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Drug Cost Containment

Drug Cost Containment. National Governor’s Association Health Policy Advisors Meeting September 3-5, 2003. Mark Gibson Program Officer, Milbank Memorial Fund. Why Drug Cost Containment?. Tax dollar stewardship Reduce waste Top value for dollar spent This is Real Money Improving Health

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Drug Cost Containment

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  1. Drug Cost Containment National Governor’s Association Health Policy Advisors Meeting September 3-5, 2003 Mark Gibson Program Officer, Milbank Memorial Fund

  2. Why Drug Cost Containment? • Tax dollar stewardship • Reduce waste • Top value for dollar spent • This is Real Money • Improving Health • Better Prescribing • Better Drug Selection • Fewer cuts to other health services

  3. Purpose of Medicaid is to Improve Health • Health care has no intrinsic value • Public budgets are finite • Zero sum health care trade offs • 37 Reduce/Freeze providers • 27 Reducing eligibility • 17 Increasing co-payments • 25 Reducing benefits

  4. Finding Value in Drug Purchasing • Value traditionally determined by markets • Quality • Cost • Medicaid Drug Purchasing is not a traditional market • Payer ¹ Buyer • Payer has poor quality information • Buyer has poor quality information • Buyer bears no risk • Neither payer nor buyer have current cost information

  5. Preferred Drug Lists — An Attemptto Createa Functional Market for Drugs • Making a clinical judgment • Making a price comparison • Determining the exceptions process

  6. Making a Clinical Judgment • If it’s in the class • Expert process • Systematic Review of Evidence

  7. Making a Price Comparison • Analyzing prices after the fact • Reference pricing/supplemental rebates • Prospective bidding

  8. Determining an Exception Process • PDL Advisory • Simple “Generic” style substitution • Prior authorization • Phone call • Written submissions

  9. Enhancing the Quality of Medical Evidence Used in Coverage and Treatment Policies • Oregon requires effectiveness first • Collaboration with EPC • Use of systematic reviews • Open public process

  10. Information Strategy • Focus on specific classes • Evidence-based • Emphasize key questions • Systematic review—removes bias • Credible public process • Conflict eliminated and externalized

  11. OHSU Evidence-basedPractice Center • AHRQ Center • Contracts with state for drug class reviews. • Credible, responsive source of comprehensive information. • Reports to local decision making body.

  12. EPC Strengths • Emphasize getting questions right • State of art methods for conducting systematic reviews • Accustomed to timelines, deliverables • Extensive, external peer review • Products are available free to anyone

  13. Expert Weakness • Experts may underplay controversy or select only supportive evidence • Without systematic approach bias may be introduced • Experts may ask good research questions but the wrong questions for patients and providers • Experts may not be aware of all evidence • Sometimes are not willing to disclose fully their evaluation process back to importance of disclosure to consumers and advocates documents

  14. Systematic Review Process • Problem formulation/key questions • Find evidence • Select evidence • Synthesize and present • Peer review and revision • Maintain and update

  15. First Four Classes — Oregon Conclusions 1. PPIs/heartburn—”no significant demonstrable differences among them” 2. Long-acting opioids—”insufficient evidence to draw any conclusions about the comparative effectiveness” 3. Statins/cholesterol lowering-”evidence supports the ability of lovastatin, pravastatin and simvastatin to improve coronary heart disease clinical outcomes.” 4. NSAIDs—”no significant clinical differences”

  16. Next Classes — Oregon • Estrogens---”No studies showed any difference between estrogen preparations.” • Triptans—”Using 2-hour pain free…oral rizatriptan 10 mg appears to be the most efficacious.” • ACE Inhibitors/Calcium Channel Blockers— thousands of studies meeting criteria—due in Summer ‘03

  17. Next Classes — Oregon • Incontinence drugs---”evidence does not demonstrate significant differences in objective or subjective efficacy, adverse events or withdrawals.” • Skeletal Muscle Relaxants---”the evidence does not support any conclusions for the comparative efficacy or safety….for musculoskeletal conditions.” • Oral Hypoglycemics---”patients on glyburide had greater risk reduction of progression of retinopathy than those on chlorpropramide….chlorpropramide has a less favorable adverse effect profile…insufficient evidence on other sulfonylureas and non-sulfonylurea secretagogues.”

  18. What is Next • Globalize the evidence • Localize decision making

  19. What is Next • Globalize Evidence • Collaborate • Improve evidence-based process for all • Disseminate evidence • Update evidence

  20. Center for Evidence-based Policy • Focus on informing state policy makers of the evidence regarding key issues • Funded by public and private participants sharing in the cost • Each project governed by the participants • Participants identify topics and key questions

  21. First Project—Drug Effectiveness Review Project • Continue drug class reviews focusing on comparative effectiveness to support preferred drug list, formulary or disease management activity • Focus on the most common 25 drug classes • Update every 6 months • Each participant uses local decision makers to draw conclusions from the evidence for their use

  22. Drug Effectiveness Review Project • Systematic evidence-based reviews done by a network of Evidence-based Practice Centers • EPCs in several regions of the country • Experienced, credible, reliable • Used to deadlines, working in public domain, free of conflict of interest. • Work peer reviewed through AHRQ

  23. Drug Effectiveness Project • The Center is part of Oregon Health and Sciences University • Assuming information is used in Medicaid, states contracting are eligible for federal match • Goal of 20 participants

  24. Why Participate? • Shape the process • Technical Assistance • Collaborate with private and public purchasers with similar concerns • Cost effective and efficient • Begin to move beyond current policy approach

  25. What is Next • Localize Decision Making • Organize public and private decision makers • Explicit, public process • Externalize bias • Eliminate conflict of interest

  26. More Information • Reports at oregonrx.org • Email comments/questions to j.mark.gibson@att.net • Call Mark Gibson at 503-930-6668

  27. The dream of reason did not take power into account. Paul Starr

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