Category: Pharmacy, PBMs, and Pharma costs

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. 

May
4

RIMS, opioids, and awards to drug distributors’ risk managers

Posted by Joe Paduda on Monday, May 4th, 2020 | Comments

Last month RIMS announced its annual awards; one of the recipients is the risk manager for Cardinal Health, another has a similar role at McKesson.

Awarding awards for excellence in risk management to two individuals at companies with huge liabilities for the opioid crisis, and failing to discuss that liability in press releases is pretty shocking.

Both companies are embroiled in ongoing and likely very expensive litigation regarding their responsibility for the opioid crisis. Cardinal just announced a $4.9 billion loss for the first quarter of 2020, attributing the hit entirely to opioid litigation (the company estimated the cost of litigation at $5.6 billion.

West Virginia is one of the states devastated by rampant overuse of opioids; Pulitzer Prize-winning reporter Eric Eyre just published a book detailing his investigation into Cardinal’s role in the opioid crisis.

According to Eyre, Cardinal “saturated the state with hydrocodone and oxycodone — a combined 240 million pills between 2007 and 2012. That amounted to 130 pain pills for every resident.” All told, distributors shipped 780 million pills into West Virginia over that time.

Cardinal, McKesson, and Amerisource Bergen are the largest drug wholesalers in the nation, acting as the middlemen between manufacturers and retail and mail order pharmacies. While all three contend they are just part of the supply chain, they are required to monitor and report shipments of controlled substances – including opioids, a responsibility that is at the center of the litigation.

(This is not to say the three distributors bear all the responsibility for the crisis – far from it. State health officials, the DEA, FDA, prescribing physicians, opioid manufacturers and others all share in that responsibility.)

From the Washington Post:

McKesson, Cardinal Health and AmerisourceBergen, were in and out of court. They paid lots of fines but kept on trucking. In 2018, their chief executives gave sworn testimony before the House of Representatives Committee on Energy and Commerce: All denied contributing to the opioid crisis. Later that year, the committee released the results of an 18-month study. It found that distributors failed to conduct proper oversight of pharmacies by not questioning suspicious activity and not properly monitoring the quantity of painkillers shipped. [emphasis added]

Earlier this year, McKesson agreed to pay investors $175 million to settle claims that “directors failed to maintain adequate internal systems for spotting suspicious opioid shipments…”  According to Bloomberg, U.S. District Judge Claudia Wilken in Oakland, California said the suit raised:

“legitimate questions about whether directors ignored “multiple red flags” about opioid shipments even after agreeing to step up compliance oversight as a result of a deal with the government.

The settlement, produced in part by a series of mediation sessions, calls for McKesson to add two new independent directors to its board, to beef up compliance training for directors and improvements in internal systems designed to red-flag suspicious orders, according to court filings.”

McKesson is the also the subject of a criminal probe launched by Federal prosecutors in Brooklyn, NY. 

So, the world’s leading risk management organization conferred prestigious awards on risk management professionals at two companies that have massive financial liability – and I would argue ethical responsibility – for what can only be described as a massive risk management failure. And one is the subject of a Federal criminal probe.

I contacted RIMS to inquire about the decision criteria used by the individuals to select the award recipients, stating:

I’m curious as to the decision criteria employed by the award committee that resulted in awards to these two executives. While their accomplishments are impressive and their achievements notable, I’d like to understand how the opioid settlement issue factored into the award decision.

RIMS Communications Director Josh Salter was kind enough to provide an initial response:

RIMS awards are reviewed and selected by volunteers. This group of risk professionals is charged with vetting all submissions and then, using their experience in the profession, making a decision based on the applicant’s accomplishments. While the volunteer group changes from year to year, I will share this information with them.

I asked Mr Salter if he would facilitate a discussion with any members of the committee and offered to keep the names of those members confidential; to date and after multiple requests I have not received a response. [I’m certainly willing to hear from Mr Salter and committee members]

Eyre’s editor, Ned Chilton, coined the term “sustained outrage” to define what he saw as an essential responsibility of news organizations, a demand that media keep the focus on injustices instead of reporting on a calamity and moving on. I’ve been reporting on the opioid crisis since 2005; over the last two years my passion and drive has burned out.

That’s my fault.

I struggle to understand how RIMS could confer prestigious awards for “risk management” on individuals at two huge companies that bear significant responsibility for the opioid crisis – and not even mention the opioid issue in publicity around the awards. This is not to impugn the professionalism, ethics, or abilities of the individuals recognized by RIMS, rather to ask a very uncomfortable question, one RIMS needs to address.

What does this mean for you?

We cannot let crisis fatigue take our focus off opioids.

[PS – kudos to Tristar’s Mary Ann Lubeskie for her ongoing and tireless efforts to keep opioids front and center… you can follow her at @maryannlubeskie on Twitter]

 

 

 

Apr
20

Are you paying too much for drugs, Part Two

Posted by Joe Paduda on Monday, April 20th, 2020 | Comments

The good news – most workers’ comp payers have seen their drug costs steadily decline steadily.

The bad – many are still paying too much due to poor contract terms.

One of the issues is a failure to update generic drug pricing tables; in several recent PBM assessments the PBM has apparently failed to update pricing tables. The result – the insurer, employer, or TPA is charged what the drug cost as much as 12 months ago. Because generic drug prices continually decrease, the insurer, employer or TPA is paying more than they should.

Meanwhile, the PBM is paying the pharmacy today’s price – which is almost always less than it cost a year ago.

The net  – the PBM makes a bigger profit because it is “buying low and selling high.”

While the “fix” is obvious – ensure contractual terms require updates to pricing are timely – there’s a much bigger issue.

This is just one reason many work comp insurers and employers pay too much for drugs. Pharmacy pricing is opaque at best, requiring a lot of experience and expertise to make sure you’re paying only what you should, updating generic pricing schedules is only one issue.

What does this mean for you?

Are you paying what you should?

Feb
7

PBMs and legacy work comp claims

Posted by Joe Paduda on Friday, February 7th, 2020 | Comments

Employers, state funds, and insurers are focusing more and more on closing old claims; the most successful ones are partnering with their Pharmacy Benefit Managers.

The logic is clear – the older and more costly the claim, the greater the percentage of spend is for drugs (except for those cat claims needing long-term home health/facility care).

And, the higher the reserves, the greater the percentage of those reserves is for drugs (except for those cat claims needing long-term home health/facility care).

Both graphs from NCCI; Medical Services by Size of Claim—2011 Update.

While some very large payers (e.g. Ohio BWC, Washington L&I, State Fund of California and Sedgwick) have strong clinical pharmacy capabilities, most payers don’t.

If you are looking to reduce your claims inventory, partnering with a PBM with:

  • real expertise in analyzing legacy claim information,
  • very strong clinical capabilities, and
  • a demonstrated ability to help manage legacy claims is mandatory.

What does this mean for you?

Find out if your PBM has these capabilities – and ask how they can help you. If you aren’t impressed, find another PBM.

 

Dec
10

Hyper-expensive moisturizer, uninsured jewelry, drug prices, and those costly hospital mergers

Posted by Joe Paduda on Tuesday, December 10th, 2019 | Comments

in which I cover newsworthy stuff that happened this week…

Uh…that’s why you buy insurance

From Politico we hear CMS Administrator Seema Verna asked us taxpayers to pay for $47,000 worth of jewelry and other stuff stolen “during a work-related trip.” Among the valuables gone missing – that she wanted us to pay for were a $325 moisturizer (!!!) and $349 for noice-canceling headphones – plus a $5,900 Ivanka Trump pendant.

Yep, the person who runs the biggest insurance entities in the world wants the government to bail her out because she decided to NOT buy insurance. (update – good news, we aren’t paying for Ms Verma’s bling)

Physical therapy in workers comp

MedRisk released its third annual report on PT in WC earlier this week.  560,000 work comp patients were served by MedRisk so far this year; the average duration of care has shrunk to 11.2 visits over 48 days.  Better news – 98.1% patient satisfaction rate and 97.7% of providers agree with MedRisk’s clinical recommendations.

There’s an old business meme that comes to mind – “stick to your knitting.”

At a time when other service companies were seeking to become everything to everyone, Shelley Boyce, Mike Ryan and their colleagues at MedRisk went the other direction, focusing narrowly on work comp physical medicine. Along with the best management team in the business, they executed the plan to perfection. (While MedRisk is an HSA consulting client, all the credit goes to those folks).

Meanwhile all the caterwauling about drug prices turns out to be much ado about nothing (I’m looking at you, AARP) . This from the estimable Adam Fein PhD’s discussion of CMS’ review of healthcare costs:

    • For 2018, spending on outpatient prescription drugs grew by 2.5%—below the spending growth rate on hospitals, physician services, and overall national healthcare costs.
    • CMS significantly lowered its previously reported drug spending figures by billions after incorporating new data on manufacturers’ rebates.

More news showing hospital consolidation raises your healthcare costs.

From NIHCM comes a terrific slideshow – my favorite is this one – key takeaway is prices ALWAYS GO UP after mergers.

 

 

Dec
6

AARP, healthcare costs and drug prices

Posted by Joe Paduda on Friday, December 6th, 2019 | Comments

AARP has rather strange positions on drug prices and healthcare costs.

AARP positions itself as an advocate for seniors (and no, while I’m eligible, I’m not a member). The latest PR effort by the huge organization touts its lobbying to “help Americans afford high healthcare costs.”

Rather than lobbying for extensions on tax breaks for healthcare costs, AARP would serve its members better by doing something to actually reduce the cost of healthcare. Here are a few suggestions:

  • vigorously promote value-based care with reimbursement more closely tied to valid outcomes including functional ability
  • aggressively regulate healthcare system expansion, and specifically require reductions in costs after mergers
  • promote higher reimbursement for primary care, reduced reimbursement for questionable specialty care
  • focus attention on transparency in drug pricing – including rebate payments to plan sponsors

On this last suggestion, I’d note that AARP consistently moans about the retail price of drugs, while refusing to acknowledge the very real impact of rebates on brand drugs – which aren’t passed on to consumers.

Frankly, AARP’s stance on drug prices is misleading.

AARP’s “research” doesn’t discuss rebates – and the fact that plan sponsors are getting rebates, which drastically reduces the prices those sponsors pay for drugs.

As a result, consumers pay the higher retail prices, while plan sponsors – AARP partners among them – keep the rebates.

(thanks to Adam J Fein, PhD, for his work on this.)

I emailed AARP, indicating my concern with this.  This was the response:

“While AARP appreciates the potentially distorting effects of rebates, evidence indicates that plan sponsors are sharing rebates with consumers in the form of lower premiums. For example, a recent CBO analysis of a proposal to eliminate rebates under Medicare Part D that found that premiums would increase for all enrollees and that federal spending would increase by nearly $200 billion, primarily due to increases in federal subsidies for premiums.

“Further, AARP has consistently said that it would be happy to run these analyses based on net prices. Unfortunately, no drug manufacturers have been willing to take them up on the idea.”

Well, no.

First, there’s a megaton of evidence out there that some individual/group health and Medicare Part D insurers are getting rebates, and are NOT passing them on to consumers.

This from the estimable Dr Fein; (note the rebate percentage accruing to Plan D (senior drug card) sponsors):

Second, AARP could easily ask its “partners” (Part D plan sponsors among them) if they are getting rebates (which they are), and if so are they passing the savings along to consumers and what is the impact on those consumers’ drug costs. That would allow AARP to ” run these analyses based on net prices.”

AARP positions itself as an advocate for seniors. I’d suggest failing to address this is not helpful to their members.

What does this mean for you?

Does AARP benefit from rebate payments? I dunno…

 

Dec
2

Time for an effective workers’ comp opioid solution for Louisiana

Posted by Joe Paduda on Monday, December 2nd, 2019 | Comments

Today’s WorkCompCentral arrived with William Rabb’s report on the use of opioids by workers’ comp patients in Louisiana. [subscription required]

A few notable findings:

  • Louisiana work comp patients get more opioids, and they get them for longer periods of time than any other state studied
  • Employers and taxpayers pay significantly higher prices for drugs than in other states
  • 7 out of 10 claims included an opioid prescription
  • Louisiana patients get twice as many opioid scripts than the average state.

For some reason, some “claimant attorneys” don’t see the wisdom of formularies/guidelines intended to reduce inappropriate opioid use, citing spurious claims from the pain industry in attempt to validate their complaints.

Louisiana has had treatment guidelines in place for several years, however they have not been revised or updated in memory and are very difficult to enforce. Compared to other states, the Pelican State has made little progress reducing inappropriate opioid use by work comp patients.

Back in 2017 I cited Sheral Kellar, Director of Louisiana’s Office of Workers’ Compensation Administration discussing the opioid issue in her state.

Ms Kellar knows a formulary is NOT a panacea, rather a critical tool in the armamentarium which includes:

  • Prescription drug monitoring programs that require and facilitate pharmacist and physician participation,
  • Strong and well-designed utilization review programs,
  • Flexibility for PBMs and payers to customize medication therapy to ensure patients get ready access to appropriate drugs and reduce risks from inappropriate medications,
  • Carefully-planned implementation,
  • Drug testing, opioid agreements, and addiction/dependency treatment

Over the last decade I have spoken with many individuals heavily involved in Louisiana workers’ comp; each frustrated and saddened by the lack of meaningful progress in attacking the overuse of opioids by workers’ comp patients. 

What does this mean for you?

Here’s hoping Louisiana is able to make real progress on reducing opioid usage. Families, communities, employers, and providers have all waited long enough.

 

 

Nov
1

What’s up?

Posted by Joe Paduda on Friday, November 1st, 2019 | Comments

The inbox has been stuffed with important new research and news; here’s what most interested me.

Work Comp

Perhaps the best annual summary of the state of the workers’ comp world is just off the press.  The National Academy of Social Insurance’s report is here. Free to download, NASI’s latest finds:

  • Employers’ costs have fallen from just over $1.50 per $100 of covered wages in 1997 to $1.25 in 2017.
  • Worker benefits decreased even more, from $1.17 twenty years ago to $0.80 per $100 of covered wages in 2017.

My takeaway – workers are getting less in benefits than they have in the past – and that’s a bad thing.  It is great that employers’ costs are declining, but that shouldn’t be at the expense of injured workers and their families.

The fine folk at CWCI published their latest research on UR in the Golden State. Despite what some on the applicant attorney side argue;

Results show that 94.1 percent of services performed or requested from January 1, 2018 to October 31, 2018 were either approved (92.5 percent) or approved with modifications (1.6 percent)…

Yup, 17 out of 18 services were approved. 

WCRI’s annual conference returns to Boston – register here – now.  Or risk missing out, as the event fills up every year. Don’t be one of these people!

[I don’t think the guy on the right is Andrew Kenneally…]

Check out WCRI’s upcoming webinar on medical prices paid and work comp fee schedules – lots of great information on facility costs – the biggest problem (outside of opioids) in work comp today.

Drugs!

From Alan Fein at DrugChannels, a most excellent video by John Oliver on everything you should know about compounding pharmacies. You gotta watch this… [can you believe Oliver actually knows about stuff we work comp pharmacy nerds think about???]

The video is both hysterically funny and terrifying. Watch it.

From the funny to the deadly serious; if you haven’t read Gary Anderberg’s most recent GB Journal, you likely don’t know this:

research showed that “57% of those who died from opioid-related deaths had at least one prior workplace MSD. [musculoskeletal disorders]

I’ve long opined the opioid industry has done horrendous damage to the work comp industry, injured workers, taxpayers and employers. Gary’s reporting shows it is even worse than we thought.

When are you going to hold the opioid industry accountable for their criminal actions?

That’s it for now…for those attending the NWCDC next week in Vegas – make sure to say thanks and farewell to Peter Rousmaniere and Roberto Ceniceros.  These gentlemen are both retiring, and our industry will be much the worse for it.

I’ve known them both for decades, learned much from them, and deeply respect their contributions to our industry. They’ve certainly earned a respite…here’s hoping Peter and Roberto weigh in from time to time. Their wisdom and experience are irreplaceable.

I won’t be there – family vacation in Zion Utah…with three grown kids, we have to work around their schedules, proving once again that I am completely not in control of anything.

 

Sep
17

Where have all the work comp opioid patients gone?

Posted by Joe Paduda on Tuesday, September 17th, 2019 | Comments

Workers’ comp has done an admirable job reducing the volume and potency of opioids dispensed to work comp patients.

This from our latest Survey of Prescription Drug Management in Workers’ Comp…

The question is – how many work comp patients really stop taking opioids?

A Canadian study offers a sobering possibility – many likely did not.

those injured workers that received…120 MED or more at the end of their claim were likely to have post-claim opioid use in approximately 80% of cases. [emphasis added]

Caveats abound – different country, different system, different approach to opioid management. Yet we need to ask ourselves questions that are deep and uncomfortable.

Did we really help these patients?

Were they addicted, dependent, and/or have serious chronic pain that we failed to adequately address?

Have we looked deep enough into what happened to those patients taking opioids after they stopped?

Perhaps most important – What is our responsibility to those patients?

This is not – an any way – justification for the opioid industry’s twisted and misguided attack on efforts to reduce opioid over-prescribing. It is crystal clear that industry has killed hundreds of thousands of people, devastating communities and families.

Rather, we need to make very sure we are doing the right thing for patients. In some instances this will involve telling patients what they don’t want to hear; we need to be prepared to do that and help them thru the process, while understanding that process is very difficult.

What does this mean for you?

Do you know whether patients no longer getting opioids via work comp are still taking them? What responsibility do you bear?

Sep
13

The Purdue Opioid “settlement” – key takeaways for workers’ comp

Posted by Joe Paduda on Friday, September 13th, 2019 | Comments

Reportedly Purdue Pharma, the fine folk behind OxyContin, is nearing a settlement with 23 state attorneys general and thousands of other governmental entities.

Here are the key takeaways:

  • this does NOT appear to be a universal settlement; other state AGs, local governments, employers, and other affected entities will almost certainly seek their own compensation from Purdue.
  • The Sackler family, Purdue’s owners, will lose up to $3 billion of their personal fortunes estimated to total $13 billion – most of which came from OxyContin sales.
  • Purdue Pharma will enter bankruptcy and future earnings will go to addressing the awful repercussions of the opioid crisis

What wasn’t included are criminal charges for the Sacklers; that is an outrage.

It is crystal clear many members of the family were intimately involved in Purdue’s efforts to shove more and more opioids down more and more throats. Not satisfied with those billions, the arrogant bastards were going to make yet more treating the addicts they created. (Note not all of the Sacklers were involved in the opioid disaster)

This from NY’s opioid lawsuit (credit Vox)

The unmitigated gall of the Sacklers is stunning; they knew their drugs were killing tens of thousands, and now wanted to profit from the untold damage they had done.

For workers’ comp, there are a couple of implications.

First, as the tort industry dives deeper into this, they will sue more and more participants. My informed opinion is payers are pretty safe for several reasons;

  • state regulations are the primary and ultimate driver of work comp coverage;
  • work comp entities led the charge to reduce opioids when they first grasped the size of the problem;
  • payers did not receive rebates from opioid scripts so there was no financial benefit to allowing the scripts; and
  • payers were damaged by the opioid industry due to much higher medical costs, extended disability duration and death claims.

I haven’t heard of any workers’ comp entity being sued for damages related to opioids – but it is possible.

Second, work comp payers have been damaged by the Sacklers and their ilk. While state funds may be involved in some of the suits seeking compensation for damages (it’s impossible for me to unpack all the plaintiffs in all the filings), I have yet to hear of any suits involving commercial insurers or reinsurers.

I’ll admit to being surprised at the work comp insurance industry’s seeming lack of interest in taking on the opioid industry. Every day:

  • Insurers go after claimants for double-dipping and false claims,
  • Insurers go after employers for falsifying payroll data,
  • Insurers go after providers for fraudulent billing for practices, and
  • Insurers sue each other over coverage issues and reinsurance claims.

Before anyone else could spell opioids, work comp payers saw the damage being done and took action.

What does this mean for you?

Work comp insurers must be a highly visible part of the solution; we owe it to policyholders and taxpayers, we owe it to patients, and we owe it to all of the insurer staff, regulators, researchers, and other stakeholders who’ve dedicated untold hours to fixing the damage done by the Sacklers and their ilk.

Need more incentive? Here’s David Sackler’s $22 million Bel Air mansion your workers’ comp dollars helped pay for.