High Stakes Healthcare: High Stakes Healthcare: Who’s Gambling With Your Who’s Gambling With Your

Health?Health?

Evelyn L. Lewis, MD, MA, FAAFP

Deputy Director USU Center for Health Disparity Research

and EducationMedical Director Pfizer, Inc

Therapeutic Therapeutic Switching Pay for Switching Pay for

PerformancePerformanceWhat Everyone What Everyone Should KnowShould Know

ObjectivesObjectives

1.1. Defining Drug SwitchingDefining Drug Switching

2.2. Drug Switching Practices and Drug Switching Practices and Trends Trends

3.3. Clinical Risks of Drug SwitchingClinical Risks of Drug Switching

4.4. Other ConsiderationsOther Considerations

DEFINING DRUG DEFINING DRUG SWITCHINGSWITCHING

Several Terms Are Commonly Several Terms Are Commonly Used to Refer to Drug Used to Refer to Drug

SwitchingSwitchingGeneric Substitution Therapeutic Substitution

Substitution of a drug with the same active ingredient and mechanism of action, but produced by a different manufacturer

Substitution of a drug that treats the same medical condition according to guidelines outlined in a drug formulary

The drug products have different active ingredients and/or mechanisms of action

One version, called therapeutic interchange, requires the consent of the prescribing physician

Generic Substitution

TherapeuticSubstitution

Drug Switching Affects Drug Switching Affects Patients and Physicians and Patients and Physicians and Has the Potential to Increase Has the Potential to Increase

Overall Healthcare CostsOverall Healthcare Costs

Drug Switching

Increases likelihood of poor clinical outcomes

Can hurt patient experience

Can particularly effect vulnerable populations

Patient Experience

May drive additional physician visits, tests

May create greater need for acute care

� May raise overall healthcare costs

Healthcare Costs

Can interfere with MD - patient relationship

Can decrease ability to provide personalized care

Physician Experience

Drug Switching Means That A Drug Switching Means That A Patient Does Not Receive the Patient Does Not Receive the Drug Originally Prescribed by Drug Originally Prescribed by

Their PhysicianTheir PhysicianGeneric

Substitution

Therapeutic Substitution

Generic Substitution

Therapeutic SubstitutionPhysician Prescribes:

Prozac

Patient Receives: fluoxetine

PatientReceives:

Zoloft

PatientReceives:Sertraline

(Zoloft)

Generic Substitution Law Generic Substitution Law - 2007- 2007

PermittedPermitted

MandatoryMandatory

Patient Consent Patient Consent is Not Requiredis Not Required

Source: National Association of Boards of Pharmacy, “2007 Survey of Pharmacy Law”

Patients Face Various Risks Patients Face Various Risks Depending on the Type of Depending on the Type of

SwitchingSwitchingPatient risk factorsage

health statuscurrent medications

Patient receives drug prescribed

Patient receives generic version

Patient receives different drug

Potential Consequences Decreased efficacy Drug-drug interactions Intolerable side effects Adverse reaction to

substitute Lack of patient awareness

Potential Consequences Adverse reaction to

substitute Lack of patient awareness

Potential Consequences Delayed access to

medications Administrative burden for

patient, physician, pharmacist

More riskyLess risky

Tiered formulary, prior authorization, step therapy, generic substitution, therapeutic interchange

DRUG SWITCHING DRUG SWITCHING PRACTICES AND TRENDSPRACTICES AND TRENDS

Public and Private Payers Are Using A Public and Private Payers Are Using A Variety of Approaches to Promote Drug Variety of Approaches to Promote Drug

SwitchingSwitchingDrug Switching Strategy Definition Example

Tiered Formulary (differential cost-sharing)

Each formulary tier has higher cost sharing to encourage patients to choose lower priced drugs. Generics typically have the lowest cost sharing requirement.

Patient goes to pharmacy for Prevacid but told lansoprazole is cheaper. Patient chooses Lansoprazole due to lower price.

Generic Substitution Substitution of a generic product for a branded drug with the same active ingredient.

A patient goes to the pharmacy and receives simvastatin (generic) instead of Zocor (brand).

Therapeutic Interchange Substitution of a drug with different active ingredient for prescribed drug.

Patient gets prescription for Mobic (meloxicam) but pharmacist dispenses Toradol (ketorolac).

Prior Authorization Requires a provider to provide clinical justification in order to obtain permission from payer to prescribe a medication.

Doctor prescribes Bevacizumab but must first call patient’s health plan to obtain permission.

Step Therapy Requires use of one or more drugs in a graduated manner before other drugs used to treat the condition will be covered.

Patient with psoriasis must take methotrexate for 90 days before they can be reimbursed for Humira.

Generics Only Policy A plan only covers generic brands on their formulary.

Patient gets prescription for Zyrtec but insurance only covers generic, cetirizine.

Private Plans Are Using Financial Incentives Private Plans Are Using Financial Incentives and Other Strategies to Support Drug and Other Strategies to Support Drug

Switching ProgramsSwitching ProgramsStrategyStrategy DefinitionDefinition ExampleExample

Pay for Performance (P4P): Switching brand to generic

Physicians are financially rewarded for prescribing drugs on a plan’s formulary

BCBS of Michigan paid physicians $100 per patient switched from brand to a generic statin1

P4P – Payment Withholds/Physician “Risk Pools”

Payer withholds portion of per-patient payment

If physician payment is $100 per patient, insurer pays $80. The doctor receives the remaining $20 only if related medical and drug costs fall below a threshold value

P4P – Generic Utilization Rates Doctors are rewarded financially for prescribing generic drugs

Generic prescribing rate counts for 25% of physicians’ total quality scores in Anthem Quality Insights P4P program2; up to 6% bonus payment

Promoting Formulary Compliance

Payer or pharmacist attempts to influence prescribing behavior directly

Fax or call physicians to advocate specific drug switches

Incentives for Pharmacists Insurers reward pharmacists for recommending formulary drugs

PCS Health Systems paid pharmacists up to $12 per Rx to recommend specific drugs3

In 2000, physicians filed largest healthcare class action suit against eight HMOs. Plaintiffs alleged insurers denied claims based on cost alone. Defendants have since settled for more than $1 billion.

The Vast Majority of Medicaid The Vast Majority of Medicaid Programs Are Using a Full Range of Programs Are Using a Full Range of

Mechanisms to Promote Drug Mechanisms to Promote Drug SwitchingSwitching

Frequency of Medicaid Drug Switching Approaches2001 - 2008

0

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2005 2006 2007 2008

Year

Pe

rce

tag

e o

f S

tate

s

Prior Authorization

Generic Substitution

Preferred Drug List

Source: Avalere Health analysis using DataFrame®, a proprietary database of Medicare Part D plan features. 2008 data from November 2007; 2007 data from November 2006; 2006 data from July 2006.

Some Medicaid Programs Have Explicit Some Medicaid Programs Have Explicit Therapeutic Interchange and Therapeutic Interchange and

Therapeutic Substitution PoliciesTherapeutic Substitution PoliciesStateState StrategyStrategy DescriptionDescription

Washington Therapeutic Interchange

Under Washington’s Therapeutic Interchange Program (TIP), pharmacists must substitute a non-preferred drug with a preferred drug for prescriptions written by Medicaid-participating physicians who have endorsed the state’s PDL. Pharmacists must notify physicians of the substitution within 24 hours; physicians can override the substitution by writing “dispense as written” on the prescription. Non-preferred drugs prescribed by non-endorsing physicians are still subject to prior authorization.

Wisconsin Therapeutic Interchange

Pharmacists receive an enhanced dispensing fee if they contact a Medicaid prescriber and the prescriber agrees to change a prescription from a non-preferred drug to a preferred drug.

North Carolina

Therapeutic Interchange and Substitution

Medicaid recipients with more than 11 monthly prescriptions must participate in the Focused Risk Management (FORM) program, facilitated by the recipients’ pharmacists. Under FORM, pharmacists perform a comprehensive drug regimen review to identify opportunities for therapeutic interchange.

Source: State Medicaid websites

Drug Switching Can Lead to Drug Switching Can Lead to Poor Clinical Outcomes and Poor Clinical Outcomes and Higher Medical UtilizationHigher Medical Utilization

1. Less Effective Treatment

2. Side Effects

3. Drug Interactions

1. Less Effective Treatment

2. Side Effects

3. Drug Interactions

Poor Clinical Poor Clinical OutcomesOutcomes

Poor Clinical Poor Clinical OutcomesOutcomes

Drug Switching Can Lead To:

Higher Higher Medical Medical

UtilizationUtilization

Higher Higher Medical Medical

UtilizationUtilization

Populations Potential Problems

Patients with multiple conditions

Increased risk of adverse events from taking multiple medications1,2

Elderly patients Age and disease-induced changes can affect absorption, distribution, metabolism, and elimination of medicines2

Likely to have multiple comorbidities (In 2002 50% of Medicare beneficiaries had 5+ chronic conditions)2

Patients with certain conditions(List of conditions is not exhaustive)

Mental illness HIV/AIDS Alzheimer’s

Cancer Epilepsy Multiple Sclerosis

Clinical Implications of Drug Switching Are Clinical Implications of Drug Switching Are Particularly Severe and Frequent In Certain Particularly Severe and Frequent In Certain

PopulationsPopulations

Sources: 1NAMI comment letter on Formulary Guidance, 2005; 2“Medication Use by Aged and Disabled Medicare Beneficiaries Across the Spectrum of Morbidity: A Chartbook” The Peter Lamy Center on Drug Therapy and Aging, University of Maryland School of Pharmacy, 2007.

OTHER CONSIDERATIONSOTHER CONSIDERATIONS

Drug Switching Practices: Often Not Drug Switching Practices: Often Not Transparent To Patients and May Have Transparent To Patients and May Have Negative Impact on Their ExperienceNegative Impact on Their Experience

When asked by reporters if patients moved from Lipitor to generic Zocor were aware that their physicians were paid $100 per patient switched, a spokeswoman for Blue Cross Blue Shield of Michigan said, “not specifically.”

A former Lipitor patient’s response to the information?

“I’m shocked. They’re paying the doctors?”1

Source:1The Boston Channel, “Doctors Paid to Switch Patients to Generic Drugs,” August 1, 2007

May not inform patient of potential switches due to: Limited time with patient Lack of familiarity with

patient’s insurance plan May have undisclosed

financial incentive

May not inform patient of switches due to: Limited time with patient Pharmacy or insurance

policies

Even when provided an explanation, patients may not understand reasons for drug switch or differences between medications

Physician Prescribes Medication

Pharmacist Dispenses Medication Patient Uses Medication