Generics improve access to care, combat rising costs
Few factors have played as significant a role in helping curb healthcare costs over the past decade as generic drugs, a report released by the Generic Pharmaceutical Association showed.
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The report, prepared for GPhA for the seventh straight year by the IMS Institute for Healthcare Informatics, shows that since 2005 generics have saved patients $1.68 trillion. In 2014 alone, the report noted, generic drugs trimmed more than $254 billion from healthcare spending. Slightly more than one-third of those savings were from generics taken by people ages 65 years and older.
“This new report reinforces that generic drugs are a critical part of any solution to rising costs for patients, payers and for the entire healthcare system,” GPhA president and CEO Chip Davis said. “Safe, effective and more affordable generic medicines mean increased access for the millions who rely on these life-saving therapies.”
According to the IMS report, 88% of all prescriptions in the United States are filled with generics. However, these lower-cost alternatives to branded drugs account for only 28% of pharmaceutical spending.
Davis said these savings are particularly relevant given lawmakers’ efforts to lower the costs of federal and state health programs.
“As policy-makers look for solutions to rising healthcare costs, we look forward to working with Congress, the FDA, the patient and provider communities, and stakeholders from all corners of the supply chain to embrace policies that support generic manufacturers’ ability to provide this remarkable level of savings,” he said.
The savings that generics can provide federal and state programs are already apparent, the report found, noting that Medicare saved $76.1 billion in 2014 by using generics. That figure, Davis said, translates into an average of $1,923 for every person enrolled in the program. For the joint state and federal Medicaid program, the 2014 savings amounted to $33.5 billion, or $479 per enrollee.
The IMS report also noted that generics provided significant savings across a wide range of therapeutic classes. For example, it said patients saved $38 billion by using generics to treat mental health conditions, while $27.9 billion were saved with generic hypertension drugs and $26.8 billion were trimmed from spending on medications to manage or lower cholesterol levels.
“It is evident that annual spending on many medication classes would soar in the absence of generic competition,” said IMS Institute executive director Murray Aiken. “This underscores the need to sustain the generic drug industry and actively pursue policies that support or grow, rather than undermine, patient and health system savings from generic drugs.”
This year’s report marked the first time that IMS has included state-by-state savings from generics in its GPhA report. Generics had the greatest impact on per capita Medicaid spending in Kentucky, West Virginia, Maine, Rhode Island and Massachusetts.
CMS pilot extended to Part D MTM in 2017
A new, long-term pilot program from the U.S. Centers for Medicare and Medicaid Services’ Center for Medicare and Medicaid Innovation, set to launch in 11 states in January 2017, will gauge the effectiveness of an Enhanced Medication Therapy Management model.
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The program will include sweetened payments and other incentives to the Part D plans that “offer innovative MTM programs, aimed at improving the quality of care while also reducing costs,” according to CMS. The agency called the five-year effort to boost MTM services and evaluate their impact on patient outcomes and costs part of its “better care, smarter spending, healthier people approach to improving health delivery.”
Five Part D regions will participate in the pilot, encompassing 11 states, including Arizona, Florida, Iowa, Louisiana, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Virginia and Wyoming.
The long-term goal, according to CMS, is “to test whether providing Part D sponsors with additional payment incentives and regulatory flexibilities will engender enhancements in the MTM program, leading to improved therapeutic outcomes, while reducing net Medicare expenditures.”
CMS called the program “an opportunity for stand-alone basic Part D plans to right-size their investments in MTM services, identify and implement innovative strategies to optimize medication use, improve care coordination and strengthen system linkages.”
In a statement aimed at Medicare beneficiaries, CMS urged seniors to take advantage of MTM services if they’re offered by their Part D drug plan. Among the benefits “a pharmacist or other health professional” can provide through MTM, the agency tells beneficiaries, and “a comprehensive review of all your medications,” as well as counseling on:
- How to get the most benefit from the drugs you take
- Any concerns you have, like medication costs and drug reactions
- How best to take your medications
- Any questions or problems you have about your prescription and over-the-counter medication.
MTM also includes “a written summary of this discussion, including an action plan that recommends what you can do to make the best use of your medications,” CMS reports, as well as “a personal medication list that will include all the medications you’re taking and why you take them.”
Investing in pharmacy services
One factor behind CMS’ more aggressive push to promote a more hands-on, direct style of care for Medicare patients is the relatively sluggish adoption of the MTM concept by Part D prescription drug plans, according to Larry Kocot, former VP government affairs for the National Association of Chain Drug Stores, and currently head of KPMG’s new Center for Healthcare Regulatory Insight within its Healthcare and Life Sciences Practice.
“For a variety of reasons, MTM has not realized its potential in Medicare Part D,” Kocot told DSN. “Most Part D sponsors do not view MTM activities as central to their patient care strategies because incentives are not aligned sufficiently to drive them to look beyond MTM as a program requirement.”
“Indeed, MTM in Part D is currently included as an ‘administrative cost’ within Part D bids,” Kocot added. “As a result, plans actually have an incentive to economize on MTM to control costs, rather than invest in MTM to optimize therapy. By realigning the incentives and paying plans for MTM outside of the bid, CMS is trying to unleash the potential for advances in MTM to more directly benefit beneficiaries and the Medicare program.”
To spur innovation, improve long-term patient outcomes and encourage adoption of MTM, said Kocot, “the first step is to realign the incentives.” CMS’ new pilot program, he said “will test whether the incentives are sufficient to achieve the goals of the program.”
“The exciting part of this demonstration model is that CMS will be developing direct and useful evidence to apply to continually improve the program,” he noted. “With incentives realigned and plan sponsors leveraging the important role of pharmacists within the program, MTM may actually become a cornerstone of the Medicare Part D benefit.”
Pharmacy groups quickly embraced CMS’ plan. “NACDS and our allies know that MTM can go a long way toward helping patients get and stay healthy, and toward addressing the $290 billion in annual costs that are associated with not taking medications as prescribed,” said Steve Anderson, president and CEO of NACDS. “That is why NACDS is advocating for the Medication Therapy Management Act [S. 776], and … for MTM programs in the Affordable Care Act.”
“We want to identify exactly how this fits into a comprehensive vision to help patients benefit from MTM — particularly those patients who have the most to gain from improved medication use,” Anderson added.
The renewed impetus for pharmacist-provided MTM services comes amid growing support in Congress for a higher level of pharmacy-based patient care, according to the Patient Access to Pharmacists’ Care Coalition, an advocacy group whose members include NACDS, the National Community Pharmacists Association, the American Pharmacists Association and the National Alliance of State Pharmacy Associations. That support is seen in the steady rise in the number of lawmakers who have added their names to the Pharmacy and Medically Underserved Areas Enhancement Act (S. 314/H.R. 592), a piece of legislation that would expand Medicare beneficiary access to pharmacist-provided patient care services in medically underserved communities.
“Cosponsorship in the House of Representatives recently eclipsed 230, confirming that a majority of House members recognize the value that pharmacists can play in providing healthcare services to underserved communities throughout the nation,” PAPCC reported in early November. “The Senate’s support is also strong, with cosponsorship now equaling 33 [senators].”
Prescription home delivery service options increase
The advent of online shopping and the proliferation of mobile apps across a wide range of businesses has led consumers across the country to expect companies that provide them with goods and services to deliver products to their door.
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While Amazon has set the standard for this new way of shopping — offering same-day delivery of thousands of items in some markets for Amazon Prime members — a handful of smaller companies are beginning to explore ways to deliver prescriptions.
Major pharmacy chains like Walgreens, Rite Aid, CVS/pharmacy and a host of others have offered home delivery in some markets for several years, and independents across the country tout such services as one of the factors that set them apart from their competitors. However, the most recent entries in the prescription delivery business have upped the ante, promising patients quicker service that fits their schedule.
In New York City, for example, Zipdrug, a startup that debuted in July, is offering on-demand prescription delivery from any pharmacy in Manhattan and expects to widen its reach in the New York area by the end of the year, as well as start exploring other markets in 2016. The company uses HIPAA-trained, background-checked and drug-screened messengers to ensure patients’ privacy and safety.
Zipdrug founder Stuart Libby told Drug Store News earlier this year that his service takes the guess work out of prescription delivery, bolstering retailers’ reputations and driving patient adherence.
“Instead of sending out a messenger where you don’t know what time the medications will arrive — if they did arrive — and there’s a paper confirmation from the patient, we digitize all of that and make it really easy, accountable and transparent, which ultimately will lower costs and help increase adherence for pharmacies,” he said. “Waiting for your prescription medication shouldn’t be like waiting for your cable installation. It should have a precise time that you know it comes.”
Meanwhile, in San Francisco, two companies — ScriptDash and TinyRx — offer slightly different forms of prescription delivery.
ScriptDash bills itself as an actual pharmacy that provides free on-demand delivery to a home or office within two hours of receiving the patient’s prescription. TinyRx is more of a traditional delivery service, partnering with independent pharmacies to bring medications to patients’ doors. The company said it uses a prescription coupon index to ensure that patients pay the lowest price for their medicines.
“Even with insurance, we often save customers hundreds of dollars per year,” TinyRx said on its website.
As the demand for home delivery increases, systems and software suppliers have begun exploring ways to help community pharmacies incorporate these services into their everyday offerings.
Earlier this year, for example, QS/1 released QS/1 Delivery-Rx, an Apple iPad application for prescription medication delivery that does not require an Internet connection or cellular signal.
Market analyst Justin Buckland said the app — designed to work with the company’s NRx Pharmacy Management System and Point-of-Sale software — lets pharmacies download transactions, capture signatures, accept payments and allow deliveries from multiple stores.
“Customer service is the backbone of independent pharmacies,” he said when the app was rolled out in October. “This new app allows pharmacies to show their commitment to top-notch customer service and place themselves ahead of the competition.”
While it was originally developed for retail pharmacies, Buckland said QS/1 is looking at modifying QS/1 DeliveryRx so it can be used in long-term care pharmacies, as well.
Solutions like this, he said, are the first steps in what many see as the next wave of innovation in pharmacy technology, as retailers look to keep up with customer demands for new options and a more comprehensive pharmacy offering.
“I expect it to be a huge resource for local pharmacies as it makes it much easier to manage the delivery process,” Buckland said. “I expect some pharmacies to take advantage of it as part of their customer service.”