May DTR Analysis: Step therapy might offer opportunity to reduce drug expenditures

May 1, 2005

OTC and generics help the cause

The step therapy arena continues to expand as new clinical opportunities present themselves. The expiration of patent protection along with the over-the-counter (OTC) crossovers on some blockbuster drugs have been the driving force to date, according to Andrew M. Reis, director of clinical services, National Medical Health Card Systems Inc. (NMHC), a national independent pharmacy benefits manager.

“As a result, new generics or prescription to OTC products that enter the market create uneven pricing in drug classes that once had no generics available,” Reis says. “This disparate pricing across therapeutically equivalent products presents opportunities to reduce drug expenditures within particular high-cost and/or highly utilized drug classes. Good examples of this are OTC omeprazole, OTC loratadine and the generic SSRIs. These opportunities have saved many of our plan sponsors significant dollars while at the same time promoting sound, evidenced-based clinical guidelines.”

Along with market influences, step therapy continues to improve and grow as more sophisticated adjudication software is created, according to Reis. “The new software applications or upgrades allow for greater flexibility and intelligence to be programmed into clinical step therapy protocols. Greater use of prescription claim data allows PBMs to more specifically target a drug’s place in therapy thus enforcing compliance with therapeutic guidelines and minimizing therapy disruption for members,” he says.

According to Earl Steinberg, MD, MPP, president and CEO, Resolution Health, a healthcare data analysis company, step therapy makes both clinical and economic sense. “In many instances, there are several drugs that are therapeutically equivalent, meaning they are equally safe and equally effective,” Dr. Steinberg says. “In such instances, it makes sense to start with the lowest cost option. Doing otherwise would be a result of good pharmaceutical marketing, rather than good medicine.”

That said, there sometimes are inter-individual variations in response to particular drugs. “Thus, even though two drugs may be therapeutically equivalent on average, or statistically, that may not be the case for particular patients,” Dr. Steinberg says. “As a result, some patients may have good reason to use a drug in a higher step-but only after trying the lowest cost therapeutically equivalent option. Step therapy makes economic, but not clinical sense, when the drug classifications are based on what deals are obtained from a PBM, rather than on clinical data.”

To some degree, the top five drug classes included in step therapy have enabled PBMs to curb drug trends in these therapeutic categories for plan sponsors, according to Reis. “In some cases these step-therapy programs or ‘contingent edits,’ as they are sometimes called, helped prevent serious medication adverse events as in the case of the cardiovascular risks associated with the Cox-2s,” he says. “For many years, PBMs like NMHC have promoted the use of step therapy to manage the Cox-2 class, understanding that the unique clinical benefit of these newer anti-inflammatory medications was relegated to a specific patient population. What many had discovered was that the highest trend rates were occurring in those patient populations with lowest risk for gastrointestinal bleeds. By using step therapy with the Cox-2s, PBMs were better able to manage the Cox-2s’ place in therapy, which may have saved lives in addition to curbing drugs costs.”

According to Dr. Steinberg, it is not surprising that antiulcer medications are No. 1 on the list of those used in step therapy. “About 6% of people in health plans today are on proton pump inhibitors (PPIs), the most commonly prescribed category of antiulcer medications. The most widely prescribed PPIs are Nexium, Prevacid and Protonix,” he says.

PPIs have had the greatest financial savings impact on plan sponsors, according to Reis. “The crossover of omeprazole to OTC status resulted in great cost disparity among the PPIs and made OTC omeprazole the most cost-effective product on the market. With many plan sponsors opting to include an OTC product as part of their pharmacy benefits, step therapy programs mandate that OTC omeprazole be first-line therapy in many cases,” he says.

New generics have also fueled the growth of step therapy as was the case with the statin class and ACE inhibitors, Reis says. “The entries have opened up opportunities for step-therapy programs to enforce generic use as first line treatment in drug classes dominated by single source brand products or in similar drug classes such as the angiotensein receptor blockers,” he says. “This is something that mandatory or generic incentive programs typically do not do.”

Finally, the reformulation of existing drug products has created newer, more expensive products without significant increases in efficacy. “This was the case with the newly created long-acting formulation of albuterol, levalbuterol. These pharmaceutical marketing strategies can extend product patents or shift market share away from drug products soon to come off patent.” Reis says.

One of the standout categories, Reis believes, are the statin drug class.

“The release of the combination product simvastatin and ezetimibe-which is parity-priced across all available strengths and is significantly less expensive than the brand name statin products currently on the market-will create market pressure as more clinical studies come out illustrating its cost effectiveness and safety,” Reis says. “Additionally, patent protection will be lost on some major statin products over the next several years. This will allow plan sponsors to appropriately and responsibly reduce trend rates in this area with clinical management tools such as step therapy.”

It surprises Dr. Steinberg that antihistamines are No. 11 on this list. “On average, there is about one prescription for a non-sedating antihistamine filled per year for every two people in a health plan,” he says.

One of the limitations to step therapy is that all these programs are driven solely by patient demographics and prescription claim records, according to Reis. “The integration of medical data into such programs will significantly improve the effectiveness of promoted proper medication use,” he says. “The specificity of determining what indication a member is using a medication for through the use of ICD-9 codes will enable more sophisticated clinical protocols across more areas of a pharmacy benefit. You will also see more integration of prior authorization or pre-certificate programs with step therapy to allow for smarter prescription claim edits that will reduce member disruption and delays in therapy-all problems associated with those programs.”

Dr. Steinberg believes that step therapy is here to stay, and likely will become even more common. “I also think we will see creative new strategies for getting people to use products in the lower steps. The introduction of HSAs creates convenient new approaches for providing people with economic incentives to use lower step medications,” he says.

Resolution Health, for example, is about to launch a new program called SMART Switch, which employs personalized coupons (i.e., coupons in which a personal identifier has been embedded in a bar code in the coupon) to incent people to try lower-step drugs.