Category: Pharmacy, PBMs, and Pharma costs

Sep
4

Friday catch-up

Posted by Joe Paduda on Friday, September 4th, 2020 | Comments

Lots happened this week – here’s the big stuff.

COVID’s impact on work comp

WCRI is hosting a free webinar on the delivery of medical care and RTW during the pandemic.  Hosted by WCRI CEO John Ruser PhD and Randy Lea MD, the webinar will also include Mark Herbert MD, an infectious disease specialist.

Sign up here for the September 24 event, it kicks off at 2 pm eastern.

Drug prices

No, payers’ drug costs are not dramatically higher. In fact, net costs after rebates and other payments are flat to lower.  That’s one of the key findings from Adam Fein PhD’s analysis of the top PBM’s results. Kudos to Express Scripts, CVS, and Prime Therapeutics for publishing true cost data; one only wishes all PBMs did the same.

Ever wonder where all those new drugs come from?

Well, pat yourself on the back – because you, dear taxpayer, funded most of the initial R&D behind new drug development. Here’s the takeaway:

every new drug approved by the Food and Drug Administration (FDA) for the decade from 2010-2019 was associated with basic science funded by the NIH.

The IAIABC’s annual meeting kicks off next week; registration is still open here. Lots will be covered, including a discussion of COVID claims, presumption, fee schedule improvements, and of course EDI.

David Dubrof is PBM myMatrixx’ new Chief Sales Officer. I’ve known David for 20+ years; he is one of the very few “A” players in work comp services sales and a consummate professional. (myMatrixx is an HSA consulting client). David is all in on myMatrixx’ industry-leading push for price transparency.

How’s that budget process going?

Imagine trying to set up a curriculum for an unknown number of students with an unknown level of education. Or meal planning for an unknown group with different dietary requirements that are also unknown.

Well, that’s budgeting 2021. Never has that been so…fraught/uninformed/scary/pointless as it is today. If you need a break from trying desperately to figure out how to justify/rationalize your 2021 forecast and budget, read this.  It’s an excellent discussion of budgeting in a time of huge uncertainty.

Family is coming in this weekend to celebrate our new granddaughter’s arrival – have to say this is much-needed these days; the nastiness and bad news is getting to be a bit much.

Hope your weekend is filled with joy.

Sep
3

Will the FDA keep your family safe?

Posted by Joe Paduda on Thursday, September 3rd, 2020 | Comments

Would you let your kids/parents/grandparents be injected with a COVID19 vaccine “approved” by the FDA?

The same FDA that lied about treating COVID with blood plasma and hydroxychloroquine?

How about the blood plasma scam? FDA chief Stephen Hahn flat out lied in public, claiming it “saved” 35% of COVID patients. Now the NIH has weighed in, refuting Hahn’s lies.

Now Trump et al want the FDA to issue an Emergency Use Authorization for a vaccine – something that has NEVER been done before, because it is incredibly dangerous.

Remember hydroxychloroquine? Touted as a miracle drug by the President, his Administration and allies, we know it is far more dangerous than helpful. And we knew that when the FDA gave it conditional use approval (that was later revoked).

Fox News on the FDA’s screw up…

Both were touted as solutions to COVID19 – and both claims were proven to be flat out wrong.

Now we have that same FDA telling states to prepare for a vaccine that will be ready in early November. The Centers for Disease Control is also involved.

The Administration is turning the FDA – once the world’s leading scientific authority on drug approval, research, and guidance – into a political machine. Lesser known is that the FDA’s oversight of pharma and food safety has plummeted under Trump.

Without full vetting of a vaccine, we do not know if it will hurt us more than help.

If this was happening under a Hilary Clinton administration I’d be screaming bloody murder.

What does this mean for you?

Elections have consequences. 

 

 

Aug
28

Friday fact day – COVID19 update, job losses, more uninsured, and executive move

Posted by Joe Paduda on Friday, August 28th, 2020 | Comments

Another whirlwind week is just about over, and with it the summer of 2020.

Here’s important/interesting news that came across my virtual desktop this week.

COVID and Comp

More data on workers’ comp COVID19 claims is coming in; Virginia’s Workers’ Comp Commission has published data; key takeaway is to date, only 8.3% of COVID19 claims reported have resulted in benefit payments. That will certainly increase as claims develop.

More info on state COVID reporting is here – you can watch a recorded webinar on the subject here – Mark Priven and I dive into data from California and Florida and discuss the implications thereof.

Meanwhile, employment took another hit as last week more than a million Americans filed for unemployment. This continues a five-month run of claims at or above the million mark. 14 million of us are still without jobs.

COVID19’s impact on health insurance coverage

Several million people have lost their health insurance due to COVID19-related job losses.  We don’t know the specific number – and it is certainly increasing – but it is likely between 3 and 12 million. (download the report for details).

Another perspective is here.

Most of those folks are lower-income workers and many are minorities; some may be eligible for Medicaid however states that did NOT expand Medicaid such as Texas and Florida will see an increase in uninsured care costs.

Congratulations to myMatrixx and new Chief Sales Officer David Dubrof; David is one of the very few “A” players in work comp services sales; myMatrixx will benefit greatly from his sales leadership. David and his colleagues are equally fortunate; payers have consistently rated myMatrixx the top workers’ comp PBM. (myMatrixx is a client)

NCCI published a report on the impact of fee schedule changes on outpatient facility costs.  Good to see this rapidly-rising cost driver getting attention.

Implications

  1. Fewer jobs = lower payroll = lower work comp premiums
  2. Things are tough and getting tougher for lower-wage workers, which are disproportionally people of color.
  3. More uninsured = more need for facilities to get $$ from those who are insured.
Aug
26

BWC’s dividends and drug costs

Posted by Joe Paduda on Wednesday, August 26th, 2020 | Comments

Last week Ohio’s Bureau of Workers’ Compensation announced it will consider $1.5 billion in dividends to policyholders.

This comes on the heels of a similar payout in April;

$1.35 billion went to private employers and $184 million went to local government taxing districts, such as counties, cities, townships, and school districts.

Together, the two dividend payments amount to a refund of all premiums paid by employers in 2018 and 2019.

The Bureau’s very strong financial results were attributed to excellent investment performance, a continued decline in claim counts, and “prudent fiscal management.”

A significant piece of this “prudent fiscal management” was the audit of BWC’s pharmacy program, an audit that led to the State Attorney General suing BWC’s PBM OptumRx. Subsequently AG Dave Yost accused OptumRx of overcharging “the state on 57% of 2.3 million claims between January 2014 and September 2018.” [it is important to note that BWC’s prior PBM was acquired by Optum and operated under a separate business unit]

The suit was later amended to reflect Yost’s allegation that overcharges exceeded $16 million.

BWC switched PBMs two years ago.

BWC’s drug costs have dropped significantly over the last couple of years; while a decline in claim frequency undoubtedly contributed to that drop, it is safe to say that prices paid for drugs helped slash pharmacy expenses.

And that has helped fund the huge dividend checks BWC’s customers are getting.

What does this mean for you?

Do you know you are paying only what you should? 

How can you prove that to your policyholders and customers?

Aug
25

Lies, Damn lies, and Statistics – the Blood Plasma debacle

Posted by Joe Paduda on Tuesday, August 25th, 2020 | Comments

Sunday President Trump, HHS Secretary Alex Azar and FDA Commissioner Dr Stephen Hahn said the use of blood plasma had reduced COVID19 deaths by 35%.

Trump said it was a “tremendous” number.

Azar said:

“We saw about a 35 percent better survival in the patients who benefited most from the treatment, which were patients under 80 who were not on artificial respiration…I don’t want you to gloss over this number…We dream in drug development of something like a 35% mortality reduction. This is a major advance in the treatment of patients.”

Hahn said

“a 35 percent improvement in survival is a pretty substantial clinical benefit. What that means is — and if the data continue to pan out — 100 people who are sick with covid-19, 35 would have been saved because of the administration of plasma.”

This is not “stretching the truth”, or over-generalizing, or taking something out of context.  It is total bullshit.

A REAL FDA scientist – whose name was redacted from an FDA memo, was a LOT less enthusiastic, writing the study data:

 “support the conclusion that [convalescent plasma] to treat hospitalized patients with COVID-19 meets the ‘may be effective’ criteria for issuance of an EUA. [emphasis added; EUA = emergency use authorization, which allows use of a treatment before it goes thru the entire approval process]

There is no basis or source for the 35% figure; it appears to have been derived from a very small group of patients treated at the Mayo Clinic.

Note the emphasis on “appears”; that statistic was NOT in the Mayo Clinic’s 31 page report;

  • nor was it in a memo authored by FDA scientists,
  • nor was it in the FDA’s letter authorizing use of blood plasma on an emergency basis to treat COVID19,
  • Nor could it have been credibly derived from the actual study report.
  • Nor did one of the principal study authors have any idea where the 35% figure came from.

If anything, it looks like Azar, Hahn, and President Trump cherry-picked data by only looking at results from a very select and very small subset of a subset of patients; those:

  • less than 80 years old;
  • not on a ventilator; that
  • received plasma within 3 days of diagnosis, and
  • received plasma with high levels of antibodies.

But wait, you say, that’s still good news!

Okay,

Here’s what the study actually found as reported by the NYTimes:

among the larger group of more than 35,000 patients, when plasma was given within three day of diagnosis, the death rate was about 22 percent, compared with 27 percent when it was given four or more days after diagnosis.

Hahn later corrected his statement – but only after an official FDA spokesperson perpetuated the fraud…

I get we all want to find a cure, and a vaccine, and we want this long global nightmare to end. We want the dying to stop, the suffering to end, the pain to go away, life to return. But our only hope is rigorous, robust, careful and thorough science.

Not political grandstanding, not abuse of a vitally important Federal Agency, not outright lying. We’ve been down this path before, and it didn’t turn out well.  Remember hydroxychloroquine?

Does it appear blood plasma from patients that have recovered from COVID19 may be beneficial? Yes. Is it likely it will help some patients? Well, there’s some evidence it may help some patients.

Is it a universal cure?

Highly unlikely.

What does this mean for you?

Science matters. Dig deep, ask hard questions, and don’t believe the headlines until you do your homework.

 

Jul
24

Friday catch-up

Posted by Joe Paduda on Friday, July 24th, 2020 | Comments

COVID and client work has kept me way too busy this week – hope to be back to more frequent posting soon. Meanwhile, here’s what I missed…

Workers’ comp drug trends

myMatrixx released its annual Drug Trends Report. Key findings include:

  • 6.1% drop in drug spend for myMatrixx clients
  • 10.7% drop in opioid spend
  • over five years, clients’ opioid spend dropped 45%
  • Lyrica’s brand patent expired; within 4 weeks over 90% of patients had been switched to a less-costly generic

(myMatrixx is an HSA consulting client)

Workers’ comp pharmacy regulations – WCRI’s national inventory

Is available for purchase here. This is a must-have for any and all workers’ comp payers. Info on medical marijuana, opioid prescribing limits, drug testing, and pricing is all there.

Presumption

Pretty solid summary of presumption changes provided by the Premium Reduction blog; some good reporting on numbers of claims in FL, CO and CA as well.

Medical pricing lookup

Medata has a pretty cool medical service pricing lookup tool that’s useful for consumers, adjusters, and employers. It includes pricing for group health, auto, and workers’ comp.

COVID’s impact

Thanks to Risk & Insurance’s Courtney DuChene for her reporting on our survey of COVID”s impact on workers’ comp.

Finally, this…

And, one day, perhaps this…

Jul
9

Work comp drug trends – costs and opioid use down, physician dispensers still a big problem

Posted by Joe Paduda on Thursday, July 9th, 2020 | Comments

myMatrixx released it’s annual Drug Trend Report yesterday; there’s a lot of good news – and a few trends that bear close attention.

The good stuff (lots more in the report itself)

  • drug costs per patient decreased by 2.4% despite a 1.9% increase in utilization
  • opioid cost per patient continued to drop, this time by 10.7%
  • comparing claims incurred in 2019 to those incurred in 2016 or earlier:
    • 45% fewer patients were prescribed opioids
    • the average days supply dropped by 2/3rds, from 28 to 9
    • the average morphine equivalent dose dropped by 40%

Stuff that demands your attention.

Many payers are working hard to close older claims. For claims older than about 8 years, pharmacy costs account for almost half of medical expenses. Obviously, ensuring the drugs prescribed and dispensed to long-term patients are still appropriate and are helping the patient recover is the first step in developing a plan to resolve these old – and very expensive – claims.

Specialty meds are becoming increasingly common – and increasingly costly, accounting for 8.8% of drug costs.

The bad stuff

Physician dispensers are the worst. They suck money out of employers and taxpayers, justifying their rampant profiteering by lying about maintaining patient access and improving care. 

Their latest scam is topicals. One out of every eight physician dispensed meds is a topical, but one out of every three dollars you pay for physician dispensed drugs is for a topical.

chart used by permission

One – methyl salicylate cream 25% – is available at retail pharmacies for about five bucks. Physician dispensers are getting $345.

I’ll save you the math – you are paying 69 times more than you should.

There’s a lot more detail in myMatrixx’ report – you can download it here.

What does this mean for you?

While payers and PBMs have made remarkable progress addressing opioids and controlling costs, much remains to be done:

  • keep the focus on long-term opioid patients
  • aggressively attack physician dispensing
  • if you don’t have a specialty med program, you’d best get one set up.(myMatrixx is an HSA consulting client)
Jun
4

COVID and pharmacy benefit management – an update

Posted by Joe Paduda on Thursday, June 4th, 2020 | Comments

COVID19 is having an impact on work comp payers’ pharmacy programs – but this isn’t due to treatments for the disease itself.

That’s largely because there are no medications that have been shown to be safe and effective in treating COVID19 in credible clinical trials.  As a result, there’s little consistency in how payers are approaching medications intended to treat COVID and the symptoms thereof.

Some are approving hydroxychloroquine without a prior authorization (PA) while others require a PA for initial and refills. As the surveys were completed before the latest news that hydroxychloroquine research found less-than-promising clinical results for patients exposed to the virus, it is possible more payers will require at least a PA for future prescriptions. (Other research that reported specific health risks recently came under fire from multiple sources.)

None of the respondents mentioned remdesivir, a brand antiviral that has shown some promise (based on limited clinical trials). This may well change if and when additional trials are completed and the results are satisfactory.

What is consistent is payers’ moves to loosen other prior auth requirements to allow refills for other medications for longer periods and earlier than usual.

Home delivery has also ramped up appreciably, with many retail outlets offering delivery in an effort to keep customers tied to their local store as opposed to using the PBM’s mail order pharmacy.

What does this mean for you?

Unfortunately, we don’t yet have any medications that have been proven to be safe and effective in preventing COVID19 or moderating COVID19’s effects.

Read studies carefully, and get your clinical experts to weigh in on coverage decisions. Science matters.

May
12

Now, about those drug rebates…

Posted by Joe Paduda on Tuesday, May 12th, 2020 | Comments

Drug rebate dollars account for a big chunk of brand drug costs – more than 40% in some cases. While list prices for brand drugs have been rising rapidly, net prices – the prices actually paid to the manufacturer – have not.

That’s mostly because manufacturers have been paying rebates to employers, insurers, and others in the drug distribution system.

This from Adam Fein PhD of Drug Channels:

A drug’s net price equals the actual revenues that a manufacturer earns from a drug. The net price equals the list price minus rebates as well as such other reductions as distribution fees, product returns, chargeback discounts to hospitals, price reductions from the 340B Drug Pricing Program, and other purchase discounts.

AARP is one of those making bank off rebates, along with lots of healthplans and insurers.

Workers’ comp

The picture’s a bit different in workers’ comp, for several reasons. Rebate payments tend to be lower because:

  • fewer brand drugs are dispensed to work comp patients
  • far fewer speciality drugs – the really expensive ones – are dispensed to work comp patients
  • the brand drugs dispensed to work comp patients typically don’t have big rebates.

But – there’s always a but – rebates must be considered when evaluating your drug spend. If you are an insurer or self-insured employer, a few things to consider:

  • ask your PBM how rebate payments affect your current pricing, and how.
  • if you’re pricing a new PBM, ask if you’re going to get the rebates paid directly to you, or if rebates are included in a calculation of your drug price
  • find out if you are getting ALL the rebate payments, or other entities in the supply chain are getting a cut. [that’s not necessarily a bad thing, but you do want to know where your dollars are going – because they are your dollars]
    • the big PBMs have more buying power, so you’re more likely to get more of the rebate dollars if you’re working with one of the big players

What does this mean for you?

These are your dollars. You need to ask the hard questions to be sure you’re getting the right answers. 

May
8

COVID19 catch up

Posted by Joe Paduda on Friday, May 8th, 2020 | Comments

Three key takeaways from this week’s COVID19 news.

Do we KNOW how bad things are, who’s dying, and Remdesivir.

  1.  Do we know how many are infected, the death rate, and the number hospitalized/in the ICU/on ventilators?

No.

We are three plus months into the crisis and if anything, the picture is muddier than it was a month ago. From the highly-credible COVID Tracking Project;

it is impossible to assemble anything resembling the real statistics for hospitalizations, ICU admissions, or ventilator usage across the United States.

Also from the Project:

the CDC does offer a national-level account of “specimens tested,” this data is incomplete and lagging, and it uses a different unit (specimens tested) for total tests than for positive results (which are counted in people). This makes it impossible to accurately match testing totals with positive tests to infer a complete picture of COVID-19 testing, even at the national level…a simple count of identified COVID-19 cases doesn’t show the true location or comparative severity of outbreaks. Simple case counts show where people are being tested, not where people are sick. [emphasis added]

Yep, the greatest country on Earth can’t even capture and accurately report infections, hospitalizations, and deaths…you should be pounding your head against the wall.

Or maybe just scream in frustration…

2. Who’s dying.

In the New York City, it’s mostly older folks.

From Statista…

Alas, our nation’s leaders still do NOT KNOW how many of our loved ones in nursing homes have been killed by COVID19. 

Almost three weeks after CMS Administrator Seema Verna took to the podium to announce HHS would begin publishing the numbers, we’ve seen nothing.

3. Finally, Remdesivir is NOT a cure – far from it.

The results of a study conducted by NIAID on about 1,000 patients found it does shorten the course of COVID19 – by four (4) days – in some patients. Manufacturer Gilead hasn’t said what remdesivir will cost, but indications are about $4,000 per patient.

NIAID’s study found the anti-viral drug:

  • has been shown to be safe in humans,
  • is given intravenously (it is injected into the blood stream),
  • the course of treatment is 5 – 10 days,
  • has to be administered in a hospital, and
  • the vast majority of patients who recover at home will NOT get the drug.

Perhaps the most important impact will be shortening the course of COVID19 (although that didn’t happen in all patients who got the drug). This will free up more bed-days in facilities and allow them to treat more patients.

Note an earlier study in China did not find remdesivir was effective in treating COVID19. From the study: “Remdesivir use was not associated with a difference in time to clinical improvement”

Lastly, who will actually get the drug depends on luck – some hospitals will get it, others will not, with no rhyme or reason.

For my work comp readers, over at Workers’ Comp Insider Tom Lynch has a quick summary of COVID19 and its impact on workers’ comp.

What does this mean for you?

We should expect way more from our elected officials.