Transcript Change is Good: Simple Ways to Lower

Change is Good:
Simple Ways to
Lower Pharmacy Costs
Tim R. Covington, M.S., Pharm.D.
President/CEO
Covington Healthcare Associates, LLC
3800 Colonnade Parkway, Suite 110
Birmingham, AL 35243
Phone: (205) 970-3939
E-mail: [email protected]
Pharmacy (Rx) Economic Trends
 Rx costs account for approx. 12% of total medical cost.
 85% of all Rx costs are associated with injuries that
occurred > 3 years prior.
 Rx costs account for approx. 25% of total medical costs
after 5 years.
 Rx costs are the fastest growing care cost
component.
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Rx Issues in Workers’ Comp
 Extreme polypharmacy (too many Rxs)
 Flawed prescribing (clinically and economically)
 Inadequate value derived for Rx $’s spent
 Drug-related safety issues
 Chemically impaired patients (“Rx straight jacket”)
 Extreme Rx vendor pricing
 Physician dispensing
 Lack of generic mandates
 State maximum Rx Fee Schedule
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Where Will You Be in 10 Years?
$3,500,000
$3,000,000
$2,500,000
20%
$2,000,000
$1,500,000
15%
10%
$1,000,000
8%
6%
$500,000
$0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
8% doubles in 9 yrs.
10% doubles in 7 yrs.
• fiduciary responsibility to your client(s)
• limits of affordability
15% doubles in < 5 yrs.
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How Do We Achieve Rx Savings?
Two primary ways:
 Management of Rx Utilization
 Management of Rx Cost
(other pathways are slower to achieve savings and may
require regulatory or legislative action)
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Goal of Drug Utilization Review (DUR)
 Avoid unnecessary Rx costs without
compromising quality of care.
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What is a DUR (also called pharmacy review)?
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Evidence-based medication review and
evaluation by experts in drug therapy
management, drug information and relative drug
cost.
Address all areas of drug therapy (clinical and
economic).
Makes specific recommendations for
refinements in drug therapy.
Gives adjusters and case managers intellectual
“ammunition” to present to prescribers.
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Who Should Perform the DUR?
 Would be best if DUR is performed by a
group independent of your Rx provider
(vendor) to avoid potential conflict of
interest.
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Focus of an Appropriate DUR
 Clinical appropriateness
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Right drug
Alternative drug
Drug duplication
 Safety issues
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Excessive dosing
Rx Risk v. Benefit (Adverse Effects)
Drug interactions
FDA-unapproved use (“off-label”use)
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Focus of an Appropriate DUR (cont’d)
 Cost savings opportunities
 Noninjury related drug use
 Generic alternative
 Therapeutic alternative
 Dose consolidation
 Stop unnecessary prescription(s)
 Physician dispensing
 Compounded prescriptions
 Nutritional supplements
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DUR – An “Extreme” Example
 41 YO Female w/ankle, back, & neck injury from fall.
 Reports 3 to 4 additional falls per month.
Rx Name
Duragesic® (fentanyl patch) 100 mcg #30
Actiq® (fentanyl “lollipop”) 600 mcg #120
Soma® (carisoprodol) 350 mcg #90
Rx Cost Per Rx Cost Per
Month
Year
$1,850.70
$22,208.40
$5,244.00
$62,928.00
$523.49
$6,281.88
Lidoderm® (lidocaine 5% patch) #60
$351.76
$4,221.12
Lunesta® (eszopiclone) 3 mg #60
$378.12
$4,537.44
Nexium® (esomeprazole) 40 mg #30
Lyrica® (pregabalin) 150 mg #60
$150.00
$117.90
$1,800.00
$1,414.80
 Annual Rx Cost = $103,391
 Projected Lifetime Rx Spend = $3.5 to $5.0 million
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DUR Findings:
 Recurrent Falls - Experiencing 3 to 4 falls per month =
Significant risk for future injury & liability
 Independent
medical review could not find any
orthopedic or neuromuscular reason for falls.
 Recurrent falls are likely drug-induced
 Patient receiving multiple (5) CNS depressants that
when combined can have their effects multiplied.
 This may result in sedation, drowsiness, dizziness,
impaired coordination and balance, diminished mental
function, reduced quality of life, and increased risk of
workplace and/or motor vehicle accidents.
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DUR Findings:
 Actiq® (fentanyl lozenge)
 An alternative generic opioid would safely and
effectively manage breakthrough pain, yet would cost
as much as $62,000 less per year.
 Lunesta® (eszopiclone)
 A conversion to generic Ambien® or Sonata® would save
about $4,000 per year.
 If Lunesta® is continued, the dose should be reduced by
at least half. The patient is currently receiving twice the
maximum daily recommended dose.
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DUR Findings:
 Soma® (carisoprodol)
 Has never been shown to be safe or effective with
chronic therapy. It is metabolized to meprobamate, a
highly addictive substance.
 Discontinuation and/or conversion to generic tizanidine
or baclofen was recommended. This would save nearly
$6,000/year.
 Duragesic® (fentanyl patches)
 A conversion to the generic version would reduce cost by
approximately $10,000/year.
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DUR Findings:
 Nexium® (esomeprazole)
 Heartburn symptoms are more than likely related to
dietary/lifestyle factors, not the original injury.
 For the most part, PPIs are interchangeable.
 A switch to generic Prilosec® would save $1,400/year.
 Lidoderm® (lidocaine 5% patch)
 Published review articles have suggested that lidocaine
topical products can be used instead of Lidoderm®.
 Conversion to lidocaine 5% ointment would save
$3,800/year.
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DUR Findings:
 Lyrica® (pregabalin)
 Generally considered a first-line treatment in
neuropathic pain; however, numerous generic first-line
treatments are available.
 A conversion to generic gabapentin would save
$1,100/year.
 Brand v. Generic Issues
 By simply converting Actiq®, Soma® and Duragesic® to
their FDA-approved generics, $47,000 in savings per
year could be realized.
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DUR Potential Savings
 Annual Rx Cost = $103,391
 Potential Savings = $88,300/year (100%
acceptance)
 If only Nexium® switch is accepted, savings would
be $1,400/year or $14,000 over 10 years.
 If only Lidoderm® switch is accepted, savings
would be $3,800/year or $38,000 over 10 years.
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Savings in Work Comp Patients
 A Worker’s Compensation third party administrator
(TPA) enrolled 35 patients into our DUR program.
They realized an average annual savings of
$3,708/patient/ year (see below).
Average Savings Per Patient Per Year
Realized Savings at 2 Years for 35 Patients
Savings
$3,708
$259,561
Potential Savings After 5 Years for 35 Patients
$648,902
Potential Savings After 10 Years for 35 Patients
$1,297,805
Return on Investment (ROI) = 200% to 300% in 1st year
alone; compounding will occur in subsequent years
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Savings in MSA Patients
 Consider the cost savings achieved in actual
settlements involving 18 representative cases:
Examples
18 Cases
Lifetime Rx Cost
Before the DUR
$3,934,769.42
Lifetime Rx Cost
After DUR
Difference in
Rx Cost
$2,195,133.53
$1,739,635.89
Total Savings =
$1,739,635.89
Savings/Case =
$96,646.44
Return on Investment (ROI) = >10,000% per case
due to the realization of lifetime savings on Rxs
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Who can benefit from a DUR?
 In the general work comp population (non-MSA),
target your highest cost patients.
 Top 10% of Rx spending patient population
typically accounts for 20% to 30% of all Rx costs.
 Target any case you are trying to settle that involves
significant Rx cost.
 Look for “Red Flags” in any case…
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What is a “Red Flag” for a DUR?
1. Drug Cost – DURs are most beneficial in patients
who spend more than $500 to $750/month on
prescription drugs. The higher the drug costs, the
more likely a DUR will be beneficial.
2. Brand Name Drugs – A DUR may be beneficial in
anyone using one or more of the following brandname medications…Aciphex, Actiq, Ambien CR,
Amitiza, Avinza, Celebrex, Cymbalta, Duragesic,
Fentanyl lozenge, Fentora, Gabitril, Kadian,
Lamictal, Lidoderm, Lunesta, Lyrica, Nexium,
Opana, OxyContin, Prevacid, Provigil, Seroquel,
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Skelaxin, Topamax, etc.
What is a “Red Flag” for a DUR?
3. Physician Dispensing – Approximately 10% of
physicians dispense drugs. Although this can be very
convenient for patients, physicians can charge
significantly more than pharmacies for the same
medications.
4. Number of Medications – Patients receiving 6 or
more medications are likely to be taking one or more
drugs that are non-injury related, unnecessary, have
lower cost but equally effective alternatives, interact
adversely with other medications and/or have a safer
alternative.
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DURs – A Plan of Action
 Use DURs as a utilization management tool to control
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drivers of Rx cost.
Use DURs as early as possible after patient meets one or
more “red flag” criteria. Longer the delay the greater the
cost.
DURs can help you settle cases involving moderate to
high cost pharmacy charges.
DURs can reduce Rx-related MSA costs.
DURs can help you decrease your cost exposure on highcost cases with open medicals.
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Where Will You Be in 10 Years?
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Questions?/Discussion
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