Pharmacy Costs Which Medications Offer Value And How Are They Priced

Taskforce Members Roxanne Homar - State Pharmacist for DOH Aimee Lewis - DUR Manager for Medicaid Jim Bush M.D. - Medicaid Medical Director Ralph Hayes - Administrator State Employee Health Care Plan Bill Harrison M.D. - Internist Cheyenne, Member Winhealth and Medicaid P&T Committees John Vandel - Dean School of Pharmacy,WHCC Rick Davis M.D. - Cardiologist Cheyenne, State Pharmacy Board Jack Glode M.D. Medical Director Winhealth, WHCC

Pharmacy Costs and Concerns 12% or more of direct health expenditures Significant impact on premium Benefit of medication consumed is frequently questionable and based on thin evidence, usually Big Pharma sponsored Growing body of evidence indicating significant conflict of interest in literature supporting approval of new medications Recent scandals indicating non disclosure of medication toxicity

Rising number of FDA censures for false advertising to patients and physicians, i.e. dependency risk of Oxycontin, ($600,000,000 fine) Manufacturer successfully removed generic competition in patent court case Exaggerated value of “me too” new(more expensive) versions of established class of meds(Statins, PPI, SSRI, ED) Growing concern regarding physician/industry conflict of interest, including academic centers References and literature available supporting these concerns

Potential Short Term Projects Pharmacy Benefit Manager (PBM) Transparency Legislation Statewide Pharmacy & Therapeutics (P&T) Committee Electronic Access for Providers to All Pharmacy Medications dispensed in Wyoming ( Patient Safety Issue ) Budgetary support from WHCC

Potential Long Term Projects In-State Mail-Order for Maintenance Medications/ In-State nonprofit PBM Join Multi-State Purchasing Program

Pharmacy Benefit Manager Transparency Legislation Senator Mockler has drafted bill for this session modeled after Maine legislation Supreme Court rejected PCMA Appeal to repeal Maine transparency legislation Playing the Spread- PBM contract allows higher payment from patient insurer than the PBM pays the retail pharmacy,PBM pockets difference. Pharmacy and Insurer contracts are not transparent Mail Order - PBM owns mail order service and charges Insurer more than the AWP paid to the manufacturer, pricing is not transparent. Mail order generic fill rate is much lower than local pharmacy

Transparency Continued Drug Switching - PBM requests physician to alter prescription to medication with higher rebate to PBM from manufacturer (handout) Rebates given to PBM to place medications on formulary. Manufacturer rebates account for the majority of PBM income. These agreements are secret. Pennsylvania court mandated disclosure of total income (Caremark) Sale of physician prescription data to manufacturer to enhance physician marketing, legislation proposed to prohibit this practice

Transparency Legislation Maine, North and South Dakota, Wash D.C., Mississippi, Rhode Island, Kansas, Louisiana - PBM laws (handout) South Dakota saved >$800,000 in state health insurance costs Illinois directly negotiated pharmacy benefits for state employees and saved $1.35/claim ( $10million/year) Taskforce recommends WHCC support for transparency legislation

Statewide P&T Committee Evidence based reviews provided by the Dept. of Health’s Drug Effectiveness Review Project sponsored at the Oregon Health Sciences University (currently used by Wyoming Medicaid Drug Review Committee) Wyoming practicing physicians would make formulary recommendations based on evidence review and encourage Wyoming insurers to adopt

P&T Committee Continued Uniform formulary based on evidence should evolve since practicing physicians make recommendations, countering direct to consumer and physician advertising Resource of unbiased medication information(evidence based research) for providers, newsletter Wyoming Medicaid program has proven value of this concept Sponsor electronic availability of formularies

Provider Electronic Access to Pharmacy Prescription Data Patient Safety issue, polypharmacy, medication interaction and duplication Will be key component of the THR Especially important for patients seeing multiple physicians (Average Medicare patient sees more than 3 providers each year) This information is already available to providers for controlled substances in the Prescription Drug Monitoring Program

Long Term Projects, In-state mail-order for maintenance meds/in-state nonprofit PBM Payers could utilize in-state program rather than out of state PBM Help rural pharmacies reduce inventory costs Increase in state health care revenue

WHCC Budget Contract with Dr. Garis (handout) Pharmacy program analyses - State Employee Plan, Workman's Comp,State Hospital, Corrections, others Contracts with large groups have proven value of this analysis (accurately estimates amount of spread pricing to enhance price negotiations with PBM) Fair med pricing is calculated ( Garis software ) estimated $20,000

Garis Software Projected savings for Winhealth using program is six figures. Garis contracts with large groups have proven value of system Reports are current and medication specific Can be used to monitor med costs over time Can be used to enhance short term projects as discussed (best prices for medications suggested by physicians for uniform formulary) Designed to assure fair pricing at the retail pharmacy, reveals markup at the mail order level to encourage patients(insurers) to use local pharmacies

Budget Continued Garis research- $200/hr- assist with transparency research, program development, State projects previously outlined - estimated $10,000 Compensation for Roxanne Homar