Articles on Pharmacy Benefit Management

Featured HBD Story December 12, 2007

Proposed 'Behind-the-Counter' Category of Drugs Would Give Health Plans and PBMs New Cost-Saving Opportunities

Reprinted from DRUG BENEFIT NEWS, biweekly news, data and business strategies for health plans, PBMs and pharmaceutical companies.

The long-familiar Rx and OTC (over-the-counter) classifications could someday have company. The FDA held a public meeting Nov. 14 to discuss the feasibility of establishing a third "behind-the-counter" (BTC) category of drugs, a concept that health plans and PBMs say could eventually lower Rx payers' overall spending, but for which savings would be modest at first and coverage decisions would depend on individual products.

Unlike OTC drugs, BTC products would be available to consumers only after consulting with a pharmacist. Drugs considered for this designation include cholesterol-lowering statins, oral birth control pills and some higher-dosage pain medications. FDA officials heard pros and cons of creating a BTC category at the day-long meeting, but declined to speculate on a timetable for making a decision.

The concept has divided stakeholders. In favor are pharmacist groups, which argue that a BTC category would increase patient access to needed medications, reduce health care costs, and provide a vehicle for postmarket safety supervision. In opposition are physician groups, which contend that if a drug is considered unsafe without some type of supervision, then a physician should be the one responsible for supervising the use of that drug.

Health plans and PBMs appear to be taking a more wait-and-see approach to the issue. Experts contacted by DBN say a BTC category would create a "gray zone" that would, among other things, raise questions about drug utilization, reimbursements and potential conflicts of interest.

The Academy of Managed Care Pharmacy doesn't have an official position on a BTC category, says Marissa Schlaifer, AMCP's pharmacy affairs director. AMCP members, however, did discuss the issue following the FDA's meeting, she told DBN.

"Our members believe that it will obviously increase access to medications, which in general is a good thing," Schlaifer says. But any financial or clinical impact will likely be years away, she adds. "Without knowing for sure which drugs will end up being in this class, over the short term — even being five years or so — I don't see a large quantity of drugs in this class. I'm not anticipating major changes."

The question of how Rx payers would reimburse for BTC products also is still up in the air, Schlaifer acknowledges. "Some of these will be treated in the same way over-the-counter medications are today, where they are generally not reimbursed by a third-party plan. Other third-party plans might reimburse both for the medication and for the pharmacist intervention necessary to determine whether or not this drug is appropriate. It will vary greatly depending on the drug."

The National Community Pharmacists Association (NCPA) says that regarding reimbursement, "pharmacists must be paid for services provided in conjunction with BTC medication." These services would include clinical interventions and ensuring that patients meet conditions for specific BTC drug use. "Health insurers should consider the addition of BTC medications to their formularies as a way to improve patient health care and lower costs," NCPA President Steve Giroux said in prepared testimony at the FDA meeting.

Similar BTC categories are available in Europe and Canada. A form of BTC status in the U.S. now applies to the emergency contraceptive Plan B and to cold drugs that contain pseudoephedrine. Sales of these products, which must be dispensed by pharmacists, are limited to consumers who show photo identification. But unlike the proposed BTC products, these drugs do not require a pharmacist's clinical intervention.

The Regence Group, which operates Blue Cross and Blue Shield plans in the Northwest, says it's unclear whether BTC drugs officially would be considered OTC or Rx products, a key distinction for coverage determinations under many contracts. "It opens up a lot of different interpretations," says Lynn Nishida, director of pharmacy services at Regence BlueCross BlueShield of Oregon.

Any cost savings from a BTC product would depend on how the prescription benefit is designed, she tells DBN, pointing to OTC products as an example. While a generic drug may cost members only a $5 copayment, health plans may pay $80 overall for the product, Nishida explains. An OTC-equivalent product, by contrast, may cost $30 for a 30-day supply, and is a cost paid entirely by the member.

"In the health plan's mind, we would love the member/patient to go get an over-the-counter product," Nishida says. "But we also know that the patient can get this at a generic copay. So ethically, in our own minds, it is difficult for us as health plans to say, 'Hey, use the more expensive over-the-counter product.'" As such, Nishida adds, some health plans cover certain OTC products, a move that allows insurers to save the difference between the $30 and $80 costs.

Administratively, such coverage policies would be easier for BTC products than for OTC drugs, says Steve Johnson, Pharm.D., senior director of clinical consultative services for Prime Therapeutics, a PBM owned by 10 Blue Cross and Blue Shield plans.

BTC drugs would be more easily captured by claims systems because members "would be required to go speak to the pharmacist to get the actual product, versus going to the shelf, bringing it back and asking them to submit to the claims system," he tells DBN. Johnson also says this system could more easily capture potential drug-drug interactions.

He says it's too early to say if health plans would cover BTC products. "I'm certain there wouldn't be universal coverage or no coverage," he adds. Still, BTC drugs would lend themselves to new programs aimed at lowering costs. "You can require them to try some of these first before prescription products," Johnson says as an example. "It could be similar to what is done with over-the-counter Claritin and Prilosec." The nondrowsy allergy drug Claritin (loratadine) went OTC in 2002. Heartburn drug Prilosec (omeprazole) went OTC in 2003.

Kathleen A. Johnson, Pharm.D., Ph.D., associate professor of clinical pharmacy at the University of Southern California's School of Pharmacy, says she expects health plans and PBMs to treat BTC drugs like OTC products, and not cover them. As such, these organizations would likely see their drug costs go down under a BTC system, she tells DBN. But Johnson adds that pharmaceutical payers may want to encourage BTC use — and save a payment to the doctor — by paying the pharmacist a fee and also paying for the product.

Regardless of reimbursement questions, pharmacy executives don't expect an immediate financial impact with the establishment of a BTC class, especially because only individual drugs are expected to switch status rather than whole therapeutic categories.

A likely candidate for BTC status is Merck & Co., Inc.'s cholesterol-lowering drug Mevacor (lovastatin). The firm has tried unsuccessfully to turn the product OTC since the drug lost patent protection in 2001. Mevacor is not commonly prescribed today, says AMCP's Schlaifer. "That wouldn't have as significant effect," she says of the drug's potential BTC switch. "If we're talking about the [cholesterol] class as a whole, it's definitely one of the top-tier cost drivers in a health plan."

The same holds true for birth control pills, says Nishida. If this entire class were to go BTC, "there would be a huge opportunity as far as significant dollars," she says.

Schlaifer says the BTC issue has not yet generated a lot of buzz among AMCP members. But that could change.

"As they start talking about individual drugs within that [BTC category], health plans will be paying a lot more attention," she says. "They may have strong feelings about whether an individual drug is appropriate. There will be some drugs where people will think this is a good thing. There will be other drugs where people think that this [drug] will see — both on a safety issue and from a health plan side — inappropriate utilization."

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