8 recommendations to cut drug prices nationally

The article below was published on December 12, 2017 by BenefitsPRO, written by Sarah Jane Tribble.

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Photo source: BenefitsPro

The nation’s most influential science advisory group will tell Congress today that the U.S. pharmaceutical market is not sustainable and needs to change.

“Drugs that are not affordable are of little value and drugs that do not exist are of no value,” said Norman Augustine, chair of the National Academies of Sciences, Engineering and Medicine’s committee on drug pricing and former CEO of Lockheed Martin Corp.

The report, “Making Medicines Affordable: A National Imperative,” identifies eight steps to cut drug prices. It also provides a list of specific “implementation actions” for various federal agencies, including Congress, the Federal Trade Commission and the U.S. Departments of Justice and Health and Human Services.

Today’s hearing, which is the third in a series by the Senate Health, Education, Labor and Pensions committee, comes as Americans across the political spectrum say lowering the price of prescription drugs is a top priority. Yet, while individual states have passed laws for more transparency and price controls and President Donald Trump has publicly called for lower drug prices, Congress has stalled.

So, will the committee’s recommendations spur action? Kaiser Health News takes the political temperature, talks to experts and rates their chances:

Recommendation No. 1: Allow the federal government to negotiate drug prices

Current law prohibits the U.S. Health and Human Services Secretary from directly negotiating drug prices and the committee says that’s ridiculous.

The committee recommends Medicare and other agencies negotiate which drugs are placed on a list of covered drugs and, when necessary, exclude some drugs. This is not a new idea.

Some states are already restricting high-priced drugs in Medicaid, the state-federal insurance program for low-income Americans. But federal efforts to change Medicare are more complicated.

Just two months ago, top House Democrats introduced another Medicare negotiation bill. But don’t hold your breath, Trump hasn’t responded to multiple letters sent from Rep. Elijah Cummings (D-Md.) — including one after the most recent bill was introduced in late October. That bill hasn’t moved past the health subcommittee.

Recommendation No. 2: Speed approvals of safe and effective generics and biosimilars

This recommendation has a strong ally at the Food and Drug Administration.

Commissioner Scott Gottlieb announced a “drug competition action plan” in June and followed it up two months ago with a new set of policies aimed at speeding the drug approval process for complex generics. More changes are expected too, as Gottlieb wrote in his blog post “if consumers are priced out of the drugs they need, that’s a public health concern that FDA should address.”

But the pharmaceutical world knows which games to play to keep competition at bay. The committee specifically recommends the U.S. Department of Justice and the Federal Trade Commission should watch for anti-competitive tactics, such as pay-for-delay and extending exclusivity protections. The U.S. Supreme Court weighed in on pay-for-delay, saying settlements between brand-name drug makers and generic rivals warranted antitrust review. The total number of these deals has fallen in recent years.

To further encourage generic approvals, Congress could include several proposed bills, such as the so-called CREATES Act, in a final year-end package, said Chip Davis, president of the generics and biosimilars lobby Association for Accessible Medicines.

“People are starting to pay more attention” to anti-competitive patent tactics, Davis said.

Recommendation No. 3: Transparency

The committee takes direct aim at drug prices by saying that Congress should make manufacturers and insurers disclose drug prices, as well as the rebates and discounts they negotiate. It also asks that HHS curate and publicly report the information.

States have taken the lead on price transparency with Vermont the first to pass a law, which requires an annual report on up to 15 drugs that cost the state a lot of money and have seen price spikes. In Congress, Sen. Ron Wyden (D-Ore.), introduced a bill in June that would impose price-reporting requirements on some drugs. It now sits in the Senate finance committee. The pharmaceutical industry has fended off most price disclosure efforts in the past.

Notably, the committee also recommends that nonprofits in the pharmaceutical sector — such as patient groups — disclose all sources of income in their tax filings. That’s a move that would reveal exactly how much the pharmaceutical companies are supporting advocacy groups.

Recommendation No. 4: Discourage the pharmaceutical industry’s direct-to-consumer advertising

The U.S. is only one of two developed countries in the world to allow direct-to-consumer pharmaceutical advertising (the other is New Zealand and doctors there have called for a ban). And U.S. taxpayers support the tax breaks with a deduction that politicians have tried to eliminate in the past.

Now, the committee recommends Congress eliminate the tax deduction pharmaceutical companies are allowed to take on direct-to-consumer advertising.

This is an idea that should have wide support. Polls show that most Americans favor banning the ads and federal lawmakers have tried to change the rules on so-called DTC for years. The American Medical Association called for a ban on pharmaceutical advertising directly to patients in 2015, saying there were concerns that the ads were driving up demand for expensive drugs. The FDA provides guidance for the advertising and, in August, FDA Commissioner Gottlieb said he may reduce the number of risks manufacturers must reveal when advertising a medicine.

In a sign of just how entrenched the tax break is in D.C. politics, Sen. Dick Durbin (D- Ill.) introduced a bill last month that doesn’t eliminate the break but takes a step to rein in the advertising. Durbin’s bill would require manufacturers to provide the wholesale price of a drug in their advertisements.

Recommendation No. 5: Limit what Medicare enrollees pay for drugs

The committee ticks off a to-do list for Congress when it comes to what older Americans and those with disabilities are paying for drugs.

Their recommendations include asking Congress to establish limits on total annual out-of-pocket costs for Medicare Part D enrollees and telling Congress to make sure the Centers for Medicare and Medicaid Services efforts to guarantee enrollee cost-sharing is based on the real price of the drug as well as how well the drug works.

Turns out, there is already some limited movement on this one.

Medicare allows negotiations between the corporate insurers and pharmacy benefit managers who help administer the Part D program. CMS announced last month that it is exploring how to pass on the behind-the-scenes manufacturer rebates to patients, though it warns premiums may rise if they make this move.

Recommendation No. 6: Increasing oversight of a very specific federal drug discount program

The committee is stepping into a hot-button political issue by recommending increased transparency and oversight of a program that Congress created in 1992.

The program, known as 340B, requires pharmaceutical companies to sell drugs at steep discounts to hospitals and clinics that serve high volumes of low-income patients. Congress held two hearings this year, questioning who is benefiting from the discounts and the Centers for Medicare and Medicaid Services recently announced it was slashing Medicare reimbursement to some hospitals enrolled in the program.

Hospitals are fighting back, filing a lawsuit over the reimbursement cut. The committee, echoing concerns from House Republicans, recommends making sure the program helps “aid vulnerable populations.”

Recommendation No. 7: Revise the Orphan Drug Act

The committee wants to make sure the 1983 Orphan Drug Act helps patients with rare diseases.

The law, intended to spur development of medicines for rare diseases, provides financial incentives for drugmakers such as seven years of market exclusivity for drugs that treat a specific condition that affects fewer than 200,000 people.

The program has been under fire this year after Kaiser Health News, whose investigation is cited by the committee, reported that approved drugs often gamed this system and won won blockbuster sales for more common diseases. The Government Accountability Office has begun an investigation into the program after receiving a request from top Republican senators and FDA’s announced a “modernization” plan for the agency this summer.

The committee’s requests include limiting the number of exclusivity periods a drug can receive and making sure drugs that win the financial incentives really do treat rare disease. Finally, the committee says HHS should “obtain favorable concessions on launch prices, annual price increases,” and more.

Recommendation No. 8: Make sure doctors prescribe drugs for the right reasons

Medical practices, hospitals and doctors should “substantially” tighten restrictions on office visits by pharma employees, and the acceptance of free samples, the committee recommends.

This isn’t the first time the national group has recommended controlling drug samples and visits. In 2009, the then Institute of Medicine said doctors and medical schools should stop taking free drug samples. It may have worked — to some extent. A study this year found that academic medical centers that limited visits saw changes in prescribing patterns.

Now, the National Academies committee says doctors in private practice should also stop taking free samples and welcoming pharmaceutical visits. The AMA, which is nation’s largest membership group doctors, supports physicians using samples on a voluntary basis, particularly for uninsured patients.

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Patient Satisfaction Goes Public

dgb-surveyWhile the University of Utah Health Care System began publishing data from patient satisfaction surveys 5 years ago, dozens of hospitals and health systems are following suit. One Midwest-based system is listing Yelp-like reviews and a star rating next to each qualifying physician’s name. Research shows that 45% of consumers have looked at online provider reviews, with nearly two-thirds saying their selection or avoidance of a certain provider was based on a review.

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Longer hospital stay linked to low health literacy

The article below was published on October 11, 2017 by Clinical Advisor, written by Madeline Morr.

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Photo source: Clinical Advisor

Low health literacy is associated with a longer hospital length of stay among general medicine patients, according to a study published in the Journal of Hospital Medicine.

Ethan G. Jaffee, MD, from Massachusetts General Hospital in Boston, and colleagues conducted an in-hospital cohort study of patients who were admitted or transferred to the general medicine service at the University of Chicago between October 2012 and November 2015. Those who died during hospitalization or whose discharge status was missing were excluded.

Health literacy was screened using the Brief Health Literacy Screen (BHLS), which included 3 questions: 1) How confident are you in filling out medical forms on your own?; 2) How often do you have someone help you read hospital materials?; and 3) How often do you have problems learning about your medical condition because of difficulty understanding written information?

Responses to the questions were scored on a 5-point Likert scale, in which higher scores corresponded with higher health literacy. Length of hospital stay was counted from the date of admission to the hospital, with patients being discharged on the same day as admission counted with a hospital stay of 1.

A total of 5,983 participants met inclusion criteria and completed the hospital length assessment. Of these participants, 75 (1%) died during hospitalization, 9 (0.2%) had missing discharge status, 79 (1%) had a length of stay greater than 30 days, and 280 (5%) were missing data on sociodemographic variables. A total of 5,540 patients remained, with a median age of 57 years. The sample was divided into those with private insurance (25%), those with Medicare (46%), and those with Medicaid (26%).

Using the BHLS screen, 20% (1104/5540) had inadequate health literacy. Patients with low health literacy had an 11% longer average length of stay (6.0 vs 5.4 days). Among men, low health literacy was associated with a 17.8% longer length of stay, and among women, low health literacy was associated with a 7.7% longer length of stay.

“We found that low health literacy was associated with a longer hospital length of stay, a result which remained significant when controlling for severity of illness and sociodemographic variables and when testing the model for sensitivity to the highest values of length of stay and illness severity,” the authors said. “Additionally, the association of health literacy with length of stay appeared concentrated among participants with shorter length of stay.”

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Doctors Go Retail

doctorIf you live near a large shopping mall, chances are you’ve noticed vacant stores, thanks to the rapid growth of online shopping. Many retail vacancies are being filled by doctors, dentists, physical therapists and other healthcare professionals looking for ways to become more accessible to their communities. To generate more foot traffic, one dental network will open clinics in 36 retail centers this year.

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What are your clients’ most-pressing issues?

The article below was published on October 17, 2017 by BenefitsPRO, written by Alan Goforth.

Benefits professionals have been on a roller-coaster ride since the 2016 presidential election. That ride includes the highs of lofty rhetoric, the lows of as-yet unfulfilled promises, and uncertainty about what may lie around the next curve.

Every now and then, it helps to step off the ride, catch your breath and collect your thoughts. That’s why BenefitsPRO takes time each year to ask employers to share their insights on the most important issues they face. Their responses provide a valuable roadmap for brokers as they plan ahead for this fall’s abbreviated open enrollment period.

Not surprisingly, the economy is top of mind for the 125 decision-makers who participated this year (see box on last slide). Overall, employers give the Trump administration low marks for its economic policies. Thirty-seven percent said these policies have had a moderately or extremely negative effect on their business outlook, with 20 percent reporting a moderately or extremely positive impact.

Perhaps the most important takeaway message for brokers is that most employers adjust their benefits spending to economic conditions. Sixty-four percent said their benefits spending is influenced by the economy.

Coping with costs

The rising cost of health care benefits tops the list of concerns, with most citing increased expenses over the previous year:

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However, there is good news for brokers among the economic concerns. The overwhelming majority of employers (85 percent) use a benefits broker or agent. Compensation is divided somewhat evenly between commission-based (54 percent) and fee-based (46 percent). Seventy percent of employers said their broker either conducts enrollment or helps them conduct it.

The even better news is that more than 91 percent of respondents have no thoughts of dropping their broker and going it alone. Still, it would be smart to pay attention to the factors that they say would cause them to consider such a bold move:

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Communication is critical

Timely, actionable communication is more important than ever in today’s fast-changing benefits environment. Nine employers in 10 said they are satisfied with the frequency of communication with their broker. How often do they connect?

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One potential topic of conversation is the new Department of Labor fiduciary rule and its potential impact. Eighty-three percent of employers said they understand it extremely or moderately well, and the rest said not very well or not at all.

Although many conversations take place about benefits products, technology is an increasingly hot topic. Thirty-six percent of employers consult with their broker multiple times each year about such topics as enrollment, administration and compliance platforms. Another 25 percent do so once a month or more frequently. More than 80 percent of employers are satisfied with the frequency of technology communications with their broker.

Speaking of technology, nearly every employer said it is essential to his or her business:

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Employers seek out a variety of print and online sources for information about health-care reform, led by electronic newsletters from an insurance magazine (66 percent). Not to blow our own horn, but BenefitsPRO.com is the most popular information site, mentioned by 81 percent of employers.

Expanded product offerings

Although many employers are expanding the menu of voluntary benefits, health insurance (including HMOs and PPOs) remains the overwhelming favorite. Eighty percent said their employees consider health insurance their most important benefit. Sixteen percent cited consumer-driven health care options, such as HSAs and HRAs. A majority—60 percent—now offer health savings accounts. About half of employers surveyed said they are used by between 1 percent and 25 percent of their employees.

Not many employers are open to the idea of health insurance exchanges. Forty-four percent have consulted with their broker about an exchange. However, only 13 percent have considered moving their employees onto a public exchange, while 21 percent have considered a private exchange option.

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Positive outlook

The bottom line for this year’s survey is that the vast majority of employers look to their broker as a valued business partner. Brokers who listen to what they have to say, communicate clearly, and deliver practical solutions will be well positioned to build strong relationships during enrollment and look forward to a mutually prosperous 2018.

Meet the respondents

The 125 survey respondents represent a broad cross-section of the benefits industry (although not every participant answered every question). Three-fourths of them are involved in making benefits decisions for their company.

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BenefitsPRO takes time each year to ask employers to share their insights on the most important issues they face. Their responses provide a valuable roadmap for brokers as they plan ahead for this fall’s abbreviated open enrollment period.

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National Prescription Drug Take-Back Day is October 28th

PrescriptionBecause of their focus on substance abuse issues and the national awareness of the opioid epidemic, Magellan Rx Management is calling your attention to the Drug Enforcement Administration’s (DEA) scheduled event – National Prescription Drug Take-Back Day. This event will take place on Saturday, October 28th, from 10 a.m. to 2 p.m. and is a great opportunity for those who missed the previous events, or who have subsequently accumulated unwanted, unused prescription drugs, especially medications including opioids such as codeine, hydrocodone, oxycodone, morphine or fentanyl, to safely dispose of those medications.

Since the first Take-Back day in 2010, over 4,000 tons of unwanted or expired medications have been surrendered for safe and proper disposal at over 9,000 sites. Click here to find a collection site near you.

In an environment where cost containment and quality care are constantly challenged, Magellan Rx Management is the smart solution.

Top 10 health conditions costing employers the most

The article below was published on September 13, 2017 by Employee Benefit News, written by Nick Otto.

Photo source: benefitnews.com

As healthcare costs continue to rise, more employers are looking at ways to target those costs. One step they are taking is looking at what health conditions are hitting their pocketbooks the hardest.

“About half of employers use disease management programs to help manage the costs of these very expensive chronic conditions,” says Julie Stich, associate vice president of content at the International Foundation of Employee Benefits Plans. “In addition, about three in five employers use health screenings and health risk assessments to help employees identify and monitor these conditions so that they can be managed more effectively. Early identification helps the employer and the employee.”

What conditions are costly for employers to cover? In IFEPB’s Workplace Wellness Trends 2017 Survey, more than 500 employers were asked to select the top three conditions impacting plan costs. The following 10 topped the list.

10. High-risk pregnancy – Although high-risk pregnancies have seen a dip of 1% since 2015, they still bottom out the list in 2017; 5.6% of employers report these costs are a leading cost concern for health plans.

9. Smoking – Smoking has remained a consistent concern of employers over the last several years; 8.6% of employers report smoking has a significant impact on health plans.

8. High cholesterol – While high cholesterol still has a major impact on health costs – 11.6% say it’s a top cause of rising healthcare costs – that number is significantly lower from where it was in 2015 (19.3%).

7. Depression/mental illness – For 13.9% of employers, mental health has a big influence on healthcare costs. This is down from 22.8% in 2015.

6. Hypertension/high blood pressure – This is the first condition in IFEBP’s report to have dropped a ranking in the last two years. In 2015, hypertension/high blood pressure ranked 5th with 28.9% of employers reporting it is a high cost condition. In 2017, the condition dropped to 6th with 27.6% of employers noting high costs associated with the disease.

5. Heart Disease – This year’s study found that 28.4% of employers reported high costs associated with heart disease. In 2015, heart disease was the second highest cost driver with 37.1% of employers citing high costs from the disease.

4. Arthritis/back/musculoskeletal – Nearly three in 10 employers (28.9%) say these conditions are drivers of their health plan costs, compared to 34.5% in 2015.

3. Obesity – Obesity is still a top concern for employers, but slightly less so than it was two years ago. In 2017, 29% of employers found obesity to be a burden on health plans. In 2015, 32.4% cited obesity as a major cost driver.

2. Cancer (all kinds) – Cancer has become more expensive for employers. Now, 35.4% of employers report cancer increasing the costs of health plans, compared to 32% in 2015.

1. Diabetes – The king of rising health costs, diabetes has topped the list both in 2015 and 2017. In the most recent report, 44.3% of employers say diabetes is among the conditions impacting plan costs.

If you or your client is struggling with trying to manage the costs of expensive chronic conditions, our wellness consulting and services company, CF&H, has the guidance and support to help. With over 30 years of experience, Corporate Fitness & Health helps businesses and agencies identify the risks that drive healthcare costs and implement a wellness program that can improve employee health and productivity.

Healthcare costs continue to rise. Let Corporate Fitness & Health ensure you’re taking every cost control measure possible.

Corporate Fitness & Health