Tim R. Covington, M.S., Pharm.D.

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Change is Good Simple Ways to Lower Pharmacy
Costs

• Tim R. Covington, M.S., Pharm.D.
• President/CEO
• Covington Healthcare Associates, LLC
• 3800 Colonnade Parkway, Suite 110
• Birmingham, AL 35243
• Phone [phone]
• E-mail trcoving_at_charx.com

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Pharmacy (Rx) Economic Trends

• Rx costs account for approx. 12 of total medical
  cost.
• 85 of all Rx costs are associated with injuries
  that occurred gt 3 years prior.
• Rx costs account for approx. 25 of total medical
  costs after 5 years.
• Rx costs are the fastest growing care cost
  component.

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Rx Issues in Workers Comp

• Extreme polypharmacy (too many Rxs)
• Flawed prescribing (clinically and economically)
• Inadequate value derived for Rx s spent
• Drug-related safety issues
• Chemically impaired patients (Rx straight
  jacket)
• Extreme Rx vendor pricing
• Physician dispensing
• Lack of generic mandates
• State maximum Rx Fee Schedule

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Where Will You Be in 10 Years?
8 doubles in 9 yrs. fiduciary
responsibility to your client(s) 10 doubles in
7 yrs. limits of affordability 15 doubles in
lt 5 yrs.
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How Do We Achieve Rx Savings?Two primary ways

• Management of Rx Utilization
• Management of Rx Cost
• (other pathways are slower to achieve savings
  and may require regulatory or legislative action)

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Goal of Drug Utilization Review (DUR)

• Avoid unnecessary Rx costs without compromising
  quality of care.

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What is a DUR (also called pharmacy review)?

• Evidence-based medication review and evaluation
  by experts in drug therapy management, drug
  information and relative drug cost.
• Address all areas of drug therapy (clinical and
  economic).
• Makes specific recommendations for refinements in
  drug therapy.
• Gives adjusters and case managers intellectual
  ammunition to present to prescribers.

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Who Should Perform the DUR?

• Would be best if DUR is performed by a group
  independent of your Rx provider (vendor) to avoid
  potential conflict of interest.

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Focus of an Appropriate DUR

• Clinical appropriateness
• Right drug
• Alternative drug
• Drug duplication
• Safety issues
• Excessive dosing
• Rx Risk v. Benefit (Adverse Effects)
• Drug interactions
• FDA-unapproved use (off-labeluse)

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Focus of an Appropriate DUR (contd)

• Cost savings opportunities
• Noninjury related drug use
• Generic alternative
• Therapeutic alternative
• Dose consolidation
• Stop unnecessary prescription(s)
• Physician dispensing
• Compounded prescriptions
• Nutritional supplements

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DUR An Extreme Example

• 41 YO Female w/ankle, back, neck injury from
  fall.
• Reports 3 to 4 additional falls per month.
• Annual Rx Cost 103,391
• Projected Lifetime Rx Spend 3.5 to 5.0 million

Rx Name Rx Cost Per Month Rx Cost Per Year
Duragesic (fentanyl patch) 100 mcg 30 1,850.70 22,208.40
Actiq (fentanyl lollipop) 600 mcg 120 5,244.00 62,928.00
Soma (carisoprodol) 350 mcg 90 523.49 6,281.88
Lidoderm (lidocaine 5 patch) 60 351.76 4,221.12
Lunesta (eszopiclone) 3 mg 60 378.12 4,537.44
Nexium (esomeprazole) 40 mg 30 150.00 1,800.00
Lyrica (pregabalin) 150 mg 60 117.90 1,414.80
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DUR Findings

• Recurrent Falls - Experiencing 3 to 4 falls per
  month Significant risk for future injury
  liability
• Independent medical review could not find any
  orthopedic or neuromuscular reason for falls.
• Recurrent falls are likely drug-induced
• Patient receiving multiple (5) CNS depressants
  that when combined can have their effects
  multiplied.
• This may result in sedation, drowsiness,
  dizziness, impaired coordination and balance,
  diminished mental function, reduced quality of
  life, and increased risk of workplace and/or
  motor vehicle accidents.

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DUR Findings

• Actiq (fentanyl lozenge)
• An alternative generic opioid would safely and
  effectively manage breakthrough pain, yet would
  cost as much as 62,000 less per year.
• Lunesta (eszopiclone)
• A conversion to generic Ambien or Sonata would
  save about 4,000 per year.
• If Lunesta is continued, the dose should be
  reduced by at least half. The patient is
  currently receiving twice the maximum daily
  recommended dose.

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DUR Findings

• Soma (carisoprodol)
• Has never been shown to be safe or effective with
  chronic therapy. It is metabolized to
  meprobamate, a highly addictive substance.
• Discontinuation and/or conversion to generic
  tizanidine or baclofen was recommended. This
  would save nearly 6,000/year.
• Duragesic (fentanyl patches)
• A conversion to the generic version would reduce
  cost by approximately 10,000/year.

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DUR Findings

• Nexium (esomeprazole)
• Heartburn symptoms are more than likely related
  to dietary/lifestyle factors, not the original
  injury.
• For the most part, PPIs are interchangeable.
• A switch to generic Prilosec would save
  1,400/year.
• Lidoderm (lidocaine 5 patch)
• Published review articles have suggested that
  lidocaine topical products can be used instead of
  Lidoderm.
• Conversion to lidocaine 5 ointment would save
  3,800/year.

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DUR Findings

• Lyrica (pregabalin)
• Generally considered a first-line treatment in
  neuropathic pain however, numerous generic
  first-line treatments are available.
• A conversion to generic gabapentin would save
  1,100/year.
• Brand v. Generic Issues
• By simply converting Actiq, Soma and Duragesic
  to their FDA-approved generics, 47,000 in
  savings per year could be realized.

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DUR Potential Savings

• Annual Rx Cost 103,391
• Potential Savings 88,300/year (100
  acceptance)
• If only Nexium switch is accepted, savings would
  be 1,400/year or 14,000 over 10 years.
• If only Lidoderm switch is accepted, savings
  would be 3,800/year or 38,000 over 10 years.

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Savings in Work Comp Patients

• A Workers Compensation third party administrator
  (TPA) enrolled 35 patients into our DUR program.
  They realized an average annual savings of
  3,708/patient/ year (see below).
• Return on Investment (ROI) 200 to 300 in 1st
  year alone compounding will occur in subsequent
  years

Savings
Average Savings Per Patient Per Year 3,708
Realized Savings at 2 Years for 35 Patients 259,561
Potential Savings After 5 Years for 35 Patients 648,902
Potential Savings After 10 Years for 35 Patients 1,297,805
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Savings in MSA Patients

• Consider the cost savings achieved in actual
  settlements involving 18 representative cases
• Return on Investment (ROI) gt10,000 per case
• due to the realization of lifetime savings on Rxs

Examples Lifetime Rx Cost Before the DUR Lifetime Rx Cost After DUR Difference in Rx Cost
18 Cases 3,934,769.42 2,195,133.53 1,739,635.89
Total Savings 1,739,635.89
Savings/Case 96,646.44
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Who can benefit from a DUR?

• In the general work comp population (non-MSA),
  target your highest cost patients.
• Top 10 of Rx spending patient population
  typically accounts for 20 to 30 of all Rx
  costs.
• Target any case you are trying to settle that
  involves significant Rx cost.
• Look for Red Flags in any case

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What is a Red Flag for a DUR?

• Drug Cost DURs are most beneficial in patients
  who spend more than 500 to 750/month on
  prescription drugs. The higher the drug costs,
  the more likely a DUR will be beneficial.
• Brand Name Drugs A DUR may be beneficial in
  anyone using one or more of the following
  brand-name medicationsAciphex, Actiq, Ambien CR,
  Amitiza, Avinza, Celebrex, Cymbalta, Duragesic,
  Fentanyl lozenge, Fentora, Gabitril, Kadian,
  Lamictal, Lidoderm, Lunesta, Lyrica, Nexium,
  Opana, OxyContin, Prevacid, Provigil, Seroquel,
  Skelaxin, Topamax, etc.

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What is a Red Flag for a DUR?

• Physician Dispensing Approximately 10 of
  physicians dispense drugs. Although this can be
  very convenient for patients, physicians can
  charge significantly more than pharmacies for the
  same medications.
• Number of Medications Patients receiving 6 or
  more medications are likely to be taking one or
  more drugs that are non-injury related,
  unnecessary, have lower cost but equally
  effective alternatives, interact adversely with
  other medications and/or have a safer
  alternative.

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DURs A Plan of Action

• Use DURs as a utilization management tool to
  control drivers of Rx cost.
• Use DURs as early as possible after patient meets
  one or more red flag criteria. Longer the
  delay the greater the cost.
• DURs can help you settle cases involving moderate
  to high cost pharmacy charges.
• DURs can reduce Rx-related MSA costs.
• DURs can help you decrease your cost exposure on
  high-cost cases with open medicals.

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Where Will You Be in 10 Years?
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Questions?/Discussion