Critical Enablers in Reducing Pharmaceutical Expense: The Role of Pharmacy Leaders Today and Tomorro

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Critical Enablers in Reducing Pharmaceutical
Expense The Role of Pharmacy Leaders Today and
Tomorrow
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Presenters

• Elizabeth Shlom, PharmD, BCPS
• VP/Director, Clinical Pharmacy Programs, GNYHA
  Services, Inc.
• Marcia Jacinto, PharmD, FASHP
• Director of Pharmacy, Englewood Hospital and
  Medical Center
• Emily Kao, RPh, MS
• Associate Executive Director for Clinical and
  Ancillary Operations, North Shore University
  Hospital

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Program Objectives

• 1 - Describe strategies to reduce and manage
  rising drug expenses
• 2 - List challenges to the successful reduction
  and management of rising drug expense
• 3 - Discuss the need for Executives to help
  champion the cause of controlling rising drug
  expense

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Trends in Prescription Drug Prices
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National health expenditures are significantly
increasing and will be progressively more of the
U.S. economy.
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Consistent Increases in National Health
Expenditures for Prescription Drugs

• 1993-2001 From 5.8 to 10
• CMS projection 8.0 - 8.4 average annual
  change through 2015
• 2015 projection 446.2 billion (370 increase
  over 2000)
• Percent increase per year has decelerated
• decrease in drug utilization
• increasing cost burden on consumers
• significant patent expirations in 2002-03

Change from Previous Year
CMS National Health Expenditures Projections
2005-2015
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Drugs in Development Effects on Drug
Expenditures

• Number of drugs approved
• Orphan drugs have limited effect on expenditures
• Innovative therapies that treat previously
  untreatable diseases have higher drug costs
• Approval times are increasing
• FDA more cautious and requiring multiple review
  cycles
• Why?
• First 6 months of 2005
• 11 public health advisories regarding drug risk
• 45 black-box warnings

Hoffman JM, et al Projecting future drug
expenditures--2006. Am J Health Syst Pharm
200663123-138.
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Drug Approvals Many Unique New Drugs Are Being
Approved

• New molecular entities (NME) are unique new drugs
  available for use
• 187 NMEs approved from 1999-2005

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Drug Approvals Significant Advances Over
Current Therapies

• Includes biologic therapeutics since 2004
• Given priority review
• -105 new drugs from 1999-2005
• - 8 months median review time

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Generic Drugs

• Consolidation of Generic drug companies
• Novartis acquired Eon Labs
• Teva acquired Ivax
• Biological agents no generics yet!
• Approval process for generic biologicals is
  unclear
• Human growth hormone and insulins approved under
  NDAs, but application for generic growth hormone
  was denied in 2004
• 20-30 lower cost expected for generic
  biologicals

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Pharmaceutical expenditures within hospitals will
significantly increase

• In 1999, 12.3 of all non-labor expenditures in
  hospitals were for pharmaceuticals
• By 2009, expenditures for pharmaceuticals will
  increase significantly.
• Injectable drugs account for 74 of total
  inpatient drug expenditues

Muse Associates The role of group purchasing
organizations in the U.S. health care system.
Washington, DC 2000
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Pharmaceutical expenditures within hospitals will
significantly increase

• Expenditures will increase from a combination of
  increase in purchase price and non-price
  inflation
• Non-price inflation is a function of
• increase in utilization and volume of drugs
  purchased
• shifts in acuity of illness and intensity of
  therapy
• approval of new drugs

Hoffman JM, et al Projecting future drug
expenditures--2006. Am J Health Syst Pharm
200663123-138.
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Managing Rising Drug Prices in the Hospital
Setting

• Maximize contract utilization
• Market share agreements
• Premier Rational Choice
• Maintain a tight formulary
• Involve key physicians in formulary
  decision-making process
• Focus on best practices and monitor patient
  outcomes
• Use technology (CPOE) to communicate with
  prescribers regarding formulary medication
  choices and guidelines

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Challenges to Managing Rising Drug Prices in the
Hospital Setting

• Use of
• Non-formulary drugs
• New, expensive drugs
• Drugs for unproven indications
• Intravenous vs oral drugs
• Drug shortages

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Case Study Managing Rising Medication Costs in
Bloodless Surgery

• Marcia S. Jacinto, PharmD, FASHP
• Former Director of Pharmacy
• Englewood Hospital Medical Center
• Englewood, New Jersey

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Bloodless Medicine and Surgery - Defined

• Use of new and existing techniques, procedures,
  technology, and equipment to reduce or eliminate
  use of allogeneic (donor) blood

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Englewood Hospital Medical Center Bloodless
Institute

• Patients from 35 States in USA
• Patients from 25 Countries
• Major Cardiac, Orthopedic, Vascular,
  Neurological, Gynecological, Hepatic, Thoracic,
  Urologic Surgery
• Hundreds of Transfers from Other Hospitals
  including those claiming to be Bloodless
  Centers

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Bloodless and Cost Savings

• Cost of acquiring ONE unit of Packed Red Blood
  Cells is approximately 225 US
• TRUE cost much higher (transport, storage,
  administration, potential complications)
• Study found allogeneic transfusions associated
  with 1000-1500 US incremental Hospital costs

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Jehovahs Witnesses

• Do Not Refuse Medical Care, only transfusions
• Refusal of Blood not a RIGHT TO DIE Issue
• Actively Pursue Non Blood Medical Management
• Use of erythropoietin (Epo) to minimize
  transfusion of packed red cells

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Increased Expenditures of Epo at EHMC
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Medication Policy Development
Pharmacy Reviews literature Drafts usage
guidelines Presents to medical specialties
Physicians Review guidelines versus
clinical practice
Pharmacy Publicizes guidelines to MDs
Conducts DUE Makes recommendations for
improvement Presents to DUE Committee
Drug Usage Evaluation Committee -gt PT -gt Med
Exec    Reviews/approves usage guidelines
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EPO - Initial Drug Utilization Evaluation (DUE)

• Presented to PT Committee Apr 1998
• 97 patient charts reviewed 3 months
• Preliminary guidelines for Dialysis, cancer, HIV
  and surgery
• Showed use in GI bleed
• Develop guidelines as per literature and MD
  discussion

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EPO use in Surgery

• Require History Physical, Hgb measurement
• Patients requiring special consideration
• Uncontrolled HBP
• Iron Deficiency
• Myelodysplasia
• B12 or folate deficiency
• Hypersensitivity to human albumin or mammalian,
  cell-derived products

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Hgb Monitoring Surgery Patients
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EPO Dosing - Surgery Patients at Risk for
Transfusion
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Patients Deemed at Risk for Transfusion
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Patients Deemed at Risk for Transfusion
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Monitoring of EPO Patients

• Elective surgery
• Non-Elective surgery

• BP before every dose, Hgb weekly
• BP before every dose, Hgb postop day 2 and Q 5
  days

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EPO Dose Adjustments

• If Hgb increases by 1.5g/dL in any 2-wk period
• decrease dose by 25
• If Hgb gt18g/dL or pt develops BP
• D/C EPO
•  D/C EPO if clinician believes Hgb has risen
  adequately.

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Adjuvants to EPO

• Folic Acid (1 mg/day)
• Vitamin B-12
• Ascorbic Acid (500 mg/day)
• Iron (Oral or Intravenous)

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Rising Procrit Expenditure as 0f 2001
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Measures Taken to Control EPO Use

• Pharmacist reviews EPO order versus approved
  indications/dosing
• Pharmacist contacts MD if not according to
  protocol
• Pharmacist contacts EPO Physician Panel if no
  order change
• EPO MD contacts prescriber
• EPO administration time changed from 10AM to 6PM
  to give RP time to investigate Procrit order
  prior to dispensing
• To prevent Procrit dose from being
  misplaced/lost, RN signs for each dose delivered

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Follow-up EPO DUE Nov-Dec 2001

• Compliance with guidelines
• Indications - 97 Dosing - 99 Iron Therapy -
  84

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Follow-up EPO DUE Nov-Dec 2001

• Changes to Epo guidelines
• Add indication
• reduce transfusions in critically ill pts with
  sepsis/SIRS
• New dosing
• If Hgb lt 7.5g/dL, dose EPO 20K units SC daily
• If Hgb 8-10 g/dl, dose EPO 40K units weekly
• Approved by DUE, PT Committees Feb, June 2002

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EPO in Anemia of Chronic Disease (ACD)

• Identified in DUE (Jan 2001)
• Indications
• ACD secondary to Rheumatoid Arthritis, Diabetes
  Mellitus, Inflammatory Bowel Disease

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Initiatives to Control EPO Expenditure 2002

• Change Epo 40K to 30K weekly for inpatients using
  order form
• Based on 3 large, open-label, randomized studies
  on chemo pts
• EPO 150units/Kg 3x/wk, 10K units 3x/wk, 40K units
  weekly
• Exclude pre- and post-op patients
• Project 200,000 savings/year
• Approved Nov 2002

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Initiatives to Control EPO Expenditure 2003

• Change Epo 40K to 30K weekly for oncology, HIV,
  ACD
• Pts on Epo with Hgb lt7.9 g/dL, change from 20K
  daily to 20K for 5 days, not to exceed 100K in 7
  days

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Rising Procrit Expenditure as of 2003
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Initiatives to Control EPO Expenditure 2004

• Explore darbepoetin as therapeutic alternative
• Use Procrit for inpatients who need hemodialysis
  Apr 2004
• Patient monitoring to be done by Clinical
  Coordinator Nov 2004

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EPO Expenditure as of 2005
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EPO Expenditure 1999-2005
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Critical Enablers to Control Drug Expenditure

• Pharmacy department to
• spearhead efforts
• draft usage guidelines based on literature
• identify MD champions
• work through medical staff committees
• explore cost reduction initiatives
• be involved in monitoring MD compliance
• Physicians willing to intervene with other MDs
  PRN

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System Approach InControlling Pharmaceutical
Costs

• Emily W. Kao, RPh, MS
• Associate Executive Director
• North Shore University Hospital
• Manhasset, New York

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North Shore-LIJ Health System Service Area
Introduction and Background
Manhattan
Suffolk
Nassau
Queens
Kings
Staten Island
125 Miles
2003 Patient Origin
Total Population 5.4 Million
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SourceQM Database and U.S. Census Bureau
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NORTH SHORE-LONG ISLAND JEWISH HEALTH SYSTEM
Franklin Hosp
Huntington Hosp
LIJ Medical Center
NSUH-Forest Hills
NSUH-Glen Cove
NSUH-Manhasset
NSUH-Plainview
NSUH-Syosset
Southside Hosp
Staten Island Univ Hosp
Nassau University Medical Center
Peninsula Hosp
HCN Hospice Care Network
ACLD Adults Children with Learning
Disabilities Center for Extended Care
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NSLIJ HEALTH SYSTEM - Expected Drug Expenses
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Non-Salary Expense Distribution for NSLIJHS
(owned hospitals)
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System Approach to Formulary Effectiveness and
Safety S.A.F.E Rx

• Provide safe and cost-effective therapies to all
  patients served through the health system.
• Share and implement value added best practices to
  maximize use of clinical expertise.

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• Goal I
• System Formulary standardization to reduce
  therapeutic redundancies and improve clinical
  efficacy and safety

• Goal II
• Implement strategies to
  decrease inappropriate
  utilization of target medications based on
  targeted DRGs

• Goal III
• Implement cost saving
  initiatives
• Implement automatic
  substitution

• New drug addition process
• Class review
• Posting system formulary on Healthport

• Target DRG drug appropriateness
• Identify high cost drug and review where they
  are utilized

• Out sourcing programs
• Centralized contracts
• Therapeutic substitution
• Epoetin alfa
• ACE inhibitors
• H2 antagonist

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New drug addition review process

• Key focus
• Standardize process in new drug addition by
  sites
• Standardize review process
• Identify system task force that can assist in the
  class review
• What should be the realistic timeframe from start
  of drug request to local PT/Medical Board level

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Approach to standardize formulary
Target class review
Standardization
Utilization
Guidelines
Patient Safety
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Drug Requests and Utilization by sites
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System review of new drugs(Xopenex)

• Usage by all sites
• Pharmacology review
• Restriction guidelines
• System Recommendation
• Approved with restriction
• All sites should restrict use

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System monitoring to track Xopenex use
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Standardizing drug choices within target classes

• ACE inhibitors
• Manhasset Franklin
• Glen Cove LIJ
• Forest Hills Plainview
• Huntington Syosset
• Staten Island
• Southside

• Short acting ACEI
• Captopril
• Enalapril
• Long acting ACEI
• Lisinopril

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Standardizing drug choices by disease state
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Monitoring compliance
Compliance rate ranges from 20 to 75 for the
first three months of tracking to close to 90
within six months
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Understand appropriate use of Epoetin
alfathroughout the system
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Sharing Best practices Syringe repackaging
program
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Achievements to date
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• Changing role of Pharmacy leaders
• Create vision
• Motivate staff
• Generate enthusiasm
• Facilitate teamwork
• Build relationships

Critical enablers
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Any system approach must be multi-faceted

• Prospective Strategies
• Education of Decision Makers
• Engagement of Medical Staff Leadership
• Disease/Procedure Specific Strategies
• Evolutionary Change

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Sometimes, we need to think out of the box
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LIES OPPORTUNITY
IN THE MIDDLE OF EVERY DIFFICULTY
LETS BE THE ONETO LEAD THE WAY