spending more on pharmaceuticals: good news, bad news or the … · 2002-07-21 · anti-diabetics...
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Spending More on Pharmaceuticals:Spending More on Pharmaceuticals:Good News, Bad News or the WrongGood News, Bad News or the WrongQuestionQuestion
November 17, 2000November 17, 2000 Robert W. Dubois, MD, PhD Robert W. Dubois, MD, PhD
Protocare SciencesProtocare Sciences
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1.1. How much growth has occurred?How much growth has occurred?
2.2. What could cause growth?What could cause growth?
3.3. Is it price or volume?Is it price or volume?
4.4. Is the volume appropriate?Is the volume appropriate?
5.5. Is spending growth bad news or good news?Is spending growth bad news or good news?
6.6. Are we asking the right question?Are we asking the right question?
Outline: Pharmaceutical SpendingOutline: Pharmaceutical Spending
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Prescription Drug SpendingPrescription Drug Spending
0
20
40
60
80
1970 1980 1990 1999
5.55.512.012.0
37.737.7
101101
(7.5%*)(7.5%*) (4.9%*)(4.9%*) (5.4%*)(5.4%*) (8.2(8.2%*)%*)
BillionBillion($)($)
*Percentage of health expenditures*Percentage of health expendituresIglehart, N Engl J Med, 1999, HCFA Office of the ActuaryIglehart, N Engl J Med, 1999, HCFA Office of the Actuary
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Do Rising Drug Costs Explain The Increase inDo Rising Drug Costs Explain The Increase inPrivately Covered Medical Costs?Privately Covered Medical Costs?
Drug Cost IncreaseDrug Cost Increase 13.8%13.8%
Drug Component Drug Component
of Health Care x 12.4%of Health Care x 12.4%
1.7% of Total Increase (6%)1.7% of Total Increase (6%)Due to DrugsDue to Drugs
28%28%DrugsDrugs
72%72%OtherOther
Proportion of IncreaseProportion of IncreaseDue to RXDue to RX
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Conceptual Model for Growth inConceptual Model for Growth inDrug ExpendituresDrug Expenditures
Demographic ChangesDemographic Changes
§§ Multiple medicalMultiple medicalproblemsproblems
§§ Disease ProgressionDisease Progression
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Conceptual Model for Growth inConceptual Model for Growth inDrug ExpendituresDrug Expenditures
ÒPrevalenceÓ (or patient volume)ÒPrevalenceÓ (or patient volume)
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Conceptual Model for Growth inConceptual Model for Growth inDrug ExpendituresDrug Expenditures
Changes in Drug MixChanges in Drug Mix
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Conceptual Model for Growth in Drug ExpendituresConceptual Model for Growth in Drug ExpendituresQuantityQuantity
Rx1Rx1
ÒUse PRNÓ
Change in Days SupplyÒUse DailyÓ
Change in Scripts/Pt. - YearÒUse on Chronic BasisÓMarch 1 Sept. 1
Rx2Rx2
Rx1Rx1 Rx2Rx2 Rx3Rx3 Rx4Rx4
March 1 June 1May 1April 1
March 1 Sept. 1
Rx1Rx1
Rx1Rx1
Rx2Rx2
Rx2Rx2
01100-nwDubois 8
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Conceptual Model for Growth inConceptual Model for Growth inDrug ExpendituresDrug Expenditures
New ProductsNew Products
§§ ReliabilityReliability
§§ Crash SurvivabilityCrash Survivability
§§ ComfortComfort
§§ Smog EmissionSmog Emission
$40,000$3,000
01100-nwDubois
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Conceptual Model for Growth inConceptual Model for Growth inDrug ExpendituresDrug Expenditures
Price InflationPrice Inflation
$2$2$3$3
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Study MethodologyStudy Methodology
§§ Performed by Protocare Sciences and MedstatPerformed by Protocare Sciences and Medstat
§§ Data from health plans and employersData from health plans and employers
§§ 3 year time interval (1994 vs. 1997, 19953 year time interval (1994 vs. 1997, 1995vs. 1998, 1997 vs. 1999)vs. 1998, 1997 vs. 1999)
§§ Controlled for changes in populationControlled for changes in population
§§ Examined Examined actual actual expendituresexpenditures¥¥ Pharmacy charge (co-pay, Plan benefit)Pharmacy charge (co-pay, Plan benefit)
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Methodology of Current Study Methodology of Current Study (contÕd)(contÕd)
§§ Disease/Class specific analysisDisease/Class specific analysis¥¥ Anti-diabeticsAnti-diabetics¥¥ Anti-depressantsAnti-depressants¥¥ Anti-lipidemicsAnti-lipidemics¥¥ Gastrointestinal drugsGastrointestinal drugs¥¥ Hormone replacement therapyHormone replacement therapy¥¥ Anti-histaminesAnti-histamines¥¥ AsthmaAsthma
50% ofTotal RxDollars
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Examples from Key Diseases and DrugExamples from Key Diseases and DrugClassesClasses
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All DiseasesAll Diseases
19
66
21
73
14
53
28
98
12
82
3
40 63
156
-25
25
75
125
175
225
Anti Depressants Asthma
Volume
Price
94%
43%
67%85%
126%
94%
219%
3 Year3 YearGrowthGrowth
t
Anti-depressants
Anti-diabetics
Antihyper-lipidemics
Asthma Gastro-intestinal
HormoneReplacementTherapy
Anti-histamines
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Factors Responsible for Growth in Factors Responsible for Growth in AntihyperlipidemicsAntihyperlipidemics1997-19991997-1999
0%
20%
40%
60%
80%
100%
120%
140%
PerEligible
Inflation Mix ofEstablished
Products
EstablishedProducts
NewEntrants
EstablishedDrugs
NewEntrants
PrevalencePricesof
NewEntrants
Days ofTherapyper Rx
Rxs perPerson
Price FactorsPrice Factors Volume FactorsVolume FactorsSource: MedstatSource: Medstat01100-nw
Dubois 16
PricePriceFactorsFactors
VolumeVolumeFactorsFactors
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Changes in Lipid Care*Changes in Lipid Care*
New ScienceNew Science
Best PracticeBest Practice
More PatientsMore Patients
§§ Lipid reduction can stopLipid reduction can stopprogression and may reduceprogression and may reduceatherosclerosisatherosclerosis
§§ Routine lipid screeningRoutine lipid screening
§§ Ease ofEase of statin statin use improves use improvescompliancecompliance
§§ Result of screeningResult of screening
§§ Patient awarenessPatient awareness
*1997 vs. 1999 (66,270 patients in Ô99)*1997 vs. 1999 (66,270 patients in Ô99)
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0%
50%
100%
150%
200%
PerEligible
InflationMix of
EstablishedProducts
EstablishedProducts
NewEntrants
EstablishedDrugs
NewEntrants
PrevalencePricesof
NewEntrants
Days ofTherapyper Rx
Rxs perPerson
Price FactorsPrice Factors Volume FactorsVolume Factors
VolumeFactors
PriceFactors
01100-nwDubois 18
Growth in Hormone Replacement TherapyGrowth in Hormone Replacement Therapy 1995-1998 1995-1998
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Factors Responsible for Growth in all Factors Responsible for Growth in all Asthma-RelatedAsthma-RelatedTherapy 1995-1998Therapy 1995-1998
-40%
-20%
0%
20%
40%
60%
80%
100%
PerEligible
Inflation Mix ofEstablished
Products EstablishedProducts
NewEntrants
EstablishedDrugs
NewEntrants
PrevalencePricesof
NewEntrants
Days ofTherapyper Rx
Rxs perPerson
Price FactorsPrice Factors Volume FactorsVolume Factors
VolumeFactors
PriceFactors
01100-nwDubois
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Appropriateness of Lipid TherapyAppropriateness of Lipid Therapy
HierarchyHierarchy
�� Prior ÒeventÓ (MI, CABS/PTCA)Prior ÒeventÓ (MI, CABS/PTCA)
�� Vascular Disease (Angina, PVD, CVD)Vascular Disease (Angina, PVD, CVD)
�� Diabetes or Multiple Risk FactorsDiabetes or Multiple Risk Factors
�� Single Risk FactorSingle Risk Factor
�� HypercholesterolemiaHypercholesterolemia
�� No ReasonNo Reason
2¡ Prevention
1¡ Prevention
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1.1. How much growth has occurred?How much growth has occurred?
2.2. What could cause growth?What could cause growth?
3.3. Is it price or volume?Is it price or volume?
4.4. Is the volume appropriate?Is the volume appropriate?
5.5. Is it bad news or good news?Is it bad news or good news?
6.6. Is it the right question?Is it the right question?
Outline: Pharmaceutical SpendingOutline: Pharmaceutical Spending
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Cause of Rising VolumeCause of Rising Volume
Hypothesis: Hypothesis: Are the increases in volume due toAre the increases in volume due tomore patients receiving more prescriptions formore patients receiving more prescriptions forappropriate/high value situations?appropriate/high value situations?
Pre-DTCPre-DTC Post-DTCPost-DTC
ororAppropriateAppropriate
AppropriateAppropriate
InappropriateInappropriate InappropriateInappropriate
AppropriateAppropriate
InappropriateInappropriate
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0
25
50
75
100
76%76%
61%61%
10.3%10.3%13.5%13.5%
00 11
%%PatientsPatients
Number of Canister Claims per PatientNumber of Canister Claims per Patient
Utilization of Inhaled CorticosteroidsUtilization of Inhaled Corticosteroids
19951995
19981998
3+3+22
7.4%7.4%
18.5%18.5%
9%9%5.0%5.0%
Source: Protocare SciencesSource: Protocare Sciences
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0
50
100
150
200
250
300
350
400
45019951995
19981998
424424393393
163163128128
ERER($430 each)($430 each)
HospitalizationsHospitalizations($11,037 each)($11,037 each)
# per# per1,0001,000
Rate per 1,000 AsthmaticsRate per 1,000 Asthmatics
Asthma Related Hospital and ER UseAsthma Related Hospital and ER Use
Source: Protocare SciencesSource: Protocare Sciences
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0
100
200
300
400
Cost Savings
$224
$399
Per Patient($)
Resource Use Offset: AsthmaResource Use Offset: Asthma
RxRxIncreaseIncrease
SavingsSavings(ER/hosp)(ER/hosp)
Source: Protocare SciencesSource: Protocare Sciences
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1.1. How much growth has occurred?How much growth has occurred?
2.2. What could cause growth?What could cause growth?
3.3. Is it price or volume?Is it price or volume?
4.4. Is the volume appropriate?Is the volume appropriate?
5.5. Is spending growth bad news or good news?Is spending growth bad news or good news?
6.6. Is it the right question?Is it the right question?
Outline: Pharmaceutical SpendingOutline: Pharmaceutical Spending
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Market Responses to Rising VolumeMarket Responses to Rising Volume
§§ Be happy?Be happy?
§§ AdministrativeAdministrative¥¥ more excluded drugsmore excluded drugs¥¥ defined benefit ($1000/year)defined benefit ($1000/year)¥¥ higher co-payshigher co-pays¥¥ prior authorization for chronic therapiesprior authorization for chronic therapies