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AIS's Health Business Daily
Featured Story June 29, 2009 Pharmacy Cost-Savings Proposals Lack Details and Dollar Amounts Reprinted from DRUG BENEFIT NEWS, biweekly news, data and business strategies for health plans, PBMs and pharmaceutical companies. By Jill Brown, Managing Editor, (jbrown@aispub.com) There were several pharmacy benefit-related policies among the health care cost-containment strategies outlined this month by six health care stakeholder groups for President Obama in an effort to save $2 trillion in health care costs over the next decade. But pharmacy and policy experts say the pharmacy proposals are not new, are light on details and would be difficult to implement in a way that generates major cost savings. The June 1 letter to Obama from the Advanced Medical Technology Association (AdvaMed), America's Health Insurance Plans, the American Hospital Association (AHA), the American Medical Association (AMA), Pharmaceutical Research and Manufacturers of America (PhRMA) and the Service Employees International Union, outlined strategies that the groups said would help fund comprehensive health care reform. Among the pharmacy-related proposals are: (1) Expanded use of medication therapy management "to address polypharmacy, reduce medication errors and inappropriate use, and achieve better clinical outcomes at lower cost" (PhRMA). (2) Prescription drug coverage for the uninsured that would provide "significant savings off retail prices" (PhRMA). (3) Expanded comparative effectiveness research (AdvaMed). (4) A reduction in adverse drug events from high-hazard medications like anticoagulants, narcotics, opiates, insulin and sedatives through improved protocols, monitoring and education (AHA). (5) Improved care transitions to avoid hospital readmissions, through (among other strategies) an increased focus on medication guidance for patients prior to discharge (AMA). (6) Elimination of overuse of antibiotics for respiratory and sinus infections "with potential savings of $525 million to $1.1 billion" (AMA). (7) Reconciliation of multiple prescriptions for individual patients treated by different physicians to avoid potential adverse events and inappropriate prescriptions, for "potential annual savings of $3 billion" (AMA). "All of these individually —and certainly in the aggregate — would save billions and billions of dollars," says William Hermelin, general counsel at the Academy of Managed Care Pharmacy (AMCP). "The current system is generating billions of dollars of inefficiency and waste." AMCP Says Proposals Lack Details But, he adds, "I'm not sure they're detailed enough to merit the term 'proposals.'…They are recommendations; they're ideas." And what's more, "many of them have been ones that we have advocated for many, many, many years. Some of them are proposals that some of these organizations are advocating almost for the first time." For example, "overuse of antibiotics — that's been one of the highest priorities for managed care pharmacists in the field advocating with physicians and…patients for at least the last 15 years," says Marissa Schlaifer, AMCP's pharmacy affairs director. "So yes, not only do we agree with them — we've been walking the walk." And "if we could cut the overuse of antibiotics,…there's huge savings there," Schlaifer says. "It's really easier said than done, though.…I don't really know how a lot of the health care reform package is really going to change that," unless a mandatory prior-authorization program is created to restrict antibiotic use. But, she adds, that "is going to make a lot of people really mad." AMCP also questions PhRMA's wording in the proposal to expand prescription drug coverage. "I think there are a lot of reasons to ensure adequate prescription drug coverage for uninsured Americans," she says — but accessing negotiated rates "is not the No. 1 reason." Instead, she points to the need to reduce complications that stem from access issues. But "without cost containment, there will be no health reform," says Joseph Paduda, principal of health care consulting firm Health Strategy Associates. "It is unaffordable." He asserts that although the White House and Congress "have made a lot of progress in a lot of areas, they still haven't addressed the core issue — which is cost." Paduda dismisses the proposals offered by the six stakeholders as "marketing dross." Congressional and White House leaders are "going to have to tell physicians, pharma, device manufacturers [and other stakeholders] that…'you're not going to have as much income as you thought you were going to have.' Until and unless that conversation…occurs," health care reform isn't viable, Paduda contends. However,
he adds that pharmaceuticals are a "relatively soft target,"
particularly compared to inpatient care, where there is a "lot
of fat."
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