Life Sciences

Medicare & Reimbursement Advisor Weekly, December 11th, 2009

Medicare & Reimbursement Advisor Weekly, December 11, 2009


Sales, managed care synergy vital in health reform evolution

P&T committee debates bidding impact, interchange

Conversation: Hospital GPO uncovers diabetes, DM opportunities

Breaking down silos in managed care

Did adherence survey forget about formulary influence?

Sales, managed care synergy vital in health reform evolution

When you are considering sales and managed care marketing and account team synergy in the next era of healthcare reform, look to key states and how commercial and Medicare plans and employers interplay. To help think about this, MRAW took a look back at plan enrollment and market share in 2007, one year after the last major health reform—Part D.

Our focus was Florida and Miami-Dade county—a bellwether area for healthcare policy and, to a degree, pharmaceutical strategy. Upon close inspection of Florida’s largest county, Miami-Dade, we noticed that six plans controlled almost 90% of the local Medicare market share. Boosted by HMO enrollees from the 2005 acquisition of CarePlus, Humana had the largest enrollment share in the county, with more than 86,000 enrollees through its stand-alone and Medicare Advantage plans—created out of Part D. CarePlus had an open formulary, but Medicare members would be subject to Humana’s formulary in this scenario. United was second in market share with most of its enrollees from its stand-alone PDP. Interestingly, two local plans ranked ahead of national players. Ranking third was Leon Medical Centers, an integrated system with a PDP product called Leon Cares. An integrated system such as Kaiser could hurt a pharmaceutical company if its product is nonformulary. Preferred Care Partners and Envision Services company ranked fourth. WellCare and WellPoint fell next. Health plan enrollment numbers such as these can be useful for managed care teams interested in capitalizing on strong formulary placement but also in approaching the right companies and employers as policies shift to focus on prevention, wellness, and, perhaps, a new benefit. For example, if your best-selling drug’s formulary placement is better than your competitors’ among the top Medicare plans by enrollment, you might consider adding account or sales representatives to this market to ensure that employers and physicians understand how important these plans are to their practices. For products not on the formulary for any of the top-enrolling plans, consider taking sales reps out of this market and redeploying them to other states or counties. With many questions remaining about health reform, how to allocate or reallocate resources may not yet be clear, but taking a local customer approach may be pivotal, depending on how each state and market respond.

P&T committee debates bidding impact, interchange

At a recent Alaska Medicaid P&T committee meeting, Jeffrey Demain, MD, discussed the impact of the committee’s decision to remove Albuterol from the preferred drug list (PDL), and give Xopenex® the bid. The committee determined in its decision that the two products were not interchangeable. “So every Albuterol prescription had to be rewritten,” Demain said. “Making these types of changes to the PDL creates confusion and has an impact on patients. In that particular case, we created a disservice to our medical community and patients. We need some type of safety net for when those types of things happen. We should fix that particular problem today. When you see a drug that is prescribed 95% of the time, you cannot just vote it away. If we determine a class effect, the drugs should be interchangeable.” Committee member Richard Brodsky, MD, said the drugs in the class were therapeutically equivalent, and changing the PDL to “include a drug that submitted a higher bid than another drug would undermine the whole process.” Demain disagreed, saying that changing drugs caused confusion with patients.

Prior authorization impact

Meanwhile, the state’s drug utilization review committee has instituted a prior authorization (PA) for PPIs. “We were concerned about utilization and continual use among numerous patients,” said Demain. “If the guidelines were adhered to, we would not have to do that. To be fiscally responsible and to maintain appropriate care, we felt it was best to add the prior authorization. We had intended to implement this in 2006, but due to confusion in the system, it has not yet been done. Two letters were sent out advising prescribers that the PPIs would require prior authorizations in the future.” On the PA issue, with new patients, committee member Kelly Conright, MD, said physicians may not always be aware of why certain medications were started, so they are reluctant to discontinue them.

Conversation: Hospital GPO uncovers diabetes, DM opportunities

Premier is a hospital GPO with about 2,000 individual hospital members and is a key customer if you are getting into the hospital segment with an account team. For insight, we chatted with Fred Pane, RPh, senior director of Premier’s contracting and pharmacy affairs.

Pane is a key contact for manufacturers and is focused on value-based design, quality-of-care initiatives, and pay-for-performance programs, with the goal of supporting members and improving the handling of patients at admission through discharge. “We need to manage them better with education, disease management [DM], the right meds, so they can be more productive throughout the continuum of care,” Pane says. Are there opportunities for contracting or DM? Yes.“We’ve done lots of great work with Merck to increase use for its branded drug for colon cancer up against generics, but there’s currently a great opportunity for pharmaceutical companies in diabetes. I’d love to do some work in this area.”According to Pane, contracting for pharmaceuticals should be tied to the achievement of optimal patient outcomes.

Breaking down silos in managed care

To evaluate costs versus outcomes in the most expensive categories, more payers are integrating cost-effectiveness models into their formulary decision-making. “The wave of the future is that there won’t be separated medical and pharmacy budgets,” said Linda Schultz, PharmD, clinical intervention manager at WellPoint Pharmacy. “[Those silos]will end, and you’re going to see one person overseeing a single budget and taking a total cost-of-care approach.”

More plans will use probabilistic sensitivity analysis to help them deal with the uncertainty of a manufacturer’s product claims, noted Paul Langley, PhD, director of Maimon Research, a pharmacoeconomic consulting firm in Minneapolis. Plans will select products for a formulary based on how much the product costs per quality-adjusted life year. As a plan, Langley said, you must ask, “If we move to therapy B, how much do we truly gain?”

Here’s what WellPoint uses to make its cost-effectiveness case:

  • A presentation of modeled claims for cost-effectiveness within a robust decision-model framework
  • Modeled claims that reflect health technology assessment standards for that disease area and a literature review summary
  • Modeled claims that reflect the need for a pragmatic impact assessment with high internal/external validity
  • Modeled claims that account for structural and parameter uncertainty
  • Preference for probabilistic sensitivity analysis in presenting incremental claim results

“Populate your claim with assumptions about how much it will cost the plan to treat patients in a particular pathway up until their success and failure,” said Langley.

So what’s the big failing of product submissions? Companies avoid product comparisons, Langley said. But how do you undertake a cost-effectiveness comparison for your class? Active comparator trials are critical, but the FDA doesn’t require them. “Senior management uses this as a reason to say, ‘Let’s not do these trials.’ But these trials are critical to your case,” he said.

An effective pitch

“We have the cost-effectiveness data that compare our product to others in our class and definitely show that you’ll save more money with our product.” This is an example of a bold, but compelling pitch that should garner you a P&T committee meeting—or at least a conference call with key decision-makers. Considerations to make your sales pitch stand out include the following: The two-year rule. If a plan invests in a product about formulary and it can’t pay for itself in two years, it’s unlikely to keep it on formulary. Play up guidelines from the National Institute for Health and Clinical Excellence (NICE) that support your product as the standard of care or first-line therapy. Follow the NICE guidelines and class reviews, and if one review is positive for your product or class, let your MCO customer know.

Patient outcomes

Managed care’s emphasis on patient reported outcomes is well timed as nurses and doctors see more evidence of poor outcomes from switching medications and other payer policies. The U.S. Department of Veterans Affairs and Kaiser Permanante use patient-reported outcomes criteria that are built into their IT to validate their formulary decisions. WellPoint was close to doing this as well, said Schultz. For example, say that a medication for hypertension (i.e., prod- uct A) is first in its class, but a plan has added product B to its formulary because the manufacturer made a great clinical case and gave the plan an excellent contract. As a result, the plan will evaluate spending for product A versus product B. Most plans have published clinical data but lack effectiveness data, including cost-specific information. If product B can show the plan that it is surpassing product A in seven out of 10 patient-outcome reporting measures, this will prompt the plan to move all of its business over to product B, although the manufacturer should expect to pay a sizeable rebate for this offer, said Langley.

Did adherence survey forget about formulary influence?

Editor’s note: Someone contacted me recently about a new program designed to help patients adhere to medicines. I’ve put some background information below, plus reaction from a few clinicians about the managed care perspective. What’s interesting is that there seem to be some basic gaps in the actual research that was conducted and the claims made. We thought this might be a useful discussion to bring up internally or with customers.


Primary Health Network has 35 clinics in Pennsylvania and Ohio and its insurer, Highmark BCBS, works with the employer to incent all employees to use Habit Care, a behavioral change system using Web, phone, mail, and community support to affect physician prescribing behavior for branded products, support favorable payer formulary decisions, and bolster medication adherence. Physicians surveyed in July 2009 said that if a prescription has a Habit Care follow-up component, this service could affect their prescription decisions—scripts could basically double.

(Note: Details about Habit Care can be accessed from the link at the end of this story.)

Survey respondents were given a specific scenario based on their specialty. The following is a general version of what each doctor read:

Consider a scenario where prescriptions to certain medicines also include patient access to a free one-year behavioral change service. The service is based on four well-studied approaches to behavioral change: The Transtheoretical Model, Self-Determination Theory, Cognitive Behavioral Therapy, and Coaching. The service provides scientifically validated advice to help patients adhere to medication therapies, change their diet, and exercise. It helps patients set goals and track progress.

The physicians were then given an opportunity to stipulate how such a program would affect product selection. The following responses are from four physician participants.

Survey method

This was a Web-based survey, with 113 primary care physicians responding; 89 psychiatrists. The goal was to understand whether Habit Care’s model would change prescribing behavior. Each physician was asked a range of prescribing scenarios based on treating patients with high cholesterol, depression, hypertension, and diabetes. For example, one question asked, “To how many of your last 10 hyperlipidemia patients did you prescribe Vytorin®?” In the follow-up, “How many of the 10 would have received Vytorin if Vytorin included a one-year subscription to this free Habit Care service?”

Similar questions were asked about Byetta® (diabetes), Diovan® (hypertension), PristiqTM (depression), and Cymbalta® (anxiety). In almost all cases, the physicians said they would choose the branded product twice as often if the Habit Care program were available. This is quite a claim.

Michael Yanuck, MD, a consultant from Tampa, FL, for managed care, hospitals, and drug companies shared his reaction:

“One immediate question I would have is what type of patients we’re talking about here,” Yanuck said. “Are the last 10 in the scenario highly managed or non-managed care? Are these 10 hypothetical patients all with Medicare Part D, commercial, self-pay, or no insurance? I won’t prescribe Vytorin, for example, if the patient can’t afford it, but if the patient has BlueCross and a $10 copay, then the program probably adds value in that context.”

Editor’s note: This seemed to us to be a gap in the survey, in the method.

  • Looking at the Byetta and Vytorin examples, I’m wondering why if this program is so good, why the numbers aren’t 10 across the board. Perhaps this takes into account the mix of prescription coverage/copay issues for each patient.
  • A managed care plan may not want to see a ton of utilization for a branded product. In Byetta’s case, where there is no generic, obviously the plan would like to see a program that adds value such as this. In classes filled with generics, the plan would rather see the generic offer of this program rather than having scripts going up for a more costly brand.
  • For managed care, the plan will want to see a feedback loop back to the physician. With Byetta, for example, the program must return information back to the physician about cases in which the patient is not adherent or not filling the script.
  • Yanuck thought a pilot would be critical to get payer support. If out of 100 patients in a control group 20% are adherent, and in the test group (those utilizing the behavioral follow-up service) 70% are adherent, then you have a model. A difference of 30%– 40% between groups would mean the program doesn’t work, Yanuck said. For the depression piece, the testing could compare those receiving cognitive behavioral counseling versus those in the control group, among other comparators.

Joel Brill, MD, chief medical officer at Predictive Health, said given that physicians are slowly moving to e-prescribing, if they have two-way messaging with the ability to send prompts when the preferred drug is not chosen.Such e-technology would reduce the need for this program over time.

Former Humana pharmacy director, Dan Renick, RPh, now withThe Hobart Group, said there isobviously interest in empowering providers and patients to resist a generic switch.

That’s important if the brand is more appropriate clinically. If the program has the potential to improve compliance and adherence and also control utilization, then, from a managed care perspective, it has merit, but “I’m notsure about the financial value this specific program will ultimately have for a brand,” said Renick.

Here’s a link to the program and full survey: