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Pharmacy Management Market Update Mona Chitre, PharmD, CGP Vice President, Pharmacy Management.

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Presentation on theme: "Pharmacy Management Market Update Mona Chitre, PharmD, CGP Vice President, Pharmacy Management."— Presentation transcript:

1 Pharmacy Management Market Update Mona Chitre, PharmD, CGP Vice President, Pharmacy Management

2 Quiz This “purple pill” helps your stomach not spontaneously combust after that late- night spicy dish you should not have eaten… 2

3 Quiz A. Prozac B. Nexium C. Motrin D. Premarin 3

4 Quiz This pill helps you “when the moment is right.” 4

5 Quiz A. Speed B. Solodyn C. Viagra D. Caffeine Pills 5

6 Quiz This pill helps you climb out from under a rock to face the world. 6

7 Quiz A. Allegra B. Prozac C. Zoloft D. Diovan 7

8 Quiz You’ve done it all in one night: You’ve eaten spicy food. The moment is right. You’ve crawled out from under that rock. Now it’s time to say “night-night.” 8

9 Quiz A. Ambien B. Lunesta C. Albuterol D. Advair 9

10 Drug Costs and Use Increasing GREAT JOB!! …However this proves that the pharmaceutical companies have done a great job as well. 10

11 Pharmacy Management: Market Landscape Impact of Prescription Benefits Specialty Medications Price Increases Appropriate Care Trend Management Opportunities

12 Service BucketPMPM Allowed: Rx extracted from buckets and consolidated Drug (Rx and Medical Benefits)$ Physician$ Outpatient$ Inpatient$ Why are Prescriptions important: # 1 Benefit: Most commonly used benefit 67-70% use the drug benefit each year prescription fills per person per year #1 Cost : Drugs are the top cost driver

13 How does Rx affect benefit plans? Medical Benefit Hospital Physician Office Outpatient Facility Clinics Infusion centers Home Infusion DME Drug Costs: 5-8% of total medical cost ($20-$25 pmpm) Pharmacy Benefit Retail Pharmacy Mail Pharmacy Specialty Pharmacy Drug Cost : 20-25% of total health care cost ($75-$85 pmpm)

14 Prescription Benefit Medical Benefit Cancer Rheumatology Psoriasis Contraceptives Multiple Sclerosis Osteoarthritis Asthma Pulmonary Arterial Hypertension Diabetes Antidepressants Hypertension Hyperlipidemia PPIs Glaucoma Hemophilia Vaccines Immunoglobulins Enzyme Replacement

15 Today’s pharmaceutical benefit reality $20 – generic Rx $2,200 – specialty Rx $200 – brand Rx

16 16 SPECIALTY PHARMACEUTICALS

17 New Technology: Specialty Drugs General Description: High Cost Biologics Pharmacy or Medical Benefit (Oral, Injectable, Infusion) Monitoring Required Targeted Chronic or genetic conditions with still an unmet need DrugConditionAnnual Cost VectibixCancer$100,000 EnbrelRheumatoid Arthritis $16,000 CinryzeHereditary Angioedema $450,000 JuxtapidFamilial High Cholesterol $1,000,000

18 Top Ten Drug Projections

19 19 Specialty Drug: Employer Impact Employer: 200 employees (450 total with coverage) 5300 Prescriptions/ year Average employer cost/Rx: $60 Total Annual Rx cost for employer: $320,000 Specialty Drug Impact: Tykerb Oral drug used in combination for breast cancer. Incremental Added Cost: $55,000/ year 15% increase in Rx expense that year

20 20 Specialty Drug: Employer Impact Large multiple employer coalition: 41,000 covered lives Medical Drug PMPM: $14.47 (07-08) Medical Drug Trend: 50% over 2 years Specialty Drug Impact: –2 of the covered members treated with Fabrazyme – Annual cost of > $518,000 This drug accounted for 8% of the medical expense

21 Cancer Costs and Responsible Behavior Questioned

22 “Cancer Trends Demand Call To Action” The Tipping Point “At Memorial Sloan-Kettering Cancer Center, we recently made a decision that should have been a no-brainer: we are not going to give a phenomenally expensive new cancer drug to our patients” Zaltrap v. Avastin –Same Efficacy –$11,000 difference Cost Trends

23 More than 90 percent of cancer therapies approved in the last five years cost more than $20,000 for a 12- week course of therapy. Significant price increases in oncology products have not necessarily shown a correlation between overall survival or progression free survival.

24 DrugManufacturerRouteIndicationApproval Launch (est) Annual Cost Inlyta (axitnib)PfizerOral Advanced renal cell carcinoma 1/27/20122/1/2012$75,000/yr Erivedge (vismodegib) GenentechOralBasal cell carcinoma1/30/20122/7/2012$75,000/yr Kalydeco (ivacaftor) VertexOralCystic Fibrosis1/31/20122/7/2012$294,000/yr Korylm (mifepristone) CorceptOralCushings Disease2/17/20125/1/2012$180,000/yr Elelyso (taliglucerase alfa) Pfizer/ProtalixIVGaucher Disease5/2/20125/3/2012$180,000/yr Perjeta (pertuzumab) GenentechIVHER2-positive Breast CA6/11/20126/25/2012$71,000/yr Juxtapid (pertuzumab) AegerionOralFamilial High Cholersterol 12/21/ /1/2013$1,000,000 Kadylca (traztuzumab emtansine) GenentechIV HER2-positive Breast CA 2/22/2013$94, /2013 Sample Specialty Rx Approvals

25 Trend Management: Specialty Pipeline Review and Planning Use Management (to ensure safety and appropriateness) Manufacturer Contracting (where applicable) Waste Management Collaboration with Specialists Clinical Outreach: Adherence, Side Effect Management Off-Label Use Management

26 Pricing and Price Increases

27 27 Case Study: Multiple Sclerosis New Technology: 2010: 2 New agents - 1 st Combination drug and 1 st Oral Agent Significant Price Increases: 2006 Price - $ 15, Price - $37,000 METRICEHP 2 year Trend COST40% USE16%

28 Drug Cost Trends: Upstate New York

29 Trend Management: GENERICS “Ask your doctor if a generic is right for you”

30 Each 1 point increase in GFR can reduce Rx spend by 2-3% Employer Impact: Case Study Employer: 200 employees (450 total with coverage) Avg 12 Rx/person/yr: approx. 5,300 Rx Avg employer cost/Rx: $60 Generic Fill Rate: 65% (3,445 of the Rx are for generic) Total Annual Rx cost for employer: $318,000 Generic Opportunity: Increase GFR to 70% 265 brand drug Rx changed to a generic option. Cost saving per Rx: $100 Savings to employer: $26,500 (8% of spend) Savings to employee: 200-$400+/year

31 Medication Management

32 Medication Errors – National Data  Medication Errors are estimated to account for $21 billion in wasteful medical spending annually.  Inpatient preventable medication errors cost $16.4 billion annually.  Outpatient preventable medication errors cost $4.2 billion annually.  70% of Medication Errors occur due to prescription mistakes.  Dosing errors – 37%  Drug allergies or harmful drug interactions – 11%  Medication reconciliation errors during admission – 22%  Fragmentation of Care  Survey shows only 13% of primary care physicians communicated with a pharmacist regarding new prescriptions. 6

33 50% of all prescriptions are not taken correctly Human toll –About 125,000 preventable deaths/year –Diabetics: 699,000 ER Visits, 341,000 hospitalizations Financial toll –Additional $290 billion dollars of health care costs –13% of the total healthcare spend in this country –$8.3 billion in annual healthcare costs for diabetics Medication Non-adherence

34 Adherence rates across conditions * 1 year after initiation of both antihypertensive and lipid-lowering therapies; proportion of days covered ≥80%. † 1 year after initiation of therapy; medication possession ration (MPR) ≥80%. ‡ MPR 80%-110% of days eligible for Medi- Cal. § MPR >80% for patients with at least 90 days of observation.

35 Age & race Socio- economic status Illiteracy Cost of medications Forgetfulness Treatment anxiety Misunderstood instructions Fear of dependence Complexity of regimen Duration of treatment Side effects/ ADR Changes in therapy Comorbidities (depression) Level of disability Severity of symptoms Drug/alcohol abuse or use Patient- provider relationship Overworked HCP Lack of incentives Lack of knowledge The Five Dimensions of Non-Adherence* Social/ Economic Patient- related Therapy- related Condition- related HealthCare System Trend Management: Adherence Improvement

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