Posts made in February, 2012

Cancer Pathways Are Just One Tool To Managing Cost

Posted on Wednesday, February 29, 2012

According to the Medco Drug Trend report, by 2015 oncology drug costs will be the second or third costliest class that it tracks, up from seventh in 2011.  That’s why, in this relatively unmanaged category, many payers are turning to new cost-containment strategies. Of particular interest: cancer pathways, which standardize therapy based on recognized guidelines and outcomes data, as a vital mechanism to control out-of-control costs.  (To attend a free Value & Innovation webinar on the subject, click here.) The attention has caused a mini-boom in pathway program and software providers, like Cardinal’s P4 Healthcare and McKesson’s Innovent Oncology or newer groups like eviti and Proventys (which was acquired by McKesson in early February).  But other service providers also feel they have a role to play – and that pathways, while important, offer only partial solutions.  Self-interest aside, they’re probably right. Dr. Milanya Subar, national practice leader of Medco Health Solution’s Oncology Therapeutic Resource Center, notes that while pathway programs encompass many important elements of cancer treatment, they don’t deal with all the important details required in the treatment of such a complex disease. Those include eliminating waste, especially when it comes to filling prescription orders, and closing treatment gaps to ensure patients receive the right medicine at the...

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The Healthcare Round-Up: 2/21- 2/28

Posted on Tuesday, February 28, 2012

Weight-loss drug gets advisory committee nod: Can the benefits of weight-loss outweigh the potential costs of severe medical side-effects? An FDA Advisory Committee thinks so. On Wednesday February 22, the Endocrinologic and Metabolic Drugs Advisory Committee voted 20 to 2 to approve Vivus’s Qnexa, a weight-loss pill that combines two previously approved—and now generic—drugs, phentermine and topiramate. It’s been a long and torturous road for Vivus; the company’s backers believe the strong advisory committee meeting increases the odds of a positive nod from the agency by the drug’s April 17 PDUFA date. (And they are trying to capitalize with a February 28 public offering of 8.5 million shares of common stock.) Certainly, with one third of the population struggling with obesity, it’s a fair bet FDA will be under some pressure to approve the medicine: after all, the data show Qnexa can sheer off up to 10% of a person’s weight. Moreover, the biotech has mitigated some of the side-effect risks by proposing a REMS to monitor birth defects and a post-market cardiovascular study. Let’s assume Qnexa will be approved by mid-April. That leaves two central questions unanswered. First, how will Vivus price the drug? Second, how will payers, who typically steer patients to diet and exercise for weight-loss,...

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The Healthcare Round-up: 2/14 -2/21

Posted on Tuesday, February 21, 2012

Payers, technology providers, and policy experts are convening in Las Vegas for the annual HIMSS fest to discuss how IT will enable new delivery models and payment reforms that are supposed to improve quality of care and lower costs. The experts are just hoping that what happens in Vegas –from the secure transfer of patient data via iPads and smart phones to the latest technology enabling health information exchanges—won’t stay in Vegas. Meantime, here’s a look at the top reimbursement-related news of the past week. ICD-10: Better Late Than 2013?  One topic that is top of mind for HIMSS attendees: Health and Human Services’ decision last week to delay implementation of ICD-10, more specific coding rules designed to reduce fraud and abuse and ease the sharing of health data with agencies outside the US. The new system – boosting the number of procedure codes from 14,000 to 180,000 — was due to come into force in October 2013. Now it’ll be later than that, though how much later is unclear. Never mind that most of Europe has already implemented ICD-10 and that ICD-11,  a more updated set of codes, is due to roll out in 2014; US providers simply aren’t ready for a change that is costly both in...

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Medco Enters Europe: One Company’s Hurdle Is Another’s Opportunity

Posted on Tuesday, February 21, 2012

With falling prices and growing reimbursement hurdles, Europe is the last place most pharma want to be right now. One man’s hurdle is another’s opportunity, though. So it is for Medco, the US-based pharmacy benefit manager, which has recently launched a Europe-focused international operation, underpinned by various legacy collaborations including in Germany, the UK and the Netherlands. The idea: to apply its US expertise and experience in the European context, where different systems and different stakeholders face nonetheless similar challenges. And yes, they’re mostly around cost. Europe spends $1.7 trillion annually on health care, the vast majority in chronic diseases. Most if not all of the EU 27 are seeking to rein in health spend, and realizing (after plenty of attempts) that simply cutting drug prices won’t work. Enter Medco. It’s essentially trying to export to the EU its US patient adherence programs (or “advanced clinical solutions”) and mail-order/specialty pharmacy experience to help European payers improve the efficacy and outcomes of the drugs they do pay for. Much of the focus thus far has been in Germany, Europe’s largest market, where Medco in October 2011 bought out a joint venture with wholesaler and service provider Celesio AG. As a result of this, Medco already provides medication to patients on behalf...

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So We’re All Wrong About NICE?

Posted on Friday, February 17, 2012

It seems the National Institute of Clinical Excellence (NICE), referred to interchangeably as “cost-watchdog” and “fourth hurdle”, has been woefully misunderstood. The health technology assessment body for England and Wales hasn’t curbed NHS spend, it has infact pushed it up. “I have never seen NICE as cost-containment organization,” declared its CEO Andrew Dillon at The Economist Pharma Summit in London Feb. 9. Indeed, he continued, “the effect of NICE has been to push the NHS to spend rather more, rather more quickly, than would otherwise be the case.” There are no numbers to back up such a claim.  And it will be hard for many to agree with Dillon’s assertion that the “powerful signal” sent by NICE isn’t one about cost containment, but instead one about “optimal use of new treatments”. After all, the organization has posted negative guidance for multiple drugs because they overstep the controversial cost-per-quality adjusted-life-year threshold (which unofficially sits at £30,000). And yet some UK Primary Care Trusts (responsible for commissioning care) do curse NICE for pressuring, if not obligating, them to pay for certain drugs that NICE does recommend but which don’t necessarily fit their own regional demographic priorities. Meanwhile, Dillon’s right that the NHS is spending more, even though this report from brokerage Tullett Prebon suggests it’s not doing so any more productively, despite...

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The Healthcare Round-up: 2/7 -2/13

Posted on Tuesday, February 14, 2012

What’s better than a box of chocolates or a dozen fair trade, organic red roses? A #healthpolicyvalentine. It’s cheaper too. Wonks and journos quickly embraced the nerdy Twitter hash tag created last week by Health and Human Services staffer Emma Sandoe. Notable gems included: Let’s grow Medicare-eligible together I know I am being inpatient, but how about a private exchange? I want to put the oh! in your ACO. Roses are red, violets are blue. I could never ration my love for you. Meantime, here are the notable gems in Real Endpoints’s healthcare round-up for the week of February 7-13: Pfizer’s Lipitor Tactic Isn’t Working: At least in the coverage department at WellPoint. On February 9th the insurer said that as of April 1, it will stop covering Pfizer’s Lipitor in preference for generic atorvastatin. The “no coverage” decision is one of the most visible signs yet of what payers will do to blunt the impact of discount or co-pay cards. (WellPoint had already decided in early December to make branded Lipitor a “tier 3”, non-preferred drug with generics sold by Watson and Ranbaxy given “tier 1” coverage.) Last fall as Lipitor lost its patent exclusivity, Pfizer announced a controversial program that provides the cholesterol-lowering medicine for $4, effectively diminishing...

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As New Tools Offer Explicit Cost Data on Cancer Treatments, Will Payers Push for their Use?

Posted on Friday, February 10, 2012

As we told you in this recent post, a limited number of payers believe one way to better manage the current cancer drug spend is via cancer pathways, essentially a “soft formulary” approach that attempts to standardize care based on publicly available evidence tied to a therapy’s efficacy, toxicity, and cost. Calling 2012 “an inflection point” for cancer pathways, Dr. Ira Klein, national medical director for Oncology Strategy at Aetna, believes “payers have a responsibility in pushing forward with these programs.” Since that responsibility doesn’t extend to choosing the care regimens that will ultimately be “on pathway”, it’s hardly surprising that a cottage industry of clinical pathway providers has sprung up in recent years to help physicians select the optimal treatment course for their patients. Traction in the marketplace doesn’t just depend on payer adoption. Pathway “technology has to be easy to use and able to capture data quickly,” or physicians – especially community based oncologists — won’t adopt it, notes Klein.  He believes the software is evolving rapidly and that better tools mean “there will be more transparency about what costs what and where the savings are.” For now, three pathway providers –US Oncology’s Innovent Oncology subsidiary, Cardinal Healthcare’s P4 Healthcare, and D3 Oncology Solutions’ Via Oncology —...

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The Healthcare Round-Up: 1/31 – 2/6

Posted on Tuesday, February 7, 2012

Every week Real Endpoints scours the web, the wires, and (sometimes) the weeds for the top reimbursement related news you need to know now. Below are our top picks for the past week. ExpressScripts/Medco: Who would have thunk it? Turns out folks worried that anti-trust concerns might scupper the proposed merger of ExpressScripts and Medco may have been right after all. According to the wire service Reuters, key people at the Federal Trade Commission believe the $29 billion merger “should be stopped but want to ensure they have adequate evidence to win a court fight.” Meantime, on February 2, the Food Marketing Institute, which represents the biggest grocery chains (think Safeway, Giant, and Wal-Mart among others), sent a letter to the FTC saying the merged entity would have the might to cut payments to supermarket pharmacies that already operate on razor-thin margins. According to Reuters, the association said in its letter to the FTC: “[We] ask the commission to bring an enforcement action to enjoin the merger.” A decision on whether the FTC will move to block the deal could come as soon as the end of February.  Meantime ExpressScripts remains confident the merger will be completed, announcing February 6, a second round of notes to finance the transaction....

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Payer’s Delight: European Drug Prices Could Spiral Downward Thanks To Germany

Posted on Thursday, February 2, 2012

A little-reported fact about Germany’s new early-benefit assessment system (AMNOG to most people) is that the current law requires making public the rebates agreed to between drug firms and the country’s sick funds association (GKV). That’s a huge departure from the current cozy situation, where only ‘list’ prices are revealed. (That’s the case in most other key markets, too). And it matters to drug firms, since close to 30 countries in the world, including 19 in Europe, currently refer to published German prices in order to determine their own. Thus, transparent rebates will mean lower prices in other markets.  But that’s not all. Here’s another little-reported fact about AMNOG: if the first-in-kind negotiations between the sick fund association and drug firms don’t lead to an agreed price, then an arbitration committee is summoned, and pricing is determined on the basis of…yes, a European reference price. (This flow-chart helps illustrate the steps in the process.) Details of just how that European reference price will be calculated are still being debated. But whatever the outcome, the potential for a downward price spiral in European drug prices “is more than an idle threat,” notes Maarten Meulenbelt, a partner at Sidley Austin in Brussels. There’s still a chance that the part of the German...

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Payers Beware: Cancer Pathways Probably Aren’t Enough To Manage Costs

Posted on Wednesday, February 1, 2012

Payers like Aetna and UnitedHealth have a problem. Every year, they spend billions of dollars on their members’ cancer care, and those costs keep going up. And yet, they haven’t felt empowered to actually actively manage this spend. Why? “It’s a sensitive issue,” admits one senior veep at a regional payer. Put simply: no payer wants to end up on the front page of the New York Times for denying a desperately ill patient a drug or procedure that could save his life, especially if that decision could be linked to cost. In the face of this kind of public relations nightmare, payers have allowed physicians wide latitude in choosing oncology regimens for their patients. Whether those regimens work or not. But unmanaged oncology costs are becoming untenable. An aging population coupled with the creation of newer, more targeted – and almost always more expensive – treatment options means medical expenditures for oncology will reach at least $158 billion by 2020, according to a recent National Institutes of Health analysis. So how to manage costs in ways that are politically acceptable; i.e. that don’t also smack of European-style rationing? Payers like Aetna, BlueCross BlueShield and Highmark believe cancer clinical pathways are the answer. The idea behind pathways isn’t to directly...

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