Brian K. Solow, MD

Although the economy is beginning to show signs of renewed strength, many employers continue to face pressures on their bottom line. As a result, they may be tempted to drastically reduce pharmacy benefits or increase employee cost sharing. Such an approach could backfire, because this type of short-term fix could end up costing more in the long run. Experience has shown that such cuts can result in increased risk of illness and disease progression, which could lead to increased visits to the hospital, emergency  department, or doctor’s office.

A simpler, sustainable fix for employers to help manage costs and improve healthcare outcomes is to give their pharmacy benefit manager (PBM) a checkup to evaluate its vital signs. To help you survive and thrive, your PBM should be continually working to:

Respond to individual health needs with personalized solutions.

As a practicing physician, I know that busy doctors often see PBMs as one more layer in the bureaucracy of patient care. Yet, because I also work for a PBM, I can tell you that if that is your perspective, you are overlooking a resource that can be a significant help in achieving a common goal: getting the right medication to the right patient at the right time, at an affordable price.

In many ways, it has never been more challenging to be a practicing physician or other healthcare provider. We all can benefit from assistance that helps us deliver the best care that  we can. Pharmacy benefit managers are a major resource to providers, for information not only on prescription drugs, but also on how our patients are taking these drugs, on potential adverse drug interactions that can be avoided, and on how to obtain the most affordable medications.

This latter point is especially important in today’s economy, when we know that many patients are compromising their care by skimping on or not taking their prescription medications because they can’t afford them. The New England Healthcare Institute estimates that one third to one half of all patients in the United States do not take their medications as prescribed by their doctors.

With these common goals in mind, let’s look at some of the vital signs that indicate how your patients’ PBMs can be a resource for you in your practice, for the benefit of your patients.

Pharmacy benefit management companies exist to manage the pharmacy benefit program that is funded by plan sponsors. The role of PBMs today encompasses numerous programs and initiatives to help patients obtain drugs as conveniently and affordably as possible, to stay compliant with their prescription drug regimen, and to use drugs safely.

Generic Medications Continue to Help Control Costs

When discussing cost management for pharmacy benefits, one of the key strategies has been and will remain generic formulations of branded medications. Pharmacy benefit managers encourage the use of generics for 2 reasons: a generic drug is therapeutically equivalent to its branded counterpart, and the cost savings from using generics help everyone control their prescription drug costs.

Industry sources say that the future of prescription drugs is all about generic conversions. Between 2010 and 2013, $137 billion of branded products are expected to be replaced by generics—a huge opportunity for combining safety and savings. Among the blockbusters expected to lose exclusivity during this period are Pfizer’s Lipitor, sanofi-aventis/Bristol-Myers Squibb’s Plavix, and GlaxoSmithKline’s Advair.

The good news is that employers and employees today understand the value of generics. The average branded drug retails for about $120 and the average generic costs about $35 (Source: National Association of Chain Drug Stores). It is important to note that the $120 represents the average retail cost of all branded drugs (ie, those both with and without generic alternatives). Typically, branded drugs without generic alternatives are newer to market and cost, on average, more than older branded drugs, for which generics are more often available.

Although many employers have already implemented strong generic programs and achieved high utilization rates, there are a number of strategies to be explored and implemented to create further cost savings.

 To ensure that physicians stay abreast of what is going on in the world of generics, some PBMs contact them directly to let them know about the availability of a new generic drug.

 Direct mailings to physicians with information on generic drugs, along with identification of patients who are taking branded drugs for which generics are available. The mailing may be followed by contacting the physician to suggest the generic alternative.

 Recognizing the complexity of the marketplace, some PBMs offer multitiered generic formularies or incorporate other strategies to lower overall medication costs.

The key to effective generic programs in today’s marketplace is to have a well-thought-out strategy. For example, Prescription Solutions has a program that provides prenotification to our members when a branded drug is about to lose its patent and a generic is becoming available. As soon as the benefit changes (ie, when the PBM has ensured the generic provides optimal cost savings), another letter goes out to the members and their physicians to let them know that the generic is available at a reduced copayment. Two to 4 months following the initial letter, a retrospective claims analysis is conducted to determine whether members have changed to the generic. If not, another round of mailings is sent to  members who have not responded and their physicians.

The program includes a telephone outreach component. An automated call is made to the members to let them know that the generic is available and to recommend that they discuss the therapeutic benefits, along with any questions, with their physician(s).

Programs such as this one have proven highly successful. Some PBMs are able to achieve generic substitution rates of more than 90% within just 1 month of a drug becoming available as a generic. This prompt transition can save employers millions of dollars, especially when blockbuster branded drugs become available as generics. The bottom line to a successful generic medication program is to emphasize and promote the total health management of the patient.

Mail service pharmacy is yet another core strategy for controlling pharmacy benefit costs. Over the past decade, mail service pharmacy has rapidly become a popular method for  delivering prescription medications, particularly for older populations or those with chronic illnesses.

However, with the advent of low-cost generics and retail pharmacies offering 90-day supplies, employers and employees have renewed interest in determining which option  ultimately provides the best cost savings. When considering a mail service pharmacy, it is important to consider not only the cost, but other program components as well. In tight  economic times, it is not just about reducing costs; the challenge is also to ensure overall value and satisfaction for the employer and employee.

The best mail service pharmacies today do more than just deliver medications. They offer clinical programs that provide important education, communication, and drug safety  features. Members can call from the privacy of their home to speak to a pharmacist about their prescriptions anytime, day or night. The leading mail service facilities also use the  latest technological innovations combined with multiple redundant safety checks to ensure prompt and safe delivery. Filling accuracy rate at top mail service PBMs is in excess of  99.99%, which other prescription delivery systems including retail pharmacies find very difficult to match.

Mail service provides the benefit of integration of information about all prescriptions written by all prescribers treating a member and filled at all pharmacies patronized by that member. This capability is especially important for employees with multiple prescribing providers. It is estimated that older employees take an average of 3 to 5 separate  prescriptions, greatly increasing the chance for potentially harmful interactions. Mail service safety programs can check for drug—drug interactions and determine whether a patient  might be taking a medication that could be dangerous or lead to an adverse reaction when combined with another prescription drug. Additionally, PBMs often will use mail service to provide important reminders (eg, missed prescriptions, appropriate compliance guidelines) and to educate employees about the importance of diet, exercise, and lifestyle changes to prevent and/or manage certain diseases. Mail service is not for everyone. It works best for chronic medications such as those for hypertension, heart disease, or diabetes management. However, when used as part of a comprehensive pharmacy program, it can provide key benefits to employers and employees. Employers can achieve savings of up to 10% when employees use mail service, representing millions of dollars for large to midsize employers. Employees can save as well, particularly those who take branded medications or who have tiered generic copayments. In addition, employees can secure the added benefit of convenience and, with leading mail service pharmacies, the ability to talk 24/7 directly and privately to a pharmacist by phone or e-mail.

Although mail service and generics represent 2 important areas to address in cost-saving programs, there are other options to consider. To maintain quality and control costs, also consider the following.

It is estimated that about half of consumers are noncompliant with taking their prescriptions and, therefore, get a submaximal effect from their medications.

Nonadherence with prescription medications also is a key source of unnecessary cost in the US healthcare system. According to a recent New England Healthcare Institute study, otherwise avoidable medical spending resulting directly from nonadherence accounts for up to $290 billion per year, or 13% of total healthcare expenditures.

 This situation represents wasted benefit dollars in terms of actual costs and increases the potential for negative health outcomes.

Pharmacy benefit managers can help patients to be more compliant with their medications, which is a huge challenge for physicians as well. Some PBMs offer programs for  physicians that identify patients who are not taking medications as prescribed and help them to directly reach out to those patients, thereby improving adherence and outcomes.  Some PBMs also have clinical management expertise to improve medical outcomes. They offer disease therapy management programs, for example, to help manage the  medication therapy component for patients with chronic illnesses.

Education programs (especially used in conjunction with mail service) and coordination and collaboration with physicians and other available company communication programs (eg, newsletters, Web sites) should be used to promote and encourage patient compliance to prescribed medication therapies. The goal of these programs is to improve patient compliance, which will improve outcomes over time.

Pharmacy benefit managers with the ability to provide a range of programs designed solely to ensure the safe and effective utilization of prescription medications can help save employers money and improve employees’ health. Medication-related errors and adverse events are the leading cause of hospitalizations. Polypharmacy programs can help to  identify potentially harmful duplicated medications or ones that may no longer be needed or that are potentially dangerous for that employee. Adverse drug reaction programs will  help to prevent costly hospitalizations, inappropriate medical resource utilization, and even death. Avoiding drug—drug interactions and managing the dangers of polypharmacy are  critical health challenges as baby boomers age and chronic illness across all age groups increases.

Many PBMs offer a wide range of safety programs and will work with employers to implement those that are of most value to an employee population. Pharmacy benefit managers can help because they are in a position to identify at-risk patients and can provide physicians with feedback on whether or not patients are filling their medications and taking them correctly, and whether there is the potential for a dangerous drug interaction, which often can happen when patients see multiple physicians. By contacting physicians and providing them with educational materials to use as a discussion point with their patients, a PBM can intervene very effectively to prevent these interactions.

A significant asset that PBMs bring to these initiatives is the information within their claims database. They have the overall picture of a patient’s prescription drug use—across multiple physicians, facilities, and geographic areas&mdash;knowledge that the individual physician does not have in today’s medical world, even with e-prescribing. This information helps physicians provide their patients with the best healthcare.

In the day-to-day practice of medicine, it is easy to view the interactions with the PBM as another administrative chore and even as interference in the physician—patient relationship. Another perspective is to recognize the value of the otherwise unavailable information that the PBM brings to the physician.

Communication between PBMs and physicians should always be a 2-way street. Often the physician has important information on the patient’s situation that impacts the decision. To reach the best choice for each patient, my PBM work includes many hours of such discussions each week. 

The “best practices” of PBMs with which physicians are most familiar—such as prior authorization, step therapy, and programs that look at drug interactions and polypharmacy&mdash;are designed to work to the benefit of everyone: physician, patient, and plan sponsor. They are a checkpoint that brings together a wide range of information that the physician does not have available at the point of prescribing, to help make the best choice for a particular patient.

Prior authorization—the practice of requiring approval for a specific drug&mdash;is used to ensure that the right medication gets to the right patient for the right length of time. It is a good strategy to ensure that patients who need highcost drugs receive them, while helping plan sponsors to manage costs. 

Articles

Pharmacy benefit managers can aid both physicians and employers in providing quality healthcare at an affordable price.

PBMs:Vital Signs for Managing Costs and Improving Outcomes

To address the multiple needs of constituents— from patients and plan sponsors to prescribing physicians and pharmacists&mdash;today’s pharmacy and therapeutics (P&T) committees must move beyond the traditional areas of safety and efficacy to have a 360-degree perspective on a number of critical issues. For example, how can the formulary help to

	• Avoid unnecessary patient emergency department visits and hospitalizations?

Effectively dealing with these important issues requires participation by a broad cross-section of representatives involved in, and touched by, the prescription drug selection process. Whether the task is development of a new P&T committee or restructuring of an existing one, here are some of the voices and perspectives that must be brought into the discussion to assist in comprehensively identifying and addressing all issues.

The question is not whether specialists should be included in the process, but which ones. One of the best ways to decide is first to undertake a thorough review of claims data to identify medications and conditions that are most prevalent in a population. Once those have been established, appropriate specialists can be included. The specialists do not have to be voting members on the committee, but their testimony and opinions about certain medications should be factored into every relevant decision.

The perspectives of professionals who have insights into a wide range of population demographics must be incorporated into the formulary development process. For example, geriatricians can supply insights into the medical, psychological, and social needs of seniors. Likewise, as the number of children with diseases such as asthma, diabetes, and other chronic conditions increases, pediatricians—traditionally overlooked in many P&T committees&mdash;will need to have their concerns and recommendations incorporated.

Medical ethicists provide guidance on how to ensure that moral and institutional values are applied to difficult healthcare decisions. Promising medical advancements bring hope, but also raise highly sensitive issues related to access, cost, duration of care, and even therapeutic exit strategies. In combination with other clinicians, ethicists help to facilitate and further discussions that can help organizations make morally sound and consistent medication decisions.

How to weigh the cost of prescription drugs within formulary development is an ongoing question. Clearly P&T committees must not base important clinical decisions on cost or rebates. Equally clear is the simple fact that analyzing certain aspects of medication costs must play some role in the process. Pharmacoeconomic studies that provide quantifiable data on outcomes related to costs can help committee members make better decisions. Issues such as side effects and the ability of a medication to reduce utilization are legitimate and necessary factors to consider when making formulary decisions.

As drug therapies become more complex and targeted toward specific disease states and even genetic profiles, it may be tempting to place greater emphasis on insights from specialists and other clinicians. However, it is critical to ensure that primary care physicians (PCPs) remain a focal point of the P&T decision process. Practicing PCPs know what works in a real-world setting and can share insights into the patient experience with drug therapies, including compliance rates and side effects. One way to maximize the value of PCP participation is to ensure that committee members are independent nonemployees who represent a broad cross-section of the community served.

Inclusion of pharmacists on P&T committees is a given. However, it is important to include a wide range of pharmacists—clinical and research pharmacists, and pharmacists practicing in the community. Pharmacists working in a retail setting have invaluable insights about how patients actually use and respond to prescription drugs. Clinical pharmacists will bring in-depth knowledge of pharmacology, drug-delivery systems, and pharmacokinetics. The ability of the committee to avail itself of a wide range of pharmacist perspectives will help to refine and improve the formulary development process.

Increasingly, organizations are including lay people from their communities in the P&T committee process. Additionally, hospitalists, psychologists, and nurses all can provide invaluable insights. Finally, ensuring that a majority of members who may participate in the P&T committee process are not employees and maintaining anonymity to avoid potential conflicts help ensure that recommendations are based solely on clinical attributes, not financial issues.

Ultimately, the overriding goal of the committee must be to obtain 360 degrees of opinion—insights and perspectives from all who are touched by the process. The result of such a comprehensive and inclusive effort will be a much more effective and better-supported formulary for all organizations.

Ultimately, the overriding goal of a P&T committee must be to obtain insights and perspectives from all who are touched by the process.