Top ways you can impact drug spending

February 3, 2016

How at-risk negotiations with pharmaceutical manufacturers and medication adherence programs improve both sides of the healthcare value equation: patient outcomes and costs.

The continuous increase in medication spending, especially spending related to specialty drug costs, has been well-documented and appropriately lambasted in some circumstances. According to a report by the Kaiser Family Foundation and Truven Health Analytics, prescription drug spending accounts for 10% of national spending on health: $300 billion. Moreover, drug spending in employer health plans is nearly double that share, 19%.

O'Connor

Price gouging by pharmaceutical executives with little to no experience in clinical care does little to ameliorate the situation, except to shine a light on the desperate need for industry alignment among payers (especially Medicare) and pharmaceutical manufacturers. I am certain the notorious Martin Shkreli’s appearance before Congress scheduled for February 4, 2016 will be must-see-TV for many.

Related: Six ways to prevent price gouging

Nevertheless, here are the top ways you can impact medication spending while improving patient outcomes at the same time.

1. Done properly, at-risk negotiations with pharma manufacturers should generate positive outcomes for managed care executives.

In November 2015, pharma’s at-risk day in the United States arrived with the announcement of the Harvard Pilgrim deal with Amgen for the PCSK9 inhibitor Repatha. The gist of the agreement is that Harvard Pilgrim will recoup additional rebates from Amgen if patients on Repatha do not achieve specific cholesterol targets for various patient groups.

Managed care executives have many resources available capable of smoothing at-risk negotiations in a way that aligns all parties for value-based success. If manufacturers and payers would allow them to do so, specialty pharmacies could serve as the conduit that enable both parties to generate value from at-risk agreements.

Next: Nonadherence impacts drug spending

 

2. The longest lever available to impact medication spending is still fixing nonadherence.

Medication nonadherence is a serious problem, with the World Health Organization noting that the average nonadherence rate is 50% among those with chronic illnesses. Those chronically ill patients, roughly 20% of the population, account for 80% of U.S. healthcare spending. According to a meta-analysis published in the Annals of Internal Medicine, Americans are failing to comply with medication prescriptions for a variety of reasons costing them and their insurers between $100 billion to $289 billion a year.

As it relates to pharmacotherapy, payers need to ensure stellar adherence to high-cost therapies among their patients.

A study published in 2012 by Curant Health CEO Patrick Dunham, and others, demonstrated that for a population of patients taking Highly Active Antiretroviral Therapy (HAART), the percentage of patients whose viral loads were considered undetectable increased from 28% to 66% with advanced, high-touch medication therapy management. Overall healthcare costs for the same population of patients decreased by $3,000 per patient per year.

Related: Top ways to tap value from specialty drugs for chronic care

We have known, and endeavored to make known throughout the healthcare community, that improving medication adherence especially for chronically ill patients should be a top U.S. healthcare priority. Thanks to medication therapy management protocols proven to accomplish this, we struggle to understand why more accountable care organizations and MCOs aren’t beating our doors down. That aside, we will continue to improve patient education and adherence to specialty regimens, especially for those with multiple chronic conditions. We do it every day because with know that it improves patient outcomes and reduces overall healthcare costs.

Read more: How to reduce healthcare spending through MTM

 

 

Marc O’Connor is chief operating office for Curant HealthCurant Health treats patients nationwide through its medication management protocols.

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