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Towards ‘Values-Based’ formularies: Generic uptake, sustainability and safety.

Towards ‘Values-Based’ formularies: Generic uptake, sustainability and safety. Value of Generics Conference Montreal, P.Q. October 26, 2011.  . Alan Cassels, University of Victoria. cassels@uvic.ca. I am .

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Towards ‘Values-Based’ formularies: Generic uptake, sustainability and safety.

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  1. Towards ‘Values-Based’ formularies: Generic uptake, sustainability and safety. Value of Generics Conference Montreal, P.Q. October 26, 2011.   Alan Cassels, University of Victoria. cassels@uvic.ca

  2. I am Supported by research grants, contracts related to health reporting and a UVIC research salary

  3. The “learning” objectives: • Look at some data on current trends in drug spending • Recount some examples of how people typically receive drugs and drug coverage. • Suggest ways that drug coverage can become more cost-effective, rationale and safe.

  4. What do we hear from employees regarding drug coverage? • “If the doctor prescribes it, I must need it and my plan must therefore cover it.” • “Sure, newer drugs are more expensive, but you get what you pay for, right? • “My doctor gives me free samples because he cares about my health and the cost of the drugs.” • “My drugs don’t cost me anything, they’re free. “

  5. Seeking Solutions to the Drug Benefit Cost Crisis* • Most employer-sponsored drug coverage involves no deductible; most provide 80 to 100% coinsurance. • More than half of employers have plans with no formulary (open formulary or few formulary restrictions). • Despite concerns about escalating costs, employers are wearing most of the cost burden. • Employers are looking for new ways to respond to growing prescription drug costs. *survey report my group carried out in 2005 of major employers in Canada about trends in drug benefit cost control.

  6. What are some of the ways drug plans control costs? Change the plan design, avoid costs or share costs PLAN DESIGN •Co-insurance •Benefit maximums •Drug formularies •Benefit levels COST AVOIDANCE •Wellness programs •Absence management •Education/awareness •Legislative shifting •Benefit formulas COST SHARING •Employee/member contributions •Flex benefits •Health care spending accounts

  7. What are we actually covering?Top Therapeutic Classifications 2009 Avg Cost % Paid by Disease colour 1) Cholesterol disorders $72.60 9.8% GREEN 2) Blood pressure $31.66 7.9% PINK 3) Diabetes $51.67 6.8% 4) Depression $45.69 6.7% 5) Ulcers $52.98 6.4% YELLOW 6) Rheumatoid Arthritis $1,674.60 5.7% 7) Asthma and other Inflammatory Diseases 47.09 5.5% 8) Antibiotics/Anti-infectives $27.56 4.9% 9) Narcotic Analgesics $27.28 3.2% 10) Skin Disorders $34.10 3.0%

  8. Top 25* *Based on 2009 data from Telus, the pay-direct drug card provider for Sun Life, Great-West Life, Standard Life and other group insurance companies in Canada. The top drugs represent 10,651,541 prescriptions at a cost of $982,676,747 and an average cost per prescription of $92.25.

  9. Next top 25

  10. Sheila’s got heartburn… • Office Administrator. 34 years old • She has been taking Losec (omeprazole) for years. It works great. • She feels it’s worth every penny of the $112 per month. Her plan is a 20% deductible so her cost is $22 per month; employer pays $90. • What’s wrong with this picture?

  11. Sheila’s Story • Has her doctor ever tried her on over-the-counter treatments for heartburn or “older but proven” H2-antagonists? • Does she know her benefit plan pays twice as much as it could/should for her heartburn? • Does she know that PPI users have a higher risk of pneumonia and infection with C-difficile and that long-term use of PPIs is associated with an increased risk of certain bone fractures? • Many provinces have PPIs under “Special Authority” (prior authorization) so why doesn’t her private drug plan follow?

  12. Proton Pump Inhibitors

  13. Proton Pump Inhibitors

  14. PPI Special authority form, BC Pharmacare

  15. What is the basis for BC PharmaCare’s “Special Authority” process around PPIs? • Evidence show that all PPIs are equally effective for the treatment of common acid-reflux conditions. • PharmaCare’s first-covered PPI for patients eligible for Special Authority approval was previously rabeprazole (Pariet® and generics). • On January 26, 2010, PharmaCare coverage was expanded for the PPIs, and pantoprazole Mg was added as another first-covered PPI for patients eligible for Special Authority approval. These patients now have two PPI options - rabeprazole and pantoprazole Mg – with one Special Authority approval. • Patients become eligible after first trying ranitidine (Zantac® and generics), cimetidine (Tagamet® and generics), or a similar drug. • Excerpts from Pharmacare memo January 26, 2010

  16. Peter has hypertension… • Retired hospital technician. 74 years old • Told he has “uncontrolled hypertension.” • First drug given to him is a free sample: Diovan (valsartan)—it’s an ARB • It seems to ‘work’. His municipal pension plan covers 80% ($60) of its 75$/ month cost. • “My doctor is great. He gave me the best” • What’s wrong with this picture?

  17. Peter’s Story: The reality • Does he know there are many non-drug approaches to treating hypertension; reduced salt diet, etc? • Does his doctor know that free samples are always the newest, most expensive, least studied drug? • Does his doctor know the guidelines saying a drug like Diovan is a 4th line treatment (after a diuretic, an ACE-Inhibitor and maybe a Beta-blocker)? • Why would his drug plan pay 75$ a month instead of a better treatment costing only $15 per month? • If his plan was guided by similar rules to BC Pharmacare’s formulary rules he’d need to try an ACE-inhibitor first. • The Municipal Pension plan got rid of its dental coverage and may dump its drug coverage. Why? It’s unsustainable.

  18. Top drugs for hypertension

  19. Top drugs for hypertension

  20. Savings if you covered blood pressure pills according to the guidelines? What if the most effective, guideline-approved drug was the one prescribed first? • Diovan: 77,000 prescriptions, total cost $5.6 million. • Generic ramipril: $43 per script would cost $3.3 million • Generic hydrocholorothiazide: $2.45 per script would cost $188,000

  21. Marge has ‘high’ cholesterol • University sociologist: 54 years old • Told she has “high cholesterol”. • She asks for a generic; gets generic atorvastatin. • It costs 50% of the brand ($50 instead of $100) • Needs a ‘boost’ so her doctor gives her a sample of Ezetrol (ezetimibe)$108/ month • “My doctor is great. He really cares about bringing my cholesterol down.” • What’s wrong with this picture?

  22. Marge’s Story • Treating “high cholesterol” in women is unproven. • A study released in January 2008 showed ezetimibe had no benefit on the buildup of arterial plaque when compared with patients taking only statins. $108 for no added benefit? • Side effects include: Rhabdomyolysis - severe muscle damage including pain, tenderness, weakness and liver damage. • Marge wonders why she feels weak all the time.

  23. Statins: drugs to lower cholesterol

  24. Statins: drugs to lower cholesterol

  25. What values would a “Values-based” formulary be based on? • Full access to the “best” medications. • Best? • NEWEST • MOST COSTLY • MOST ADVERTISED • MOST SEXY • MOST ADVANCED • MOST TALKED ABOUT

  26. What values would a “Values-based” formulary be based on? • Full access to the “best” medications. • Best? • Best in effectiveness • Best in cost effectiveness • Best in safety • Best in terms of a proven track record (no surprises)

  27. What these stories tell us? • Free samples are gateway drugs to higher drug spending and poor prescribing. • Private drug plans who “pay for everything” often disregard the concept of comparative cost effectiveness. Employees and employers suffer. • Both employees and employers should avoid a drug plan that provides automatic coverage of: • More expensive drugs vs. less expensive drugs that are equally effective. • Brand names vs. generic drugs which do the same thing. • Newer drugs of unknown benefit vs. older proven therapies. • Drugs of questionable safety vs. drugs whose safety profile we know.

  28. “Managing” the formulary. • Needs an independent, high quality source of drug information for payers, patients and prescribers. • Three key elements: prior authorization, generic substitution and therapeutic substitution. • Involves other costs, especially education and communications. • Employees need to be incented to seek value in their prescriptions. “They don’t cost anything, they’re free!”

  29. What role do plan sponsors have in educating their members who believe?: • “If the doctor prescribes it, I must need it and my plan must pay for it.” • “Newer drugs are more expensive, but they are always going to be better. You pay for what you get, right?” • “The drugs don’t cost me anything, they’re free.“

  30. Conclusions • ‘Newer’ never automatically mean ‘more effective.’ • Communicating ‘value for money’ to payers, patients and prescribers would help improve rational use of drugs. • Think of drug coverage in terms of “What is it that we value?”

  31. How to contact me: Alan Cassels University of Victoria cassels@uvic.ca 250 361 3120

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