Drug Formulary Management in Drug Formulary Management in MCOs – View from the Private MCOs – View from the Private

SectorSector

DoD PE and Drug Benefit Management DoD PE and Drug Benefit Management 12 January 200512 January 2005

Frederic R. Curtiss, PhD, RPh, Frederic R. Curtiss, PhD, RPh, CEBSCEBS

Editor-in-ChiefEditor-in-Chief

Journal of Managed Care PharmacyJournal of Managed Care Pharmacy

Clinical Director - PharmaCare-Clinical Director - PharmaCare-TexasTexas

2ObjectivesObjectives

1.1. Define the 80/4 ruleDefine the 80/4 rule2.2. Describe the difference between a low Describe the difference between a low

net-cost drug formulary and a high net-net-cost drug formulary and a high net-cost drug formularycost drug formulary

3.3. Compare and contrast the relative value Compare and contrast the relative value of the following in drug benefit of the following in drug benefit management:management:

Low net-cost drug formularyLow net-cost drug formulary Benefit designBenefit design T-MACT-MAC

3

Top 12 Drugs by ExpenditureTop 12 Drugs by Expenditureaverage charge per 30-day supply average charge per 30-day supply – 3 months – 3 months end 11.30.04end 11.30.04

$1,478

$108 $86 $109 $119 $139$108 $85

$138 $134$83

$121

3.2%

4.1%

1.2%1.4%

1.5% 1.5%

2.3%

1.9%

1.3%

1.5%1.6%1.6%

$0$50

$100$150$200$250$300$350$400$450$500$550$600$650$700$750$800$850$900$950

$1,000$1,050$1,100$1,150$1,200$1,250$1,300$1,350$1,400$1,450$1,500

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

average charge per month

% of all health plan spend

4

ratio of top 12 and top 100 drugsratio of top 12 and top 100 drugsto total Rx benefit expendituresto total Rx benefit expenditures

0%

10%

20%

30%

40%

50%

60%

70%

80%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

top 12

top 100

5generic drug pipelinegeneric drug pipeline

20032003 20042004 20052005 20062006 20072007 20082008

LoestrinLoestrinOrtho-TriCyclenOrtho-TriCyclen

1.15.041.15.04Celexa – Q1Celexa – Q1 PravacholPravachol AccuprilAccupril Effexor XREffexor XR

Tiazac Tiazac 4.10.034.10.03

Wellbutrin SRWellbutrin SR

1.18.041.18.04

DuragesicDuragesic

Jan 2005Jan 2005ZocorZocor AmbienAmbien FosamaxFosamax

BiaxinBiaxin

11.23.0311.23.03

DiflucanDiflucan

1.29.041.29.04AllegraAllegra ZoloftZoloft ClarinexClarinex RisperdalRisperdal

LotensinLotensin

8.11.038.11.03

OxyContinOxyContin

April 2004April 2004

BiaxinBiaxin

April 2005April 2005ImitrexImitrex

FloxinFloxin

9.02.039.02.03

CiproCipro

6.09.046.09.04

SporanoxSporanox

June 2005June 2005LamisilLamisil

Ortho-Novum Ortho-Novum

777777 – 9.26.03 – 9.26.03LovenoxLovenox

12.24.0412.24.04

ZithromaxZithromax

Nov 2005Nov 2005NorvascNorvasc

TopamaxTopamax

9.26.039.26.03

GlucovanceGlucovance

06.01.0406.01.04ZofranZofran ZyrtecZyrtec

FloventFlovent

11.14.0311.14.03

NeurontinNeurontin

Sept 2004Sept 2004ConcertaConcerta

(Citizen’s Pet.)(Citizen’s Pet.)

Rebetol – Q2Rebetol – Q2 FlonaseFlonase

6

XYZ Corp.XYZ Corp.Average Copay % for Single-Source Average Copay % for Single-Source Brand DrugsBrand Drugs

29.1%27.7%

24.1%

0%

10%

20%

30%

40%

50%

1999 2000 2001 2002 2003 2004

XYZ Corp.

target

7

Optimum Drug Benefit DesignOptimum Drug Benefit Design

3-tier copay design3-tier copay design tier-1 copay: $ 5 (generic drugs)tier-1 copay: $ 5 (generic drugs) tier-2 copay: $ 20 or 20% (formulary tier-2 copay: $ 20 or 20% (formulary

brand drugs)brand drugs) tier-3 copay: $ 35 or 35% (non-tier-3 copay: $ 35 or 35% (non-

formulary brand drugs)formulary brand drugs) 30-day maximum supply30-day maximum supply

90-day supply of maintenance drugs at 90-day supply of maintenance drugs at mail for greater of mail for greater of 2X d2X dollar copays or ollar copays or 20% for tier-2 drugs and 35% for tier-3 20% for tier-2 drugs and 35% for tier-3 drugsdrugs

8

Effect of $100 and $200 Annual Effect of $100 and $200 Annual Rx Deductibles on Beneficiary-Rx Deductibles on Beneficiary-UsersUsers

27%

73%

no $ benefit

$ benefit

$100 annual deductible $200 annual deductible

48%

52%

9

Meta-analysis of Oral Meta-analysis of Oral Triptan Therapy for Triptan Therapy for

Migraine: Migraine:

Number Needed to Treat Number Needed to Treat and Relative Cost to and Relative Cost to

Achieve Achieve

Relief Within 2 HoursRelief Within 2 Hours

Adelman JU, Belsey J. JMCP 2003 9:(1)45-52.

10MethodsMethods

Randomized, double-blind, placebo Randomized, double-blind, placebo controlled trialscontrolled trials

Single-dose triptan treatment with no Single-dose triptan treatment with no rescue or repeated dose for 2 hoursrescue or repeated dose for 2 hours

Headache assessed on 4-point pain Headache assessed on 4-point pain scalescale

Adelman AU, et al. JMCP 2003; 9(1):45-52

11Triptan Efficacy DataTriptan Efficacy Data

7.9%

11.6%

20.7%

24.6%

29.2%30.4%

31.7%

35.9%

40.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Perc

ent P

ain

Fre

e a

t 2 h

ours

Placebo Frova2.5mg

Amerge2.5mg

Imitrex50mg

Zomig2.5mg

Imitrex100mg

Zomig5mg

Axert12.5mg

Maxalt10mg

Adelman AU, et al. JMCP 2003; 9(1):45-52

12Drug InteractionsDrug Interactions

DrugDrug CimetCimet MAOIMAOI SmokinSmokingg

InderalInderal OCsOCs VerapVerap CYP34ACYP34A

ImitrexImitrex ZomigZomig AmergAmergee

Maxalt*Maxalt* AxertAxert RelpaxRelpax FrovaFrova

*Decrease Maxalt dose by 50% if on propranolol

Medical Necessity or Trojan Medical Necessity or Trojan Horse?Horse?

Early Warning Signs and Symptoms of……?Early Warning Signs and Symptoms of……? lack of close friends or confidantslack of close friends or confidants exaggerated self-opinionexaggerated self-opinion suspiciousnesssuspiciousness difficulty in abstract thinkingdifficulty in abstract thinking difficulty performing functions at work or difficulty performing functions at work or

schoolschool flat emotionsflat emotions passivity to social activities and disinterestpassivity to social activities and disinterest preoccupation with religion or meditationpreoccupation with religion or meditation déjà vudéjà vu

14

HyperlipidemiaHyperlipidemiaNew Developments – evidence and pseudo-New Developments – evidence and pseudo-evidenceevidence

pravastatin reduced absolute risk of stroke by 0.8% and relative risk by 19%pravastatin reduced absolute risk of stroke by 0.8% and relative risk by 19% 9,014 patients with Hx of MI or unstable angina followed for six years on pravastatin9,014 patients with Hx of MI or unstable angina followed for six years on pravastatin 3.7% incidence of stroke v. 4.5% for placebo 3.7% incidence of stroke v. 4.5% for placebo [[NEJMNEJM 2000;Aug 3:317-26] 2000;Aug 3:317-26] no effect on hemorrhagic stroke (only ischemic stroke)no effect on hemorrhagic stroke (only ischemic stroke) $752,813 in (discounted) Pravachol drug cost to prevent one (1) non-fatal stroke$752,813 in (discounted) Pravachol drug cost to prevent one (1) non-fatal stroke subsequent letters in subsequent letters in NEJMNEJM [2000;Dec 21:1894-5] [2000;Dec 21:1894-5] critical of study and article: critical of study and article:

erroneous literature citations (e.g., West of Scotland – no reduction in rate of stroke)erroneous literature citations (e.g., West of Scotland – no reduction in rate of stroke) statistical significance 0.05 on univariate analysis but 0.10 on multivariate analysisstatistical significance 0.05 on univariate analysis but 0.10 on multivariate analysis lack of practical significance – 750 patients for one year to prevent one (nonfatal) strokelack of practical significance – 750 patients for one year to prevent one (nonfatal) stroke failure to measure left ventricular function (LVF) as a risk factorfailure to measure left ventricular function (LVF) as a risk factor

18% of patients with CHD reached NCEP goal with anti-lipid therapy18% of patients with CHD reached NCEP goal with anti-lipid therapy where: study of 4,888 patients in a 350,000-member group-model HMOwhere: study of 4,888 patients in a 350,000-member group-model HMO 85% of patients with dyslipidemia treated with drug therapy85% of patients with dyslipidemia treated with drug therapy 38% of all patients reached NCEP goal38% of all patients reached NCEP goal 18% of patients with CHD reached NCEP goal18% of patients with CHD reached NCEP goal culprits included intolerability to drug therapy, poor compliance and low drug dosagesculprits included intolerability to drug therapy, poor compliance and low drug dosages

Arch Intern MedArch Intern Med 2000;160:459-67 2000;160:459-67 97% of patients on low-dose (5-10mg) simvastatin converted to 10-20mg lovastatin97% of patients on low-dose (5-10mg) simvastatin converted to 10-20mg lovastatin

prospective study of 96 VA patients (61% with CHD) prospective study of 96 VA patients (61% with CHD) [[Am J Health-Syst PharmAm J Health-Syst Pharm 2000;Sept 15] 2000;Sept 15] patients not meeting LDL goal decreased from patients not meeting LDL goal decreased from 52%52% (initial assessment) to 26% by second follow-up (initial assessment) to 26% by second follow-up

15

heartburn drug therapyheartburn drug therapy Your Health Plan Your Health Plan – – 3 months end 11.30.043 months end 11.30.04

$20$24

$49

$109 $111

$133 $134$139

$166

$10

1,654

453

6,328

1,764

4,534

2,877

11438

2,690

359

famotidine ranitidine OTCPrilosec

nizatidine omeprazole Protonix Aciphex Nexium Prevacid Prilosec

avg. charge/month

# patients

16cholesterol-lowering drug therapycholesterol-lowering drug therapy Your Health Plan Your Health Plan – – 3 months end 11.30.043 months end 11.30.04

$44

$67 $69$72

$76$83

$87

$112$119

$23

3,409

570390941

2,515 2,190

12,154

2,155

1,059 836

gemfibrozil lovastatin Lescol XL Niaspan Crestor Vytorin Lipitor Tricor Pravachol Zocor

avg. charge/month

# patients

17

cholesterol drug therapycholesterol drug therapy3-tier drug plan3-tier drug plan

$49$52

$61

$72 $74

$80

$99

$118

$21

4

168

27

50

203

44

17

6

gemfibrozil Lescol Niaspan Lescol XL Tricor lovastatin Lipitor Pravachol Zocor

avg. charge/month# patients

18

cholesterol drug therapycholesterol drug therapy$3/$20 plan$3/$20 plan

$43$47

$58

$70 $72

$80

$103

$117

$1820

2622

43

170

111

29

10

1gemfibrozil Niaspan Lescol Lescol XL lovastatin Tricor Lipitor Pravachol Zocor

avg. charge/month

# patients

19

heartburn drug therapy – therapeutic MACheartburn drug therapy – therapeutic MACYour Health Plan - Your Health Plan - 3 months end 11.30.04 3 months end 11.30.04 ($1.00 ($1.00 per day)per day)

$12$20 $24 $30 $30 $30 $30 $30 $30 $30

$79

$109

$136

$10

$0$0

$103

$81

$104

$19

$0 $0

famotidine cimetidine ranitidine OTCPrilosec

nizatidine omeprazole Protonix Aciphex Nexium Prevacid Prilosec

member cost

plan cost

20

COX-2/NSAID drug therapy: t-MACCOX-2/NSAID drug therapy: t-MACYour Health Plan - Your Health Plan - 3 months end 11.30.04 3 months end 11.30.04 ($1.00 ($1.00 per day)per day)

$10 $13$22

$30 $30 $30 $30 $30

$66

$6

$0

$0

$5

$78

$70$77

$0$0

piroxicam ibuprofen naproxen indometh. oxaprozin Bextra Arthrotec Mobic Celebrex

member cost

plan cost

21

hypercholesterolemia – therapeutic MAChypercholesterolemia – therapeutic MACYour Health Plan Your Health Plan 3 months end 11.30.043 months end 11.30.04

$44

$60 $60 $60 $60 $60 $60 $60 $60

$9$16

$59

$23

$7$12

$52

$23 $27

$0

$0

$0

$20

$40

$60

$80

$100

$120

gemfibrozil lovastatin Lescol XL Niaspan Crestor Vytorin Lipitor Tricor Pravachol Zocor

member cost

plan cost

22ReviewReview

1.1. Define the 80/4 ruleDefine the 80/4 rule2.2. Describe the difference between a low net-cost Describe the difference between a low net-cost

drug formulary and a high net-cost drug drug formulary and a high net-cost drug formularyformulary

3.3. Compare and contract the relative value of the Compare and contract the relative value of the following in drug benefit management:following in drug benefit management:

Low net-cost drug formularyLow net-cost drug formulary Benefit designBenefit design T-MACT-MAC

4.4. What about disease management?What about disease management? http://www.cbo.gov/ftpdocs/59xx/http://www.cbo.gov/ftpdocs/59xx/

doc5909/10-13-DiseaseMngmnt.pdfdoc5909/10-13-DiseaseMngmnt.pdf

23Path to the Path to the AnswerAnswer

““This crazy lady needs to be punished.”This crazy lady needs to be punished.”