Pharmacy Trends and Management Opportunities Kerry Bendel, R.Ph. Director of Pharmacy Medica September 14, 20 1
Agenda Pharmacy Trend Experience Trend Drivers and Management Opportunities Call to Action 2
Pharmacy Trend Experience 3
Rx Drugs Source: Medicare-approved Drug Discount Cards and Prescription Drug Prices, Chisholm et al, Am J Health-Syst Pharm Vol 62, July 15, 2005 4
MCHA Pharmacy Utilization PMPM $180.00 2.7 $160.00 2.4 $140.00 2.1 $120.00 1.8 Amt Paid PMPM $100.00 $80.00 1.5 1.2 Rx's PMPM $60.00 0.9 $40.00 0.6 $20.00 0.3 $0.00 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- 0 Amount Paid PMPM # Rx's PMPM 5
20 YTD MCHA Top Drug Report Cost Rank Medica BOB Cost Rank Brand Name Therapeutic Use # of Rx's Amount Paid by Plan % of Total Amt Paid Avg. Amt Paid/Rx Utilizing Members 1 1 LIPITOR High Cholesterol 10,539 $675,123.20 3.46% $64. 3254 2 4 ENBREL Rheumatoid Arthritis, Psoriasis 479 $593,1.33 3.04% $1,238.12 111 3 5 EFFEXOR XR Depression 3,256 $381,718.31 1.95% $117.24 792 4 18 COPAXONE Multiple Sclerosis 257 $327,205.17 1.68% $1,273.17 57 5 77 REYATAZ HIV/AIDS 496 $322,977.36 1.65% $651.16 109 6 6 PROTONIX GERD 3,027 $320,196.26 1.64% $105.78 886 7 64 ATRIPLA HIV/AIDS 292 $300,474.99 1.54% $1,029.02 60 8 73 TRUVADA HIV/AIDS 463 $300,408.24 1.54% $648.83 111 9 2 PREVACID GERD 2,2 $281,618.13 1.44% $127.66 608 10 3 ADVAIR DISKUS COPD 2,036 $272,759.25 1.40% $133.97 743 11 17 LANTUS Diabetes 3,013 $270,302.48 1.38% $89.71 884 12 7 SEROQUEL Antipsychotic 1,483 $269,744.94 1.38% $181.89 371 13 31 HUMALOG Diabetes 2,294 $262,787.69 1.35% $114.55 675 14 14 LAMICTAL Anticonvulsant 1,254 $260,592.48 1.33% $2.81 297 15 1 EPZICOM HIV/AIDS 425 $257,719.35 1.32% $6.40 94 16 42 CELLCEPT Transplant Rejection 585 $248,121.54 1.27% $424.14 137 17 10 ACTOS Diabetes 1,863 $242,254.56 1.24% $130.03 502 18 16 CYMBALTA Depression 1,821 $221,158.59 1.13% $121.45 490 19 20 TOPAMAX Anticonvulsant 997 $215,098.65 1.10% $215.75 260 20 15 ONE TOUCH ULTRA TEST STRIPS Diabetes 2,493 $2,610.66 1.% $83.28 1008 21 115 KALETRA HIV/AIDS 366 $2,183.56 1.% $563.34 85 22 12 LEXAPRO Depression 3,200 $197,938.99 1.01% $61.86 901 23 35 REBIF Multiple Sclerosis 129 $178,083.69 0.91% $1,380.49 25 24 40 AVANDIA Diabetes 1,467 $168,9.27 0.86% $114.57 402 25 25 HUMIRA Rheumatoid Arthritis, Crohns 124 $165,586.87 0.85% $1,335.38 29 Top 25 Drug Total 44,565 $7,146,795.56 Total Drug YTD 346,621 $19,529,654.11 Top 25 as a % of Total 12.86% 36.59% 6
$150.00 Plan Paid Per Prescription $125.00 $100.00 $75.00 $50.00 $25.00 $0.00 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Brand Generic 7
MCHA Generic Utilization 60.00% 59.00% 58.00% 57.00% 56.00% 55.00% 54.00% 53.00% Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- De c- Jan- Feb- Mar- Apr- May- Jun- 8
Drug Trend 15.00% 10.00% 13.41% 9.00%- 12.00% 7.90% 7.20% 5.00% 5.40% 4.87% 0.00% 2.80%2.90% 1.00% ESI* Medco+ Medica MCHA -5.00% -7.31% -5.00% -10.00% 2005 20 20 (Projected) Source: *ESI 2005, 20 Drug Trend Reports + Medco 2005, 20, 20 Drug Trend Reports 9
Trend Drivers and Management Opportunities 10
Introduction to Drug Trend Drivers Pharmacy Trend Drivers Member Contribution Price Utilization Mix What factors are within our control? Benefit Coverage Demographics 11
Introduction to Drug Trend Drivers Pharmacy Trend Drivers Member Contribution Price Utilization Mix Benefit Coverage Strategies used to address controllable influences Formulary management Clinical and trend management Plan design Demographics 12
Cost and Quality Asking tough questions Can we have it all and expect someone else to pay for it? Will medicine save us despite our unhealthy lifestyles? Should we pay for care that s not recommended by experts nor based on evidence? What defines medically necessary? 13
Cost and Quality Making Tough Decisions Formulary Management Preferred products Prior authorization medical necessity Generic incentives Clinical / Trend Management Step therapy: Use of a generic or low cost brand prior to a higher cost brand when medically appropriate. Quantity level limits: Supports benefit design, member cost share and prevents waste Disease and care management: Chronic condition coaching Plan Design Cost Share Network Restrictions Coverage exclusions or restrictions by category 14
Intervention Targets Members Physicians Pharmacists Generic incentives Formulary notifications Online self-service Disease education and management Specialty pharmacy services Wellness and lifestyle programs Formulary Interventions Pay for performance Generic samples Retrospective DUR Brand & generic substitution Therapeutic substitution On-line point-of-service edits 15
Impact of Managing the Formulary MCHA Statin Utilization 2500 2400 2300 2200 2100 2000 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0 Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- LIPITOR SIM VASTATIN VYTORIN CRESTOR LOV AST AT IN PRAVASTATIN SODIUM PRAVACHOL LESCOL LESCOL X L M EVACOR ZOCOR 16
A Call to Action 17
The Impact of Decision Making The True Cost of a Prescription Decision Nexium: $185 Prilosec OTC: $20 $165 per month NPV* = $17,172 The new math equation is: Prilosec OTC + = Nexium $17,172 * Net Present Value 18
The Obesity Burden 64%: Increase in diabetes patients, 1987-2002 1,000%: Increase in obesity-related costs, 1987-2002 $1,244: Annual health care spending difference, normal weight v. obese adults. Source: Health Affairs, June 2005 % of U.S. Health Spending On Obesity-linked Conditions 19
Specialty Pharmacy Cost 1 IMS Health, Company Reports and JP Morgan estimates 2 Ernst & Young, Competitive Growth, Growing Competition, Beyond Borders 2005 20
MEDICA 21