Hg * Effects are dose and time dependent t 1 drink ½ oz or 15 ml ethanol (eg, 12 oz beer, 5 oz wine, 1.5 oz 80-proof whiskey) Source: JNC 7 (http://www.nhlbi.nih.gov)

Class: Angiotensin receptor blockers (ARBs) Diovan/Diovan HCT Opportunity Pharma Strategy Price inflation The prices for Diovan/Diovan HCT are expected to increase significantly after 1/1/09 Indication: Hypertension and heart failure Avg. ARB Cost 1 80 70 60 50 40 30 20 10 0 Diovan Diovan will cost 86% more than other Tier 2 ARBs and 15% more than other Tier 3 ARBs. Benefit Patients: Mitigate the expected increased costs for these medications through incentives for higher value, lower cost choices Mitigates increased cost of Diovan and encourages lower cost equivalents

Half Tablet Program Can all pills be split? Is pill splitting for everyone? NO! Once a day dose Flat priced Same clinical outcomes Voluntary tell doctor

Top 3 opportunities for ½ tab program Blood Pressure Meds: ARBs Cholesterol Lowering: Lipitor/Crestor Antidepressants: Lexapro

Caduet Class: Lipid/Cholesterol Lowering Indication: Hypertension, High Cholesterol Opportunity Pharma Strategy Patent extension Combination of atorvastatin (Lipitor) and amlodipine (generic Norvasc). Priced at a premium to individual components. Clinical Assessment Caduet is therapeutically equivalent to atorvastatin and amlodipine taken separately. Lipitor $$ + Generic = Caduet Norvasc $$$$ $ Benefit Patients: Will not pay a high cost for Caduet when individual medications are available at a lower net cost. Patients: Same treatment results by taking individual components; can pay an even lower copayment by switching to another statin. Combination drug with no unique value

Class: Beta Blocker Indication: High Blood Pressure/Heart Failure Coreg CR Opportunity Pharma Strategy Patent extension Coreg CR is priced significantly more than generic Coreg. Clinical Assessment Coreg CR contains the same active ingredient as generic Coreg, but is taken once a day as opposed to twice a day. Generic Coreg $ = Taken twice daily Coreg CR $$$$ Taken once daily Benefit Patients: Will not pay a cost premium for a medication available at a lower cost Patients: Generic Coreg provides the same active ingredient at an affordable cost Me too drug with no added clinical value

Moderate LDL Reduction Lescol XL Pravachol (pravastatin) Mevacor (lovastatin) 25%-34% LDL reduction

Potent LDL Reduction Zocor (simvastatin) Lipitor Crestor 26%-63% LDL reduction

Clinical + Financial Decision $120/$30 $20/$10 copay copay Lipitor LDL reduction simvastatin 10 mg 39% 20 mg 20 mg 43% 40 mg 40 mg 50% 80 mg 80 mg 60%

Zetia 10 mg = 18 % $90 Cheerios = 5 % Oatmeal = 10 %

Vytorin Zetia 10 mg = 18% Zetia 5 mg = 16% #30 Vytorin 10/20 = 45% $90 #15 Vytorin 10/40 = 55% $45

Pharmacy Example (100 Prescriptions with 10 refills) Prescriber A simvastatin 40 mg 30 Rx @ =$0 10 refills =$0 OTC Prilosec 20 mg 30 Rx @ =$0 10 refills =$0 fluoxetine 20 mg 40 Rx @ =$0 10 refills =$0 Total $0 Prescriber B Lipitor 20 mg 30 Rx @ $100 =$3,000 10 refills =$30,000 Nexium 40 mg 30 Rx @ $100 =$3,000 10 refills =$30,000 Cymbalta 60 mg 40 Rx @ $100 =$4,000 10 refills =$40,000 Total $100,000

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