Archive for February, 2011

The Evidence Base for Step Therapy for Pharmaceuticals

While step therapy has been around for a decade or more, it still represents one of the lowest hanging fruit for plan sponsors who want to improve the value received from their pharmacy benefit with minimal member disruption.  Today more than 50 therapy classes have the opportunity for step therapy, including several specialty medication classes.

When I recently returned to pharmaceutical policy work, I was surprised to see how few evaluations of step therapy had been conducted in the last decade, particularly considering step therapy’s high degree of popularity among plan sponsors in both private and public settings.  I was also surprised to see that most of the evaluations of step therapy that had actually examined clinical and economic outcomes were funded by pharmaceutical manufacturers rather than managed care organizations that can provide thought leadership on this benefit tool.

In a paper published today in the Journal of Managed Care Pharmacy , I review the literature on step therapy and highlight important areas for future research.  Clearly, evaluations of step therapy are needed for numerous therapy classes of clinical significance, such as statins and specialty medications.  This is important because one would fully expect patient response and the clinical implications of patient choices to vary by therapy class and by the underlying indication.  The lack of evaluations of step therapy in the Medicare Part D population is a particularly notable gap.

Most of the research to date has focused on the drug cost savings of step therapy, a necessary condition for step therapy’s uptake but certainly not the only outcome of interest.  While savings from step therapy are widely known within healthcare organizations, a better understanding the clinical profile of patients who receive prior authorization for brand medications or receive no medication following a step edit is an important area of inquiry as it has the potential to affect not only economic outcomes, but clinical outcomes and member satisfaction. Perhaps the second most notable gap is the lack of evaluation of alternative forms that are growing in popularity, such as removal of grandfathering and integration of medical claims into the real-time step edits.

 In the paper, I also discuss some of the key methodological concerns with the publications to date and highlight examples of potential bias.  Based on this review, here are a few methodological tactics you should watch for when considering step therapy evaluations:

  • Reporting of non-significant findings as if they were statistically significant
  • Evaluation of all-cause medical expenses rather than disease-related expenses (all-cause medical costs are highly variable are have a greater chance of showing random differences across groups for reasons that have nothing to do with the program being evaluated)
  • Inclusion of patients who were unaffected by the program to calculate drug savings, which will reduce the magnitude of apparent savings
  • Examination of a small subpopulation of patients affected with extrapolations to the entire program

 As I point out in the paper, the popularity of step therapy among commercial, Medicaid, and Medicare plans is no doubt due to the wide availability of generic alternatives that offer significant savings, the strong clinical evidence that typically underlies these programs, and their ability to affect only new users, thereby minimizing member disruption. It is important that evaluations of step therapy keep pace with their growing use in order to optimize program design and patient outcomes.


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Can You Reduce Risk Through Outcomes-Based Contracting for Pharmaceuticals?

I recently attended the Pharmacy Benefit Management Institute’s (PBMI) Annual Drug Benefit Conference where one of the keynote speakers, Ed Schoonveld of ZS Associates, shared his point of view on the merits of outcomes-based contracting.  As you can read in his 2010 article on the subject, Ed advocates to pharmaceutical manufacturers for judicious use of these contracts given their potential complexity and potential risk for being nothing more than a thinly veiled price reduction. 

While I found his article and presentation insightfuI, I was struck by Ed’s comment questioning the wisdom of pharmaceutical companies providing insurance to insurance companies via outcomes-based contracts.   From a literal perspective, a large percentage of employers purchase pharmacy benefits on a self-insured basis through their health plan or PBM so the organization bearing the risk for the pharmaceuticals is often the employer and not an insurance company.  Second, while the price paid to the manufacturer is certain, the uncertainty and accordingly, risks to the employer and health plan are many, including:    

  • Uncertainty about effectiveness under real-world conditions of use that often lacks close monitoring and quick dose adjustment;
  • Uncertainty about the nature and extent of side effects in the broader population and over the long-term;
  • Uncertainty about the extent of use for off-label conditions lacking scientific support;
  • Uncertainty about the extent to which the new product will replace older, equally efficacious alternatives
  • Unknown medication compliance rates under real-world conditions; and
  • Ultimately, unknown cost-effectiveness in the real-world.

There is no shortage of examples of the impact that this uncertainty can have on clinical and economic outcomes for patients and payers; and while employers can mitigate some of these risks through benefit design choices, most are beyond their control.   Certainly outcomes-based contracts can be messy.  However,  the much higher unit cost of specialty medications and even greater uncertainty on these various dimensions relative to traditional medications makes outcomes-based contracting a logical alternative for sophisticated plan sponsors who want to mitigate uncertainty.

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Two Things You Must Know About Employee Wellness Incentive Programs

A new survey, by Fidelity Investments and the National Business Group on Health, reported that the use of employee incentives to promote health and wellness continues to rise.  The Fidelity survey covered 147 companies with between 1,000 and 100,000 employees. The average employee incentive rose 65% to $430 last year from $260 in 2009.

While incentives can be used in all sorts of way, one of the most common uses is for promoting completion of a health-risk assessment (HRA), the idea being that employers can then identify patients who are at highest risk for poor clinical outcomes and target these patients for enrollment in targeted wellness and disease management programs. 

When I first joined the care management industry and began to study evaluate wellness programs, I had two fundamental questions: 1) what is the validity of the self-report HRAs that are so common in the industry and 2) how well do incentives improve participation and  longer-term behavior change?  Here is what we found:

  1. Using self-reported health-risk assessments to identify high-risk patients will miss 90% of your high-risk population.

We examined more than a dozen employers who had simultaneously incentivized completion of a self-report HRA and biometric screening..  Participation was between 70 and 80% across employers, providing an ideal scenario for assessing the validity of the self-reported HRA.  Examining more than 5,000 patients, we found that the percent of members failing to report or under-reporting their risks at baseline ranged from about 20% to more than 60%, depending on the particular measure, as shown below.  An example of under-reporting would be when a member reports that their total cholesterol is 180 md/dl (low risk), but the biometric test finds that the actual score is 250 (high risk).

Percent of Members Failing to Report or Under-Reporting Their Risk


For individual patients, the underreporting was not limited to just one risk factor.  Nearly 50% of respondents failed to report or underreported 3 or more risk factors.  The reasons for underreporting are multiple, likely reflecting a lack of prior testing, lack of memory, or confusion about different biometric scores.  Of course, some of the gap also reflects an unwillingness to share health-related data with their employer due to confidentiality concerns, embarrassment, questions about the program’s value, etc.  Regardless of the reason, the impact of the poor quality data on an employer’s ability to identify high-risk patients was profound– Across these employers, the biometric scores identified 18 percent of the responders as being high risk where the self-report HRA identified only 1 percent of responders as high-risk.  In other words, the self-report missed more than 90% of the high-risk patients.

Improving the quality/validity of responses to self-reported HRAs is no small task given the complex nature of the problem.  However, the alternative of incentivizing biometric scores, while increasingly popular, raises fundamental questions about the employer’s role in promoting wellness. 

A second note of caution relates to the effectiveness of incentives.

                2. Incentives can increase enrollment in a wellness program, but their ability to impact longer-term behavior change and ultimately, outcomes has yet to be seen.

Incentives can be quite effective in promoting completion of an HRA, enrollment in an online wellness program, or other programs that represent a low “cost” to the patient if they enroll.  However, incentives for participation have yet to be shown to lead to longer-term behavior change in employer-based wellness programs.  Perhaps more concerning, there is a notable lack of research which demonstrates that incentives paid for health improvement are effective.  This is not particularly surprising as we know the non-adherence to healthy behaviors (e.g., medication compliance) is a multi-factorial problem in which financials play only a small, if any role, for the majority of employees.

As evidenced by this recent survey, employers are spending a growing amount of money on employee incentives, perhaps with an over-confidence in the effectiveness of these programs given the research to date.  Furthermore, as many companies will inevitably pass on the cost of these incentives to workers in the form of higher premiums, the importance of prudent purchasing becomes even more critical.


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Are Statins Cost-Effective for Primary Prevention?

There has been no shortage of headlines about the cost-effectiveness of statins in recent weeks, and another study was reported today in Journal of the American College of Cardiology. In a pharmacoeconomic model developed by Choudry and other researchers at Brigham and Women’s Hospital/Harvard Medical School using the JUPITER (Justification for the Use of statins in Prevention: An Intervention Trial Evaluating Rosuvastatin) trial, the authors project that the average JUPITER patient treated with rosuvastastin will have $7,900 higher life costs and an additional 0.31 quality-adjusted life years (QALYs), providing a cost-effectiveness ratio of $25,000/QALY. Against the widely used benchmark of $50,000/QALY, the authors conclude that statins appear to be cost-effective for primary prevention.

These results are somewhat contradictory to the recent Cochrane Collaboration review of statins in primary prevention, which recommended that statins be prescribed with caution to those at low risk of cardiovascular disease. The researchers reviewed data from 14 trials and nearly 35,000 patients. Although clinical benefits were found, the authors concluded that “ there was evidence of selective reporting of outcomes, failure to report adverse events and inclusion of people with cardiovascular disease. Only limited evidence showed that primary prevention with statins may be cost effective and improve patient quality of life.” The authors pointed out that all but one of the trials they reviewed were industry-sponsored and that you cannot simply extrapolate results from studies of people with history of heart disease to those without.

So why the differing conclusions about statin cost-effectiveness? In a commentary accompanying the latest study, Mark Hlatky, a physician and researcher at Stanford, provides some insights on the study. Hlatky points out that the model was only based on JUPITER and not the full breadth of evidence, which has NOT found large reductions in risk from the use of statins in primary prevention. Furthermore, the longer term risk reduction is simply unknown because clinical trials rarely last longer than 5 years. Choudhry assumed that rosuvastatin would reduce the risk of cardiac events by more than 50% for 15 years. If the same effect does not extend beyond 5 years, the cost-effectiveness grows to $62,100/QALY. The assumption of proportional risk reductions across levels of severity has been a limitation of many of the more recent cost-effectiveness analyses of statins.

There are additional questions about this and other recent studies of statins for primary prevention. Choudhry did not have data on long-term adverse effects, to which their model was quite sensitive. As Hlatky pointed out, if patients taking rosuvastatin had a 2% decrease in their well-being, the cost-effectiveness ratio grew to more than $62,000 per QALY. Also unclear is whether the model adjusted for medication persistency rates over the longer-term. Studies have shown that even after the first year of therapy, 50% of patients discontinue their statin medication, leading to increased short-term costs with little or no clinical benefit.

In hearing this latest information, many providers and plan sponsors are likely to point to diet and exercise changes as the solution to reducing the long-term risk of cardiovascular disease. Unfortunately, a recent Cochrane Collaboration review also found that education and counseling to encourage people to change their diets and stop smoking had little or no impact on deaths or disease caused by cardiovascular disease. An accompanying editorial pointed out that “Although various multiple prevention strategies exist, the most effective and cost-effective intervention for primary prevention in adults at low risk currently remains unclear.”

Do you know what percent of your current statin use is for primary prevention? Depending on the population, it could be as high as 50% of your statin users and may be growing.  If you are funding a wellness program to reduce the risk of cardiovascular disease, do you have any rigorous evidence that the program is leading to sustained changes in behavior?


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U.S. Drug Prices 3- to 6-Fold Greater Than Other Countries

A November 2010 report from the International Federation of Health Plans (iFHP) highlighted differences in health care prices across different countries.  It is no surprise that the U.S. leads the world in costs and prices for the 14 different services and procedures, which ranged from hip replacements to MRIs.  The real concern, of course, is that our health outcomes are not better, and in fact, worse than many of the other countries that spend far less than the U.S. does on health care.   

 Receiving less attention is the reported differences in drug pricing across the three countries.  In the report, iFHP examined pricing for Lipitor, Nexium, and Plavix, finding more than a 4-fold difference in pricing for Lipitor, a 6-fold difference in pricing for Nexium, and more than a 3-fold difference for Plavix. 

 Keep in mind that these prices are not all directly comparable.  In fact, I threw out France, Australia, and the Netherlands because of fundamental differences in reporting.  In addition, the U.S. data may not have fully captured rebates.  That said, the average price for Plavix in the U.S. was $152 compared with $57 in the UK and $76 in Canada, two countries that do allow for comparison.  For Lipitor, the average U.S. price was $129 while UK and Canada paid less than $40. 

 As with costs for other healthcare services, the finding of much higher drug prices in the U.S. is not new information, and it is fortunate that generics are available for two of these medications.  However, this report is a reminder that we are using more of and paying more for pharmaceuticals than other industrialized countries, often without clear evidence of value.  The link between pharmaceutical spend and clinical outcomes in the real-world is still in its infancy and represents an opportunity for those organizations willing to tackle the tough questions of value and equity.

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ACOs, Pharmacists, and Transitional Care: A Winning Strategy

Among all the elements of health care reform, perhaps none has created as much debate in the halls of health plans and hospitals as Accountable Care Organizations (ACOs), which can be loosely defined as integrated and coordinated systems with financial incentives to reduce the cost of care within quality standards.    Norton Healthcare was selected by the Brookings/Dartmouth University initiative as one of the nation’s first pilot sites to develop an ACO.   Exciting for the pharmacist community is that Norton also happens to be one of a minority of hospitals where pharmacists are actively engaged in transitional care services.  Transitional care focuses on the coordination and continuity of health care as patients transition between different locations or levels of care.  While it can apply to various types of transition, patient transition from the hospital setting to home has been an area of particular interest because patients are vulnerable to gaps in care and adverse medication events, as evidenced by high rates of readmission.  Nearly two-thirds of adverse events following discharge from the hospital are related to medications.

Based on well-done randomized controlled trials, transitional care has repeatedly been shown to improve quality, reduce readmissions, and in many cases, save money—a rare find in health care.  Unfortunately, its commercial adoption has been limited until now due to a lack of financial incentives.   However, organizations such as Norton will now have just such incentives under health reform, and pharmacists are at the forefront of Norton’s efforts to reduce readmissions through transitional care services.  Norton staff pharmacists were trained in the provision of transitional care services, and a pilot project was implemented that allowed for pharmaceutical care provision by Norton pharmacists both during the admission and at discharge.  Norton reported better adherence to physicians’ orders at discharge and fewer medication errors at admission and at discharge.   An evaluation of readmissions apparently was not part of the initial pilot, but prior research bodes well for the savings potential of this initiative.  As a next step, Norton is placing pharmacists on a team with nurse navigators, who will follow up with heart failure patients after hospital release and will reach out to pharmacists to address medication issues.

The financial incentives that promote transitional care under health reform are a win for patients, and the early recognition of the value of pharmacists in transitional care at one of the first ACOs is a win for both the profession of pharmacy and for Norton.

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