INTELLIGENCE, INSIGHTS, AND OPPORTUNITIES FOR ACTION

Non-adherence can mean that you’re not getting optimal results from your pharmacybenefit investment.

“Take your medicine as directed.” It sounds simple, but if it were, people would probablybe better at it than they are. Research consistently shows that only a fraction of patientscomply with their doctor’s directions regarding drug therapy (see story above). What’s more,those who are on long-term therapy for chronic conditions have the greatest rates of non-adherence.

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IN THIS ISSUE■ ADHERENCE INDEX

A New Tool to Identify PotentiallyHigh-Risk Plan Participants

■ CATEGORY TO WATCH: STATINSWill New Cholesterol GuidelinesIncrease Utilization?

■ MEDICARE:Caremark Administers Pilot of Part D Drug Benefit

TrendsRx QuarterlyCAREMARK

The Caremark Adherence Index™

Healthcare ManagementStrategies:Supporting Compliance, Controlling Cost, Improving Care

In 200l, Pitney Bowes began an experiment.They lowered co-pays for diabetes andasthma drugs to see whether makingthese prescriptions less expensive wouldencourage employees to take their drugsmore regularly. They knew they might bespending more on these prescriptions; thequestion was, would they be spendingless on overall healthcare for theseparticipants?

It was an uncommon strategy. They wereplanning to lower participant cost sharerather than raise it, encourage increasedutilization rather than attempt to lower it,and look at their pharmacy benefit as ameans to help control healthcare spendoverall, rather than add to it.

As reported in the Wall Street Journal(May 10, 2004), Pitney Bowes’ strategysucceeded. According to Jack Mahoney,M.D., corporate medical director at PitneyBowes, average annual cost for aparticipant with diabetes fell about 6percent. For a participant with asthma,

average annual cost fell about 15 percent.Overall, the company expects to save atleast $1 million in 2004 on participantswith these conditions.

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November 2004

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Prelude to the experiment

Concerned about their rising healthcare costs,Pitney Bowes wanted to identify plan participantswho were most likely to become high-costclaimants. Surprisingly, data analysis revealed thatlow possession rates of chronic medications were amore accurate predictor of disease progression thanpresence of the disease itself. (For more onmedication possession, see “The CaremarkAdherence Index™”, cover story.)

For people with chronic conditions, appropriateutilization of medicine—adherence to prescribedtherapy—is crucial. If your goal is to optimizehealthcare investments, these are the people youwant to have filling their prescriptions.

At Pitney Bowes, now a Caremark client andformer AdvancePCS client, lowered co-pays didresult in more prescription refills. There were alsomore refills for some comparatively costly, butconvenient, combination drugs, such as Advair®, acombination of two inhaled asthma drugs. Whileprescriptions for such maintenance drugs increased,the company’s benefit cost associated with“rescue” medications decreased significantly, as didthe number of emergency room visits,hospitalizations, and physician office visits—producing substantial overall savings on PitneyBowes’ healthcare spend.

Knowing what works

Caremark healthcare and disease managementprograms and strategies employ nationally recognized evidence-based guidelines.These guidelines define specific practices that have been shown in research to produce optimal health outcomes.

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About adherence

Medication non-adherence is a major healthcareproblem. One study involving plan participants withchronic or long-term conditions in the U.S. foundthat:1

■ only 1/3 took their medication as prescribed,

■ 1/3 took their medicine infrequently, and

■ 1/3 didn’t take their medicine at all.

Non-adherence often leads to complications due toillness and even death. This, in turn, can increasetotal healthcare cost. A study published thissummer and funded by the National Institute onAging found that middle-aged and older Americanswith heart disease who cut back on their prescribedmedications because of cost were 50 percent morelikely to suffer heart attacks, strokes, or angina thanthose who did not.2 The cost of medication non-adherence in the United States is estimated at $100billion annually, including hospitalizations, nursinghome admissions, ambulatory costs, and lostproductivity.3, 4

Why don’t they take their medicine?

Researchers have identified multiple reasons fornon-adherence. Medication cost is one factor, butpeople may also have trouble getting to thepharmacy to pick up their prescription. They waittoo long to order their refills, find it difficult tomanage therapy for multiple conditions, worryabout side effects, doubt that their drug is “working,”or simply have trouble getting the bottle open.

Healthcare Management StrategiesCONTINUED FROM PAGE 1

1. E-Pill Medication Reminders. Plan participant compliance statistics and references. Available at http://www.epill.com/epill/statistics.html from Hayes, R.B. NCPIE Prescription Month, October 1989.

2. Heisler, Michelle. National Institute on Aging, part of U.S. NIH, published in Medical Care, a journal of the American Public Health Association.

3. O’Hara D. Given but not taken: when your plan participants don’t take their medicines. AMNews correspondent. Feb 4, 2002. Available at: http://ama-assn.org/amednews/2002/02/04/hlsa0204.htm

4. Noncompliance with Medication Regimens: An Economic Tragedy. Emerging Issues in Pharmaceutical Cost Containing. Washington, DC: National Pharmaceutical Council. 1992; 1-16.

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Name PlaceholderTrendsRx QuarterlyCAREMARK ®

Beyond following their prescription guidelines,individuals with chronic conditions face otherchallenges in their therapy—includingrecommended dietary guidelines, lifestyle changes,follow-up testing, and preventive care such asvaccinations. Implementing such changes andadhering to recommended therapy could bedifficult even for healthy people.

Healthcare management strategies

There is growing recognition among providers,public health officials, legislators, analysts, andpayors that high-cost, or potentially high-cost,participants call for additional support in meetingthese challenges and managing their conditions.To be effective, such support needs to beindividualized, targeted appropriately, and, in manycases, ongoing. Caremark has developed a rangeof capabilities and strategies to support our clientsin meeting these needs.

Caremark healthcare management strategies offerseveral unique advantages:

■ Pharmacy claims are an early-warning system. Medical claims typically take three weeks to a month to be entered into a data system. Pharmacy claims are generally entered the day a plan participant receives a prescription.

■ The pharmacy benefit is the most-used medical benefit, providing greater frequency of data and more opportunities for intervention.

■ Our analytics and predictive modeling capabilities allow us to identify the plan participants who are most likely to increase their utilization of medical services in the next year. Our analysts can work with pharmacy claims alone, although the integration of medical claimsenhances results. (For more information on thesecapabilities, see “The Caremark Adherence Index™”, cover story.)

■ Mail service pharmacy supports a variety of intervention strategies to encourage optimal therapy. Utilizing mail service also eliminates the need for the plan participant to get to a retail pharmacy.

Examples of Caremark Healthcare ManagementStrategies

■ Case management for chronic conditions, including rheumatoid arthritis, multiple sclerosis, lupus, hemophilia, and more.

■ Specialty pharmaceutical management, including distribution of specialty pharmaceuticals and necessary supplies, support for medication adherence, and appropriateness monitoring.

■ Disease management which utilizes individualized plan participant support and education for common chronic conditions such as asthma, diabetes, and heart disease.

■ Interventions alerting physicians to gaps in care and providing recommendations regarding plan participants at risk for chronic diseases.

Every plan population has potentially high-cost participantswho are likely to spend substantially more on overallhealthcare over time. Consult your Caremark accountrepresentative to discuss how we can help identify theseindividuals and provide the support that will reduce the risk ofadverse health events and progression of disease.

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■ Our continuum of intervention strategiesallows us to tailor our services to meet the needsand goals of the plan sponsor and the particular plan participant. Our clinical pharmacists and consultants can contact the prescribing physician by phone, fax, or mail. Plan participants can be sent health education materials or contacted directly by a clinician or Caremark representative.Contact can be one-time or recurring.

■ Our tracking systems and proven outcomes capabilities allow us to measure savings and results and guide continuous quality improvements to achieve optimal results in termsof cost and participant well-being.

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Adherence consists of two major components—compliance and persistency. Compliance describes howwell a plan participant follows the prescribed therapyregimen. It is measured as a ratio and compares thequantity of the drug that is actually taken to thequantity that needs to be taken according to thephysician’s directions. Persistency refers to the length oftime that a plan participant follows the treatmentregimen. A plan participant can be compliant, but cuttherapy short—low persistency. Or the individual maypartially comply for the full duration of recommendedtherapy. Either deviation can negatively impact theeffectiveness of therapy and health outcomes.

Historically, the Medication Possession Ratio (MPR) hasbeen used to measure adherence. However, MPRmeasures only the quantity of medication in the planparticipant’s possession—compliance. Especially for planparticipants with chronic conditions and prescriptionsfor long-term, maintenance medications, MPR tells onlyhalf the story.

In an effort to rectify that imbalance, the CaremarkAnalytics and Outcomes team developed theAdherence Index™ (AI), a unified measure ofcompliance and persistency at a plan participant level.Our analysts have found that this combined measuredemonstrates a stronger correlation with totalhealthcare utilization and costs than the historicstandard, MPR.

Using historical data to learn and predict

The analytics and outcomes team conducted extensiveanalysis using integrated medical and pharmacy data tocorrelate AI to total healthcare costs for 19 chronicconditions. This evaluation revealed that:

■ Plan participants with higher AI scores consistently have lower overall total health costs.

■ Plan participants using our mail service pharmacy have higher AI scores. Mail service supports adherence because it provides the timely opportunity for clinical review of each prescription and appropriate intervention to support optimal therapy.

Defining predictors of non-adherence—such as age,complexity of recommended therapy, and behavior—allows us to identify potentially high-risk planparticipants. Such prediction, in turn, helps to identifyactionable adherence interventions to educate planparticipants and provide the behavioral skills to supporttherapy adherence.

The Caremark Adherence Index™

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Mine your data

Caremark has a suite of proprietary analytic and predictive modeling tools designed to help plan sponsors identify future needs in order to optimize the use of resources for pharmaceutical and comprehensive health management. Ask your Caremark account representative for more information on these tools.

Higher AI scores have been correlatedwith lower overall healthcare costs for:

■ Cardiovascular diseases including high blood pressure, high cholesterol, and congestive heart failure

■ Thyroid disease■ Diabetes■ Glaucoma ■ HIV■ Hepatitis C■ Alzheimer’s disease■ Depression, anxiety, and other behavioral health

conditions■ Neurological diseases■ Epilepsy/seizure disorders■ Rheumatoid arthritis■ Multiple sclerosis

TrendsRx QuarterlyCAREMARK

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Tren

d Re

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Gross Trend: 8.9%rend slowed down in the third quarter inthe Caremark Book of Business. Althoughwe are seeing increased utilization in all top-

spend categories, the rate of growth inutilization has slowed. Utilization continued todecrease in the non-sedating antihistamines (NSAs,6% decrease) and the estrogens (13-15%decrease). Increases in the proton pump inhibitors(PPIs, 1-2%), the non-steroidal anti-inflammatories(NSAIDs, 3-4%), and the selective serotoninreuptake inhibitors (SSRIs, <2%) were moderate toflat. Our trend number demonstrates the benefitsof the availability of generic and OTCalternatives in several of these categories.

Stricter cholesterol guidelines, additional indicationsfor Lipitor®, and the introduction and marketing ofnew statins and combination products help toaccount for increased utilization—almost 14%—inthe top-spend cholesterol category. Analystsexpect this trend to continue (see page 7).Anticonvulsants and specialty and biotech productsalso experienced increases.

While utilization of antidepressants increasedsomewhat, the availability of generics for productssuch as Paxil®, Prozac®, and Wellbutrin® helped toblunt the impact on spend. The Caremark analyticsteam is closely monitoring pediatric spend onantidepressants, which had been increasing, toevaluate the effect of new FDA safetyrecommendations (see page 6).

The manufacturer’s recall of COX-II inhibitor Vioxx®

caused immediate market shifts. Two weeks afterthe recall, national data* indicated that most Vioxxusers (70%) who switched migrated to anotherproduct within the category, with Celebrex®

benefiting a bit more than the more recentintroduction Bextra®. NSAIDs also gained, withnewcomer Mobic® drawing 10% of Vioxx® switchers.We expect continuing shifts to NSAIDs —anddecreased spend in this category—in the months tocome due to ongoing concerns in the marketplaceabout the safety of the entire Cox-II class.

J u l y – S e p t e m b e r 2 0 0 4

TrendsRx® Quarterly is a publication of Caremarkand was developed as an informational resourceproviding an overview of events anddevelopments in the pharmacy benefit andpharmaceutical industries. Please contact aCaremark representative to discuss possibleimpact on your specific pharmacy benefitprogram. If you are not a Caremark client andwould like to receive TrendsRx® Quarterly or tolearn more about Caremark services, pleasecontact David Joyner, Executive Vice President,Sales and Account Services, at 800-749-6199.

750 W. Carpenter Freeway, Suite 1200,Irving, TX 75039www.caremark.comTr

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Source: Caremark Analytics & Outcomes, Book of Business Data, 2004

Product Shift of Vioxx® Utilizers2 Weeks Post-Withdrawal

CELEBREX36%

NSAID18%

NSAID COMBO1%

BEXTRA33%

MOBIC12%

Price increases continue within the normal range.

Trend—the annual increase in the cost of providingprescription benefits to plan participants—iscalculated as gross cost per employee per month inthe Caremark Book of Business.

*Business Wire Oct. 6, 2004

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legislative and regulatory updatesq 3 2004

population. Members believed access to thesetherapies was important for those who couldbenefit. The hearings also highlighted issuesrelated to disclosure of research from clinicaltrials. A group of influential medical journals,including the Journal of the American MedicalAssociation, announced plans to stop publishingthe results of clinical trials unless a trial isregistered at its outset in a public database.Meanwhile, legislators announced plans to call forsuch a registry.

Federal definitions

A recent decision by the Centers for Medicare andMedicaid Services to change its policy on obesitycould open the door to wider coverage ofstomach surgery and other therapies that wouldreduce complications of obesity. For the timebeing, coverage of weight-loss drugs is not underdiscussion. In providing guidance on healthsavings accounts (HSAs), the TreasuryDepartment and the Internal Revenue Serviceclarified the meaning of preventive care. Diseasemanagement and certain prescription drugs—suchas antihypertensives and cholesterol drugs for heartattack prevention—will qualify as preventive care.

he Federal Trade Commission (FTC) andthe Department of Justice issued a report,“Improving Health Care: A Dose of

Competition,” evaluating a number of issuesaffecting cost, quality and accessibility of health-care. Concerning PBMs, the report concluded thatrobust competition benefits consumers bylowering costs and improving quality.

Proposed rules for the Medicare ModernizationAct (MMA) drug benefit were released for publiccomment. Topics under discussion include theemployer subsidy provision and the proposed“blueprint” for the benefit’s drug list. TheCaremark Government Relations team isevaluating the proposed rules as we continue toassess how we can best support our clients’priorities under MMA provisions.

Enrollment in the interim drug discount programand initial enrollment in the MedicareReplacement Drug Demonstration (see page 8)has been less than expected, leading to calls for astepped-up public education program to ensurethat beneficiaries take advantage of these savingsopportunities. The Medicare drug benefit was alsolinked to a record increase in Medicarepremiums for 2005.

New estimates from the U.S. Census Bureau putthe number of uninsured at 45 million. In itsannual employer survey, the Kaiser FamilyFoundation cited an 11.2 percent increase in thecost of health coverage in 2004. While the rateof increase had slowed somewhat, continuingdouble-digit increases are leading some employersto drop or modify coverage, lowering thepercentage of people with job-based healthcoverage. Moreover, rising health costs havedeterred job growth according to some analysts.

Concerning safety and efficacy

Two U.S. Food and Drug Administration (FDA)advisory committees recommended thatantidepressants carry a “black box” warning abouttheir safety for use in children and adolescentsafter hearing testimony from families and healthprofessionals. The committees also advised againstcontraindicating these products in the pediatric

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TrendsRx QuarterlyCAREMARK ®

ombination and dual action products winapproval. Cholesterol-lowering combination drugVytorin® was approved by the FDA in July. Vytorin

combines the statin Zocor® and the absorption inhibitorZetia®, two drugs which target LDL (so-called bad)cholesterol in different ways. The two drugs together arebeing promoted as more effective than previous options.Recent revision of cholesterol guidelines for high-riskpatients could benefit sales of the newly-launched drug.(See story, below.)

Two HIV medicines, TruvadaTM (Viread® and EmtrivaTM) andEpzicomTM (Epivir® and Ziagen®), also won approval. Bothcombination drugs are indicated for use with other HIVmedicines and call for once-a-day dosing, simplifyingtreatment, and possibly increasing compliance.

Newly approved adult antidepressant Cymbalta® targetsnorepinephrine and serotonin, two brain chemicalsassociated with depression; it’s classed as aserotonin/norepinephrine reuptake inhibitor—an SNRI.Cymbalta is indicated for major depressive episodes andfor diabetic peripheral neuropathic pain.

Other news from the FDA. Campral® became the firstnew treatment for alcoholism to win approval in adecade. Top-selling statin Lipitor® is now also approved tolower risk of heart attack for people with risk factorsother than elevated cholesterol and to reduce the risk ofangina. Geodon®, originally indicated for schizophrenia,received an additional indication for the treatment ofacute bipolar mania. Aldara®, a topical cream, is nowapproved to treat superficial basal cell carcinoma inaddition to actinic keratosis—a pre-cancerous skinlesion—and external genital warts.

Thyroid drug levothyroxine sodium has been marketedfor many years, both under common trade namesincluding Synthroid® and Levoxyl® and by the genericname. Recently, for the first time, selected labelers gainedapproval of their bioequivalency studies allowing the FDAto call specific generic and brand products therapeuticallyequivalent. The new A-rating does not apply to everygeneric and brand product, but assures physicians,pharmacists, and patients that A-rated generic substituteswill provide the same clinical effect as the brand product.Synthroid has been cited as the second most prescribeddrug in the United States with annual sales of over $800million.

phar m aceu t ical p i pel ineu p dat e

Category to Watch: StatinsThis summer the National Cholesterol EducationProgram (NCEP) issued new, more aggressiveguidelines for people at high and moderatelyhigh risk of coronary heart disease. Wall Streetanalysts expect a 25 percent to 50 percentincrease in statin utilization as a result ofthese updated guidelines, increasing drug spendin this already highly utilized class. Caremarkexperienced a significant increase in this class in2001 after the last NCEP guideline update. Theresult for plan participants who comply withtherapy over the long-term may be better healthoutcomes and a reduction in heart attacks andother serious cardiovascular events. Caremarkclinical pharmacy and disease managementprograms can support your plan participants incomplying with statin therapy and getting thebest results from their (and your) prescriptioninvestment.

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Caremark role

Caremark has been contracted to provide benefitadministration, retail network management, and mailservice through Caremark Specialty Pharmacy Services.Caremark is providing the full range of MRDD-coveredmedications, 24/7 clinical support from a pharmacist-led CareTeam, and savings through competitive pricingand free shipping and supplies.

Transitioning from receiving medication in a physician’soffice to self-administration can add to an alreadychallenging treatment regimen. The support providedthrough our Specialty Pharmacy Services is crucial inmaintaining and even improving compliance andmedical outcomes for these patients.

Our experience with MRDD will provide in-depth, first-hand knowledge of claims adjudication, reportingrequirements, actuarial modeling, plan participant cost-sharing strategies, and other provisions of the newdrug benefit. This will provide crucial insight as wework with plan sponsors to evaluate how best to servetheir retiree population.

Caremark continues to be closely involved in theFederal rule-making process to improve and clarify theintent of Medicare Part D. Clients interested in learningmore about our Medicare experience, including initialPart D administration, can contact Adina Safer at1-469-524-4712.

Medicare beneficiaries with limited drug coverage,including employer-sponsored supplementalprescription drug coverage, may be eligible for MRDD.They can learn more about the program by callingTrailBlazer Health Enterprises toll-free at 1-866-563-5386.

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©2004 Caremark Inc. All rights reserved.

CTC1811-1004

Caremark Administers Medicare Pilot Project,First Trial of the Part D Drug BenefitAs the PBM chosen to administer the MedicareReplacement Drug Demonstration (MRDD),Caremark is providing pharmacy benefitmanagement and specialty pharmacy services to agroup of up to 50,000 Medicare beneficiaries over a16-month period.

When it goes into effect in 2006, Part D of theMedicare Reform Bill will introduce sweepingchanges in the healthcare marketplace, affectingretirees, employers, and the benefit andpharmaceutical industries. Implications andimplementation of the bill have been underdiscussion throughout 2004, but the MedicareReplacement Drug Demonstration will provide thefirst actual experience with its provisions.

Moving away from the physician’s office

MRDD provides coverage for more than two dozenself-injected or oral “specialty” drugs, which can beused to replace drugs normally provided in aphysician’s office. Forty percent of allotted funding isdedicated to oral cancer drugs; other selectedproducts are used to treat multiple sclerosis, hepatitisC, rheumatoid arthritis, and other conditions. Mostcovered drugs are high cost, ranging from $1,200up to $4,200 per month. The program requires thesame cost-sharing structure as Medicare Part D,incurring significant out-of-pocket expense for planparticipants. However, beneficiaries with no othercoverage who are using these products have theopportunity to save tens of thousands of dollars per year.

Centers for Medicare/Medicaid Services developedthe program to significantly improve access to self-administered medications for severely illbeneficiaries. The program will be monitored toevaluate savings in overall medical costs.

MRDD Covered Drugs Include:

■ Copaxone®, Rebif®, Avonex®, Betaseron® – multiple sclerosis

■ Gleevec®, Iressa®, Thalomid®, Targretin® – cancer

■ Enbrel®, Humira®, Kineret® – rheumatoid arthritis

■ Pegasys®, Peg-Intron® – hepatitis C

■ Tracleer® – pulmonary hypertension