Category: Pharmacy, PBMs, and Pharma costs

Jul
8

Friday catch-up

Posted by Joe Paduda on Friday, July 8th, 2016 | Comments

A short but busy week; here’s a few “highlights”

Jobs!

Big jump in hiring – 287,000 new jobs last month. Even better, the jobless rate has stayed below 5 percent for the last nine months, AND hourly wages increased albeit by a marginal amount AND there are still 5.8 million unfilled jobs as of April.  Here’s one expert’s read:

“This report should ease any fears that a persistent slowdown or recession is coming soon in the U.S.,” said Dean Maki, chief economist at Point72 Asset Management. “The service sector is where the real strength is, with 256,000 hires, but the gains were widespread across sectors.”

But…real median household income is still below where it was ten years ago.

Off-label prescribing run wild

Fentanyl – now infamous for having killed Prince – is the subject of a devastating piece in the NYT detailing the arrest of two pharma marketers for allegedly “financially incentivizing” docs to prescribe Subsys, a fentanyl spray intended for breakthrough cancer pain.  According to Katie Thomas’ article, only 1 percent of Subsys scripts were from oncologists.

Suggestion – ask your PBM to tell you how many Subsys scripts you paid for, and what practitioners were writing them.  NDC codes here.  Thanks to Brian Grant MD of MCN for this one

How the pharma world works

From Drug Channels comes this easy-to-read flow chart showing the drug and dollar flows in the pharmacy market.  Boss Adam Fein is a must-follow for those interested in this business.

Hat Tip to WorkCompWire for the head’s up on the news that Minnesota’s Department of Labor and Industry just published their 2014 system report. A couple of not-obvious takeaways:

Medicare’s physician fee schedule is new and improved – a brief synopsis courtesy of HealthAffairs is here.  Couple of key points:

  • Until 2019, Medicare will give physicians a fee increase of 0.5 percent per year.
  • After 2019, there will be no additional fee increases; providers will have to pick one of two reimbursement methodologies

States adopting the MACRA (new acronym for the fee schedule) for workers’ comp are going to have to figure out what to do after 2019…

Enjoy the weekend – hope we get some rain.  Not used to drought in upstate NY…

Jul
7

You broke it, you own it.

Posted by Joe Paduda on Thursday, July 7th, 2016 | Comments

A bill before the US House and Senate would have required physicians and pharmacists to check state databases before prescribing or dispensing opioids.

All available research shows this is the single most effective step to reduce opioid abuse and kill fewer people.

Now, thanks to “doctors and pharmacists groups”, that requirement has been stripped from the bill.  What’s left is some – but nowhere near enough – money for treatment and the hope that, against all evidence to the contrary, docs who are writing the scripts that are causing the opioid disaster will take the time to check the databases before they write the script.

Not going to happen.

I am sympathetic to the claim that mandatory Prescription Drug Monitoring Program (PDMP) checking can be time-consuming. States have to do a better job of figuring out how to streamline the process while protecting patient confidentiality – and many have done so.  Moreover, the four states with mandatory PDMPs have figured it out, and it is working pretty well.

I am a whole lot less sympathetic to the argument that somehow a moment or two of a doctor’s or pharmacist’s time is too much to ask, for the simple reason that these medical professionals’ failure to properly prescribe and dispense opioids is the proximal cause of the opioid public health disaster.

Pretty much every independent research organization studying the issue has recommended mandatory PDMP checking.  Here’s one.

More bluntly, that behavior is killing people, and the lobbying to strip mandatory use of PDMPs shows that’s not that big a deal.

Kentucky, New York, Ohio, and Tennessee all mandate prescribers access PDMPs – and all have seen dramatic reductions in doctor shopping and opioid script volume.

There’s a wealth of supporting data here.  Briefly, here’s what mandatory PDMP use does.

  • after Ohio ER docs checked the PDMP, they changed their treatment plan for 41% of patients; 61% had fewer or no opioids prescribed, 39% had more.  And doctor shopping dropped by over 2/3.
  • In Tennessee, doctor shopping dropped by 50% and the volume of opioid scripts decreased by almost half a million scripts.
  • Kentucky doctor shopping was cut in half, 30% fewer patients received the “holy trinity” drug cocktail, and benzo and opioid scripts dropped significantly.
  • in New York, doctor shopping was cut by 90%, and treatment admissions rose by 20%.

After spending a fruitless hour searching the web for an actual policy statement or testimony regarding mandatory PDMP use by the AMA, my conclusion is the giant medical society wants it both ways.

They don’t want their members to have to check PDMPs, but they don’t want to be public about that opposition.

What does this mean for you?

Refusing to support mandatory PDMP is unconscionable.  At some point an enterprising class-action firm is going to figure out how to make a shipload of money off the intransigence of “doctors and pharmacists groups.”

 

Jun
10

Work comp pharmacy – early results of 2016 Survey

Posted by Joe Paduda on Friday, June 10th, 2016 | Comments

I’m up to my eyeballs in the 13th (!!) Annual Survey of Prescription Drug Management in Workers’ Compensation; the response from payers willing to devote time to the project has been gratifying indeed.

Previous Survey reports are available here; note these are the Public versions; respondents get a much more detailed and comprehensive version.

A bit of background first.  I conduct these surveys telephonically, speaking to the individual at the insurer/self-insured employer/state fund/TPA/trust who is directly responsible for the pharmacy program. In addition to asking their opinions and views, we get data on a variety of key metrics including:

  • drug spend for 2015 and 2014
  • opioid spend for 2015
  • compound drug volume
  • generic fill and efficiency rates
  • mail order usage

A few early findings.

  1. Pharmacy continues to be seen as more important than other medical ost areas, primarily due to the “downstream” effects of opioids on claim duration, return to work, and related pharmacy spend.
  2. Most respondents are seeing a decline in drug spend.  This is a bit of a surprise, as national research suggests drug costs are going up.  A possible explanation is that (most of) these payers are pretty sophisticated, have been working diligently on pharmacy issues for years, and most (but certainly not all) have employed a variety of programs to reduce unnecessary use of potentially dangerous drugs.
  3. The percentage of spend that goes to opioids varies greatly, from around 21% to over 50%.  Some of this is due to regional or state differences, but much is not. Much more to dig into here.
  4. Mail order continues to be woefully under-used, with most respondents reporting penetration rates in the low single digits.  Argh.
  5. Compound drugs are seen as highly problematic and payers have a wide variety of programs/efforts/mechanisms in place to address compounds.

Much more to come; when the Survey Report is done I’ll post a link.

Enjoy the weekend!

 

Jun
9

What’s your state’s prescription opioid death rate?

Posted by Joe Paduda on Thursday, June 9th, 2016 | Comments

Utah’s is 16 deaths per 100,000 residents.

New Hampshire? 18.2.

West Virginia leads at 24.7.

Rhode Island is well into the double digits at 14.2.

Texas is among the lowest at 2.5, as is Nebraska at 2.8.

For 2014, the national death count was almost 19,000.  You can check every state here.

19,000 people died from prescription drugs – pills that a doctor prescribed for a patient. Not heroin, not crystal meth, not Ecstasy.  Pills a drug company marketed, many of them supposedly “abuse-deterrent”. Pills a stockholder profited from.

I bring this to your attention, dear reader, because the news these days includes some signs that we’re making progress, that opioid scripts are down and things are improving.

They are NOT.

In fact, don’t be surprised if the death count in 2015 hits 22,000.  That’s just a number, but it’s a number built on dead sisters and brothers and cousins and best friends, dead moms and dads and kids and BFFs and girlfriends and hunting buddies.

What does this mean for you?

Please don’t relax one bit.  Keep the pressure on, keep the focus tight, keep demanding answers, and above all, be aware,

 

Jun
2

Opioids and Workers’ Comp – a quick update

Posted by Joe Paduda on Thursday, June 2nd, 2016 | Comments

The rest of the world is beginning to catch up to the progress workers’ comp has made fighting the opioid scourge.  Kudos to PBMs, payers, regulators, researchers and some physicians for recognizing the incredibly negative effects of opioids years ago, and taking action to mitigate some of these effects.

That is NOT to say we’re anywhere close to getting this solved – far from it.

But we have seen some evidence of decreases in the number of new claims getting opioids in some areas and an overall decline in opioid scripts and morphine equivalents (MEDs).  We’ll have more information in a couple of months when CompPharma (a consortium of work comp pharmacy benefit managers) releases its 13th Annual Survey of Prescription Drug Management in Workers’ Compensation. (note I’m president of the organization and am conducting the research, past reports are available free for download here.)

A few factoids to give some perspective:

From CWCI’s most recent research:

  • Opioids declined to 27.2% of all scripts dispensed to California work comp patients in 2014, down from a peak of 31.8% in 2008.
  • Average number of morphine equivalents per script declined from 550 in accident year (AY) 2007 to 422 in 2012.
  • The % of work comp patients receiving opioids within 24 months of injury increased from 22.4% in 2005 to 27.9% in AY 2012
  • Express Scripts reported overall spend for opioids declined 4.9% in 2015, the fifth consecutive decrease.
  • Helios reported:
    • the percentage of work comp patients getting opioids declined by 1.6% from 2013 to 2014.
    • opioid utilization dropped 2.9% over the same period

What we have NOT seen is any significant progress dealing with the knottiest and most important problem – long term opioid users.

I can’t count the number of erstwhile start-ups, business ventures, and eager entrepreneurs I’ve spoken with who contend they’ve figured it out.

By definition, anyone who claims to have a universal solution most certainly doesn’t understand the problem.  Unlike reducing initial and secondary scripts, addressing patients who’ve been taking opioids for months is very much an

  • individual,
  • patient-by-patient approach
  • requiring flexibility,
  • a deep understanding of the disease state and chronic pain and addiction,
  • a willingness to experiment and fail, and
  • a very long term commitment to a business model that almost certainly will not be hugely profitable.

That’s not to say there isn’t opportunity – there most certainly is.

What does this mean for you?

We’re at the end of the beginning of the work to address opioids.  This will take focus, years, diligence, and unrelenting focus.

Apr
12

Why be a crook when you can be a dispensing doc?

Posted by Joe Paduda on Tuesday, April 12th, 2016 | Comments

WCRI’s latest report on physician dispensing confirms what we weary soldiers have known for years; the physician dispensing industry is way better at figuring out how to screw employers and taxpayers than workers’ comp payers and regulators are at stopping them.

We’ve tried eliminating the upcharge for repackaged drugs; they came up with custom-manufactured medications.

Fail.

Here’s the summary from WCRI:

the mechanism involves the creation of an opportunity to assign a much higher AWP to these new-strength and new-formulation products. Consider cyclobenzaprine HCL (a muscle relaxant), for which the most common strengths are 5 milligrams and 10 milligrams. If a new strength of 7.5 milligrams comes to market and the original manufacturer of that new strength sets a new AWP, this AWP could be much higher than the AWPs set by the original manufacturers for the existing 5- and 10-milligram strengths. These new strengths and formulation, almost all dispensed by physicians, are labeled as drugs made by generic manufacturers, not repackagers, and therefore, are not subject to the new reimbursement rules targeting physician-dispensed repackaged drugs.

Shockingly, Florida and California, two states that have attempted to control doc-dispensed drug costs with a repackaged drug cost cap have seen these “new” drugs become the most popular versions of the drug – and the most costly, with an average price of $3.01 per pill compared to $0.38 for the “regular” formulations.

Why has this 7.5mg version become so popular?

Is it better than 5mg or 10mg versions?

Of course not.

Make no mistake, these dispensing docs – and the industry that supports them, are quite clear about the money.

Proof.  More proof. And even more proof.

WCRI used data from 2 years ago; if anything it’s way worse now.

The solution is both simple in concept and difficult in execution.  Enable employer direction to pharmacies, a situation that currently exists in NY and MN (and in some cases in CA as well).

Yes, limiting doc dispensing to the first few days helps – legislation in IN and PA has been quite helpful in limiting the shameless profiteering of corrupt docs. However, the dispensing industry is quite creative in coming up with ways to circumvent regulations; don’t be surprised if:

  • docs rent a corner of their office to a “pharmacy”, and/or
  • docs get ownership in a pharmacy down the hall, and/or
  • companies are setting up vending machine-like dispensaries in medical office buildings

In fact, these all – and likely other maneuvers – are already operating in many states.  As I noted a year ago, these bad actors “will find any loophole, whether in a states’ pharmacy licensing process, medical board regulation, work comp statute or scope of practice to find a way to continue screwing employers and taxpayers.”

Because that is precisely what they are doing.

What does this mean for you?

It is long past time to stop playing nice.

Mar
29

Obama, Pew, Landers and Paduda

Posted by Joe Paduda on Tuesday, March 29th, 2016 | Comments

Headed to Atlanta for Operation Unite’s fifth Rx Drug Abuse Summit, an event I’ve been privileged to participate in every year (this year Mark Pew of Prium, Michelle Landers of KEMI, and I are going to discuss formularies in work comp, an issue near and dear to my heart).

This year, President Obama is also speaking.

Think about that.

The leader of the free world is taking a day to fly down, talk, and fly back.  It’s not like the guy has nothing else on his plate – the Middle East, Apple v FBI, global warming, Congress, SCOTUS nomination of Merrick Garland, Pakistan, Iranian cyber attacks, China, trade policy…

and yet Pres. Obama a) decides to go to Atlanta; b) does the prep work necessary to speak on a panel about opioid policy, the FDA, drug approvals, law enforcement, heroin, treatment v incarceration; c) make the trip with all that entails; and d) speak on the panel.

While I’m pumped he decided to make the trip, I’m equal parts disheartened that the President of the United States has to do this.  Moreover, there’s a really impressive list of speakers; Governors, Congresspeople, the US Surgeon General, head of the FDA, Senators, head of the DEA, the CDC Director…

Those of us who’ve been up to our eyeballs in the crisis for a decade are gratified indeed to see the level of attention focused on the issue, and sad beyond measure that this has risen to the level that the President is devoting this amount of time to opioids.

What does this mean for you?

I’d suggest we focus on the positive here, as the negative is just emotionally crushing.

Mar
21

Gov. Baker gets it right on opioids, we got it wrong on crack

Posted by Joe Paduda on Monday, March 21st, 2016 | Comments

On opioids, Massachusetts Governor Charlie Baker (R) has been in the forefront, working with the Democratic-led legislature on intelligent, comprehensive legislation designed to save lives, assign accountability, and reduce costs. The passage and adoption of HB4056 shows what can be done – and what should be done – by every state.

Yet there’s something unsettling about this – for me and for many others.  More on that in a minute.

Friend and colleague David Deitz MD, also a member of the Mass Healthcare Services Board, was involved in this process; here’s his take:

Gov. Baker and his administration have shown real leadership in addressing this issue, and it’s important to note that other groups within the Commonwealth, notably the Department of Industrial Accidents and the Massachusetts Medical Society, have also acted in concert to address problematic opioid prescribing.  The MA Healthcare Services Boards’ guidelines have been updated to reflect the new legislation so there are no inconsistencies.  Much work remains to be done, but this is a good step forward that puts important protections in place for injured workers, in particular.”

Key components of the bill include:

  • a seven-day limit on first-time opioid prescriptions,
  • new efforts to evaluate patients within 24 hours after an overdose,
  • addiction screening for middle and high school students.
  • requires doctors to check a state Prescription Monitoring Program each time they prescribe an addictive opioid to prevent someone from getting prescriptions from multiple doctors;
  • incorporates education about opioid addiction into high school sports training; and
  • establishes a drug stewardship program to dispose of unneeded drugs.

The other 49 states would do well to consider similar legislation.

What bothers me about my/our focus on opioids is that the victims of opioids are generally white, with many middle-class.  Did we – me, you, the powers-that-be, legislators, governors – handle this differently than the crack or “pre-opioid” heroin crisis?

Yes.  And that’s just wrong.

Back when crack and heroin were predominantly a poor and minority issue, it was a crime problem.  Policing, criminal prosecutions and jail time were the approach.  Just contrast the sentencing guidelines passed by Congress and signed into law in the eighties with the legislation pending before Congress today. Crack sentences were 100 times longer than those for powder cocaine.  Today, the bills are all about naloxone, buprenorphine, and addiction treatment, brought to our attention by weeping elected officials.  Back then, it was quite a bit different.

Now that it’s affecting a wealthier and whiter population, the solution is education, prevention, compassion, a disease model of addiction.  Abusers are victims, not criminals.

What does this mean for you?

There are lessons to be learned here, some of them uncomfortable indeed.

 

Mar
16

The Opioid Pendulum Swings

Posted by Joe Paduda on Wednesday, March 16th, 2016 | Comments

The CDC guidelines are out, and that’s a very, very good thing.

Yes, there’s an apparently-reasonable argument that the guidelines’ basis is not sufficiently evidence-based to stand up to the most rigorous standards.  There are two reasons that argument fails.

First, opioid advocates, manufacturers, and most prescribers did not worry about “evidence” when pills by the bucketful were prescribed and dispensed to anyone who presented with a sore back.  For advocates to caterwaul about science, evidence, and a lack of randomized controlled trials lasting more than 12 months is unfair at best.

Second, opioids kill more than 24,000 people a year – likely a lot more.  Mothers, daughters, sons, brothers, fathers are dying every day, causing destitution, devastated families, and disaster for communities. The time for half-measures is long past.

I understand this may lead to a few folks who ostensibly “need” opioids not getting their pills quickly or in the volume they desire.

Ask yourself this – how does this “need” stack up against the deaths, ruined communities, and parent-less children caused by rampant overuse of opioids?

I’d imagine the parents, siblings, and friends of those killed by opioids would be only too happy to wait a while or take another drug or try exercise or…

 

Mar
11

Physician dispensing, opiods and efforts to control same

Posted by Joe Paduda on Friday, March 11th, 2016 | Comments

The last session at WCRI focused on my least favorite topics – doc dispensed drugs and opioids. note findings are preliminary and subject to change.

From Dongchun Wang, doc dispensing.

My takeaways.

Price-focused controls don’t work to control physician dispensing.  Sure, they work over the short term, but the dispensing industry quickly circumvents those price controls by coming up with novel new drugs, increasing the volume, or finding higher base-cost drugs to dispense to their patients.

In fact, prices for doc dispensed drugs-actually INCREASE quarter by quarter post-implementation of price-based controls.

For those of us who’ve been stuck fighting a barely even battle against the profiteering crappy docs and their supporters who do this, this is NOT new news.

Perhaps the to-be-released study will energize payers and employers to finally ban doc dispensing, and/or drive adoption of pharmacy direction (this last is the only real solution), we’ve seen doc dispensing rise even in states that technically ban or severely restrict doc dispensing

Argh.

Opioids.  Vennela Thumula PhD talked about opioids.  Double Argh.

Okay, the good news is the amount of opioids per claim has decreased somewhat over the last few years, with almost every state seeing a drop (except WI).

  • About 30% of patients that get opioids only get one script – which is fine.  Acute injury, quick treatment, all good…
  • but 70% of so get more than one – and therein lies the issue.
  • NY LA and PA have much higher opioid usage than the average, with NY and LA patients getting well over 3000 MEDs per claim. THIS IS INSANE.
  • the average worker in Louisiana got 7 scripts, due largely to the large percentage of workers who used opioids for more than six months.
  • A significant percentage of opioid-taking claimants were also dispensed benzodiazepines.  WTF are these people thinking?

Drug testing has increased over the last few years – which is fine, except that the top 5% of claimants in LA are getting tested 11 times for 12 substances per test – and the average test costs just under $1200.

This is almost certainly driven by physician-owned labs, which have proliferated over the last few years.  (full disclosure – Millennium Health is a consulting client).

What does this mean for you?

We have a very, very long way to go.