Pharmacy Industry News: Drug shortages affecting local hospitals
How to maximize workers’ compensation prescription drug savings and ensure the highest level of care
While the overall number of workers’ compensation claims has decreased over the past few years, insurance industry studies show medical treatment costs are continuing to grow at an alarming rate with prescription drugs being one of the major contributors.
The impact, however, isn’t solely driven by the price of the drugs, but instead, in large measure, it has been due to the increased utilization — more drugs are being prescribed, more frequently, and for longer periods of time. In many cases there are more appropriate and cost-effective treatment alternatives — but, in order to better manage this process, more focus and expertise is required than what is provided in most Pharmacy Benefit Management (PBM) programs, especially when comparing workers’ compensation benefits to group health.
“One of the major challenges workers’ compensation insurance programs encounter with controlling medication costs is ensuring injured workers are being prescribed the most effective and appropriate drugs to treat an injury or work-related illness,” says Daryl Corr, president of Healthesystems. “Since the complexity of injuries and patient medication tolerances can vary so significantly, combined with the challenge of widescale use of pain medications, treatments can’t be a one-size-fits-all approach. Therefore, it’s critical to incorporate more clinically focused strategies to ensure prescription drug treatments are being managed appropriately, especially in the most complex cases.”
Smart Business spoke with Corr about the uniqueness of workers’ compensation prescription benefits and how clinically focused tools are impacting medication costs and the quality of care.
How can a clinical services program help reduce the costs associated with complex workers’ comp pharmacy claims?
At the most basic level, a clinical services program helps customers design and maintain the pharmacy program’s medication plan (formulary) around the specific prescription medications or classes used to treat workers’ comp related injuries. These rules can help determine whether a drug requires a prior authorization before dispensing.
However, on a more targeted level, a successful clinical services program can have a big impact when focused on the most complex workers’ comp cases. These complex cases may represent a small percentage of an insurance payer’s injured worker patient population, but they have a tendency to drive most of the cost. In a lot of situations, this goes well beyond the typical 80/20 business rule axiom. For many insurance payers, less than 10 percent of the claimants receiving prescription drugs are driving over 70 to 80 percent of their overall drug treatment costs.
So, focusing more attention on this narrow group of claims maximizes the opportunity to significantly reduce drug spend. However, it requires a lot more expertise and commitment from the PBM to achieve the best results. You need a highly skilled and knowledgeable staff of PharmD clinicians focused on examining individual cases, analyzing drug therapies and identifying alternate treatment options — subsequently interacting with prescribing physicians and claims professionals to educate them about more appropriate alternatives when they are available. This approach focuses on the claims where the largest dollars are being spent in order to maximize the potential savings impact.
What is the best way for a PBM to integrate clinical services into a pharmacy program?
The most successful clinical tools are highly integrated into a PBM’s overall pharmacy program. There are critical pharmacy program functions necessary to make this happen, namely powerful technology and proactive communications. Incorporating powerful technology takes pharmacy management to the next level by proactively identifying problematic prescription trends through systems edits and evidence-based medical guidelines. A proactive communication process is key, especially when it comes to interactions between the PBM, the prescribing physician and the insurer’s claims professional.
A PBM’s team of PharmD professionals needs to actively interact with physicians to provide education and insight into the specifics about the prescribed drugs and the injuries they are treating. Depending on a physician’s specialty, they may have limited knowledge about the effectiveness of a particular drug or alternatives available — or, frequently a physician may not be aware of all medications being prescribed to an injured worker if they are being treated by multiple physicians. Clinical education and outreach is imperative and must occur quickly in order to be most effective.
Are these targeted clinical services applied universally to all workers’ comp claims?
Not necessarily. Usually, these types of services are focused on the most complex claims. All clients and their individual claims are unique — just like each diagnosis is unique to each injured worker. In addition, rules and regulations differ from state to state and may affect how or if you can interact with physicians, or whether there are specific mandated treatment guidelines in place. A PBM must be aware of these rules and work with customers to ensure everyone maintains compliance. With these added issues, it becomes even more crucial for a PBM to take a proactive role in educating its clients about what is occurring in the market as it relates to applying best treatment guidelines and clinical best practices.
There is also a need to proactively monitor the pharmaceutical industry to identify new drugs that are entering the market, which may have an impact on a workers’ comp pharmacy program. The key is to help clients make the right decisions by factoring both treatment effectiveness and cost. It isn’t solely driven by the price of one pill. It’s about applying the right treatment to achieve the optimal outcome, which typically means lower costs over the life of the claim.
Buyouts skew Indian drug industry
Tie-ups between Indian drug companies and multinational pharmaceutical firms, which initially received a lot of media attention, have proven to be more beneficial for big pharma than for Indian companies, according to a recent study.
The study authors found that co-operation between multinational pharmaceutical companies and Indian manufacturers had not boosted the R & D capacity of Indian pharmaceutical businesses.
They also found that there had not been any significant transfer of technology from developed countries.
In the report, Médicins Sans Frontières (MSF), a medical non-governmental organisation, describes India as the pharmacy of the developing world.
MSF relies on Indian companies to supply 80% of all generic HIV drugs it distributes abroad.
It is not the first time that Indian officials have begun to suspect that such co-operation between drug companies is ultimately not beneficial for Indians.
When a foreign firm buys an Indian drug company, that firm inheirits the intellectual property of the foreign company.
But quite often, the same Indian companies have already benefited from patent waivers on research done by Indian technical institutes, or from Indian tax incentives.
In essence, multinational firms are benefiting from previous investments of Indian taxpayers’ money when they buy Indian drug companies.
Last year, the Indian commerce ministry said some analysts were concerned that foreign companies would steer Indian companies away from the Indian market, weakening competition and ultimately opening up a new price range for more expensive drugs, thus driving up prices overall.
The researchers found that clinical research organisations in India failed to raise their technological standards after being integrated with high-grossing pharmaceutical firms.
They found that most of the drug discovery efforts of such firms were aimed at Western markets.
While some Indian drug companies have also acquired foreign firms in the mean while, foreign firms have also bought Indian companies.
Study author Dinesh Abrol, of the National Institute of Science, Technology and Development Studies (NISTADS), said that buying domestic Indian companies would give multinational companies fewer challenges over proprietary technology.
He said that the buyouts would ultimately lead to decreased manufacturing capacity for Indian-made generic drugs.
The Indian commerce ministry said that alliances between local and global pharmaceutical companies had also been seen in Brazil, Egypt, and Pakistan.
Drug shortages affecting local hospitals
Drug shortages ranging from anesthetics to emergency room necessities have forced local hospitals to plan ahead and work together to make sure there is enough to go around.
While drug shortages are nothing new, a perfect storm of quality-control issues and manufacturing slowdowns and shutdowns have caused the worst shortages in most pharmacists’ memories. Across the nation, hospitals are having to get creative when it comes to meeting needs – often turning to older drugs to treat patients.
“This is the worst I’ve seen it ever,” said David Rowlands, director of Community Medical Center’s pharmacy. “We’ve had to do a lot of gymnastics, but it has not had any adverse effect on the care we provide.”
Shortages have affected local hospitals both large and small, though none has reported any problems that have affected a hospital’s ability to continue caring for patients.
“We haven’t had to turn anyone away,” said Michele Musheno, director of Moses Taylor’s pharmacy.
The U.S. Food and Drug Administration reported more than 150 drug shortages in the last year. About 60 of those are considered by federal officials to be “medically necessary.”
Five years ago, there were only 55 or so different drugs in short supply, Pennsylvania Medical Society President Ralph Schmeltz, M.D., said.
Amongst the most problematic shortages is propofol, a commonly used anesthetic for surgeries. Several injectable painkillers used for surgeries, trauma patients and those suffering from serious illnesses, as well as certain cancer drugs and medications used to treat heart patients are also in short supply, according to hospital pharmacists around the region.
The reasons for the shortages are myriad, local and national experts said. The FDA has ramped up inspections and cracked down on drug safety, shutting down plants where problems are found.
“The FDA has been under a lot of pressure to make sure drugs are made safely,” Dr. Schmeltz said. “Inspections have found particulate matter in IV drugs, which has caused shutdowns. You can’t inject foreign material into patients.”
Consolidation in the drug industry has resulted in fewer plants making certain drugs, and other plants have stopped production when a drug is no longer profitable.
Propofol, for example, is in short supply because one manufacturer, Teva Pharmaceuticals, decided to stop making it because of a quality issue last year.
Around the same time, propofol manufacturer Hospira also experienced some quality control issues that interrupted production.
The FDA allowed Hospira to begin manufacturing propofol again this summer, but the plant needed time to get production running smoothly before it could begin filling back orders.
Further complicating the drug shortage problem is that there is no way to predict shortages.
“It doesn’t seem like the drug companies are very forthcoming about upcoming shortages,” said Marsha Shaw, the director of Mercy Tyler’s pharmacy, which has also struggled with drug shortages over the past year. “We try to keep a certain inventory of emergency medications on hand, but it is expensive to keep our inventory up.”
Hospital pharmacies around the area are also comparing notes when it comes to what shortages are affecting them, often borrowing or lending certain drugs to make sure every facility has enough.
“We talk to other hospitals and try to have a plan in place,” Ms. Shaw said. “The drug companies allocate a certain amount to each hospital, so we try to plan for what we will have.”
Shortages of premixed drugs that come in syringes to be used in emergency rooms have pharmacists at local hospitals mixing their own, a time-consuming process. Sometimes, drugs that are in short supply can be replaced with other, older drugs, pharmacists said.
“There are other drugs out there that often work just as well,” Ms. Musheno said. “We have to educate doctors and nurses about those changes when we make them” to make sure orders reflect the approved switch.
At Mercy Tyler, pharmacists send weekly memos informing staff of drug shortages and substitutions, Ms. Shaw said. And while there are few problems using substitutions, older drugs could require different dosages or cause different side effects than newer treatments, pharmacists said.
The increasing number of drug shortages has attracted the attention of federal legislators. U.S. Sen. Bob Casey, D-Pa., along with U.S. Sen. Amy Klobuchar, D-Minn., has introduced legislation that would require drug manufacturers to give the FDA notice when an issue arises that might lead to a shortage.
“We’ve had reports about this problem,” Mr. Casey said. “We want to put in place a better structure that will result in fewer crises.”