Life Science Compliance Update

8 posts categorized "Pharmacy"

February 18, 2015

AstraZeneca Pays $7.9 Million To Resolve Kickback Allegations Related to PBM Formulary Placement


AstraZeneca last week settled with the Department of Justice over allegedly offering kickbacks to Medco Health Solutions, a pharmacy benefits manager, in exchange for Medco maintaining AstraZeneca’s drug Nexium in favorable status on its formulary. AstraZeneca settled the allegations for $7.9 million. 

A drug’s listing as “brand-preferred” on a pharmacy benefit manager’s formulary is crucial to a brand. Pharmaceutical companies want to be on a formulary so that when a physician writes a prescription for Nexium, for example, the patient can get it covered under their insurance when they walk into a pharmacy. 

Price negotiations between pharmaceutical companies and pharmacy benefits managers (PBMs) have been criticized for being too secretive. While this settlement may indicate a trend towards greater scrutiny into the manufacturer-PBM relationship, it does little to draw a definite line between a seemingly permissible rebate (that theoretically is passed on to the customer) and illegal kickbacks.

According to a Department of Justice's press release issued on February 11, AstraZeneca gave Medco “concessions” on other drugs, such as Prilosec, Toprol XL and Plendil, as long as the PBM made Nexium the “sole and exclusive” drug of its kind on certain formularies and other marketing activities. 

The United States contended that this arrangement between AstraZeneca and Medco (bought by Express Scripts in 2012) violated the Federal Anti-Kickback statute, and thereby caused the submission of false or fraudulent claims for Nexium to the Retiree Drug Subsidy Program.

Drug Tiers

The allegations were initially made in a whistleblower lawsuit filed in 2010 by two high ranking former AstraZeneca employees – Paul DiMattia, a former executive director of commercial operations, and F. Folger Tuggle, who had been a managed markets account director in charge of the Medco account. The two relators will split $1,422,000 from the settlement. 

Interestingly, many of the relators' chief allegations in the original complaint are left out of the DOJ press release. The original 2010 whistleblower lawsuit focused on the fact that AstraZeneca did not offer similar discounts to government healthcare programs as required by the Medicaid “best price” rebate system, which requires drugmakers to enter an agreement with the Centers for Medicare & Medicaid Services and state Medicaid agencies to offer the state either 23.1 percent of the Average Manufacturer Price (AMP), the average price wholesalers pay to manufacturers for drugs sold to retail pharmacies, or the best price obtained on the private market, whichever is the greater rebate.

The complaint stated:

"Ignoring its [ ] legal obligations, AZ never reported the substantial sums paid in illegal inducements to Medco to secure a favorable formulary position for Nexium…which would have significantly undercut Nexium's profitability."

"The illegal inducements/discounts and rebates AZ provided Medco were subject to “best price” reporting requirements.”

"AZ's intentional circumvention and misreporting of its Nexium best price was intended by AZ to deprive, and fraudulently did deprive the federal government and states of discounts and/or reimbursement in the hundreds of millions of dollars or more over the relevant period." 

Writing what was probably on a lot of people’s minds, Ed Silverman of the Wall Street Journal noted that this $7.9 million settlement “is rather small compared with the $3.6 billion in revenue that Nexium generated last year and the sometimes sizeable payouts made by drug makers to resolve allegations over kickbacks to physicians or illegal marketing.” Indeed, the original complaint alleged that AstraZeneca’s “intentional circumvention and misreporting of its Nexium best price was intended…to deprive, and fraudulently did deprive the federal government and states of discounts and/or reimbursement in the hundreds of millions of dollars or more over the relevant period.”

The small settlement figure compared to the underlying allegations perhaps corroborates AstraZeneca’s statement denying fault: "It is in the best interests of the company to resolve these matters and to move forward with our business of discovering and developing important, life-changing medicines - while avoiding the delay, uncertainty, and expense of protracted litigation,” the company stated. 

Silverman concludes that "[s]till, the case is interesting if only because it pulls back the curtain a wee bit on interactions with pharmacy benefit managers."


We will continue to follow enforcement action in the PBM space, especially as it relates to pharmaceutical pricing and transparency. The Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division stated that her office "will continue to pursue pharmaceutical companies that pay kickbacks to pharmacy benefit managers...Hidden financial agreements between drug manufacturers and pharmacy benefit managers can improperly influence which drugs are available to patients and the price paid for drugs.”


September 09, 2014

DEA Places Heavy Restrictions on Vicodin and Other Hydrocodone Combination Drugs; Gives Stakeholders 45 Days to Adjust

DEA Image


On Friday, August 22, the U. S. Drug Enforcement Administration (DEA) published their Final Rule moving hydrocodone combination products (HCPs) from Schedule III to the more restrictive Schedule II. The change will take effect 45-days from the Final Rule, so likely on Monday, October 6.

The Controlled Substances Act (CSA) places substances with accepted medical uses into one of four schedules, with substances with the highest potential for harm and abuse being placed in Schedule II, and substances with progressively less potential for harm and abuse being placed in Schedules III through V.  Schedule I is reserved for drugs with no currently accepted medical use and a high potential for abuse. 

The DEA may transfer drugs between schedules if they feel that more restrictions are needed for a particular product. They look at the drug’s potential for abuse, the potential to cause psychological or physical dependence, and whether it has a widely-accepted, current medical use.

Interestingly, pure hydrocodone is already on Schedule II. Before the new Final Rule, lower amounts of hydrocodone per pill (15 milligrams or less) or lower-potency pills combined with another pain-killing drug, such as Vicodin (a mixture of hydrocodone and acetaminophen), were placed in the less-restrictive Schedule III. Now the DEA has moved anything with hydrocodone up the schedule.

Many prescription drugs are not listed on the schedule because they are not considered to have a potential for abuse, such as blood pressure drugs and cholesterol lowering medication like Lipitor.

Schedule II v. Schedule III

The DEA's decision to move HCPs from Schedule III to Schedule II will impact practitioners who can prescribe drugs, but ultimately it will affect all industries involved in the manufacture, supply, and distribution of HCPs.

When the rule takes effect in early October:

  • Prescribers will no longer be able to authorize refills for HCPs and will be limited to prescribing a 30-day supply, although the DEA notes that prescribers can issue multiple prescriptions for up to a 90-day supply. Before this rule, doctors could prescribe a 180-day supply.
  • Patients will have to be seen by a doctor for a new prescription. Before this change, refills for HCPs such as Vicodin could be called in to a pharmacy.
  • Rescheduling will also change the process required to order and transfer HCPs from a distributor to a pharmacy. For Schedule III drugs, DEA registrants could transfer HCPs through simple invoices. Now all orders must be submitted on the official DEA Form 222, and separately from the pharmacy's usual bulk order of CIII-V drugs. When distributing, prescriptions must be defaced when filled and (depending on the pharmacy) require double counts of the pills filled and presentation of valid customer identification. 
  • Further, the new classification will place added burdens on manufacturers and distributors who will have to store HCPs in secure vaults (1301.72) rather than locked cages and will have to label all HCPs with a “C-II” designation. The DEA noted, however, that the packaging and labeling requirements applicable to manufacturers and distributors do not apply to dispensers such as pharmacies. The DEA specified that dispensers with HCPs in commercial containers labeled as Schedule III may continue to dispense these medications after the effective date of the final rule. Further, only manufacturers and distributors, and not retail pharmacies, are required to place Schedule II drugs in a locked vault. Retail pharmacies may disperse HCPs throughout their stock of non-controlled substances in a manner so as to obstruct the theft or diversion of the HCPs.

Reaction to the Schedule Change

The DEA’s stated purpose of the change was to minimize the misuse of the drugs for recreational purposes while still ensuring that patients with severe pain have reasonable access to the amount of drug needed to control their pain and suffering. 

“Almost seven million Americans abuse controlled-substance prescription medications, including opioid painkillers, resulting in more deaths from prescription drug overdoses than auto accidents,” said DEA Administrator Michele Leonhart, “[This] action recognizes that these products are some of the most addictive and potentially dangerous prescription medications available.”

The DEA received 573 comments on the proposed rule to reschedule HCPs. Fifty-two percent (298 comments) supported, or supported with qualification, controlling HCPs in schedule II. Forty-one percent (235 comments) opposed rescheduling HCPs into schedule II. Seven percent (40 comments) did not take a definitive position.

Many commenters indicated support for controlling HCPs in schedule II based on the scientific evidence demonstrating the high abuse potential of HCPs and evidence that HCPs may lead to severe psychological or physical dependence.

The State Attorney General and a U.S. Senator from West Virginia, the state with last year's highest per capita rate of prescription drug overdose in the nation, wrote in strong support of rescheduling HCPs: "rescheduling hydrocodone combination drugs would be a tremendous step forward in the fight to curb the prescription drug abuse epidemic that has ravaged our country. It will help prevent these highly addictive drugs from getting into the wrong hands and devastating families and communities. I urge the DEA to move quickly in finalizing its regulations so that we are able to save hundreds of thousands of lives."

Other commenters noted that rescheduling HCPs “would directly address the problem of 'leftover' pills in parents [sic] medicine cabinets, and would keep kids safe. Furthermore, lowering the quantity a doctor can prescribe will decrease the number of drugs that are sold on the street, which will in turn decrease crime and decrease HCP abuse overtime.”

The Schedule II requirements would also go a long way in reducing telephone fraud, where knowing a prescriber’s DEA number can be used to obtain a Schedule III drug from certain pharmacists.

Comments addressing the time limit and burden of the Schedule change:

Most commenters supported the policy behind the DEA's schedule change. However, certain groups in particular pointed out potentially negative consequences that could result. Of all comments submitted, in support and in opposition, 60% of pharmacists were opposed; 22% of the general public were opposed; and 91% of ultimate users were opposed.

  • Impact on patients in need

The comments in opposition touched on a wide variety of concerns, including a negative effect on access to important medications for patient access to medicine. The Institute of Medicine (IOM) estimates that as many as 100 million Americans suffer from some chronic pain. They believe that reclassifying HCPs might make it harder for those people with legitimate needs to get relief.

Furthermore, because accessing these drugs now requires more trips to the doctor’s office, this change could cost the health system millions of dollars each year. “Heading to a doctor may also be hard on elderly patients who are less mobile such as those being cared for by their children or those who live in long-term care facilities, meaning the new rules will keep the drug away from those who need it most,” notes Capital New York.

  • Effective Date and Short 45-Day Window to Comply

Several of the comments submitted by members of industry (manufacturers, wholesale distributors, veterinary distributors, retail pharmacies) and trade groups focused on the timeframe for implementation of various handling requirements. A national trade association comprised of manufacturers and distributors of generic pharmaceutical products requested that the DEA "allow sufficient time for all parts of the supply chain to integrate the new requirements into their business operations."

The DEA noted that similar requests were posed by an individual manufacturer of HCPs, a wholesale distributor, and a retail pharmacy/mail pharmacy service provider, each of whom proposed a blanket six month delay before the final rule would go into effect.

The DEA responded that generally DEA scheduling actions are effective 30 days from the date of publication of the final rule in the Federal Register. In order to ensure the continued availability of HCPs for legitimate medical use, while also ensuring they are not subject to misuse, abuse, and diversion, the DEA noted that a 45-day period is a “reasonable amount of time for registrants to comply with the handling requirements for a schedule II controlled substance and was established upon a full consideration of the totality of circumstances specific to HCPs.”

While the DEA acknowledges that the supply chain will need to plan and coordinate efforts, and may even need to temporarily modify existing ordering and inventory management practices, the DEA stated that they are required to consider the risk of diversion and risk to public health and safety of U.S. residents.

DEA took this time to explain that ”HCPs are being abused with adverse effects both individually and to the public health and safety, accordingly, it should be placed into schedule II as soon as practicable.”

“In order to prevent continued misuse, abuse and diversion, it is necessary to set an effective date for this scheduling action, including security and labeling requirements, with all reasonable haste," the Rule states. "After careful consideration of the risk to the U.S. public health and safety related to the diversion and abuse of HCPs, the DEA believes the 45-day effective date is reasonable.”

The DEA believes that a “45-day period will provide handlers of HCPs a reasonable amount of time to implement any one-time modifications to comply with the DEA regulations. Registrants are familiar with the applicable security regulations, and already have systems in place with respect to other schedule II controlled substances. Accordingly, it is reasonable to revise operating procedures, amend monitoring systems, and train staff with respect to HCPs as schedule II controlled substances within the 45-day compliance timeframe.”

  • Cost of Physical Security

Manufacturers and distributors must secure schedule II substances in a safe, steel cabinet or vault while schedule III substances may be stored in a less secure controlled substance cage or other enclosure.  Several commenters suggested that it would cost millions of dollars for distributors and retail pharmacies to obtain new vaults or increase the size of their vaults to accommodate for the influx of HCPs. Another commenter suggested that only a limited number of firms can build vaults that meet the requirements of the DEA and because of this, constructing a vault would be time consuming and costly.

The DEA’s response in a lot of categories was that “[s]cheduling determinations are based on scientific determinations regarding the drug or other substance's potential for abuse, its potential for psychological and physical dependence, and whether the drug or other substance has a currently accepted medical use in treatment in the United States. 21 U.S.C. 812(b). The DEA may not reschedule, or refuse to reschedule, a drug or other substance based on economic impacts.”

Furthermore, the DEA noted that retail pharmacies are not required by the CSA or DEA regulations to place schedule II controlled substances in a vault or safe. In accordance with 21 CFR 1301.75(b), pharmacies may disperse schedule II controlled substances throughout their stock of noncontrolled substances in such a manner as to obstruct the theft or diversion of the controlled substances.

  • Increased Record-Keeping

A pharmacy group was concerned that increased records and security requirements would increase workloads and require redesigning of pharmacy space in some cases. 

The DEA stated that they “do not find evidence to support the claim that the ordering process for schedule II controlled substances will result in limited availability of HCPs.” A DEA Form 222, or its electronic equivalent—the Controlled Substance Ordering System (CSOS)--is required for almost all distributions of schedule I or II controlled substances. This extra documentation enables the DEA to monitor the flow of these controlled substances from their point of manufacture through commercial distribution.

In terms of time commitment, DEA stated that “[i]t takes approximately an hour to complete each order using the paper DEA Form 222. It takes approximately three minutes to complete an order using CSOS… While CSOS transactions are faster, the paper DEA Form 222 orders are also able to be processed quickly through the system.” The DEA notes that in 2013, “109,632 registrants ordered schedule I or II controlled substances. About 4.8 million orders were processed on Form 222s and 924,257 were processed electronically via CSOS (approximately 16% of all orders). The paper orders represented roughly 27.7 million transactions (or about 6 per order); the electronic orders represented roughly 21.2 million transactions or slightly more than 23 per order.”


Given the widespread abuse of certain HCP products in the United States, the DEA's change in scheduling is appropriate and necessary. While we believe that patients and certain stakeholders along the supply and distribution chain would have benefited from more than 45-days to adjust to the Final Rule, we hope these strict regulations will better control the use and distribution of these drugs. 

October 17, 2013

Nearly Half of US Physicians Restrict Access by Manufacturer Sales Reps – New Strategies to Reach Physicians

With the Physician Payment Sunshine Act in full effect, the challenges that pharmaceutical sales representatives will face accessing physicians and other prescribers will only continue to grow as many practices, institutions and hospitals begin to update and change their policies in light of the increased transparency.

Consequently, a number of recent articles have highlighted the challenges sales reps are facing and some of the solutions and options companies have created to address these roadblocks.

For example, a new study from CMI/Compas found that half of physicians restrict visits from reps in one way or another. And the doctors reps want to see most—including oncologists and internists—are least likely to prefer a human face over other kinds of communication. In another recent study, ZS Associates found that almost 45% of prescribers restrict sales reps access—which is almost twice as large a share as the 23% who restricted access to their practices in 2008.

The ZS report incorporates sales-call reports from more than 200 different U.S. pharmaceutical sales teams. The report examines how often approximately 325,000 physicians and other prescribers meet with pharmaceutical sales representatives who visit them.

FiercePharma, which reported on both studies, noted that there is some good news for reps. For instance, the CMI/Compas study found that doctors do want information from drugmakers, whether from reps, or through e-detailing, email, direct mail and the like. And when it comes to information on brand-new drugs, doctors--even some oncologists--do like to talk with reps. Half of cancer docs said they'd chat about new products with reps, while 47% of them flagged email as a preference. 

However, the survey showed that oncologists are the "most restrictive specialists, with only 19% allowing reps in the door without restrictions." On the other side of the coin, 20% won't see reps at all, with the 40% in the middle either requiring appointments or limiting visits to particular hours of the day or week. The ZS Associates report found similar results with almost two-thirds (65%) of oncologists having "moderate to severe" rules governing rep visits. "[E]ven the best reps visit oncologists just once per month," ZS principal Ganesh Vedarajan said in a statement, with average reps managing to get in the door 7-8 times a year.

This is a drastic increase from 2008, when only 17% of oncologists restrict access to reps. "Access has continued to decline due to an increased number of oncology reps trying to reach the doctors and an increasing number of doctors joining institutions that severely restrict rep access."

Access by sales reps is also most restricted in areas with major cancer centers. For example, the MD Anderson Cancer Center, Mayo Clinic and Dana-Farber Cancer Institute are all located in metro areas that fall in the bottom 20 percent in terms of access to oncologists.

"Access has historically been challenging in academic institutions, so it's no surprise these places remain restrictive," said Vedarajan. "However, in recent years, we've seen a similar decrease in access to large group practices as they attempt to improve efficiencies and streamline their business models. In the same vein, parts of Texas, Georgia and Florida also have high access restrictions."

Accordingly, sales reps need other alternatives, particularly for oncologists, who said preferable alternatives include email, direct mail, and peer-to-peer programs. Alternatives are critical as companies continue to make high-profile targeted cancer drugs, particularly with the new pathways FDA has recently adopted and the patient-centered focus the agency will continue to adopt over the next few years.


The ZS Associates report did find that oncologists were more likely to open their doors "for reps with new drugs to offer," (33% more frequently) but such kindness closes "quickly—after about 6 months." "New information on existing drugs, such as new clinical trial data, helps as well, [w]hich means companies might want to consider their publication schedules accordingly, ZS says."

In addition, oncology reps with three or more products are able to visit physicians an average of 10 times per year. But those carrying just one or two products only see physicians an average of seven times per year. On average, a rep carrying three or more products is twice as likely to have access to even the most restrictive oncologists (26 percent vs. 13 percent for reps carrying one or two products).

Primary care doctors put fewer restrictions on the reps they'll admit, but they're less accessible overall—with 24% of family practitioners and pediatricians barring the door, along with 21% of internists. And internists are most likely to prefer other types of detailing; 78% of them say they'd prefer fax, mail, email and so on, and only 67% like in-person visits.

Endocrinologists, urologists, neurologists and cardiologists were least likely to keep reps out of their offices, and more likely to say they like to meet with sales folks. In fact, 86% of urologists said they like to get info from reps, compared with 38% who like other forms of communication.

The ZS Associates report found that about 58% of cardiologists and 47% of primary care physicians restrict rep access to the same degree.

Regardless of the access to physicians, ZS Associates noted that companies "need to rethink their sales strategies overall." Sales reps should tightly focus on what doctors need, "whether knowledge or reimbursement support or clinical trial enrollment assistance." In addition, sales reps need to realize that physicians (of all kinds) prefer short vists. The CMI survey showed that 85% of HCPs polled said the ideal "visit" was five (5) minutes or less, with many favoring the five-minute web conference (43%), e-detail (79%) and in-person visit (50%).

Conversely, CMI's survey showed that physicians had a very limited tolerance for visits lasting up to 15 minutes, with a precipitous drop once things move into the 16-minute plus category. "In short, reps should not waste time banking on a 16+ minute phone call, whereas there was more willingness (16% of polled HCPs) for web conferences. As for a leisurely 30-minute conversation, forget it. Zero to 2% of polled doctors favored a 30-minute phone call, web conference, e-detail and in-person visit," reported Medical Marketing & Media.

"The traditional way of physicians interacting with the sales force is not working--it's not as effective as in prior years," ZS Managing Principal Pratap Khedkar says in the AccessMonitor report. "When half of your customers don't want to interact with you the way you want to interact with them, it's a problem." The ZS reported noted that companies can focus on three areas to improve access, while also taking into consideration "practice setting, geography and" the type of diseases they treat.

First, companies must rethink their approach to academic institutions and large practices. "The traditional one-to-one selling is no longer sufficient and companies are piloting different account management models to increase the customization and relevance to a large customer," said Jon Roffman, associate principal with ZS Associates.

Second, pharmaceutical companies must customize the portfolio of products that each sales rep carries to become more customer-focused. For example, some companies have evolved their product-focused sales teams to become more tumor-focused. This enables reps to tailor their offerings to particular treatment areas of interest to each oncologist.

Third, to maintain long-term access and relevance to oncologists, companies must develop new, innovative customer engagement models – designed not from the perspective of the pharmaceutical company, but from the perspective of the customer. The trend is toward improving the sales process to optimize customer experience

A study last year in the Journal of Clinical Hypertension examined how physicians' offices who fail to see reps, are less likely to react to FDA black box warnings, and slower in adopting newer and better medications and doses.


New Options, Ideas for Sales Reps


In addition to these recommendations, a recent post from World of DTC noted that sales reps should be refining and enhancing their use of tablets (e.g. iPads and other gadgets) with physicians during details and meetings. The post notes that tablets "clearly enhance details, lengthening rep visits and piquing physician interest in follow-ups, and 54% of ePharma Physicians agree that they make meetings more valuable. But getting the most out of tablets requires understanding where they're most valuable."


The post notes that "animations and videos [are] where tablets shine – particularly when they're being used to facilitate "Ah-hah!" moments by, say, illustrating a novel MOA or treatment pathway."

"Physicians expect to be wowed, and where tablets are merely replacing printed materials, content must be crisp, with intuitive navigation, responsive design, and attention to basics like appropriate fonts and the distance from eye to screen. And it's not all about tablets."


Accordingly, the post notes that physicians handling tablets in meetings will make them "more likely to spend more time with the rep, to research further information online, to request samples, and to pre- scribe the drug discussed."


Another option, recently employed by drug-giant Pfizer, is the use of "digital" sales reps through Skype. According to an article from Pharmafile, Pfizer has been promoting a new service in the U.K. called "Pfizerline," which allows primary care doctors to book time with reps. Ads in the BMJ (formerly the British Medical Journal) tout the convenience of anytime, anywhere contact with Pfizer reps bearing info about the company's products. The service also offers links to product information about branded medicines available in the U.K.

FiercePharma, which covered this new service, noted that Merck has previously spent "heavily" on e-detailing, and other companies have "amped up" their efforts. This kind of approach might be able to resolve the lack of access reps are getting as noted in the first part of this article. Another benefit of e-detailing is it requires less staff and less resources. Ideally, a company would only need a "call center," where sales reps could be stationed to respond to e-detail calls. This would cut out the travel and associated expenses, and would decrease tremendously the risk of non-compliance with institutional or practice requirements or other compliance risks associated with sales reps.

For example, as FiercePharma notes, if "presentations are vetted ahead of time, and Skype conversations recorded, then off-label shenanigans would be more difficult to hide."

Finally, another interesting aspect that companies will have to consider is whether to detail pharmacists. Recent data suggest, as reported by MM&M, that "pharmacists may be influencing patients' drug decisions," particularly for seven over-the-counter products and five prescription drugs.

Specifically, Kantar Media's 2013 Pharmacy Readership study surveyed more than 130,000 US pharmacists. Of those, 39% of full-time pharmacists were retail staff and 30% were retail managers; 9% of those polled overall were also members of formulary committees.

On average, they made 4.8 prescription recommendations and seven OTC recommendations per day. Those numbers were slightly elevated from last year's results, which found 4.5 recommendations for prescriptions and 6.7 for OTC.

Consequently, although pharmacists recommended a generic drug 85% of the time over a branded drug (when they have the option to do so), 57% of pharmacists said their policy towards sales reps is to see "all or most" of them.



February 20, 2013

CBO Report: Improved Patient Adherence Benefits Medicare

Prescription medicines help people avoid the disability and death caused by disease, and help lower overall treatment costs. In fact, medical advances, including prescription medicines, have lowered death rates for heart disease, stroke, cancer, and other deadly diseases.  Two years ago, a report from Eli Lilly noted how if it were not for the declines in death rates from heart disease and stroke, we would lose 1 million more Americans every year.  

In addition, the 5-year survival rates for cancer have risen by 26% just since 1984.  And while HIV/AIDS was the 8th leading cause of death in the US in 1996, today, it’s not even ranked in the top 15.  Moreover, every $1 spent on statin therapy for heart attack survivors produced as much as $9.44 in health gains and routine use of beta-blockers for acute heart attack sufferers produced as high as $38.44 in health gains. 

While it is clear that people who take their drugs have enormous success in achieving better health outcomes, what is also clear is that patients who do not adhere to their medications may suffer adverse effects, thereby imposing increased and additional costs on our healthcare system.  For example, taking an antibiotic may prevent a more severe infection, and adhering to a drug regimen for a chronic condition such as diabetes or high blood pressure may prevent complications.  In either of those circumstances, taking the medication may avert hospital admissions and thus reduce the use of medical services. 

Policy changes that influence Medicare beneficiaries’ use of prescription drugs, such as those altering the cost-sharing structure of the Part D prescription drug benefit, “probably affect federal spending on their medical services.”  Consequently, the Congressional Budget Office (CBO) recently reviewed research and released a report showing that a 1% increase in the number of prescriptions filled by beneficiaries would cause Medicare’s spending on medical services to fall by roughly one-fifth of 1 percent.   

That estimate, which applies only to policies that directly affect the quantity of prescriptions filled, represents a change in the agency’s estimating methodology.  Likewise, a 1 percent decrease in prescription drug use would cause medical spending to increase by roughly one-fifth of 1 percent. 

For example, a policy that increased prescription drug copayments for certain Medicare beneficiaries might save $4 billion in federal drug costs in a given year but reduce the number of prescriptions filled that year by 1 percent.  That reduction in use would result in a one-fifth of 1 percent increase in the affected population’s total spending for medical services.  If that total spending would otherwise be $250 billion in that year, then those costs would increase by $0.5 billion. 

The net effect of the policy, combining the savings on drug costs and the costs of increased use of medical services, would be a savings for the federal government of $3.5 billion in that year. 

Forbes reported that “Pharmaceutical companies lose an estimated $188 billion annually in revenues in the U.S. because patients fail to take their prescribed medications, according to a study by consulting firm Capgemini.”   Moreover, the pharma industry could add a whopping $564 billion per year to global sales if patients stuck to their drug regimens as prescribed, the report found.  The loss represents 59% of all pharma revenues, which were $320 billion in the USA and $956 billion globally in 2011 according to IMS figures, PharmaTimes reported. 

Non-adherence is a problem across almost all chronic conditions, not only for diabetes, hypertension, and high cholesterol, but also for HIV, oncology, transplant, and glaucoma.  In the US diabetes market alone, revenue loss is estimated to be $11.4 billion. 

CBO Report  

Medicare’s Part D program—which was created in 2003 with the passage of the Medicare Prescription Drug, Improvement, and Modernization Act and implemented in 2006—the number of prescriptions filled by Medicare beneficiaries increased by more than 10 percent, according to one estimate.  More recently, the Part D benefit was expanded by the Affordable Care Act—which, between 2011 and 2020, is gradually closing the gap in coverage in which beneficiaries were responsible for all of the costs for their prescription drugs.4 That change is expected to further boost the use of prescription drugs. 

A substantial body of evidence indicates that people respond to changes in cost sharing by changing their consumption of prescription drugs.  From beneficiaries’ perspective, the price of a prescription drug is the portion of the prescription’s cost that they bear. The use of prescription drugs—or number of prescriptions filled—increases in response to price reductions and falls in response to price increases. That response is widespread, found within both the elderly population and the nonelderly population, and among both enrollees in public health care plans and people with private health insurance. 

Numerous studies have demonstrated the effect of price changes on the use of prescription drugs overall, and several others have found that lower prices for drugs used to treat chronic conditions improve the likelihood that patients take their medication as prescribed. 

Under its new assumption, spending on Medicare services will drop by roughly 1%. That's a savings of $35 billion out of an estimated $5.6 trillion from 2013 to 2022.

With Part D spending set to increase by $86 billion from the increased use in the next decade, the net increase in federal spending would actually be $51 billion after the $35 billion in reduced Medicare services is taken into account. 

The National Community Pharmacists Association (NPCA) commended CBO for acknowledging “the growing body of evidence verifying what community pharmacists have known for some time. Namely, that the more patients have their prescriptions filled and adhere to medications their doctors prescribe, the healthier they will be and the likelihood of costlier interventions including hospitalisations diminishes - reducing health care costs,” reported PharmaTimes.

June 11, 2012

CVD Death Rates Amongst Diabetics Declined 40% Over 10 Years

Diabetes and Heart Disease
A recent study published in Diabetes Care, a journal from the American Diabetes Association (ADA), sought to determine whether all-cause and cardiovascular disease (CVD) death rates declined between 1997 and 2006, a period of continued advances in treatment approaches and risk factor control, among U.S. adults with and without diabetes. 

The study found that among diabetic adults, the CVD death rate declined by 40% (95% CI 23–54) and all-cause mortality declined by 23% (10–35) between the earliest and latest samples.  There was no difference in the rates of decline in mortality between diabetic men and women.  The excess CVD mortality rate associated with diabetes (i.e., compared with nondiabetic adults) decreased by 60% (from 5.8 to 2.3 CVD deaths per 1,000) while the excess all-cause mortality rate declined by 44% (from 10.8 to 6.1 deaths per 1,000).   

The authors concluded that “Death rates among both U.S. men and women with diabetes declined substantially between 1997 and 2006, reducing the absolute difference between adults with and without diabetes.”  Nevertheless, the authors warned that diabetes prevalence is likely to rise in the future if diabetes incidence is not curtailed. 


Diabetes has been associated with an average 10 years of life lost for individuals diagnosed during middle age.  Fortunately, numerous evidence-based interventions exist, ranging from glycemic and cardiovascular disease (CVD) risk factor control to early screening for diabetes complications.  These have been paralleled by population-wide improvements in glycemic control, CVD risk factors, and rates of several diabetes complications.  Despite these improvements, it remains unclear whether longevity has increased uniformly among diabetic populations. 

Analyses of consecutive cohorts of the U.S. population from the 1970s through the 1990s, however, found that all-cause and CVD death rates declined among diabetic men but not diabetic women.  However, no national studies have examined mortality trends among the U.S. diabetic population since the 1990s, and the intervening years have been a period of continued advances in treatment approaches and risk factor levels. Newly available mortality follow-up data linked to the National Health Interview Survey (NHIS) provide a unique opportunity to determine whether CVD and all-cause mortality has improved among the U.S. population during recent decades as well as whether the excess mortality associated with diabetes has declined. 

Research and Design Methods 

The authors compared 3-year death rates of four consecutive nationally representative samples (1997–1998, 1999–2000, 2001–2002, and 2003–2004) of U.S. adults aged 18 years and older using data from the National Health Interview Surveys (NHIS) linked to National Death Index.  The NHIS is an ongoing survey of the health status, health care access, and behaviors of the U.S. civilian noninstitutionalized population conducted by the National Center for Health Statistics (NCHS). 

The authors used data from 242,383 (approximately 30,000 per year) adults aged 18 years and older (one randomly selected from each family to receive additional NHIS questions) from the survey years 1997–2004 whose data were linked to the National Death Index, a computer database of all deaths in the U.S. compiled by the NCHS. Approximately 89% of all participants’ data (range of 86–93% across survey years) were considered adequate for accurate linkage.  All NHIS surveys undergo human subjects oversight and participants give informed consent. More detailed descriptions of the NHIS design have been published elsewhere. 


Interviewers assessed diabetes status by asking participants if a doctor or other health professional had ever told them that they had diabetes or sugar diabetes and the number of years since diagnosis.  In addition, respondents were queried for age, race/ethnicity, sex, education, family income, history of CVD, and self-reported height and weight, which were used to compute BMI (kg/m2). Income was used to compute the poverty index ratio, an index of income assessed in relation to need, with a score of 1 representing the official federal poverty threshold, a score of <1 indicating a relative level of poverty, and a score of >1 representing income as a multiple of the poverty level. 

The study’s primary objective was to examine whether death rates in later samples of persons with diabetes were different from those of earlier samples.  Secondary objectives examined whether changes in mortality over time differed between the diabetic and nondiabetic cohorts and between various age, sex, race, and socioeconomic subgroups of the diabetic population. 


Among the population with diabetes, there are consistent increases over time in the levels of education, income, and obesity and a decrease in the proportion of smokers, sedentary behavior, and difficulty walking.  There were no significant changes in age, race/ethnicity, history of CVD, or diabetes duration. Demographic trends over time were similar for the nondiabetic population, except that there was also a slight increase in age and the number of Hispanics.

Among the population with diagnosed diabetes, 3-year CVD death rates declined by 4.0 deaths per 1,000 person-years from the 1997–1998 sample (9.5 per 1,000 person-years) to the 2003–2004 sample (5.6 per 1,000 person-years).  In multivariate analyses adjusting for age, sex, race/ethnicity, and diabetes duration, diabetic adults in the most recent sample (2003–2004) had 40% lower CVD mortality and 23% lower all-cause mortality than people in the earliest sample (1997–1998).  There were no significant changes in the rates of cancer mortality among persons either with or without diabetes. In sensitivity analyses excluding those with less than 2 years of diabetes duration from the most recent sample, there was essentially no difference in the rate ratios associated with later cohorts. 

CVD death rates declined among the nondiabetic population as well, but the magnitude of decline was weaker (from 3.7 to 3.3 deaths per 1,000) than that observed for diabetic adults and there was not a significant decline in all-cause mortality.  As a result, the excess CVD death rate associated with diabetes (i.e., compared with those without diabetes) declined from 5.8 to 2.3 deaths per 1,000, and the all-cause death rate difference between people with and without diabetes declined from 10.8 to 6.1 deaths per 1,000. 

All-cause and CVD death rates in the diabetic population declined among both men and women.  However, there was a slightly greater magnitude of decline among men (5.2 deaths per 1,000 decline for men vs. 3.5 per 1,000 for women).  These trends for both men and women again paralleled less dramatic reductions in the nondiabetic population, resulting in reductions in the excess CVD mortality from 7.5 to 2.5 deaths per 1,000 for diabetic men and from an excess 4.8 to 1.8 deaths per 1,000 women. 


This analysis of nationally representative samples of adults with and without diabetes reveals impressive reductions in CVD and all-cause mortality between 1997 and 2006. The rates of improvement among those with diabetes have exceeded those of the nondiabetic population, resulting in more than a 50% reduction of the excess death rates that have been repeatedly attributed to diabetes.  Although excess mortality risk remains high—about 2 deaths per 1,000 due to CVD and about 6 all-cause deaths—this excess risk is now considerably lower than previous reports and consistent with improvements in several risk factors, complications, and indicators of medical care and representative of gradual, ongoing improvement in health for people with diagnosed diabetes. 

Improvements were observed approximately equally in women and men, which contrasts with earlier analyses.  The findings of improved life expectancy support recent regional studies in the U.S., including North Dakota, Framingham, and Minnesota, as well as population-based studies in Ontario, Denmark, Scotland, Norway, and Finland.  These trends parallel other improvements in levels of risk factors and rates of complications among the overall U.S. diabetic population.   

In addition, steady improvements in quality and organization of care, self-management behaviors, and medical treatments, including pharmacological treatment of hyperlipidemia and hypertension, could each have contributed to reductions in death rates.  Incidence of lower extremity amputation, end-stage renal disease, and CVD hospitalization have each declined steadily.  Reductions in mortality are likely to be influenced by multiple factors, however, and thus may lag behind declines in specific risk factors. 

Although the NHIS provides the largest nationally representative cohort data with diagnosed diabetes, the findings were limited by reliance on self-report to define diabetes; at least 20% of cases with diabetes are undiagnosed.  Because the fraction of diabetes cases that remain undiagnosed may be decreasing, later cohorts of diabetes could be enriched with people who had their diabetes detected earlier, possibly contributing to lower mortality. 

Ultimately, the authors call for vigilant efforts to prevent vascular and neuropathic complication and early mortality associated with diabetes along with efforts to reduce diabetes incidence will continue to be major demands into the future.”


March 09, 2011

Pharmaceutical Coupons A Health Choice

One of the biggest challenges facing health care reform is how to control health care costs while maintaining a high quality of care that is both effective and efficient. While much of the debate that led up to the passage of the Affordable Care Act (ACA) discussed controlling health care costs, the $1 trillion price tag on the legislation has left many Americans wondering how this complex and complicated legislation will actually reduce health care costs.

Many of the provisions in the ACA do not specifically address how the legislation will control health care costs. For example, there are a number of provisions, which assert that the use of health information technology (HIT) and electronic medical records (EMRs) will reduce medical errors and save money. However, no data to date has proven these claims, and numerous issues such as privacy, compatibility, training, and funding present significant obstacles to achieving this goal. As a result, it may be years before Americans realize the costs benefits, if any, from HIT and EMRs.

Other provisions that address costs include reducing fraud, waste and abuse in Medicare and Medicaid. But these provisions do not “control costs,” they merely act as oversight and provide additional funding to give the government the resources they need to effectively monitor these federal programs.

Accordingly, supporters of the ACA who believe it will help control health care costs often point to the provision that helped closed the doughnut hole, which refers to the gap in coverage that leaves Medicare beneficiaries on the hook for the cost of prescription drugs when the cost of their prescription drugs passes $2,700 in a year. The success of this provision was achieved through an $80 billion agreement between the Obama administration and pharmaceutical companies.

Eventually, this agreement found its way into the ACA by fixing the gap and providing that seniors receive a 50% discount on the brand name drugs they purchase while they are in the "doughnut hole." The provision became effective January 1, 2011.

Since the provision addressed high prices for prescription drugs for Medicare beneficiaries, many policymakers and media sources utilized the image of elderly patients having to pay out of pocket expenses to assert that health care costs continue to rise because prescription drug prices are too high.

In fact, the New York Times continued this myth in a recent story by suggesting that pharmaceutical companies are leading to an overall increase in health care costs by using co-payment cards and coupons that “are just marketing gimmicks.” Co-payment coupons and cards are distributed by drug company sales representatives to doctors, and are also often available directly to patients over the Internet. Patients present them at the drugstore when paying for their prescriptions

Drug companies cannot offer co-payment assistance for patients in federal programs like Medicare because such offers are considered an inducement to use a drug and in violation of anti-kickback laws. Some companies have responded by contributing to, or even helping to set up, charitable foundations that can provide co-payment assistance legally.

The Food and Drug Administration, meanwhile, is studying the effect of the discounts on consumer perceptions, concerned that the coupons will make consumers believe that a drug is safer or better than it really is.


Pharmaceutical companies frequently use rebates, coupons, and co-payment cards to assist patients with paying for prescriptions. As the Times points out, “With drug prices rising and many people out of work, pharmaceutical companies are increasingly helping patients with their co-payments.” In fact, according to IMS Health, an information company that tracks the pharmaceutical industry, “the use of such co-payment cards and coupons and other types of discounts has more than tripled since mid-2006.”

Health insurers and some consumer groups say that in many cases, the coupons “circumvent the system of higher co-pays on costlier drugs that insurers use to encourage consumers to use less expensive products.” However, drug companies say the plans help some patients afford medicines that they otherwise could not. For example, Pfizer last month introduced a new card that can reduce the co-pay on its blockbuster drug Lipitor to $4 a month, a savings of up to $50. That brings the out-of-pocket cost in line with what consumers might pay at Wal-Mart for a generic version of a competing cholesterol-lowering drug.

Critics however believe that this process insulates the consumer from the cost of the prescription, and “In essence, it drives up the total cost of providing the prescription benefit.” They further assert that any “shift to brand-name drugs can have a big impact on health care costs.” But what about very expensive drugs or treatments which there are no generic for?

In some cases, as the Times explains, “co-payments can be up to 20 percent of the price of the drug,” especially for chronic conditions, which can cost up to $800 a month. Accordingly, as Robert M. Myers, President of Jazz Pharmaceuticals told analysts in November, “The coupon program helps patients get low monthly out-of-pocket costs.” Drug companies further defend the coupons, saying they are “helpful to consumers and allow patients and doctors to make decisions based on medical reasons, not costs, because in many cases, such as with Lipitor, the rival drugs are not exact generics.”

Joshua J. Ofman, vice president for reimbursement and payment policy at Amgen told the Times that the co-pay assistance is aimed at ensuring that differences in co-payments between the two drugs “aren’t driving medical decisions.” Companies also say that lower co-payments help patients stay on their medicines. The Times also acknowledged “Studies that have shown that patients are more likely to quit taking their drugs when the co-pay is high.”

If patients are more likely to quit taking their drugs when the co-pay is high, why would we want to prevent companies from providing coupons to reduce that cost? Chances are, if patients quit taking their medicine in these cases, the costs associated with their discontinuation of care, including hospitalization and the potential for developing symptoms that are more serious will far exceed any increased cost for the use of a brand name drug.


The main problem with the Times article is that it fails to recognize or even mention that prescription medicine costs are not what is driving increased spending for health services or insurance. As we previously noted, prescription medicines account for only 10 cents of every dollar spent on health care, and while many people consider spending on prescription drugs in the U.S. to be increasing or very expensive, money spent on drugs is considerably less than spending on hospital care or physician services. In addition, chronic disease, which accounts for $3 out of every $4 spent on healthcare, is what threatens the U.S. health care system, not the cost of medicines.

Moreover, the Times article also neglects to mention that although 81% of drug sales in 2009 were for brands for which a generic existed (up from 61% of the time 2003), 92% of the time patients get the generic. In fact, many states require that a pharmacy give a generic if it is available and a doctor has not expressly stated a need for the brand name drug.

As one commentator carefully pointed out, the pharmaceutical companies are not necessarily the ones to blame for high prescription costs when “America’s health insurance companies increased their profits by 56 percent in 2009, a year that saw 2.7 million people lose their private coverage.” In fact, the nation’s five largest for-profit insurers closed 2009 with a combined profit of $12.2 billion, according to a report by the advocacy group Health Care for American Now (HCAN).

In that case, why should the pharmaceutical companies be taking the blame when they are the ones trying to reduce costs for patients, and the insurance companies are merely trying to squeeze out every time from their policyholders?


In the end, “Helping patients with co-pays is a good marketing program at a time when the abandonment rate of prescriptions is at an all time high.” As we noted above, when patients do not take their medications, “there is a strong chance that their health conditions can worsen and cause higher costs to an already strained health care system.”

Patients have the choice to ask for generic or a branded product and by reducing the costs of co-pay, companies are merely offering patients a choice. Given that generics still make up a huge percentage of total number of prescriptions, to “suggest that drug companies are driving up health costs for insurers is a one-sided argument that negates the patients right to choose.”

October 11, 2010

The Value of Medicine

A recent report from Eli Lilly focused on “The Value of Medicine,” and how pharmaceutical companies are dedicated to the discovery and development of medicines that help people live longer, healthier lives. Despite their dedication, the complexity of the pharmaceutical industry creates many questions for the public to consider in a number of areas. To help address some of these questions, Eli Lilly focused its report on a number of issues including health care spending and value in medicine.


Prescription medicines help people avoid the disability and death caused by disease, and help lower overall treatment costs. In fact, medical advances, including prescription medicines, have lowered death rates for heart disease, stroke, cancer, and other deadly diseases. Specifically:

  • Since 1970, the death rate from heart disease has dropped nearly 60%
  • Deaths from stroke are down 70% since 1970
  • The death rate from cancer has dropped 16% since 1990
  • The death rate from HIV/AIDS dropped more than 75% from its highest point in 1995
  • The average life span of Americans increased from 69.7 years in 1960 to approximately 80 years in 2007.

If it were not for the declines in death rates from heart disease and stroke, we would lose 1 million more Americans every year. In addition, the 5-year survival rates for cancer have risen by 26% just since 1984. And while HIV/AIDS was the 8th leading cause of death in the US in 1996, today, it’s not even ranked in the top 15. There is also significant value in prescription samples because they allow patients to start immediate treatment and try out treatment options before paying for a prescription. Based on these values, health economists were able to show that for every $1 spent on:

  • Statin therapy for heart attack survivors produced as much as $9.44 in health gains.
  • Routine use of beta-blockers for acute heart attack sufferers produced as high as $38.44 in health gains
  • Intensive glycemic control in newly diagnosed type 2 diabetes patients produced $3.77 in health gains

The treatment of asthma, which affects about 23.3 million Americans, 7 million of which are children, has also derived significant value from medicines. Asthma causes about 444,000 hospitalizations, 1.7 million emergency room visits, and about 3,600 deaths a year. In total, asthma costs about $20.7 billion a year, including $15.6 billion in direct medical costs. Consequently, the use of newer inhaled corticosteroids for one year reduced the risk of hospitalization by 50%, the number of outpatient visits by 26%, and monthly health care costs by 24% per patient.

Cancer is also another tragic disease that tremendously affects Americans. About 1 in 2 men and 1 in 3 women will develop cancer during their lifetimes. About 11.4 million Americans alive in 2006 had a history of cancer. In 2010, the overall direct and indirect costs of cancer will reach an estimated $263.8 billion in the United States, and about 1.5 million new cancer cases will be diagnosed this year. As a result, cancer is expected to claim more than 1,500 lives a day in the United States in 2010.

Because of the treatments and medicine researched and developed by the pharmaceutical industry however, early detection and better treatments have increased overall 5-year cancer survival rates by 36% since the late 1970s. Moreover, life expectancy for people with cancer increased 3 years between 1980 and 2000, and 86% of that gain is attributed to better treatment, including medicines.


The pharmaceutical industry defines the value in medicine because companies research, develop, and produce the vast majority of new medicines discovered, not the government. In addition, companies invest significantly more money in research and development than the National Institutes of Health (NIH). For example, in 2009, the pharmaceutical and biotech industries invested about $65 billion in research and development. Meanwhile, the total operating budget of NIH is $31 million.

In addition, pharmaceutical companies invest more in research and development (R&D) than other industries, with 19% of domestic sales on R&D being spent in 2009. This kind of spending is significant because only 1 out of 5,000 to 10,000 chemical compounds makes it to the pharmacy, and only 2 out of 10 medicines that reach the marketplace ever make enough profit to cover average R&D costs. Therefore, the risk is substantially high for the industry to make such investments, yet they continue to dedicate significant amounts to these discoveries. Companies are also changing the R&D model to develop more targeted therapies instead of blockbusters, and researchers today are targeting narrow patient populations and designing tailored therapies that are more effective.

Part of the reason why companies take on this substantial risk is that pharmaceutical research and development represents a dynamic partnership between the public and private sectors, although their roles are distinct but complementary. This partnership began in 1984, when Congress carefully examined the pharmaceutical market and enacted the Hatch-Waxman Act to strike a balance between providing incentives for the development of new medicines and encouraging generic competition to reduce health care costs. Since its enactment, the amount of prescriptions filled with generic medicines has more than tripled. The brand-name industry’s investment in R&D in the US has grown from about $2 billion in 1980 to more than $65 billion in 2009 – and patients have benefited from the introduction of new medicines.

The reason that this relationship was established is because NIH funds largely only government and academic researchers to conduct basic research to advance the scientific knowledge and understanding of disease. This kind of research rarely ever produces an actual product. Rather, pharmaceutical companies also conduct basic research, and then translate that research into the discovery and development of new medicines. For example, most top-selling medicines are developed solely by industry: 9% developed in part with NIH-funded technologies; 91% developed solely by industry. In fact, one NIH study revealed that out of the 47 top-selling medicines in the US, 43 were developed without any NIH-funded technologies.

Nevertheless, the government’s role in advancing pharmaceutical research is still vitally important because most licensed inventions funded by NIH are valuable because they prove concepts, such as confirming that HIV is the cause of AIDS that can help guide the discovery of new medicines. By helping pharmaceutical companies identify new treatment approaches or drug targets, publicly funded research can help speed the delivery of new medicines to the patients who need them.


Health Care Spending

A critical part of this report is that it recognizes that prescription medicine costs are not driving increased spending for health services or insurance. Prescription medicines account for only 10 cents of every dollar spent on health care, and while many people consider spending on prescription drugs in the U.S. to be increasing or very expensive, money spent on drugs is considerably less than spending on hospital care or physician services.  In addition, chronic disease, which accounts for $3 out of every $4 spent on healthcare, is what threatens the U.S. health care system, not the cost of medicines.

Accordingly, it is important to recognize that as more innovative and effective medicines reach the marketplace, more people are relying on medicines to improve or protect their health, which increases the demand for prescription medicines. And as trust in and reliance on these important medicines rises, so does spending. Media reports however, often confuse the rise in “medicine spending” or “medicine costs” with increases in “medicine prices.” The reality is, spending growth results from increased use – greater volume, the mix of medicines used, and the introduction of new medicines – and price changes.

While prescription medicine spending has remained at or below 10% of total national health expenditures for more than 40 years, spending on hospital care was three times greater than prescription medicine spending, and spending on health care provider visits was twice as much as spending on medicines. Consequently, spending on hospital services is by far the largest and fastest-growing component of increased spending on health care, accounting for more than half of the total increase.

Interestingly, what is important to note about healthcare spending is for many patients, medicines can help reduce other health care costs – by eliminating the need for hospitalization or surgery, reducing trips to their health care provider or the emergency room, slowing or reversing the progression of disease, or preventing a disease from developing.

Whereas chronic diseases, particularly heart disease, cancer, and diabetes, exact a devastating human toll – 7 out of every 10 deaths and $3 of every $4 spent on health care. This total is likely to grow as the population ages. As a result, the report asserts that only by taking on chronic disease – through prevention, chronic disease management, and continued medical innovation – can we address the economic and human costs in a meaningful way.

With respect to direct-to-consumer (DTC) advertising, the report acknowledged that there are a wide variety of conditions or diseases where patients are still not receiving recommended care. Since the average American still spends far more on alcohol and tobacco products than on over-the-counter and prescription medicines combined, the report recognized the need to design pharmaceutical ads to educate consumers about products and the solutions they offer. DTC ads aim to educate consumers about diseases, about the symptoms that may help their health care provider identify the diseases, and about available therapies to treat these conditions.

Moreover, research indicates that DTC ads actually encourage dialogue between patients and health care providers, prompting many Americans to discuss their illnesses with health care providers for the first time or to do so earlier than they otherwise would have. DTC ads also help to educate the public about the benefits of new treatments, as well as the risks involved, and promote improved compliance with prescribed treatments. Health care providers agree.

 According to an FDA survey of physicians, prescription medicine advertisements can have a positive effect on the physician-patient relationship by increasing communication between the physician and the patient. The positive benefits seen from DTC advertising show its importance is well worth the 2% of pharmaceutical company sales, especially considering industry R&D expenditures are about 15 times that amount.


In addition, a study from the Bureau of Consumer Protection at the US Federal Trade Commission found that DTC advertising on demand do not support the conclusion that it has led to the increased use of inappropriate drugs or increased drug prices. Accordingly, the report noted that limiting prescription drug promotion might negatively affect patients and health care providers by restricting access to important information about diseases and proper medical treatment. Also, consumers may not as easily receive information about the benefits and risks of prescription medicines. A study found that 25% of consumers who visited their health care provider after viewing an ad for a prescription medicine received a diagnosis for a previously unidentified condition. More than 40% of those diagnoses were for conditions considered “high priority.”


From the various findings contained in this report, it is clear that patients in the US have the greatest access to the newest medical technology and prescription medicines in the world, especially considering more than half of new therapeutic substances released worldwide in 2009 launched first in the US. As a result, Americans should be proud of the progress the pharmaceutical industry has made, and support policies that enhance ways for more collaboration between industry, government, and academia to continue advancing our healthcare system and practice of medicine.

August 16, 2010

Pharmacists Expanded Role in Improving Patient Outcomes

In addition to outlining patient’s medications, and teaching them what times of day to take the drugs that will help control their specific disease, pharmacists are now taking on a new role to address the growing healthcare needs and demands of Americans, according to a recent article in the New York Times.

For example, at Barney’s Pharmacy in Augusta, Ga., the pharmacy offers classes at the store for patients once a month on how to manage diseases with drugs, diet and exercise. This new service, according to the Times, reflects the expanding role of the nation’s pharmacists in ways that may benefit their customers and also represent a new source of revenue for the profession.” In fact, “some health plans are even paying pharmacists to monitor patients taking regular medications for chronic illnesses like diabetes or heart disease.” And these pharmacists don’t just dispense drugs to patients, they also partner with patients to improve their health as well.”

Another role that pharmacists are playing at independent drugstores and some national chains like Walgreens and the Medicine Shoppe and even supermarkets like Kroger, is “by working with doctors and nurses to care for people with long-term illnesses.”

Pharmacists are also “being enlisted by some health insurers and large employers to help address the fact that “as many as half of the nation’s patients do not take their medications as prescribed, which ends up costing nearly $300 billion a year in emergency room visits, hospital stays and other medical expenditures.”

In their unique role, pharmacists also maintain the “front line of detecting prescription overlap or dangerous interaction between drugs and for recommending cheaper options to expensive medicines.

As a result of the numerous responsibilities pharmacists already carry out, pilot programs, such as the one started by Dr. Andrew Halpert, senior medical director for Blue Shield of California, are attempting to show that pharmacists “could do as well and better than a physician” for less money. Specifically, the program seeks to address the shortage of primary care doctors by using the education, expertise, free time and plain-spoken approach pharmacists use to talk to patients at length about what medicines they are taking and to keep close tabs on their well-being as a way.

This kind of approach has already been taken by “some health insurers and large employers who pay for programs called medication therapy management, which typically involve face-to-face sessions between pharmacists and patients in retail stores or clinics.” Programs such as these pay pharmacists to track patients, monitor cholesterol or blood glucose levels, or prod customers to change their diets or exercise.

Since 2006, some “Medicare plans started covering medication therapy management programs, paying $1 to $2 a minute to pharmacists to review patients’ medicines with them, and in 2010, about one in four people covered by Medicare Part D prescription drug plans will be eligible.”

Pharmacists are also advising patients about medication through grants and such as the Wisconsin Pharmacy Quality Collaborative, which standardizes medication therapy management and ensures quality care. Similarly, Humana, which has offered pharmacists medication advising for a few years, is studying a third of 62,000 pharmacies in its network to see “whether a pharmacist seeing a patient in person has more impact than a phone call.”

According to the Times, the result of these new services “has spawned a new industry of medication therapy management companies to run clinical pharmacy programs for health insurers, contracting with pharmacists and tracking the financial and health outcomes of their services.” And results so far have been positive. For example one recent study financed by GlaxoSmithKline, tracked 573 people with diabetes (30 employers in 10 cities) who took part in at least two sessions with pharmacists who helped them track their blood sugar, blood pressure and cholesterol levels and offered diet and exercise advice. The results of the study showed that after a year, blood pressure, blood sugar and cholesterol levels typically improved — and saved an average $593 a person on diabetes drugs and supplies.

While some groups may be concerned about the proper role pharmacists should play, as Michelle A. Chui, an assistant professor at the University of Wisconsin School of Pharmacy pointed out, “pharmacists do not want to compete with doctors, they merely want to provide more information “so the physician has a more in-depth picture.”

Consequently, pharmacists who provide more education and information to share with health care providers and patients should be encouraged because it gives patients a better chance to understand and follow medication directions in a consistent manner. As a result, using education companies, such as, which teaches other pharmacies how to introduce in-store services, should also be encouraged because as the owner of Barney’s Pharmacy noted, when pharmacists “get involved with chronic care patients, their outcomes improve.”

Accordingly, with 31 million more patients entering the health care system through government programs, and with populations getting older and living longer, the number of prescriptions will grow exponentially. Not only will we need companies and funding to create and discover the drugs to provide to this influx of people, we will also need pharmacists to help fill prescriptions. Allowing our pharmacists to continue their role in educating patients will help ensure that patients follow their medical therapy and management, which will save lives and money.


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