1. Drug Formulary Management in MCOs – View from the Private Sector DoD PE and Drug Benefit Management 12 January 2005 Frederic R. Curtiss, PhD, RPh, CEBS Editor-in-Chief Journal of Managed Care Pharmacy Clinical Director - PharmaCare-Texas

2. 2 Objectives 1. Define the 80/4 rule 2. Describe the difference between a low net-cost drug formulary and a high net- cost drug formulary 3. Compare and contrast the relative value of the following in drug benefit management:  Low net-cost drug formulary  Benefit design  T-MAC

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

4. 4 ratio of top 12 and top 100 drugs to total Rx benefit expenditures

5. 5 generic drug pipeline 200320042005200620072008 LoestrinOrtho-TriCyclen1.15.04 Celexa – Q1 PravacholAccupril Effexor XR Tiazac 4.10.03 Wellbutrin SR 1.18.04Duragesic Jan 2005 ZocorAmbienFosamax Biaxin11.23.03Diflucan1.29.04 AllegraZoloftClarinexRisperdal Lotensin8.11.03OxyContin April 2004 Biaxin April 2005 Imitrex Floxin9.02.03Cipro6.09.04Sporanox June 2005 Lamisil Ortho-Novum 777 – 9.26.03 Lovenox12.24.04Zithromax Nov 2005 Norvasc Topamax9.26.03Glucovance06.01.04ZofranZyrtec Flovent11.14.03Neurontin Sept 2004 Concerta (Citizen’s Pet.) Rebetol – Q2 Flonase

6. 6 XYZ Corp. Average Copay % for Single-Source Brand Drugs

7. 7 Optimum Drug Benefit Design  3-tier copay design  tier-1 copay: $ 5 (generic drugs)  tier-2 copay: $ 20 or 20% (formulary brand drugs)  tier-3 copay: $ 35 or 35% (non-formulary brand drugs)  30-day maximum supply  90-day supply of maintenance drugs at mail for greater of 2X d ollar copays or 20% for tier- 2 drugs and 35% for tier-3 drugs

8. 8 Effect of $100 and $200 Annual Rx Deductibles on Beneficiary-Users

9. 9 Meta-analysis of Oral Triptan Therapy for Migraine: Number Needed to Treat and Relative Cost to Achieve Relief Within 2 Hours Adelman JU, Belsey J. JMCP 2003 9:(1)45-52.

10. 10 Methods v Randomized, double-blind, placebo controlled trials v Single-dose triptan treatment with no rescue or repeated dose for 2 hours v Headache assessed on 4-point pain scale Adelman AU, et al. JMCP 2003; 9(1):45-52

11. 11 Triptan Efficacy Data Adelman AU, et al. JMCP 2003; 9(1):45-52

12. 12 Drug Interactions DrugCimetMAOISmokingInderalOCsVerapCYP34A Imitrex Zomig Amerge Maxalt* Axert Relpax Frova * Decrease Maxalt dose by 50% if on propranolol

13. Medical Necessity or Trojan Horse?  Early Warning Signs and Symptoms of……?  lack of close friends or confidants  exaggerated self-opinion  suspiciousness  difficulty in abstract thinking  difficulty performing functions at work or school  flat emotions  passivity to social activities and disinterest  preoccupation with religion or meditation  déjà vu

14. 14 Hyperlipidemia New Developments – evidence and pseudo-evidence  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 pravastatin  3.7% incidence of stroke v. 4.5% for placebo [NEJM 2000;Aug 3:317-26]  no effect on hemorrhagic stroke (only ischemic stroke)  $752,813 in (discounted) Pravachol drug cost to prevent one (1) non-fatal stroke  subsequent letters in NEJM [2000;Dec 21:1894-5] critical of study and article:  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 analysis  lack of practical significance – 750 patients for one year to prevent one (nonfatal) stroke  failure to measure left ventricular function (LVF) as a risk factor  18% of patients with CHD reached NCEP goal with anti-lipid therapy  where: study of 4,888 patients in a 350,000-member group-model HMO  85% of patients with dyslipidemia treated with drug therapy  38% of all patients reached NCEP goal  18% of patients with CHD reached NCEP goal  culprits included intolerability to drug therapy, poor compliance and low drug dosages  Arch Intern Med 2000;160:459-67  97% of patients on low-dose (5-10mg) simvastatin converted to 10-20mg lovastatin  prospective study of 96 VA patients (61% with CHD) [Am J Health-Syst Pharm 2000;Sept 15]  patients not meeting LDL goal decreased from 52% (initial assessment) to 26% by second follow-up

15. 15 heartburn drug therapy Your Health Plan – 3 months end 11.30.04

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

17. 17 cholesterol drug therapy 3-tier drug plan

18. 18 cholesterol drug therapy $3/$20 plan

19. 19 heartburn drug therapy – therapeutic MAC Your Health Plan - 3 months end 11.30.04 ($1.00 per day)

20. 20 COX-2/NSAID drug therapy: t-MAC Your Health Plan - 3 months end 11.30.04 ($1.00 per day)

21. 21 hypercholesterolemia – therapeutic MAC Your Health Plan 3 months end 11.30.04

22. 22 Review 1. Define the 80/4 rule 2. Describe the difference between a low net-cost drug formulary and a high net-cost drug formulary 3. Compare and contract the relative value of the following in drug benefit management:  Low net-cost drug formulary  Benefit design  T-MAC 4. What about disease management?  http://www.cbo.gov/ftpdocs/59xx/doc5909/10- 13-DiseaseMngmnt.pdf

23. 23 Path to the Answer “This crazy lady needs to be punished.”