Pharmacy Cost Initiatives

1
Pharmacy Cost Initiatives

• Roy Coakley
• John Lowe
• July 16, 2008

2
Objectives

• Review national cost avoidance plan
• List targeted initiatives for FY 08 and tentative
  plan for FY 09
• Describe how formulas are created and scored
• Determine the methods PBM employs to grade
  compliance
• Summarize the successful strategies and results

3
National Pharmacy Cost Avoidance Plan
4
Trend and variation of prescription drug cost in
the Veterans health-care system

• Published in Health Services Management Research
• Authors in VISN 2
• Based on 2003 data

5
Findings

• Increases in drug cost in VA outpaced national
  trend (as of total health care )
• Found 30 deviation in expected costs at facility
  level and 15 at network level
• Variation based on prescribing patterns
• Reducing variance has meaningful implications

6
Proclarity vs. FMP

• FMP (Financial Management Profile)
• Numerator is based on pharmacy purchases for
  inpatient and outpatient
• Denominator is unique medical center patients
• FMP report 101(Drug costs per unique) includes
  pharmacy salaries, equipment leases, training,
  etc.
• FMP report 101a (drug cost only per unique)
  includes CMOP operating expenses for labor,
  mailing, supplies
• Also known as KLF

7
Proclarity vs. FMP

• PBM SHG ProClarity Database
• Outpatient pharmacy costs only
• Denominator is OP Pharmacy users only
• Numerator is based on VistA dispensing data
• Drug costs based on local drug file

8
FY 07 FMP 101a Drug Cost/Pt
9
FY 07 Proclarity Cost/Patient
10
Potential Cost Avoidance FY 07 FMP
11
Drug Cost per Pharmacy Patient FY 03 FY 07
12
Drug Cost /Pharmacy Patient- specific VISNs
13
National Cost Avoidance Plan

• Each network will be required to develop a plan
  to achieve targeted cost avoidance
• With prior approval, networks may develop
  alternate cost avoidance measures to replace any
  or all of the national initiatives
• Network plan must be approved by PBM and DUSH
• Quarterly progress reports
• Goal to reduce variance in drug cost per unique

14
National Cost Avoidance Plan

• Plan will be dynamic based on changing market
  and/or clinical evidence
• Networks may adjust plan throughout the year
• Included in National Finance Council Operation
  Efficiency Program

15
National Cost Avoidance Plan - FY 07

• Each network assigned a cost avoidance target
  (Initial goal of 192 Million)
• Target based on a list of 21 initiatives
• Initiative targets based on average of 3 networks
  with highest performance
• Network goals based on achieving 75 of gap
  between current performance and target

16
National Cost Avoidance Plan - FY 08

• Each network assigned a cost avoidance target
  (Initial goal of 76 Million)
• Target based on a list of 15 initiatives
• Initiative targets based on average of 5 networks
  with highest performance or national average
• Network goals based on achieving 75 of gap
  between current performance and target

17
Selection of National Initiatives

• Review of high cost and high volume areas with
  significant variability in prescribing patterns
• Lack of evidence to support prescribing
  differences
• New contracts or Blanket Purchase Agreements
  (BPA) that create incentives
• Areas of concern where community standard may not
  be evidenced based

18
Formula

• Most measures changed from 30 day fills to cost
  per 30 day fill
• Cost per 30 day based on total costs for drugs in
  market basket and number of 30 day fill
  equivalents
• Market basket to include all relevant drugs in
  targeted area
• Drugs costs used in calculations come from local
  drug file
• Results calculated quarterly by PBM

19
Definitions

• Target based on average of top 5 VISNs for
  majority of initiatives
• Goal network specific goal based on 75 of the
  difference between network baseline and the
  target (top 5 networks average)

20
Performance Measure

• Dollar amount based on the national initiatives
• Finance Committee satisfactory goal (green) is
  50 of dollar amount based on the national
  initiatives
• National initiatives are not mandatory

21
FY 08 National Initiatives

• ACE/ARB
• Alpha Blockers
• Beta Blockers
• CCB
• Glitazones
• Antidepressants
• LABA

• LSNS Antihistamines
• Nasal steroids
• LA Opioids
• High potency HMGs
• Neuropathic pain
• Clopidogrel
• Ulcerative colitis
• Isosorbide

22
Cost Avoidance Results

• FY 07
• All networks at goal (green)
• 264 million cost avoidance
• FY 08
• All networks at goal (green)
• 274 million cost avoidance

23
Leading Initiatives

• Beta Blockers - 40 million
• Calcium Channel Blockers - 64 million
• TZDs - 40 million
• Antidepressants - 61 million
• Clopidogrel - 21 million

24
Variance in VISN Cost / Pharmacy Unique
25
Examples of VISN Specific Initiatives

• Lovastatin to simvastatin
• Fluvastatin to pravastatin
• Galantamine preferred for new starts
• Montelukast follow criteria for use
• Nasal steroid preferred second line agent
• Prefer ketotifen over olopatadine
• Inventory turns
• Purchase reviews
• Unit dose PPIs

26
Example of VISN X Plan

• Low potency HMGs
• Tablet splitting
• Fenofibrate BPA
• Oxybutynin IR preferred
• Risedronate to Alendronate
• Guafenesin use
• Ketotifen preferred ophthalmic antihistamine

27
Examples of Opportunities
28
Use of Oral Hypoglycemics - 1st QTR 08
29
Use of PPIs (1st QTR 08)
30
Diagnostic Agents - 2nd QTR 08
Total Cost and of Patients
31
Impact of Increased Turns
32
FY 2009 Plan

• Planning meeting scheduled for June
• Review data for opportunities
• Review new contracts/BPAs
• Baseline will be 3rd QTR 08

33
FY 09 Proposed Initiatives

• ACE/ARB
• Alpha blocker (?)
• Beta Blocker
• CCB
• TZD
• Cost/Diabetic pt
• Low potency HMGs

• Antidepressants
• LABA
• Nasal steroids
• High Potency HMGs
• NPT
• Clopidogrel
• VISN specific goals

34
Strategies for Implementation

• VISN 8

35
(No Transcript)
36
(No Transcript)
37
(No Transcript)
38
VISN 8 Drug Utilization Management (UM) Committee
(meets quarterly face to face)

• Physician MD, MBA Co-chair
• VISN 8 PBM Manager Co-chair
• VAMC 119 Chiefs
• VAMC 119 Clinical Pharmacy Coordinators
• VAMC 119 Assistant/Associate Chiefs
• OPC 119 Supervisors
• Pharmacoeconomic Pharmacists/Clinical Pharmacy
• Managers/Specialist with responsibilities for
• initiative implementations
• Guests
• - Pharmacy Residents
• - Specific groups
• - Physicians
• - Fiscal Officer

39
General Drug Cost Reduction Categories

• Brand to Generic Change (ex simvastatin)
• Minimizing cost/price
• - Tablet splitting, other dosing
  strategies,
• - Obtaining best price for individual drug when
  different sources and/or different prices for
  different quantities, forms.
• Therapeutic conversion (ex amlodipine to
  felodipine and back again) relatively straight
  forward
• Utilization reduction- Sometimes after the fact
  (examples clopidogrel and rosiglitazone)
• - Overuse
• - Safety component
• - Prior use review (criteria) and/or post use
  review patient by patient

40
Task Filters Guiding PrinciplesUrgencyEffortI
mpactData

• Urgency of task
• 3 Safety threat
• 2 Red light on
• 1 Ok, Improvable
• Effort of task
• 3 Therapy Sub
• 2 Use Restriction
• 1 Counter Detail

• Economic Impact
• 3 VISN
• gtgt1/pt/yr
• 2 VISN gt1/pt/yr
• 1 Site gt1/pt/yr
• Data Availability
• 3 On hand
• 2 Easily obtained
• 1 Collected, but Not connected

41
VISN 8 FY08 Cost Efficiency Goal (based on 2nd
qtr FY07 performance)
42
Selecting VISN Initiatives

• VISN initiatives requested to be added if there
  is a current VISN Cost Avoidance initiative
  planned or in progress not in the National Plan
• VISN initiative requested to be added if
  something will occur that triggers action or
  occurs during the FY that is not in the National
  Plan

43
(No Transcript)
44
(No Transcript)
45
Steps in Implementing Initiatives

• Initiative selected
• Gain therapeutic equivalence or utilization
  reduction approval
• Communicate to organization
• Get the prices right in VISTA
• (continued)

46

• 5a. Hard stop (generally for therapeutic
  conversions) 90 day target
• - Turn off CMOP
• - Print all labels locally
• - Enter new drug/prescription-cancel old
  drug/prescription
• - Send new drug/prescription to patient with
  letter explaining conversion
• -Dramatic changes possible in short time span

47

• 5b. Chart by chart (patient by patient) review
  of diagnosis/circumstances (usually for
  utilization reduction) then change if appropriate
• - usually a phased reduction in utilization
• - patients identified by fileman lists,
  proclarity lists, alerts/reminders, etc.
• - if safety issue involve patient upfront

48
Cost Efficiency Occurrence/Initiative Examples to
be Discussed

• Brand to generic
• Plavix (clopidogrel) Utilization reduction with
  a safety component. Reduction measured by use
  in the population and reduced cost.
• Avandia (rosiglitazone) Utilization reduction
  with a safety component. Reduction measured by
  use in population subset and reduced cost.
• Felodipine to amlodipine Therapeutic
  substitution measured by average cost
  change/TDER and volume of TDERs
• ESAs Utilization reduction overuse/inappropria
  te use safety component measured by reduced
  purchases year to year.

49
Three New Generic Drugs FY07
Impact on VISN 8

• Cost/Tablet FY06 Cost/Tablet
  Now Difference/tablet
• Simvastatin (Zocor) .60
  .07 -.53
• Finasteride (Proscar) 1.30
  .66 -.64
• Sertraline (Zoloft) 1.35
  .05 -1.30
• Approx of pts (1st Qtr FY07) Approx Qtly
  dispense Projected Annual
• Annually (tabs) Savings
• Simvastatin (Zocor) 134,000 30,000,000
  15,900,000
• Finasteride (Proscar) 17,000
  6,000,000 3,840,000
• Sertraline (Zoloft) 12,000 4,000,000
  5,000,000

50
Long Term Use of Clopidogrel (Plavix)

• Dear Veteran
• The VA would like to inform you of some recent
  information that became available regarding the
  safety of the long term use of clopidogrel
  (Plavix) in combination with aspirin. This
  document is being sent to all patients receiving
  clopidogrel through the VA since may patients
  obtain their aspirin from the private sector.
• Please disregard this document if you are
  taking clopidogrel alone due to an allergy to
  aspirin.

51
PATIENT REQUEST FOR CLOPIDOGREL (PLAVIX) REVIEW

• Patient Name _____________________________________
  _____________________
• Patient Phone Number _____________________________
  ______________________
• Patient Social Security Number ___________________
  _________________________
• VA Provider ______________________________________
  _____________________
• VA Clinic _______________________________________
  ______________________
• ? I am allergic to aspirin
• ? I am currently taking aspirin ______ mg per
  day
• ? I am not taking aspirin
• I am currently taking clopidogrel for
• ? Cardiac Stent Placement- Date of Stent
  Placement __________________________
• ? Acute Coronary Syndrome/Unstable Angina- Date
  of Hospitalization _____________
• ? Stroke or Transient Ischemic Attack (TIA)
• ? I have had a single stroke or TIA
• ? I have had more than one stroke or TIA
• ? Peripheral Vascular Disease
• ? Non-Cardiac Stent Placement - Date of Stent
  Placement ______________________

52
(No Transcript)
53
(No Transcript)
54
(No Transcript)
55
(No Transcript)
56
(No Transcript)
57
(No Transcript)
58
QTR 2 FY08 PERFORMANCE IN REDUCED UTILIZATION
EQUALS APPROXIMATELY 5,000,000 SAVINGS ANNUALLY
59
(No Transcript)
60
(No Transcript)
61
(No Transcript)
62
(No Transcript)
63
CCB conversions to generic amlodipine
176,127 TDERs equals 9.1 million dollars savings
annually
64
NF/SG Presentation ELB (6/16/05)

• Epo Clinic Interventions
• Patients evaluated 90 days after consult
  initiated
• Epo clinic initiated dose changes of epo in 74
  of patients (81/109)
• Modified iron therapy in 60 of patients (65/109)
• Epo therapy discontinued in 20.2 of patients
• 6.3 due to lack of response (7/111)
• 13.9 due to cure with iron or thyroid (14/101)

65
Cost Savings Associated With Addition of Heme-Onc
Pharmacist
(August 06 to Present)
66
High Potency LDL Lowering Drug Market
Basket Cost Analysis
67
(No Transcript)
68
VISN 8 Cost Efficiency Monitoring and Reporting

• VISN 8 PBM Data Manager
• VISN Server with Outpatient Pharmacy extract
• VISN 8 ProClarity Briefing Book
• Updated monthly
• Selected monthly/quarterly reports (Excel)
• Updated price accuracy reports for CA drugs
• Current drug file price for each CA drug
• Monthly excel reports or current status of VISN
  and each VAMC

69
(No Transcript)
70
(No Transcript)
71
(No Transcript)
72
(No Transcript)
73
(No Transcript)
74
(No Transcript)
75
(No Transcript)
76
(No Transcript)
77
VISN 8 QTR2 FY08 CA Position National and VISN 8
only initiatives
78
Overall VISN 8 Pharmacy Drug Cost
Status to Date
79
(No Transcript)
80
FMP (KLF 101A) through March
81
(No Transcript)