Lowering Prescription Drug CostsMar 27th, 2008 | By Jose DeJesus MD | Category: Physician News
Senator Kohl of Wisconsin and Senator Durbin of Illinois plan to introduce legislation to authorize federal grants for a program to prepare educational materials and to “train health professionals to conduct visits to prescribing physicians”, according to a NY Times 3/20/08 editorial, endorsing this program as a counterweight to advertising programs by drug companies for their latest (and more expensive) drugs. The justification for this program is that it is espected to pay for itself in savings to federally-funded programs, such as Medicare Part D and Medicare Advantage. The full editorial is here:
NY Times Op-Ed.
The obvious initial beneficiaries of this programs are those who will receive the Federal grants, but before heading down this road, perhaps the good senators should consider a few points:
- Medicare Part D and Medicare Advantage Already Use Restricted Formularies
If a patient walks in and asks for a prescription for the latest drug they saw on TV, it probably won’t be covered by Medicare unless the Pharmacy Benefit Manager has determined that there is compelling evidence for adding that drug to their formulary. If there are two other cost-effective drugs in the same theraputic class, there is a good chance that the new drug won’t make it onto the forumulary. There are special rules covering true medical necessity cases but, as a general rule, Medicare is not paying for expensive me-too drugs.
- Medicaid Pharmacy Benefits for Senior Citizens are Integrated with Medicare
When Medicare Part D was implemented, it was integrated with Medicaid and therefore many of the formulary restrictions mentioned above also affect Medicaid patients.
- Doctors are Not Stupid and they Do Read
- Physicians spend a considerable amount of time in continuing education, and try to keep up with the various formularies published by the insurance programs that cover their patients. They know that if a drug is not on the formulary and is not covered, there is a good chance that their patients will get sticker shock at the pharmacy, and will either not follow their prescribed treatment plan or will place an angry phone call to the doctor’s office that will require the doctor to come up with a less-expensive or covered drug.
- On the other hand, sometimes a patient requires a specific drug because others have been tried and found to be ineffective or for some other legitimate medical necessity. CMS has a directory of all the Medicare drug plans with what are SUPPOSED to be direct links to pages that detail each plan’s formulary here: Medicare Drug Formularies
- CMS can do a much better job of providing direct links to the formularies of each plan. Not every plan provides a direct link to its formulary and the physician or patient is forced to navigate through multiple pages and fine-print menus of links to actually arrive at the actual formulary for a plan. Try finding the full formulary for the AARP plans – you have to go through half a dozen steps to do so, including looking up a specific drug and dosage before you get a direct link to their formulary as part of the response. This is a no-brainer improvement that does not require any new legislation or rule making.
- If the Federal government wants to take an active role in making formulary information more readily available to physicians, it can start by making all Federal pharmacy plan formularies available through a central location, accessible by plan name and BIN number (the standardized plan number printed on all pharmacy benefit cards).
- The next step, which would require some cooperation, would be to coordinate with state insurance regulators and to reach out to private insurance companies and pharmacy benefit plan managers, and add links to the formularies of these plans to the central pharmacy plan formulary lookup service. Most pharmacy benefit plans are managed by a small oligopoly of companies and a little diplomacy and arm twisting can get the job done very easily and quickly.
- The private sector has used some innovative tactics to encourage the use of generics, and the public sector would do well to learn from the trails they have blazed. After all, the private sector puts its own money on the line and unlike the public sector, will not throw good money after bad in some failed social experiment:
- Medco Health, which is one of the premier Pharmacy Benefit Management companies, created an innovative program they named Generics First, in which it distributed samples of generic drugs to physician offices, much like the “detail men” who work for the pharmaceutical companies. By encouraging the use of generics as the initial theraputic choice, Medco significantly increased utilization of generics.
- BCBS of Minnesota, dropped copays for generic drugs altogether from some plans and found that, in many cases, the savings from increased utilization of generics more than compensated for the cost of eliminating copays.
Physicians are primarily concerned with the health and well-being of their patients, and most of them will choose the medicine that will do the job effectively, with minimal side effects, at a price that the patient can afford. If the senators want to make this job easier, they can implement some of the suggestions listed above rather than spending our tax dollars on a massive education and outreach program that would be much less effective.