Study: Medicare ‘doughnut hole’ hurts Rx compliance
FRANKLIN LAKES, N.J. —In a development that could put many seniors at risk and drive up long-term Medicare costs, many seniors with high cholesterol appear to be dropping their drug therapy rather than paying out-of-pocket for their medications once they reach the Medicare Part D drug coverage gap.
That’s the finding of a new study from the big pharmacy benefit management firm Medco Health Solutions. Medco, which unveiled the results of its research in September, found that Medicare beneficiaries who were prescribed cholesterol-lowering statins are nearly twice as likely to abandon their medications when they reach the coverage gap, or doughnut hole, and become responsible for paying the entire cost of their medications than they are in the initial phase of the benefit when the cost of the medication is covered. The result “may put them at higher risk for heart attack and stroke,” the PBM warned.
The study, conducted last year, showed the price-sensitivity of older Americans when confronted with the drop in coverage; the rate of patients who suspended generic statin treatment was 20 percent lower than those on a brand-name medication. It also showed that many seniors still opt for the higher-cost branded drug over the generic when somebody else—in this case the Medicare Part D program—is footing the bill. Once they hit the doughnut hole, a majority of beneficiaries want to switch to lower-cost generics.
“This research confirms the concerns related to patient health in the coverage gap and also validates the positive impact generics have on helping patients remain compliant with their medications,” said Dr. Woody Eisenberg, chief medical officer of Medco Retiree Solutions.
According to the Medco research, 22 percent of Medicare Part D recipients reached the gap by July 2007. By December of last year, the company reported, “exactly half were either in the gap or had such high costs that they had proceeded to the catastrophic coverage phase of the benefit.”
Researchers also found that “reaching the coverage gap dramatically stimulates the use of generics among all Medicare recipients.”
During 2007, the doughnut hole took effect when beneficiaries’ total drug costs reached $2,400. Beneficiaries were then responsible for paying 100 percent of their drug costs until total costs reached $5,451, when catastrophic coverage begins to cover 95 percent of a beneficiary’s drug costs.
In a response to the coverage-gap problem, Medco said it has introduced a communications program that alerts its prescription drug plan members and specific health plan beneficiaries through mailings and outbound phone calls of their proximity to the gap long before they reach it. In addition, reported the company, “Medco offers members prescription forms they can bring to their physician or contacts the doctor on the member’s behalf to discuss generics that can lower the member’s costs.”
Battery makers upgrade power sources, get more shelf space
LOS ANGELES and ST. LOUIS, Mo. As new products keep rolling in from major battery brand manufacturers, retailers are updating their marketing to maximize the potential of increasingly specific product functions.
On Aug. 18, Energizer announced the launch of its new Advanced Lithium battery, one designed to reliably power wireless gaming accessories, digital cameras, hand-held games or MP3 players.
Five weeks earlier, Panasonic introduced the EVOLTA battery, which it characterized as the world’s longest lasting AA alkaline battery cell in more devices. EVOLTA represents a certain resistance to battery specialization. “We see the trend in batteries going toward more ‘middle-drain’ applications as the reduction in power consumption needs of appliances has resulted in less high-drain devices needing primary battery power. EVOLTA eliminates the confusion for consumers and gives them confidence that our battery will perform well across many applications,” said Matt Sora, vice president of sales and marketing.
While others keyed on batteries, Duracell focused on the kind of line extensions. Among the new products debuted was Duracell Daylite, the cornerstone of new flashlight line designed to take LED lighting to the next level, the company stated, by capturing and using 100 of the light generated versus 70 percent in more typical instances. The flashlight introduction came hard on the heels of the debut of Duracell’s My Pocket Charger and the PowerSource Mini, which were developed to complement cell phones, BlackBerrys and MP3 players.
Ultimately, said Duracell spokesman Kurt Iverson, battery producers are bringing technology to bear in developing more effective, longer lasting products that use innovation to provide power more efficiently. “In the case of the Daylite flashlight, it’s getting a product to work using less battery power and still produce a brighter beam of light,” he said.
The involvement of major battery brands in a range of portable energy dependent items certainly is stretching traditional brand boundaries and merchandising concepts as well.
Jacqueline Burwitz, spokeswoman for Energizer said that, while the brand remains the one that keeps on going and going, the company’s merchandising support has evolved with its product line. “It has changed. Now it’s a matter of pairing the right battery with the right device,” she said.
Battery makers have encouraged many retailers to create ancillary product display spaces that complement the products they power, but drug chains haven’t necessarily bitten, as many prefer to depend on a battery center merchandising program. “We have those sections,” said Stacy Rinehart, a USA Drug spokeswoman. “We have our batteries in those displays.”
That doesn’t necessarily mean, however, that drug chains aren’t changing to the existing market.
Rather than develop secondary displays, Walgreens focuses on appropriately expanding its battery centers to make it easier to shop for specific applications, said Robert Elfinger, a company spokesman.
“The battery section has grown significantly,” he said. “Customers are starting to understand that high-draining devices such as digital cameras are getting specific batteries, and they are looking for some of the new high-tech batteries. We’re expanding the battery sections to accommodate them.”
Thus, drug chains, for the most part, feel as if a battery center, usually conspicuously positioned, makes sense in terms of both attracting customers and return from floor space, as it can keep pace with developments in the category if properly configured to changes in the market.
Survey says 40 percent of shoppers plan to start holiday gift-shopping before Halloween
WASHINGTON The National Retail Federation today released results of its 2008 Holiday Consumer Intentions and Actions Survey, run by BIGresearch, showing that the average American holiday shopper plans to spend more than $800 each on holiday shopping.
The NRF’s survey results showed that 40.2 percent of consumers said that they will begin holiday shopping before Halloween and survey respondents plan to spend about $832 on average on holiday items. This average reflects only a 1.9 percent increase over last year’s average total: $816.69. It’s the lowest anticipated spending increase NFR launched its survey in 2002.
Forty percent of survey respondents said that sales and/or promotions is the biggest lure to where they will shop, while 12.6 percent said they will seek “everyday low-prices.” Only 5.6 percent said they would choose holiday shopping locations based on convenience and 5.2 said it depends on customer service.
NRF president and chief executive officer, Tracy Mullin, said, “Retailers are going into this holiday season with their eyes wide open, knowing that savings and promotions will be the main incentive for shoppers. No one is canceling Christmas because money is tight, but consumers will be sticking to their budgets and looking for good deals when deciding where to spend this holiday season.”
Survey repondents also said they would spend about $51.43 each on decorations, $32.43 for greeting cards and postage, $95.04 on candy and food and $22.61 on flowers. The Internet has seen steady rates of shoppers: 44.2 percent of the shoppers in the survey said they were buying gifts online, flat from 44.3 last year. NRF has said that it predicts holiday sales to increase 2.2 percent over last year, for a total of $470.4 billion.