1. Drug Cost Containment National Governor’s Association Health Policy Advisors Meeting September 3-5, 2003 Mark Gibson Program Officer, Milbank Memorial Fund

2. Why Drug Cost Containment? Tax dollar stewardship Reduce waste Top value for dollar spent This is Real Money Improving Health Better Prescribing Better Drug Selection Fewer cuts to other health services

3. Purpose of Medicaid is to Improve Health Health care has no intrinsic value Public budgets are finite Zero sum health care trade offs 37 Reduce/Freeze providers 27 Reducing eligibility 17 Increasing co-payments 25 Reducing benefits

4. Finding Value in Drug Purchasing Value traditionally determined by markets Quality Cost Medicaid Drug Purchasing is not a traditional market Payer  Buyer Payer has poor quality information Buyer has poor quality information Buyer bears no risk Neither payer nor buyer have current cost information

5. Preferred Drug Lists — An Attempt to Create a Functional Market for Drugs Making a clinical judgment Making a price comparison Determining the exceptions process

6. Making a Clinical Judgment If it’s in the class Expert process Systematic Review of Evidence

7. Making a Price Comparison Analyzing prices after the fact Reference pricing/supplemental rebates Prospective bidding

8. Determining an Exception Process PDL Advisory Simple “Generic” style substitution Prior authorization Phone call Written submissions

9. Enhancing the Quality of Medical Evidence Used in Coverage and Treatment Policies Oregon requires effectiveness first Collaboration with EPC Use of systematic reviews Open public process

10. Information Strategy Focus on specific classes Evidence-based Emphasize key questions Systematic review—removes bias Credible public process Conflict eliminated and externalized

11. OHSU Evidence-based Practice Center AHRQ Center Contracts with state for drug class reviews. Credible, responsive source of comprehensive information. Reports to local decision making body.

12. EPC Strengths Emphasize getting questions right State of art methods for conducting systematic reviews Accustomed to timelines, deliverables Extensive, external peer review Products are available free to anyone

13. Expert Weakness Experts may underplay controversy or select only supportive evidence Without systematic approach bias may be introduced Experts may ask good research questions but the wrong questions for patients and providers Experts may not be aware of all evidence Sometimes are not willing to disclose fully their evaluation process back to importance of disclosure to consumers and advocates documents

14. Systematic Review Process Problem formulation/key questions Find evidence Select evidence Synthesize and present Peer review and revision Maintain and update

15. First Four Classes — Oregon Conclusions 1. PPIs/heartburn—”no significant demonstrable differences among them” 2. Long-acting opioids—”insufficient evidence to draw any conclusions about the comparative effectiveness” 3. Statins/cholesterol lowering-”evidence supports the ability of lovastatin, pravastatin and simvastatin to improve coronary heart disease clinical outcomes.” 4. NSAIDs—”no significant clinical differences”

16. Next Classes — Oregon Estrogens---”No studies showed any difference between estrogen preparations.” Triptans—”Using 2-hour pain free…oral rizatriptan 10 mg appears to be the most efficacious.” ACE Inhibitors/Calcium Channel Blockers— thousands of studies meeting criteria—due in Summer ‘03

17. Next Classes — Oregon Incontinence drugs---”evidence does not demonstrate significant differences in objective or subjective efficacy, adverse events or withdrawals.” Skeletal Muscle Relaxants---”the evidence does not support any conclusions for the comparative efficacy or safety….for musculoskeletal conditions.” Oral Hypoglycemics---”patients on glyburide had greater risk reduction of progression of retinopathy than those on chlorpropramide….chlorpropramide has a less favorable adverse effect profile…insufficient evidence on other sulfonylureas and non-sulfonylurea secretagogues.”

18. What is Next Globalize the evidence Localize decision making

19. What is Next Globalize Evidence 1. Collaborate 2. Improve evidence-based process for all 3. Disseminate evidence 4. Update evidence

20. Center for Evidence-based Policy Focus on informing state policy makers of the evidence regarding key issues Funded by public and private participants sharing in the cost Each project governed by the participants Participants identify topics and key questions

21. First Project—Drug Effectiveness Review Project Continue drug class reviews focusing on comparative effectiveness to support preferred drug list, formulary or disease management activity Focus on the most common 25 drug classes Update every 6 months Each participant uses local decision makers to draw conclusions from the evidence for their use

22. Drug Effectiveness Review Project Systematic evidence-based reviews done by a network of Evidence-based Practice Centers EPCs in several regions of the country Experienced, credible, reliable Used to deadlines, working in public domain, free of conflict of interest. Work peer reviewed through AHRQ

23. Drug Effectiveness Project The Center is part of Oregon Health and Sciences University Assuming information is used in Medicaid, states contracting are eligible for federal match Goal of 20 participants

24. Why Participate? Shape the process Technical Assistance Collaborate with private and public purchasers with similar concerns Cost effective and efficient Begin to move beyond current policy approach

25. What is Next Localize Decision Making 1. Organize public and private decision makers 2. Explicit, public process 3. Externalize bias 4. Eliminate conflict of interest

26. More Information Reports at oregonrx.org Email comments/questions to j.mark.gibson@att.net Call Mark Gibson at 503-930-6668

27. The dream of reason did not take power into account. Paul Starr