Category: Pharmacy, PBMs, and Pharma costs

Dec
6

AARP, healthcare costs and drug prices

Posted by Joe Paduda on Friday, December 6th, 2019 | Comments

AARP has rather strange positions on drug prices and healthcare costs.

AARP positions itself as an advocate for seniors (and no, while I’m eligible, I’m not a member). The latest PR effort by the huge organization touts its lobbying to “help Americans afford high healthcare costs.”

Rather than lobbying for extensions on tax breaks for healthcare costs, AARP would serve its members better by doing something to actually reduce the cost of healthcare. Here are a few suggestions:

  • vigorously promote value-based care with reimbursement more closely tied to valid outcomes including functional ability
  • aggressively regulate healthcare system expansion, and specifically require reductions in costs after mergers
  • promote higher reimbursement for primary care, reduced reimbursement for questionable specialty care
  • focus attention on transparency in drug pricing – including rebate payments to plan sponsors

On this last suggestion, I’d note that AARP consistently moans about the retail price of drugs, while refusing to acknowledge the very real impact of rebates on brand drugs – which aren’t passed on to consumers.

Frankly, AARP’s stance on drug prices is misleading.

AARP’s “research” doesn’t discuss rebates – and the fact that plan sponsors are getting rebates, which drastically reduces the prices those sponsors pay for drugs.

As a result, consumers pay the higher retail prices, while plan sponsors – AARP partners among them – keep the rebates.

(thanks to Adam J Fein, PhD, for his work on this.)

I emailed AARP, indicating my concern with this.  This was the response:

“While AARP appreciates the potentially distorting effects of rebates, evidence indicates that plan sponsors are sharing rebates with consumers in the form of lower premiums. For example, a recent CBO analysis of a proposal to eliminate rebates under Medicare Part D that found that premiums would increase for all enrollees and that federal spending would increase by nearly $200 billion, primarily due to increases in federal subsidies for premiums.

“Further, AARP has consistently said that it would be happy to run these analyses based on net prices. Unfortunately, no drug manufacturers have been willing to take them up on the idea.”

Well, no.

First, there’s a megaton of evidence out there that some individual/group health and Medicare Part D insurers are getting rebates, and are NOT passing them on to consumers.

This from the estimable Dr Fein; (note the rebate percentage accruing to Plan D (senior drug card) sponsors):

Second, AARP could easily ask its “partners” (Part D plan sponsors among them) if they are getting rebates (which they are), and if so are they passing the savings along to consumers and what is the impact on those consumers’ drug costs. That would allow AARP to ” run these analyses based on net prices.”

AARP positions itself as an advocate for seniors. I’d suggest failing to address this is not helpful to their members.

What does this mean for you?

Does AARP benefit from rebate payments? I dunno…

 

Dec
2

Time for an effective workers’ comp opioid solution for Louisiana

Posted by Joe Paduda on Monday, December 2nd, 2019 | Comments

Today’s WorkCompCentral arrived with William Rabb’s report on the use of opioids by workers’ comp patients in Louisiana. [subscription required]

A few notable findings:

  • Louisiana work comp patients get more opioids, and they get them for longer periods of time than any other state studied
  • Employers and taxpayers pay significantly higher prices for drugs than in other states
  • 7 out of 10 claims included an opioid prescription
  • Louisiana patients get twice as many opioid scripts than the average state.

For some reason, some “claimant attorneys” don’t see the wisdom of formularies/guidelines intended to reduce inappropriate opioid use, citing spurious claims from the pain industry in attempt to validate their complaints.

Louisiana has had treatment guidelines in place for several years, however they have not been revised or updated in memory and are very difficult to enforce. Compared to other states, the Pelican State has made little progress reducing inappropriate opioid use by work comp patients.

Back in 2017 I cited Sheral Kellar, Director of Louisiana’s Office of Workers’ Compensation Administration discussing the opioid issue in her state.

Ms Kellar knows a formulary is NOT a panacea, rather a critical tool in the armamentarium which includes:

  • Prescription drug monitoring programs that require and facilitate pharmacist and physician participation,
  • Strong and well-designed utilization review programs,
  • Flexibility for PBMs and payers to customize medication therapy to ensure patients get ready access to appropriate drugs and reduce risks from inappropriate medications,
  • Carefully-planned implementation,
  • Drug testing, opioid agreements, and addiction/dependency treatment

Over the last decade I have spoken with many individuals heavily involved in Louisiana workers’ comp; each frustrated and saddened by the lack of meaningful progress in attacking the overuse of opioids by workers’ comp patients. 

What does this mean for you?

Here’s hoping Louisiana is able to make real progress on reducing opioid usage. Families, communities, employers, and providers have all waited long enough.

 

 

Nov
1

What’s up?

Posted by Joe Paduda on Friday, November 1st, 2019 | Comments

The inbox has been stuffed with important new research and news; here’s what most interested me.

Work Comp

Perhaps the best annual summary of the state of the workers’ comp world is just off the press.  The National Academy of Social Insurance’s report is here. Free to download, NASI’s latest finds:

  • Employers’ costs have fallen from just over $1.50 per $100 of covered wages in 1997 to $1.25 in 2017.
  • Worker benefits decreased even more, from $1.17 twenty years ago to $0.80 per $100 of covered wages in 2017.

My takeaway – workers are getting less in benefits than they have in the past – and that’s a bad thing.  It is great that employers’ costs are declining, but that shouldn’t be at the expense of injured workers and their families.

The fine folk at CWCI published their latest research on UR in the Golden State. Despite what some on the applicant attorney side argue;

Results show that 94.1 percent of services performed or requested from January 1, 2018 to October 31, 2018 were either approved (92.5 percent) or approved with modifications (1.6 percent)…

Yup, 17 out of 18 services were approved. 

WCRI’s annual conference returns to Boston – register here – now.  Or risk missing out, as the event fills up every year. Don’t be one of these people!

[I don’t think the guy on the right is Andrew Kenneally…]

Check out WCRI’s upcoming webinar on medical prices paid and work comp fee schedules – lots of great information on facility costs – the biggest problem (outside of opioids) in work comp today.

Drugs!

From Alan Fein at DrugChannels, a most excellent video by John Oliver on everything you should know about compounding pharmacies. You gotta watch this… [can you believe Oliver actually knows about stuff we work comp pharmacy nerds think about???]

The video is both hysterically funny and terrifying. Watch it.

From the funny to the deadly serious; if you haven’t read Gary Anderberg’s most recent GB Journal, you likely don’t know this:

research showed that “57% of those who died from opioid-related deaths had at least one prior workplace MSD. [musculoskeletal disorders]

I’ve long opined the opioid industry has done horrendous damage to the work comp industry, injured workers, taxpayers and employers. Gary’s reporting shows it is even worse than we thought.

When are you going to hold the opioid industry accountable for their criminal actions?

That’s it for now…for those attending the NWCDC next week in Vegas – make sure to say thanks and farewell to Peter Rousmaniere and Roberto Ceniceros.  These gentlemen are both retiring, and our industry will be much the worse for it.

I’ve known them both for decades, learned much from them, and deeply respect their contributions to our industry. They’ve certainly earned a respite…here’s hoping Peter and Roberto weigh in from time to time. Their wisdom and experience are irreplaceable.

I won’t be there – family vacation in Zion Utah…with three grown kids, we have to work around their schedules, proving once again that I am completely not in control of anything.

 

Sep
17

Where have all the work comp opioid patients gone?

Posted by Joe Paduda on Tuesday, September 17th, 2019 | Comments

Workers’ comp has done an admirable job reducing the volume and potency of opioids dispensed to work comp patients.

This from our latest Survey of Prescription Drug Management in Workers’ Comp…

The question is – how many work comp patients really stop taking opioids?

A Canadian study offers a sobering possibility – many likely did not.

those injured workers that received…120 MED or more at the end of their claim were likely to have post-claim opioid use in approximately 80% of cases. [emphasis added]

Caveats abound – different country, different system, different approach to opioid management. Yet we need to ask ourselves questions that are deep and uncomfortable.

Did we really help these patients?

Were they addicted, dependent, and/or have serious chronic pain that we failed to adequately address?

Have we looked deep enough into what happened to those patients taking opioids after they stopped?

Perhaps most important – What is our responsibility to those patients?

This is not – an any way – justification for the opioid industry’s twisted and misguided attack on efforts to reduce opioid over-prescribing. It is crystal clear that industry has killed hundreds of thousands of people, devastating communities and families.

Rather, we need to make very sure we are doing the right thing for patients. In some instances this will involve telling patients what they don’t want to hear; we need to be prepared to do that and help them thru the process, while understanding that process is very difficult.

What does this mean for you?

Do you know whether patients no longer getting opioids via work comp are still taking them? What responsibility do you bear?

Sep
13

The Purdue Opioid “settlement” – key takeaways for workers’ comp

Posted by Joe Paduda on Friday, September 13th, 2019 | Comments

Reportedly Purdue Pharma, the fine folk behind OxyContin, is nearing a settlement with 23 state attorneys general and thousands of other governmental entities.

Here are the key takeaways:

  • this does NOT appear to be a universal settlement; other state AGs, local governments, employers, and other affected entities will almost certainly seek their own compensation from Purdue.
  • The Sackler family, Purdue’s owners, will lose up to $3 billion of their personal fortunes estimated to total $13 billion – most of which came from OxyContin sales.
  • Purdue Pharma will enter bankruptcy and future earnings will go to addressing the awful repercussions of the opioid crisis

What wasn’t included are criminal charges for the Sacklers; that is an outrage.

It is crystal clear many members of the family were intimately involved in Purdue’s efforts to shove more and more opioids down more and more throats. Not satisfied with those billions, the arrogant bastards were going to make yet more treating the addicts they created. (Note not all of the Sacklers were involved in the opioid disaster)

This from NY’s opioid lawsuit (credit Vox)

The unmitigated gall of the Sacklers is stunning; they knew their drugs were killing tens of thousands, and now wanted to profit from the untold damage they had done.

For workers’ comp, there are a couple of implications.

First, as the tort industry dives deeper into this, they will sue more and more participants. My informed opinion is payers are pretty safe for several reasons;

  • state regulations are the primary and ultimate driver of work comp coverage;
  • work comp entities led the charge to reduce opioids when they first grasped the size of the problem;
  • payers did not receive rebates from opioid scripts so there was no financial benefit to allowing the scripts; and
  • payers were damaged by the opioid industry due to much higher medical costs, extended disability duration and death claims.

I haven’t heard of any workers’ comp entity being sued for damages related to opioids – but it is possible.

Second, work comp payers have been damaged by the Sacklers and their ilk. While state funds may be involved in some of the suits seeking compensation for damages (it’s impossible for me to unpack all the plaintiffs in all the filings), I have yet to hear of any suits involving commercial insurers or reinsurers.

I’ll admit to being surprised at the work comp insurance industry’s seeming lack of interest in taking on the opioid industry. Every day:

  • Insurers go after claimants for double-dipping and false claims,
  • Insurers go after employers for falsifying payroll data,
  • Insurers go after providers for fraudulent billing for practices, and
  • Insurers sue each other over coverage issues and reinsurance claims.

Before anyone else could spell opioids, work comp payers saw the damage being done and took action.

What does this mean for you?

Work comp insurers must be a highly visible part of the solution; we owe it to policyholders and taxpayers, we owe it to patients, and we owe it to all of the insurer staff, regulators, researchers, and other stakeholders who’ve dedicated untold hours to fixing the damage done by the Sacklers and their ilk.

Need more incentive? Here’s David Sackler’s $22 million Bel Air mansion your workers’ comp dollars helped pay for.

 

Aug
7

Work comp vs. opioids – how we’re doing

Posted by Joe Paduda on Wednesday, August 7th, 2019 | Comments

It’s been a decade since work comp payers and PBMs got the big wakeup call, the one that changed the industry.

From looking at drugs just as an expense, the industry began to see how devastating these drugs were to patients, families, employers, and taxpayers. Instead of fighting over the price of each pill, payers started to push PBMs to figure out ways to slow down the spread of these incredibly dangerous drugs.

Today, we’re on a roll. While anyone with any sense of the issue knows opioids will remain a top 3 issue for years to come, we’ve made a lot of progress.

After surveying 30 workers’ comp payers, we’ve learned this:

  • Opioid spend dropped 19.7 percent from 2017 to 2018.
  • For the first time on record, opioid spend represents less than a fifth of total drug spend
  • By a long shot, opioids are not the biggest problem in workers’ comp pharmacy. (3 respondents out of 30 said they are)
  • Payers believe the’ve made more progress dealing with initial opioid scripts vs chronic
  • By far the most important tools have been more internal resources and focus on the opioid issue, followed by new regulations and legislation and payers adopting a comprehensive approach to the issue.

We’ve got work to do, to be sure.

But we should take a minute – or a day – to stand back and revel in what we’ve accomplished. 

The industry has cut opioid usage probably in half, and it’s headed further down. People haven’t died, families haven’t been destroyed, pills haven’t found their way into kids’ hands.

What does this mean for you?

A welcome opportunity to reflect on a very hard job done well.

 

Jul
17

The latest data on opioids in work comp

Posted by Joe Paduda on Wednesday, July 17th, 2019 | Comments

We’ve just about completed the 16th (!!) Survey of Prescription Drug Management in Workers’ Comp, and there are two key findings you need to know.

First – total opioid spend in 2018 dropped 23.2% across all 27 respondents (ranging from very large TPAs to state funds to insurers to small state-specific payers). The average decrease among respondents was just over 22%.

That dramatic reduction comes on the heels of a 16% reduction from 2016 to 2017, and a 13% decrease in 2016.

From last year’s Survey; each numbered column denotes a respondent’s results (2019 Report will be out in August)

Over the last few years, payers and PBMs have cut the amount of opioids dispensed to work comp patients by more than half.

While cost reductions are good news for employers and taxpayers, when you talk with payers its mostly about patient safety and return to functionality. Patients taking opioids over long periods aren’t getting better, aren’t going back to work, and most (but not all) are not functioning very well. That means they aren’t the parents, friends, daughters or sons, grandmothers or grandfathers they can or want to be.

Second takeaway: payers are anything but satisfied or complacent. All the 27 people I’ve talked with to date remain focused, committed, and completely engaged in continuing to fight the good fight against overuse of opioids. They’ve asked me what other payers are doing, what they can do differently, what works and what doesn’t.

That’s a great relief. One would understand if payers’ focus was shifting to other issues, now that they’re seeing massive progress in the battle over opioid over-prescribing.

With some exceptions, the knottiest problem remains how to help chronic opioid patients find other ways to handle their pain, to help them function at a higher level even with chronic pain. Payers are very creative and dedicate lots of dollars and time to solving chronic opioid usage. This focus will continue to help patients get better, while reducing costs for employers and taxpayers.

I’d be remiss if I didn’t note – once again – that work comp is leading the rest of the world on solving the opioid issue. You knew about it sooner, took drastic action much faster, and are delivering much better results than Medicaid, group health, or Medicare. 

Yeah, the workers’ comp industry is often maligned for its many faults and challenges. But this is one area – and a damn important one – where you’ve got much to be proud of.

What does this mean for you?

Well done. Stay focused. 

 

 

Jul
11

Survey of prescription drug management in workers’ comp – early findings

Posted by Joe Paduda on Thursday, July 11th, 2019 | Comments

With 20+ interviews to date, we are starting to see some patterns in responses.

For those unfamiliar with our annual survey, click here to get access to public versions of the last dozen-plus Survey Reports.

Respondents are the folks in charge of the pharmacy programs at major work comp insurers, TPAs, state funds, and self-insured employers. Drug spend ranges from $200 million plus to $1 million.

Quick takeaways:

  • Spend continues to decrease; haven’t totaled up the numbers yet but my guess is it’s a high-single-digit drop from 2017 to 2018.
      • A big cut in opioid spend is a major contributing factor
  • Transparency is the biggest single issue in work comp pharmacy; respondents aren’t happy with the level of transparency, are frustrated with the lack of clarity around AWP, and want more detail on pricing.
  • That said, respondents generally acknowledge it’s fine for PBMs to make a margin, they just want to make sure that margin is reasonable.
  • Opioids remain perhaps the biggest issue, but many payers have made remarkable progress in reducing both initial and chronic opioid usage.
  • Compounding is seen as all but dead, crushed by aggressive moves by payers, regulators, and legislators.
  • Specialty medications while not yet much of an issue, may well be especially if assumption laws for pubic safety workers gain more acceptance.

There’s a lot more to come; we’ll be wrapping the data collection part of this year’s effort in a few days.  If your organization’s pharmacy program management person  wants to participate – and get a detailed, respondent version of the Survey report, let me know via the comment box below this post…

May
31

Drug price fixing – the impact on workers’ comp

Posted by Joe Paduda on Friday, May 31st, 2019 | Comments

The generic drug manufacturers’ price-fixing scheme raised prices by up to 1,000 percent. There’s good news for workers’ comp payers as the impact has been minimal.

Here’s why.

Workers’ comp is mostly about trauma treatment and pain management; relatively few drugs are involved. Contrast that to Medicaid, Medicare, and health insurance which cover all conditions – and have a much broader “formulary”.

Contrary to what others have opined, this didn’t have any significant impact on workers comp, because there were very few “work comp” drugs affected by the price-fixing.

Here’s more from my conversation with Jim Andrews, RPh.

MCM – In your view how did the alleged price fixing affect workers’ comp payers?

Andrews – Since WC utilizes specific drug classes the impact of these 100 drugs could/would be significantly less than that of the commercial and governmental markets (especially Medicare and Medicaid). A quick scan of these drugs (without reviewing the larger WC PBM annual drug trends) reveals that there are blood pressure medications, antibiotics, birth control, dermatological , blood thinners etc. I do not see (might have missed it) – narcotic pain medications.

So the overall cost impact from this companies’ activities do not significantly impact WC by themselves.

MCM – What medications commonly used in workers’ comp may have been involved?

Andrews – Generic Celebrex (celecoxib), generic Neurontin (gabapentin) and generic ketoprofen represent some of the more commonly prescribed drugs utilized today.

[These drugs] didn’t seem to detail the same level of price support that some of the other drugs had e.g. pharmacy and GPO involvement.

[MCM – note data from workers’ comp PBMs indicate the these three drugs account for about 7% of total drug spend].

MCM – There’s a difference between drug reference price (AWP, etc) and the actual price paid. Does the report provide any insight into whether the price fixing actually affected the price paid?

Andrews – It is unclear to me whether the purchase price for these channels actually increased or whether the drug reference price e.g. AWP increased.

MCM – this from Vox shows changes in overall drug costs over time.

What does this mean for you?

Yes, the price-fixing affected workers’ comp, but not much.

May
30

Drug price fixing…the details

Posted by Joe Paduda on Thursday, May 30th, 2019 | Comments

A massive price-rigging scheme that drove up drug manufacturer profits by inflating drug prices has been exposed in a lawsuit filed earlier this month by 44 states.

Rather than compete in an open market, manufacturers including Teva, Pfizer, Novartis and Mylan conspired to split up market areas, allowing them to increase prices for more than 100 generic drugs by up to 1000%.

Are you angry yet?

NYTimes:

“A key element of the scheme, the complaint alleges, was an agreement among competitors to cooperate on pricing so each company could maintain a “fair share” of the generic drug markets. At the same time, the companies colluded to raise prices on as many drugs as possible, according to the complaint.”

The Times’ piece added:

“Rather than enter a particular generic drug market by competing on price in order to gain market share,” the complaint states, “competitors in the generic drug industry would systematically and routinely communicate with one another directly, divvy up customers to create an artificial equilibrium in the market, and then maintain anticompetitively high prices.” [emphasis added]

I asked Jim Andrews, RPh, for his thoughts on the suit; here’s the first part of our discussion. [Jim has been working in retail pharmacy and PBM for decades and understands this stuff as well as anyone]

MCM – In your view is the suit filed on solid ground?

Jim – Yes, it is obvious from the volume of materials collected, referenced and cited – that this investigation has been going on for multiple years. I think the sheer volume is indicative of the seriousness of the lawsuit. Many areas of the lawsuit that I found were redacted so I assume they are the most damning.

MCM – What were some of the key claims made by the plaintiffs that caught your attention?

Jim – Hyperinflation of common generic drugs, especially after 2012. Fair share territories maintained between competing generic manufacturers that preserved current drug pricing and prevented price declines. Collusion between competing generic drug companies in the form of sharing confidential information on drugs, pricing, customers and strategies.

MCM – It appears that the alleged behavior has been going on for some time – do you think this type of behavior has occurred before?

Jim – I assume that this had been going on prior to the 2012 time frame referenced in the lawsuit but the 2013/2014 hyperinflation indicates a period of increased strategic cooperation.

What does this mean for you?

The alleged criminal behavior cost consumers – and some payers – millions. 

Tomorrow – what this means for workers’ comp.