Category: Pharmacy, PBMs, and Pharma costs

Aug
25

Lies, Damn lies, and Statistics – the Blood Plasma debacle

Posted by Joe Paduda on Tuesday, August 25th, 2020 | Comments

Sunday President Trump, HHS Secretary Alex Azar and FDA Commissioner Dr Stephen Hahn said the use of blood plasma had reduced COVID19 deaths by 35%.

Trump said it was a “tremendous” number.

Azar said:

“We saw about a 35 percent better survival in the patients who benefited most from the treatment, which were patients under 80 who were not on artificial respiration…I don’t want you to gloss over this number…We dream in drug development of something like a 35% mortality reduction. This is a major advance in the treatment of patients.”

Hahn said

“a 35 percent improvement in survival is a pretty substantial clinical benefit. What that means is — and if the data continue to pan out — 100 people who are sick with covid-19, 35 would have been saved because of the administration of plasma.”

This is not “stretching the truth”, or over-generalizing, or taking something out of context.  It is total bullshit.

A REAL FDA scientist – whose name was redacted from an FDA memo, was a LOT less enthusiastic, writing the study data:

 “support the conclusion that [convalescent plasma] to treat hospitalized patients with COVID-19 meets the ‘may be effective’ criteria for issuance of an EUA. [emphasis added; EUA = emergency use authorization, which allows use of a treatment before it goes thru the entire approval process]

There is no basis or source for the 35% figure; it appears to have been derived from a very small group of patients treated at the Mayo Clinic.

Note the emphasis on “appears”; that statistic was NOT in the Mayo Clinic’s 31 page report;

  • nor was it in a memo authored by FDA scientists,
  • nor was it in the FDA’s letter authorizing use of blood plasma on an emergency basis to treat COVID19,
  • Nor could it have been credibly derived from the actual study report.
  • Nor did one of the principal study authors have any idea where the 35% figure came from.

If anything, it looks like Azar, Hahn, and President Trump cherry-picked data by only looking at results from a very select and very small subset of a subset of patients; those:

  • less than 80 years old;
  • not on a ventilator; that
  • received plasma within 3 days of diagnosis, and
  • received plasma with high levels of antibodies.

But wait, you say, that’s still good news!

Okay,

Here’s what the study actually found as reported by the NYTimes:

among the larger group of more than 35,000 patients, when plasma was given within three day of diagnosis, the death rate was about 22 percent, compared with 27 percent when it was given four or more days after diagnosis.

Hahn later corrected his statement – but only after an official FDA spokesperson perpetuated the fraud…

I get we all want to find a cure, and a vaccine, and we want this long global nightmare to end. We want the dying to stop, the suffering to end, the pain to go away, life to return. But our only hope is rigorous, robust, careful and thorough science.

Not political grandstanding, not abuse of a vitally important Federal Agency, not outright lying. We’ve been down this path before, and it didn’t turn out well.  Remember hydroxychloroquine?

Does it appear blood plasma from patients that have recovered from COVID19 may be beneficial? Yes. Is it likely it will help some patients? Well, there’s some evidence it may help some patients.

Is it a universal cure?

Highly unlikely.

What does this mean for you?

Science matters. Dig deep, ask hard questions, and don’t believe the headlines until you do your homework.

 

Jul
24

Friday catch-up

Posted by Joe Paduda on Friday, July 24th, 2020 | Comments

COVID and client work has kept me way too busy this week – hope to be back to more frequent posting soon. Meanwhile, here’s what I missed…

Workers’ comp drug trends

myMatrixx released its annual Drug Trends Report. Key findings include:

  • 6.1% drop in drug spend for myMatrixx clients
  • 10.7% drop in opioid spend
  • over five years, clients’ opioid spend dropped 45%
  • Lyrica’s brand patent expired; within 4 weeks over 90% of patients had been switched to a less-costly generic

(myMatrixx is an HSA consulting client)

Workers’ comp pharmacy regulations – WCRI’s national inventory

Is available for purchase here. This is a must-have for any and all workers’ comp payers. Info on medical marijuana, opioid prescribing limits, drug testing, and pricing is all there.

Presumption

Pretty solid summary of presumption changes provided by the Premium Reduction blog; some good reporting on numbers of claims in FL, CO and CA as well.

Medical pricing lookup

Medata has a pretty cool medical service pricing lookup tool that’s useful for consumers, adjusters, and employers. It includes pricing for group health, auto, and workers’ comp.

COVID’s impact

Thanks to Risk & Insurance’s Courtney DuChene for her reporting on our survey of COVID”s impact on workers’ comp.

Finally, this…

And, one day, perhaps this…

Jul
9

Work comp drug trends – costs and opioid use down, physician dispensers still a big problem

Posted by Joe Paduda on Thursday, July 9th, 2020 | Comments

myMatrixx released it’s annual Drug Trend Report yesterday; there’s a lot of good news – and a few trends that bear close attention.

The good stuff (lots more in the report itself)

  • drug costs per patient decreased by 2.4% despite a 1.9% increase in utilization
  • opioid cost per patient continued to drop, this time by 10.7%
  • comparing claims incurred in 2019 to those incurred in 2016 or earlier:
    • 45% fewer patients were prescribed opioids
    • the average days supply dropped by 2/3rds, from 28 to 9
    • the average morphine equivalent dose dropped by 40%

Stuff that demands your attention.

Many payers are working hard to close older claims. For claims older than about 8 years, pharmacy costs account for almost half of medical expenses. Obviously, ensuring the drugs prescribed and dispensed to long-term patients are still appropriate and are helping the patient recover is the first step in developing a plan to resolve these old – and very expensive – claims.

Specialty meds are becoming increasingly common – and increasingly costly, accounting for 8.8% of drug costs.

The bad stuff

Physician dispensers are the worst. They suck money out of employers and taxpayers, justifying their rampant profiteering by lying about maintaining patient access and improving care. 

Their latest scam is topicals. One out of every eight physician dispensed meds is a topical, but one out of every three dollars you pay for physician dispensed drugs is for a topical.

chart used by permission

One – methyl salicylate cream 25% – is available at retail pharmacies for about five bucks. Physician dispensers are getting $345.

I’ll save you the math – you are paying 69 times more than you should.

There’s a lot more detail in myMatrixx’ report – you can download it here.

What does this mean for you?

While payers and PBMs have made remarkable progress addressing opioids and controlling costs, much remains to be done:

  • keep the focus on long-term opioid patients
  • aggressively attack physician dispensing
  • if you don’t have a specialty med program, you’d best get one set up.(myMatrixx is an HSA consulting client)
Jun
4

COVID and pharmacy benefit management – an update

Posted by Joe Paduda on Thursday, June 4th, 2020 | Comments

COVID19 is having an impact on work comp payers’ pharmacy programs – but this isn’t due to treatments for the disease itself.

That’s largely because there are no medications that have been shown to be safe and effective in treating COVID19 in credible clinical trials.  As a result, there’s little consistency in how payers are approaching medications intended to treat COVID and the symptoms thereof.

Some are approving hydroxychloroquine without a prior authorization (PA) while others require a PA for initial and refills. As the surveys were completed before the latest news that hydroxychloroquine research found less-than-promising clinical results for patients exposed to the virus, it is possible more payers will require at least a PA for future prescriptions. (Other research that reported specific health risks recently came under fire from multiple sources.)

None of the respondents mentioned remdesivir, a brand antiviral that has shown some promise (based on limited clinical trials). This may well change if and when additional trials are completed and the results are satisfactory.

What is consistent is payers’ moves to loosen other prior auth requirements to allow refills for other medications for longer periods and earlier than usual.

Home delivery has also ramped up appreciably, with many retail outlets offering delivery in an effort to keep customers tied to their local store as opposed to using the PBM’s mail order pharmacy.

What does this mean for you?

Unfortunately, we don’t yet have any medications that have been proven to be safe and effective in preventing COVID19 or moderating COVID19’s effects.

Read studies carefully, and get your clinical experts to weigh in on coverage decisions. Science matters.

May
12

Now, about those drug rebates…

Posted by Joe Paduda on Tuesday, May 12th, 2020 | Comments

Drug rebate dollars account for a big chunk of brand drug costs – more than 40% in some cases. While list prices for brand drugs have been rising rapidly, net prices – the prices actually paid to the manufacturer – have not.

That’s mostly because manufacturers have been paying rebates to employers, insurers, and others in the drug distribution system.

This from Adam Fein PhD of Drug Channels:

A drug’s net price equals the actual revenues that a manufacturer earns from a drug. The net price equals the list price minus rebates as well as such other reductions as distribution fees, product returns, chargeback discounts to hospitals, price reductions from the 340B Drug Pricing Program, and other purchase discounts.

AARP is one of those making bank off rebates, along with lots of healthplans and insurers.

Workers’ comp

The picture’s a bit different in workers’ comp, for several reasons. Rebate payments tend to be lower because:

  • fewer brand drugs are dispensed to work comp patients
  • far fewer speciality drugs – the really expensive ones – are dispensed to work comp patients
  • the brand drugs dispensed to work comp patients typically don’t have big rebates.

But – there’s always a but – rebates must be considered when evaluating your drug spend. If you are an insurer or self-insured employer, a few things to consider:

  • ask your PBM how rebate payments affect your current pricing, and how.
  • if you’re pricing a new PBM, ask if you’re going to get the rebates paid directly to you, or if rebates are included in a calculation of your drug price
  • find out if you are getting ALL the rebate payments, or other entities in the supply chain are getting a cut. [that’s not necessarily a bad thing, but you do want to know where your dollars are going – because they are your dollars]
    • the big PBMs have more buying power, so you’re more likely to get more of the rebate dollars if you’re working with one of the big players

What does this mean for you?

These are your dollars. You need to ask the hard questions to be sure you’re getting the right answers. 

May
8

COVID19 catch up

Posted by Joe Paduda on Friday, May 8th, 2020 | Comments

Three key takeaways from this week’s COVID19 news.

Do we KNOW how bad things are, who’s dying, and Remdesivir.

  1.  Do we know how many are infected, the death rate, and the number hospitalized/in the ICU/on ventilators?

No.

We are three plus months into the crisis and if anything, the picture is muddier than it was a month ago. From the highly-credible COVID Tracking Project;

it is impossible to assemble anything resembling the real statistics for hospitalizations, ICU admissions, or ventilator usage across the United States.

Also from the Project:

the CDC does offer a national-level account of “specimens tested,” this data is incomplete and lagging, and it uses a different unit (specimens tested) for total tests than for positive results (which are counted in people). This makes it impossible to accurately match testing totals with positive tests to infer a complete picture of COVID-19 testing, even at the national level…a simple count of identified COVID-19 cases doesn’t show the true location or comparative severity of outbreaks. Simple case counts show where people are being tested, not where people are sick. [emphasis added]

Yep, the greatest country on Earth can’t even capture and accurately report infections, hospitalizations, and deaths…you should be pounding your head against the wall.

Or maybe just scream in frustration…

2. Who’s dying.

In the New York City, it’s mostly older folks.

From Statista…

Alas, our nation’s leaders still do NOT KNOW how many of our loved ones in nursing homes have been killed by COVID19. 

Almost three weeks after CMS Administrator Seema Verna took to the podium to announce HHS would begin publishing the numbers, we’ve seen nothing.

3. Finally, Remdesivir is NOT a cure – far from it.

The results of a study conducted by NIAID on about 1,000 patients found it does shorten the course of COVID19 – by four (4) days – in some patients. Manufacturer Gilead hasn’t said what remdesivir will cost, but indications are about $4,000 per patient.

NIAID’s study found the anti-viral drug:

  • has been shown to be safe in humans,
  • is given intravenously (it is injected into the blood stream),
  • the course of treatment is 5 – 10 days,
  • has to be administered in a hospital, and
  • the vast majority of patients who recover at home will NOT get the drug.

Perhaps the most important impact will be shortening the course of COVID19 (although that didn’t happen in all patients who got the drug). This will free up more bed-days in facilities and allow them to treat more patients.

Note an earlier study in China did not find remdesivir was effective in treating COVID19. From the study: “Remdesivir use was not associated with a difference in time to clinical improvement”

Lastly, who will actually get the drug depends on luck – some hospitals will get it, others will not, with no rhyme or reason.

For my work comp readers, over at Workers’ Comp Insider Tom Lynch has a quick summary of COVID19 and its impact on workers’ comp.

What does this mean for you?

We should expect way more from our elected officials. 

May
4

RIMS, opioids, and awards to drug distributors’ risk managers

Posted by Joe Paduda on Monday, May 4th, 2020 | Comments

Last month RIMS announced its annual awards; one of the recipients is the risk manager for Cardinal Health, another has a similar role at McKesson.

Awarding awards for excellence in risk management to two individuals at companies with huge liabilities for the opioid crisis, and failing to discuss that liability in press releases is pretty shocking.

Both companies are embroiled in ongoing and likely very expensive litigation regarding their responsibility for the opioid crisis. Cardinal just announced a $4.9 billion loss for the first quarter of 2020, attributing the hit entirely to opioid litigation (the company estimated the cost of litigation at $5.6 billion.

West Virginia is one of the states devastated by rampant overuse of opioids; Pulitzer Prize-winning reporter Eric Eyre just published a book detailing his investigation into Cardinal’s role in the opioid crisis.

According to Eyre, Cardinal “saturated the state with hydrocodone and oxycodone — a combined 240 million pills between 2007 and 2012. That amounted to 130 pain pills for every resident.” All told, distributors shipped 780 million pills into West Virginia over that time.

Cardinal, McKesson, and Amerisource Bergen are the largest drug wholesalers in the nation, acting as the middlemen between manufacturers and retail and mail order pharmacies. While all three contend they are just part of the supply chain, they are required to monitor and report shipments of controlled substances – including opioids, a responsibility that is at the center of the litigation.

(This is not to say the three distributors bear all the responsibility for the crisis – far from it. State health officials, the DEA, FDA, prescribing physicians, opioid manufacturers and others all share in that responsibility.)

From the Washington Post:

McKesson, Cardinal Health and AmerisourceBergen, were in and out of court. They paid lots of fines but kept on trucking. In 2018, their chief executives gave sworn testimony before the House of Representatives Committee on Energy and Commerce: All denied contributing to the opioid crisis. Later that year, the committee released the results of an 18-month study. It found that distributors failed to conduct proper oversight of pharmacies by not questioning suspicious activity and not properly monitoring the quantity of painkillers shipped. [emphasis added]

Earlier this year, McKesson agreed to pay investors $175 million to settle claims that “directors failed to maintain adequate internal systems for spotting suspicious opioid shipments…”  According to Bloomberg, U.S. District Judge Claudia Wilken in Oakland, California said the suit raised:

“legitimate questions about whether directors ignored “multiple red flags” about opioid shipments even after agreeing to step up compliance oversight as a result of a deal with the government.

The settlement, produced in part by a series of mediation sessions, calls for McKesson to add two new independent directors to its board, to beef up compliance training for directors and improvements in internal systems designed to red-flag suspicious orders, according to court filings.”

McKesson is the also the subject of a criminal probe launched by Federal prosecutors in Brooklyn, NY. 

So, the world’s leading risk management organization conferred prestigious awards on risk management professionals at two companies that have massive financial liability – and I would argue ethical responsibility – for what can only be described as a massive risk management failure. And one is the subject of a Federal criminal probe.

I contacted RIMS to inquire about the decision criteria used by the individuals to select the award recipients, stating:

I’m curious as to the decision criteria employed by the award committee that resulted in awards to these two executives. While their accomplishments are impressive and their achievements notable, I’d like to understand how the opioid settlement issue factored into the award decision.

RIMS Communications Director Josh Salter was kind enough to provide an initial response:

RIMS awards are reviewed and selected by volunteers. This group of risk professionals is charged with vetting all submissions and then, using their experience in the profession, making a decision based on the applicant’s accomplishments. While the volunteer group changes from year to year, I will share this information with them.

I asked Mr Salter if he would facilitate a discussion with any members of the committee and offered to keep the names of those members confidential; to date and after multiple requests I have not received a response. [I’m certainly willing to hear from Mr Salter and committee members]

Eyre’s editor, Ned Chilton, coined the term “sustained outrage” to define what he saw as an essential responsibility of news organizations, a demand that media keep the focus on injustices instead of reporting on a calamity and moving on. I’ve been reporting on the opioid crisis since 2005; over the last two years my passion and drive has burned out.

That’s my fault.

I struggle to understand how RIMS could confer prestigious awards for “risk management” on individuals at two huge companies that bear significant responsibility for the opioid crisis – and not even mention the opioid issue in publicity around the awards. This is not to impugn the professionalism, ethics, or abilities of the individuals recognized by RIMS, rather to ask a very uncomfortable question, one RIMS needs to address.

What does this mean for you?

We cannot let crisis fatigue take our focus off opioids.

[PS – kudos to Tristar’s Mary Ann Lubeskie for her ongoing and tireless efforts to keep opioids front and center… you can follow her at @maryannlubeskie on Twitter]

 

 

 

Apr
20

Are you paying too much for drugs, Part Two

Posted by Joe Paduda on Monday, April 20th, 2020 | Comments

The good news – most workers’ comp payers have seen their drug costs steadily decline steadily.

The bad – many are still paying too much due to poor contract terms.

One of the issues is a failure to update generic drug pricing tables; in several recent PBM assessments the PBM has apparently failed to update pricing tables. The result – the insurer, employer, or TPA is charged what the drug cost as much as 12 months ago. Because generic drug prices continually decrease, the insurer, employer or TPA is paying more than they should.

Meanwhile, the PBM is paying the pharmacy today’s price – which is almost always less than it cost a year ago.

The net  – the PBM makes a bigger profit because it is “buying low and selling high.”

While the “fix” is obvious – ensure contractual terms require updates to pricing are timely – there’s a much bigger issue.

This is just one reason many work comp insurers and employers pay too much for drugs. Pharmacy pricing is opaque at best, requiring a lot of experience and expertise to make sure you’re paying only what you should, updating generic pricing schedules is only one issue.

What does this mean for you?

Are you paying what you should?

Feb
7

PBMs and legacy work comp claims

Posted by Joe Paduda on Friday, February 7th, 2020 | Comments

Employers, state funds, and insurers are focusing more and more on closing old claims; the most successful ones are partnering with their Pharmacy Benefit Managers.

The logic is clear – the older and more costly the claim, the greater the percentage of spend is for drugs (except for those cat claims needing long-term home health/facility care).

And, the higher the reserves, the greater the percentage of those reserves is for drugs (except for those cat claims needing long-term home health/facility care).

Both graphs from NCCI; Medical Services by Size of Claim—2011 Update.

While some very large payers (e.g. Ohio BWC, Washington L&I, State Fund of California and Sedgwick) have strong clinical pharmacy capabilities, most payers don’t.

If you are looking to reduce your claims inventory, partnering with a PBM with:

  • real expertise in analyzing legacy claim information,
  • very strong clinical capabilities, and
  • a demonstrated ability to help manage legacy claims is mandatory.

What does this mean for you?

Find out if your PBM has these capabilities – and ask how they can help you. If you aren’t impressed, find another PBM.

 

Dec
10

Hyper-expensive moisturizer, uninsured jewelry, drug prices, and those costly hospital mergers

Posted by Joe Paduda on Tuesday, December 10th, 2019 | Comments

in which I cover newsworthy stuff that happened this week…

Uh…that’s why you buy insurance

From Politico we hear CMS Administrator Seema Verna asked us taxpayers to pay for $47,000 worth of jewelry and other stuff stolen “during a work-related trip.” Among the valuables gone missing – that she wanted us to pay for were a $325 moisturizer (!!!) and $349 for noice-canceling headphones – plus a $5,900 Ivanka Trump pendant.

Yep, the person who runs the biggest insurance entities in the world wants the government to bail her out because she decided to NOT buy insurance. (update – good news, we aren’t paying for Ms Verma’s bling)

Physical therapy in workers comp

MedRisk released its third annual report on PT in WC earlier this week.  560,000 work comp patients were served by MedRisk so far this year; the average duration of care has shrunk to 11.2 visits over 48 days.  Better news – 98.1% patient satisfaction rate and 97.7% of providers agree with MedRisk’s clinical recommendations.

There’s an old business meme that comes to mind – “stick to your knitting.”

At a time when other service companies were seeking to become everything to everyone, Shelley Boyce, Mike Ryan and their colleagues at MedRisk went the other direction, focusing narrowly on work comp physical medicine. Along with the best management team in the business, they executed the plan to perfection. (While MedRisk is an HSA consulting client, all the credit goes to those folks).

Meanwhile all the caterwauling about drug prices turns out to be much ado about nothing (I’m looking at you, AARP) . This from the estimable Adam Fein PhD’s discussion of CMS’ review of healthcare costs:

    • For 2018, spending on outpatient prescription drugs grew by 2.5%—below the spending growth rate on hospitals, physician services, and overall national healthcare costs.
    • CMS significantly lowered its previously reported drug spending figures by billions after incorporating new data on manufacturers’ rebates.

More news showing hospital consolidation raises your healthcare costs.

From NIHCM comes a terrific slideshow – my favorite is this one – key takeaway is prices ALWAYS GO UP after mergers.