Pharmacy Costs

1
Pharmacy Costs

• Which Medications Offer Value And How Are They
  Priced

2
Taskforce Members

• Roxanne Homar - State Pharmacist for DOH
• Aimee Lewis - DUR Manager for Medicaid
• Jim Bush M.D. - Medicaid Medical Director
• Ralph Hayes - Administrator State Employee Health
  Care Plan
• Bill Harrison M.D. - Internist Cheyenne, Member
  Winhealth and Medicaid PT Committees
• John Vandel - Dean School of Pharmacy,WHCC
• Rick Davis M.D. - Cardiologist Cheyenne, State
  Pharmacy Board
• Jack Glode M.D. Medical Director Winhealth, WHCC

3
Pharmacy Costs and Concerns

• 12 or more of direct health expenditures
• Significant impact on premium
• Benefit of medication consumed is frequently
  questionable and based on thin evidence, usually
  Big Pharma sponsored
• Growing body of evidence indicating significant
  conflict of interest in literature supporting
  approval of new medications
• Recent scandals indicating non disclosure of
  medication toxicity

4

• Rising number of FDA censures for false
  advertising to patients and physicians, i.e.
  dependency risk of Oxycontin, (600,000,000 fine)
  Manufacturer successfully removed generic
  competition in patent court case
• Exaggerated value of me too new(more expensive)
  versions of established class of meds(Statins,
  PPI, SSRI, ED)
• Growing concern regarding physician/industry
  conflict of interest, including academic centers
• References and literature available supporting
  these concerns

5
Potential Short Term Projects

• Pharmacy Benefit Manager (PBM) Transparency
  Legislation
• Statewide Pharmacy Therapeutics (PT) Committee
• Electronic Access for Providers to All Pharmacy
  Medications dispensed in Wyoming ( Patient Safety
  Issue )

Budgetary support from WHCC
6
Potential Long Term Projects

• In-State Mail-Order for Maintenance Medications/
  In-State nonprofit PBM
• Join Multi-State Purchasing Program

7
Pharmacy Benefit Manager Transparency Legislation

• Senator Mockler has drafted bill for this session
  modeled after Maine legislation
• Supreme Court rejected PCMA Appeal to repeal
  Maine transparency legislation
• Playing the Spread- PBM contract allows higher
  payment from patient insurer than the PBM pays
  the retail pharmacy,PBM pockets difference.
  Pharmacy and Insurer contracts are not
  transparent
• Mail Order - PBM owns mail order service and
  charges Insurer more than the AWP paid to the
  manufacturer, pricing is not transparent. Mail
  order generic fill rate is much lower than local
  pharmacy

8
Transparency Continued

• Drug Switching - PBM requests physician to alter
  prescription to medication with higher rebate to
  PBM from manufacturer (handout)
• Rebates given to PBM to place medications on
  formulary. Manufacturer rebates account for the
  majority of PBM income. These agreements are
  secret. Pennsylvania court mandated disclosure of
  total income (Caremark)
• Sale of physician prescription data to
  manufacturer to enhance physician marketing,
  legislation proposed to prohibit this practice

9
Transparency Legislation

• Maine, North and South Dakota, Wash D.C.,
  Mississippi, Rhode Island, Kansas, Louisiana -
  PBM laws (handout)
• South Dakota saved gt800,000 in state health
  insurance costs
• Illinois directly negotiated pharmacy benefits
  for state employees and saved 1.35/claim (
  10million/year)
• Taskforce recommends WHCC support for
  transparency legislation

10
Statewide PT Committee

• Evidence based reviews provided by the Dept. of
  Healths Drug Effectiveness Review Project
  sponsored at the Oregon Health Sciences
  University (currently used by Wyoming Medicaid
  Drug Review Committee)
• Wyoming practicing physicians would make
  formulary recommendations based on evidence
  review and encourage Wyoming insurers to adopt

11
PT Committee Continued

• Uniform formulary based on evidence should evolve
  since practicing physicians make recommendations,
  countering direct to consumer and physician
  advertising
• Resource of unbiased medication
  information(evidence based research) for
  providers, newsletter
• Wyoming Medicaid program has proven value of this
  concept
• Sponsor electronic availability of formularies

12
Provider Electronic Access to Pharmacy
Prescription Data

• Patient Safety issue, polypharmacy, medication
  interaction and duplication
• Will be key component of the THR
• Especially important for patients seeing multiple
  physicians (Average Medicare patient sees more
  than 3 providers each year)
• This information is already available to
  providers for controlled substances in the
  Prescription Drug Monitoring Program

13
Long Term Projects,In-state mail-order for
maintenance meds/in-state nonprofit PBM

• Payers could utilize in-state program rather than
  out of state PBM
• Help rural pharmacies reduce inventory costs
• Increase in state health care revenue

14
WHCC Budget

• Contract with Dr. Garis (handout)
• Pharmacy program analyses - State Employee
  Plan, Workman's Comp,State Hospital, Corrections,
  others
• Contracts with large groups have proven value of
  this analysis (accurately estimates amount of
  spread pricing to enhance price negotiations with
  PBM) Fair med pricing is calculated ( Garis
  software ) estimated 20,000

15
Garis Software

• Projected savings for Winhealth using program is
  six figures.
• Garis contracts with large groups have proven
  value of system
• Reports are current and medication specific
• Can be used to monitor med costs over time
• Can be used to enhance short term projects as
  discussed (best prices for medications suggested
  by physicians for uniform formulary)
• Designed to assure fair pricing at the retail
  pharmacy, reveals markup at the mail order level
  to encourage patients(insurers) to use local
  pharmacies

16
Budget Continued

• Garis research- 200/hr- assist with transparency
  research, program development, State projects
  previously outlined - estimated 10,000
• Compensation for Roxanne Homar