Pharmacists wield new tool in campaign to boost compliance
There’s nothing like 125,000 needless deaths a year and billions of dollars in waste to raise awareness among policy-makers and patient advocates about the acute problem of medication errors and patient noncompliance.
A spate of recent news reports and growing cries of alarm from health care advocacy groups and policymakers have pushed the issue high up the list of the nation’s health concerns. They paint a stark picture of patients’ lack of adherence with drug therapy and its costs.
“Between 50 [percent] to 90 percent of patients do not take their medications according to recommended instructions,” said just-retired Walgreen Co. chairman David Bernauer, citing a study from the Institute for Safe Medication Practices. “In the [United States] alone, non-adherence has been estimated to cost over $100 billion each year. That includes about 10 percent of additional hospital admissions and 23 percent of additional admissions to nursing homes.”
The problem of non-compliance remains a persistent national health care challenge, agreed the National Community Pharmacists Association and Pharmacists for the Protection of Patient Care. In a jointly sponsored poll of 1,000 adults in late 2006, NCPA and P3C noted that Americans’ lack of adherence with a doctor-prescribed drug regimen is widespread among all income and age levels, and not restricted to lower-income patients.
Most striking, according to researchers, is that nearly 3 of-every-4 consumers admit they don’t always take their prescription medications as directed. Researchers found “a major disconnect between consumers’ beliefs and their behaviors when it comes to taking medication correctly, as well as a golden opportunity for pharmacists to use their specialized training and accessibility to help improve patient compliance and health outcomes.”
Improvements in prescription compliance remain an elusive goal, researchers for NCPA and P3C found. Nearly half of those surveyed, 49 percent, said they had forgotten to take a prescribed medication, and 31 percent reported that they had not filled a prescription they were given.
Nearly one-quarter of respondents, 24 percent, said they had taken less than the recommended dosage of a prescription, and 11 percent said they had substituted an over-the-counter medication for the one prescribed.
“These findings are very disturbing,” said Bruce Roberts, NCPA executive vice president and chief executive officer. “They suggest that patients aren’t fully aware of the implications of not taking the right dose of medicine at the right time. Even more surprising, fewer than half indicated they had consulted their doctor or pharmacist before making these changes.”
“We absolutely have to get across the point that if patients don’t take their medication—or they take half their proper dose—health care costs are actually going to rise faster, because then people are going to utilize emergency rooms,” noted Walgreens chairman and chief executive Jeff Rein earlier this year.
Rein’s call to action points to both the problem and the opportunity that patient non-adherence represents to retail pharmacies. The growing use of electronic prescribing, electronic patient record-keeping, electronic transfer of patient records and other applications of health information technology are handing pharmacists, physicians and health plan payers a powerful new tool in the campaign to boost patient compliance and reduce medication errors.
The key, Bernauer said, is to give pharmacists “the systems and tools to do this work efficiently.
“Once our pharmacists have access to relevant patient medical information, the stage will be set for them to greatly improve the appropriate use of medicines—and for us to prove the benefit of their interventions,” Bernauer said in his first address as 2007 chairman of the National Association of Chain Drug Stores.
Bernauer also called the “growing role of government and private industry to push patient compliance” a positive trend “that bodes well for patient health, control of health care costs and pharmacies like Walgreens.”
A new study from the Gorman Health Group sponsored by the Pharmaceutical Care Management Association asserts that e-prescribing could prevent up to 1.9 million medication errors over the next decade if physicians utilized the technology in Medicare. “Along with reducing medication errors, the study also found that even after providing funds for equipment and training, the federal government could save $26 billion,” the PCMA noted.
The PCMA unveiled a new print ad July 19 to drive home that message. The ad features a baseball scoreboard that highlights the 1.9 million medication errors and urges Congress to “get in the game” by requiring Medicare doctors to use e-prescribing.
One thing is clear: pharmacists are on the front line of patient-compliance initiatives. Researchers for NCPA and P3C found that patients “appeared open to tapping into the unique expertise of their pharmacist in order to improve medication adherence.”
Indeed, noted the NCPA/P3C report, more than 8-outof-10 adults agreed that “pharmacists can play a role in improving adherence by helping to make sure patients take their prescription medications correctly.” Additionally, 68 percent of those polled said pharmacists are more knowledgeable than other health care professionals when it comes to information about prescription medications.
“Two-thirds of consumers said they go to one pharmacy for all their prescription medications,” said Ian Salditch, P3C’s founder. “This presents an excellent opportunity for pharmacists to help educate patients about how to take their medications properly.”
Closely related to efforts to boost compliance and patient safety is a major push by the White House and the Food and Drug Administration to improve the safety of drugs already approved and on the market. To that end, the Bush administration’s federal budget for fiscal 2008 includes a $139 million plan to improve post-market drug surveillance by the FDA.
Among the planned improvements: creation of a far more robust database for the safety and efficacy of drugs already being dispensed, and upgrading the Adverse Event Reporting System to “enhance tracking of safety signals,” according to the budget plan.
Grocer sings new tune in community involvement
Meijer is taking another step in community relations, to the tune of promoting and selling CDs of local musicians.
The Michigan-based 176-unit grocery chain launched the Outside the Mainstream promotion in February with a solo CD from Josh Davis, a singer from Lansing, Mich., whose Fool Rooster CD was recognized by Performing Songwriter magazine for its lyric.
Each month, the chain is featuring a new performer in its circulars, which are sent weekly to 7 million households in Ohio, Michigan, Illinois, Indiana and Kentucky, according to company vice president of public affairs Stacie Behler. Meijer purchases 1,000 of the artist’s CDs and offers them for sale in all the chain’s stores for $7.49.
“The goal of the program is to bring some of the talent that we find in our own backyards to a wider audience than they can normally reach by themselves,” Behler said. “And by supporting this with a low price and a feature in our circular, hopefully it will lead people to gamble on the purchase of music that is worthy of discovery.”
Meijer, according to Behler, is trying to create regional loyalty to its stores by promoting local talent.
CDs chosen for promotion, according to the chain, must have a UPC and be professionally duplicated. Submitted CDs are sorted according to state and chosen on the basis of whatever state will be featured that month and how different the music is from the previous month.
Featured in April is Michigan-based Potato Moon with its CD “The Life of The Lonely Jones.”
CVS wins Caremark battles
WOONSOCKET, R.I. —The battle for Caremark Rx has finally come to an end. And, to the dismay of Express Scripts, CVS has emerged the winner, creating a $75 billion pharmacy benefit management powerhouse that is likely to serve as a benchmark for additional mergers within the industry.
“CVS/Caremark will offer end-to-end services, from plan design to prescription fulfillment, as well as the opportunity to improve clinical outcomes, which will result in better control over health care costs for employers and plan providers,” stated Tom Ryan, president and chief executive officer of CVS/Caremark, late last month when the deal closed. “The company will improve the delivery of pharmacy services and health care decision-making, enabling consumers to benefit from unparalleled access, greater convenience and more choice.”
With the close of the transaction—ultimately valued at $27 billion—CVS/Caremark has moved into a strong, competitive position. The combined company will be No. 1 in pharmacy sales, PBM-managed lives, specialty pharmacy sales and retail-based health clinics. It will be No. 2 in mail services.
That adds up to a lot of extra leverage for the retail health care juggernaut with suppliers, as well as insurers and payers.
In terms of synergies, CVS expects to realize between $800 million to $1 billion in revenue synergies in 2008, and significantly more thereafter. The company expects about $500 million in cost savings, largely related to better purchasing.
“We would like to note that every deal that both CVS and Caremark have done historically has yielded synergies significantly in excess of original guidance,” stated Citigroup analyst Deborah Weinswig in a recent research note. “We believe this deal will be no exception.”
Charles Boorady, also of Citigroup, believes that if the company achieves cost savings from the drug-procurement process, it likely will come from a combination of the following: manufacturers accepting the lower price or offering greater rebates, the wholesalers and distributors accepting lower prices and manufacturers bypassing the wholesalers and selling directly to the combined CVS/Caremark entity.
While many industry observers view the merger as a boon for the companies, it undoubtedly will have major implications on the industry, in general, as vertical integration is a new paradigm that—if successful—could clear the way for more mergers moving forward, with Medco and Express Scripts likely being the next targets.
“The fragmentation in the past may be the reason why vertical integration did not work, but the sheer scale of the CVS/Caremark company may be able to make it work,” Boorady said. “The only test will be whether customers buy into the concept or the concerns over the perceived channel conflict will outweigh it.”
Either way, Boorady sees it as a win-win for rival PBMs. “I see Medco and Express Scripts winning either way. If this integration works, they are likely to be the ones that are acquired next. If it doesn’t work then they could stand to gain customers that prefer a standalone [PBM] instead of a vertically integrated model.”
Another issue such a deal brings to the forefront is network restriction. If customers are willing to restrict the retail pharmacy so that employees can get their prescriptions filled at a single chain, or just a few chains in the market, then it will make the synergy from a vertical integration more obvious, according to Boorady.
However, this has been a concern for several years and has yet to materialize.
“I think most employers have concluded, and will continue to conclude, that the sheer hassle factor that you are putting on your employees by making them go to a CVS instead of a Walgreens, or vice versa, isn’t really worth what little savings you can get relative to other things you can do that present less of a hassle to the employee but can save a lot more money,” Boorady said.
However, prior to the deal, CVS Pharmacare controlled a provider network of more than 56,000 retail pharmacies. Meanwhile, Caremark’s network numbered more than 60,000 retail pharmacies, so it is unlikely that the combined company, post-merger, would suddenly pull back the size of its network—particularly, if the end goal is to remain attractive to insurers and payers and competitive with stand-alone PBMs.
According to William Blair & Co. analyst Mark Miller, the combined company is facing its first big test as it expects an announcement on the large Federal Employee Program contract—currently up for negotiation—as early as May. Three years ago, Caremark won this contract from Medco and it is likely that the two PBMs, among others, will bid for this business aggressively.
“While there are many moving parts to these types of negotiations, this will be the first big test for the new CVS/Caremark, and may provide some incremental perspective on the current state of the competitive environment,” Miller stated in a research note.
In related news, CVS/Caremark has announced the members of the company’s board of directors. As previously disclosed, the 14-member board was evenly split among designees from CVS and Caremark.
Former Caremark chairman and chief executive officer Mac Crawford has been elected chairman of the board of the combined company. Ryan will continue to serve as president and chief executive officer.
The following individuals named to the board from CVS are:
Ryan, president and chief executive officer of CVS/Caremark Corp.
David W. Dorman, senior advisor and partner, Warburg Pincus LLC.
Marian L. Heard, president and chief executive officer, Oxen Hill Partners.
William H. Joyce, chairman and chief executive officer, Nalco Co.
Terrence Murray, former chairman and chief executive officer, FleetBoston Financial Corp.
Sheli Z. Rosenberg, former vice chairman, president and chief executive officer, Equity Group Investments LLC.
Richard J. Swift, former chairman, president and chief executive officer, Foster Wheeler Ltd.
The following individuals named to the board from Caremark are:
Mac Crawford, chairman of CVS/Caremark Corp.
Edwin M. Banks, founder, Washington Corner Capital Management LLC.
C. David Brown II, chairman, Broad and Cassel.
Kristen E. Gibney Williams, former executive of Caremark’s Prescription Benefits Management division.
Roger L. Headrick, managing general partner, HMCH Ventures; president and chief executive officer, ProtaTek International
Jean-Pierre Millon, former president and chief executive officer, PCS Health Systems
C.A. Lance Piccolo, chief executive officer of HealthPic Consultants