Dbn0802.pmd

News, Data and Business Strategies for Health Plans, Employers, PBMs and Pharma Companies House Passes Part D Rx Negotiations Bill; As expected, the full House passed legislation last week that gives HHS the au- thority to negotiate prescription drug prices under the Medicare Part D benefit. The initiative, however, is expected to face a much tougher time in the Senate, where some Democrats already have expressed skepticism about the government’s ability to drive prices lower than what can be achieved by private health plans and PBMs.
Meanwhile, CMS issued a report from its independent actuaries that concluded mandated government negotiations “would not produce any savings.” And President Bush has vowed to veto any bill that includes the government negotiations provision.
Nevertheless, the House voted 255 to 170 — including 24 Republican votes — on Jan. 12 to approve H.R. 4, a bill that removes the “non-interference clause” in the 2003Medicare reform law that has prevented the government from negotiating prices.
According to the legislation, the HHS secretary “shall negotiate with pharmaceuticalmanufacturers the prices (including discounts, rebates, and other price concessions)that may be charged” to Medicare Prescription Drug Plan (PDP) sponsors and Medi-care Advantage prescription drug plans (MA-PDs).
Humana Launches Generic Copay Waiver;BCBSMN’s Zero Copay Lifts Generic Rx Usage In an effort to raise awareness about the value of generic drugs, Humana Inc. is waiving the first copayment on generics in a half-dozen therapeutic classes. The pro-gram, unveiled last month, will be available in 2007 to all of Humana’s fully insuredcommercial members on tiered copay Rx drug plans. The initiative comes as otherhealth plans and PBMs are renewing efforts to promote the low-cost therapies, includ-ing through the use of copay waiver programs, which rocketed generic utilization tomore than 70% at one Blues plan.
Under Humana’s “Waive Generic Copayment” program, members get their first prescription free when they elect to switch to generic alternatives in one of six targetedclasses: proton pump inhibitors, Cox-2 inhibitors, hypertension, cholesterol, depres-sion and diabetes oral medications. The program is Humana’s first step at waiving generic copays, say company executives.
AIS Withdraws from Copyright Clearance Center Digital Program Effective October 2006, AIS no longer participates in the Copyright Clearance Center’s digital program, which means that CCC users who renew their annual CCC contracts after October 2006 are no longer permitted to redistribute portions of AIS newsletters electronically. For information on our very reasonable rates for redistributing AIS newsletters by photocopy or e-mail, please call Bailey Sterrett at 800-521-4323.
Published by Atlantic Information Services, Inc., Washington, DC • 800-521-4323 • www.AISHealth.com An independent publication not affiliated with insurers, vendors, manufacturers or associations “It’s an added value to the consumer,” says Steve which first offered the program to self-insured clients in Hyde, manager of clinical operations and pharmacy and January 2006, and extended it to fully insured clients in therapeutics at Humana. “It saves the consumer money July 2006. In total, about 35% of BCBSMN’s 2.7 million members are not charged for generics, Heaton explains.
Humana selected the six drug classes initially for the After a year on the program, self-insured clients program because they treat chronic diseases for which have seen major shifts toward generics, he says. “They medication compliance is important, says Hyde. The went from an aggregate of 54% to 55% of all prescrip- company will consider expanding the program based on tions filled generically now to 72% to 73% of all prescrip- its effectiveness in these classes, he adds. Hyde also says tions filled,” Heaton says. Most self-insured clients reach that Humana has not set a target percentage for generic a break-even point when their generic utilization rate utilization. “We feel it can definitely go higher,” he says.
rises between five and 10 percentage points. At this “We’d like to see it go higher. There is really no ceiling as point, the money spent on absorbing the full cost of the covered population’s generic drugs is fully offset by the money not being spent on brand drugs, according to (BCBSMN), meanwhile, has seen generic utilization soar to more than 70% under its year-old copay waiver pro- gram. The program more than pays for itself, says AlHeaton, Pharm.D., director of pharmacy at BCBSMN, “The net result is they are paying a lot less money for their members for a [per member per month] basisthan they did almost two years ago,” Heaton says. Fullyinsured clients are on the same track, he adds. “Within Drug Benefit News (ISSN: 1530-3438) is published 24 times a four months time, we have had an improvement of year by Atlantic Information Services, Inc., 1100 17th Street, NW,Suite 300, Washington, D.C. 20036, 202-775-9008, nearly four percentage points on generic use, from about 56% to 60% of all prescriptions generic,” Heaton says.
Copyright 2007 by Atlantic Information Services, Inc. All rights Cost savings for these clients have been estimated at reserved. No part of this publication may be reproduced or transmitted by any means, electronic or mechanical, including Heaton also explains that even a small shift of $2 to photocopy, FAX or electronic delivery without the prior writtenpermission of the publisher. Drug Benefit News is published with $3 in copays can make a difference in utilization pat- the understanding that the publisher is not engaged in rendering terns. “When you go from $10 to zero dollars, as you legal, accounting or other professional services. If legal advice or would on a typical generic, you do see quite a bit of other expert assistance is required, the services of a competentprofessional person should be sought.
Managing Editor, Neal Learner; Editor, Angela Maas; Assistant Editor, BCBSMN does financial modeling for employers to Brian Schuh; Executive Editor, James Gutman; Director, Databases demonstrate savings under the waiver. “If you want to and Directories, Susan Namovicz-Peat; Publisher, Richard Biehl; hedge your bets a little bit, and say ‘I want to drop my Marketing Director, Donna Lawton; Fulfillment Manager, LauraBaida; Production Coordinator, Melissa Muko.
generic copays to zero, but I’ll up my non-formulary Call Neal Learner at 800-521-4323 with story ideas for future brand copayment to some amount,’ we model that out as well,” he says. “This provides additional incentive to Subscriptions to DBN include free e-mail delivery in addition to the move to generics. They can move right away to zero and print copy. To sign up, call AIS at 800-521-4323. E-mail recipients feel that they’re still whole, that they’re not losing some- should whitelist aisalert@aispub.com to ensure delivery.
thing. This way, if the behavior does take place, then they gain the benefits of that as well.” (1) Call 1-800-521-4323 (major credit cards accepted), Another benefit of the zero-dollar copay appears to (2) Order online at www.AISHealth.com, or be improvement in Rx persistency, Heaton explains. “If (3) Staple your business card to this form and mail it to: you get on the right drug, and it doesn’t cost you any- AIS, 1100 17th St., NW, Suite 300, Wash., DC 20036.
thing, you have a tendency to stay on the drug,” he says, pointing out this could have a beneficial financial effect for payers. “There may be some downstream cost sav- ings on the medical side from doing this practice,” says *Make checks payable to Atlantic Information Services, Inc.
D.C. residents add 5.75% sales tax.
Heaton. He adds that BCBSMN is examining the data to Call 800-521-4323 (or visit the Marketplace at www.AISHealth.com) to order Drug Benefit News on CD, a searchable CD with all 24 Like other insurers, Aetna, Inc. aims to increase issues of the newsletter published in 2006. ($89 for subscribers; generic usage. It has been successful in boosting generic rates in recent years as several large therapeutic classes Call 800-521-4323 or visit the MarketPlace at www.AISHealth.com for more information on AIS’s comprehensive looseleaf A Guide to the Medicare Drug Benefit.
have gone generic, says Michael Brodeur, head of formu- lary development and pharmacy clinical policies at Aetna. The major class to go generic in 2006 was thestatins, with both Merck & Co.’s Zocor (simvastatin) and Covering the full cost of cardiology drugs taken by Bristol-Myers Squibb’s Pravachol (pravastatin) going patients who have suffered a heart attack could prevent generic in the second half of the year, he says.
repeat attacks and strokes, saving 4,736 lives and $2.5 “In the last several years, we have had major drug billion in annual health costs, according to a new study classes every year: Antidepressants went generic two that finds waiving medication copayments would years ago, and now the cholesterol-lowering drugs in ’06,” Brodeur says. “Going into ’07, there is not really a The study, published in the January-February 2007 large class of drugs. But in ’08, there will be another big issue of the journal Health Affairs, estimated that health class of drugs: The [proton pump inhibitors] will have insurers would spend an additional $644 per patient to their second big entrant of a generic. We probably would waive out-of-pocket expenses for drugs such as beta- see a lot more shifting. The goal is always to keep in- blockers, ACE inhibitors and statins. But the researchers found that an increase in medication compliance wouldsave $5,974 per patient.
In practice, however, such condition-specific Aetna plans to continue using a number of tools to copayment programs are not common among health encourage generic usage in the coming year, including a insurers, and carry some operational challenges, say coupon program that allows members to skip a copay while still reimbursing the pharmacy. “We usually roll it The return on investment from so-called secondary out in targeted areas first,” Brodeur says. Aetna identi- prevention programs — aimed at patients who already fies areas with the lowest generic utilization rates, and have suffered a primary heart attack or other event — uses the coupons to try and boost generic utilization “is pretty strong,” says Robert Epstein, M.D., chief medi- cal officer at Medco Health Solutions, Inc. “We have had Medco Health Solutions, Inc. also will continue its a lot of plans that have experimented with different plan efforts around generics in 2007. These initiatives include designs for secondary prevention,” he says. The tactic sending out client communications about the generic allows health plans to direct additional resources to pipeline and patient-specific physician communications patients at significantly higher risk of a second attack, asking for a “dispense as written” waiver so that the rather than to the “worried well,” he says.
The PBM also will continue using its “Off-Patent Migration Program” that focuses on blockbuster drugs But, Epstein adds, in one case, “chaos ensued at the losing patent protection, says Medco spokeswoman Jenni- member level” since different employees paid different fer Luddy. The program communicates to members, phy- copays for the same drug. Ultimately, these programs sicians and retail pharmacists about the arrival of the were phased out. “I’m not opposed to the concept,” he says. “The reality is how it plays out in the member level.” ◆ A $15 copay waiver to encourage members to move
Blue Cross and Blue Shield of Michigan subsidiary their brand prescription to Medco’s mail-order phar-
Blue Care Network offers reduced copays for certain macy prior to drugs going off patent (this is to capitalize
conditions. But the insurer avoids restricting the pro- on the generic substitution quicker once the patent expi- grams to patients with specific diagnoses because of operational challenges, says Kim Tonkavich, director of pharmacy health centers at Blue Care Network.
A faxed notification that the generic version of a par-
In an effort to improve medication compliance, the ticular brand drug is coming (90 days prior to patent
HMO subsidiary in March 2006 said it would reduce expiration), and a faxed notification that the generic is copays for certain brand-name asthma control medica- tions to the generic copay level. The goal is to increase ◆ Point-of-sale messaging. Through Medco’s integrated
compliance with control drugs, improving asthma con- data systems, the PBM sends a message to retail phar- trol, reducing dependence on rescue medications and macies if a generic equivalent is available.
eliminating some hospitalizations. Under the most Contact Doug Bennett for Hyde at (502) 580-3625, popular benefit structure, that accounts for almost $400 Kate Prout for Michael Brodeur at (215) 775-6264 and per patient per year in additional spending by the in- surer, Tonkavich says. The brand-name copay is $40, Go to www.AISHealth.com to sign up for FREE e-mail newsletters — Business News of the Week, Government News of the Week and Today in E-Health Business.
versus a $10 generic copay, and such prescriptions typi- Robert Epstein, M.D., chief medical officer at Medco Health Solutions, Inc., says that the long-term goals of “By helping to lower the consumer share of out-of- the collaboration are focused on “taking a broader ap- pocket expenses, there is a direct correlation to an increase proach” to genetic testing, specifically “what is the value in compliance,” Tonkavich says. So far, the insurer has proposition of genetic testing, of personalized medicine, noted a 20% to 25% increase in controller medication for the payer?” Although he declines to elaborate on any utilization, although the company still is conducting other areas that the new alliance may look into, Epstein analysis to compare its experience to local and national does tell DBN that “specialty drugs is a particularly trends, he says. The company also is still examining the interesting area” and that the “value proposition is even effect of compliance on costs. The Michigan Blues plan is better” for genetic testing within these drugs.
considering expanding the program to other disease states, With the agreement, Medco becomes the second big including both diabetes and cardiovascular conditions.
PBM to form an arrangement with a company focused on “We opted to put the reduced copay at the drug level, genetic testing. In September, PharmaCare Management irrespective of the disease identifier,” Tonkavich says.
Services, Inc. and a division of diagnostic services com- “We didn’t load it only to specific patients — we loaded pany Clinical Data, Inc. said they had formed a collabora- it globally.” As a result, the health plan is “pretty confi- tive agreement to incorporate genetic testing into specific dent” that members with other airway conditions such treatments, including a warfarin test (DBN 11/17/06, p. 6). as chronic obstructive pulmonary disease also are ben- efiting from the program. Blue Care Network was con-cerned that if the program was restricted to certain Epstein says that Medco had actually begun looking conditions, new patients and those for whom the plan has at personalized medicine about five years ago, but a lack incomplete medical data would not benefit, he explains.
of industry interest led to the PBM’s shelving the idea —at least for a while. So what’s changed since then? Call Health Affairs spokesperson Caroline Broder at (301) 652-1558 or Michigan Blues spokesperson Jon Ogar “I feel like we are close to a tipping point,” says Epstein, pointing to “an alignment of policy, economics,consumer demand and interest.…The community hasrun the gamut of benefit design changes, and they are looking for something different. The timing is better Self-insured employer payers are expressing stron- Medco Health Solutions, Inc. last month entered into ger interest than are health plans, says Epstein. “Health a strategic alliance with Mayo Collaborative Services, plans are concerned about return on investment [ROI].
Inc. to evaluate the potential of genetic testing — a move They need to make a policy decision,” he says, adding that some say is another sign that genetic testing contin- that “this is not an inexpensive test.” ues to gain mainstream health care acceptance. But one Still, Epstein says, some of these tests do have an industry insider asks whether PBMs’ role in genetic ROI. He cites a November 2006 American Enterprise testing will prove to be a boon or distraction to that bur- Institute-Brookings Joint Center for Regulatory Studies report on the case for genetic testing involving warfarin The initial focus of the partnership is a “comprehen- to realize health care savings, and says its results seem to sive, community-based analysis” of patients taking the be similar to Medco’s findings after an internal analysis anticoagulant warfarin, also known as the brand-name of new starts on Coumadin. “We estimate that formally drug Coumadin. Slated to start in the first quarter of integrating genetic testing into routine warfarin therapy 2007, the study will enroll patients and their physicians could allow American warfarin users to avoid 85,000 in order to look at real-world experiences on the drug.
serious bleeding events and 17,000 strokes annually,” The two companies plan to evaluate genetic test results finds the study. “We estimate the reduced health care spending from integrating genetic testing into warfarin Medco says that about 2 million people begin war- therapy to be $1.1 billion annually, with a range of about farin therapy annually in the United States, and about 200,000 of those patients are in Medco’s prescription “Dabbling into genetic testing with a sense to see drug database. Patients metabolize the drug differently, who is at risk is not a real new idea conceptually,” says and improper doses can cause clotting or overbleeding.
Al Heaton, Pharm.D., director of pharmacy at Blue Cross Genetic testing can help physicians determine the rate at Blue Shield of Minnesota. “Will it safeguard some drug which patients will metabolize the drug.
therapy? Yes. The tricky problem is do you test the entire Call 800-521-4323 or visit the MarketPlace at www.AISHealth.com for more information on AIS’s detailed Health Plan Strategies for Phamacy Benefits.
population,” or do you wait until someone is diagnosed Such arguments will now be taken up by the Senate, with a condition and needs to begin medication, which where Rx negotiations legislation is expected to face more obstacles, if not be killed outright through a prom- According to Heaton, the PBM deals are coming at a ised filibuster. Sen. Max Baucus (D-Mont.), chairman of time when “there is public uncertainty surrounding the Senate Finance Committee, which has jurisdiction genetic testing, and there is public uncertainty surround- over Medicare, held a hearing Jan. 11 on the issue.
ing PBMs.” He asks whether people will wonder Baucus, who has opposed earlier Rx price negotiation whether such deals are self-serving for PBMs. “To have measures, said he was open to the idea.
PBMs out in the forefront of the issue, it’s hard to know “The non-interference clause in the original Medi- care Modernization Act is prohibiting us from pursuing Heaton also notes that there are two big factors in constructive efforts to make the benefit work better for the current environment that will impact genetic testing: seniors,” he said in a prepared statement. “The total The government wants to promote the idea, but there prohibition on negotiation should be eliminated.” are corresponding privacy concerns a la HIPAA. The But Baucus also said the Part D program is working issue is highlighting the collision of the public-health well for most beneficiaries. “I see nothing that warrants perspective and the private-life perspective, he says.
heavy-handed intervention in this market,” he said. “We Still, Heaton stresses that “we’re all interested in seeing should proceed cautiously with any legislation. But we genetic testing done” on a larger scale.
should proceed nonetheless.” Among other things, Contact Heaton at al_heaton@bluecrossmn.com and Baucus said, “price controls and national formularies are Jennifer Luddy for Epstein at (201) 269-6402. View the AEI/Brookings study at www.aei-brookings.org/ Sens. Ron Wyden (D-Ore.) and Olympia Snowe (R- Maine) on Jan. 9 unveiled what will likely be the leadinglegislation on the issue. The bill, S.250, allows for gov- ernment price negotiations, but also calls for some limi- tations. Under the legislation, the HHS secretary wouldbe required to negotiate if: The bill, however, does not authorize HHS to estab- ◆ A pharmaceutical is a single-source drug, which means
lish, or require, a particular formulary. The legislation there is only one brand name of the drug available;
also does not prevent a Part D sponsor from obtaining adiscount or reduction of price for a covered Part D drug ◆ A drug was created with substantial taxpayer funding
below the price negotiated by the government.
for its research and development; and
While some health plans have said direct negotia- ◆ A private insurance plan requests help.
tions could level the playing field among Part D spon- The legislation also says there can be no “price- sors — and lower costs for all participants — most setting or uniform formularies.” The Wyden-Snowe bill industry stakeholders have roundly opposed the idea.
is a revised version of last year’s legislation that received Many critics of government negotiations point out thatPart D already is providing drugs at costs that are wellbelow initial expectations.
“We are very supportive of the competitive model on which Medicare Part D is structured,” says Judith Cahill, executive director of the Academy of Managed Care Pharmacy (AMCP). Repealing the non-interferenceprovision would introduce factors that are incompatible Join Michael Quilty of Matrix
with a competitive model in the way it is structured and Management Services, Holly Michaels
being administered today, she tells DBN. “The reason Fisher of Reden & Anders and Tom
we’re opposed to that change is because the program isworking,” Cahill says.
Coble of HealthCare Management
Recent satisfaction surveys find that in excess of 70% to 80% of beneficiaries are realizing Rx cost savings and February 8 audioconference.
improved access to the medications they need, she notes.
In addition, premium levels in the first year and 2007 Visit www.AISHealth.com
Copyright 2007 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means — including photocopy, FAX or electronic delivery — is a violation of federal copyright law punishable by fines of up to $150,000 per violation.
54 votes in the Senate. Any measure, they acknowledge, lower, CMS contends. Independent actuaries at CMS that would need 60 votes to overcome a filibuster. Indeed, reviewed H.R. 4 concluded government negotiations Sen. Chuck Grassley (R-Iowa), ranking minority mem- would “have no effect on lower drug prices,” CMS said.
ber of the Senate Finance Committee, has said he would The “inability to drive market share via the estab- join other senators to filibuster the legislation.
lishment of a formulary or development of a preferredtier significantly undermines the effectiveness of this negotiation,” said Paul Spitalnic, a director in CMS’s That would likely satisfy HHS just fine. Private com- Office of the Actuary. “Manufacturers would have little petition, the department says, has driven down prices to gain by offering rebates that aren’t linked to a pre- below initial expectations. According to CMS actuaries, ferred position of their products, and we assume that Part D budget estimates show that payments to Part D they will be unwilling to do so,” he said in a Jan. 11 pre- plans are projected to be $113 billion lower than ex- pected over the next 10 years, HHS said Jan. 8. Of the AMCP’s Cahill asserts the push for direct negotia- $113 billion reduction, $96 billion is a direct result of tions reflects a lack of appreciation for the complexities competition and significantly lower Part D plan bids, the involved in the purchase of medications. Formulary decisions involve a combination of looking at clinical CMS also said the average monthly premiums for attributes and value that medications offer to covered the basic benefit will be roughly $22, down from $23 in 2006. The original estimate for 2007 premiums was $38, it The reason a health plan is able to negotiate a low added. Government negotiations couldn’t drive prices price for a drug is because the manufacturer believes Call 800-521-4323 to receive free copies of five AIS newsletters, Managed Care Week, Medicare Advantage News, Inside Consumer-Directed Care, Specialty Pharmacy News and Medicare Part D Compliance News.
that by giving the health plan this price, the plan will import the VA system wholesale into Medicare Part D,” support the use of that product, and therefore more he says. “But to get a sense of the magnitude of the sav- product will be sold by the manufacturer, Cahill ex- ings that are left on the table by Part D, it is a very help- plains. “So there is leverage that comes with the volume of business that the manufacturer assumes they are go- But Cahill counters that the price comparison be- ing to be doing on behalf of that covered population for tween VA and Part D drug plans is “really looking at that particular health plan,” she adds. “If I’m the federal government, what do I have to offer? I don’t offer a pre- Substantial differences between the two systems scription drug benefit. Where is my leverage?” include the fact that VA maintains its own formulary and Still, some proponents of direct negotiations argue uses a comparatively limited network of VA pharmacies, that Medicare Part D could have at least the same lever- Cahill says. VA both purchases and distributes prescrip- age as the Department of Veterans Affairs (VA). Prices tion drugs, she adds. By contrast, the Medicare program under the VA’s drug plan are 58% lower than those un- serves as an insurer that pays for care that is delivered to der the Medicare drug plans, says health advocacy covered beneficiaries at a myriad number of sites by professions operating without a centralized system’s According to a Jan. 9 Families USA report, prices oversight and guidance, according to AMCP.
charged by the five largest Part D sponsors are 50% to Regardless of the technical arguments, some observ- 75% higher than the VA price for Celebrex, 51% to 82% ers contend that the direct-negotiations initiative is much higher for Lipitor (10 mg), 69% to 95% higher for more about politics than pharmaceutical procurement.
Nexium, and 205% to 261% higher for Fosamax (see Direct negotiations “is politically an easy win,” says John Graham, director of health care studies at free- Families USA believes that access to drugs under the market think tank Pacific Research Institute. Graham, VA system and access to drugs under Part D are quite who opposes the idea, expects a bill will eventually pass comparable, says Marc Steinberg, deputy director of both chambers. “I would anticipate a bill that is quite health policy at Families USA. Both systems have an sloppily written just to go up to [President Bush] to veto, exception process for drugs not on the formulary, for to make him [and other Republicans] look bad in ’08,” The price difference on the VA program provides a For more information on the Wyden-Snowe pro- sense of the bargaining power that the government has, posal, visit http://wyden.senate.gov. Contact Graham at Steinberg says. “No one is saying that you’d want to (415) 955-6104 and Cahill at (703) 683-8416. ✧ ◆ CVS Corp. on Jan. 16 boosted its offer to ac- $26 billion offer in December 2006 to acquire the quire Caremark Rx, Inc. by $2 a share to be paid company (DBN 1/8/07, p. 1). That offer, in turn, in the form of a one-time dividend to Caremark followed a November 2006 CVS offer of $21.1 bil- shareholders. CVS also said it would retire 150 lion to acquire Caremark (DBN 11/3/06, p.4). CVS million outstanding shares in the new company, and Caremark said Jan. 16 that the combined com- representing roughly 10% of the combined firm’s pany is expected to achieve between $800 million shares. The share retirement is expected to signifi- and $1 billion in “incremental revenues” in 2008, cantly increase the combined company’s return on revenues that would be driven by sales of new equity in 2008, CVS said. The sweetened deal offerings that only a drugstore/PBM combination came hours after rival suitor Express Scripts, Inc.
can provide. But Express Scripts responded that said it would offer Caremark stockholders $29.25 this is the third set of synergy estimates from CVS in cash and 0.426 of a share of Express Scripts and Caremark in as many weeks. “This time, CVS stock for each share of Caremark. The offer gives and Caremark have discovered alleged revenue Caremark stockholders a 7% premium over the synergies with unknown, if any, profitability,” Ex- value of CVS’s proposal as of Jan. 16, Express press Scripts said. The fate of a Caremark-CVS Scripts said. The bidding war follows on the heels merger could rest on a shareholder vote expected in of Caremark’s Jan. 8 rejection of Express Scripts’ Call 800-521-4323 or visit the MarketPlace at www.AISHealth.com for more information on AIS’s detailed Specialty Pharmacy: Stakeholders, Strategies, and Markets.
◆ WellPoint NextRx said Jan. 9 that it had won a health initiative dubbed Cover Tennessee, accord- three-year contract with the Missouri Department ing to the Tennessean. CoverRx is expected to cost of Transportation (MoDOT) and Missouri Highway the state $45 million over three years if an antici- Patrol Medical and Life Insurance Plan. Under the pated 25,000 to 50,000 people sign up. About 250 contract, which took effect Jan. 1, WellPoint NextRx drugs are available through CoverRx. Copayments, provides pharmacy benefit management to an esti- which vary depending on income, will be required mated 27,500 covered lives. The PBM services in- of all enrollees. Individuals earning as much as clude claims processing, network management mail $24,500 can expect to pay no more than $10 for a services, specialty drug services, formulary man- generic drug, according to the newspaper. Poorer agement and prior-authorization services.
people will pay as little as $3 for generics.
WellPoint NextRx will also support MoDOT’s clini-cal programs and drug utilization review. Contact ◆ Prescription drug spending grew 5.8% in 2005, compared with 8.6% in 2004 and a peak of18.2% in 1999, according to a Jan. 9 article in the ◆ OptionCare said Jan. 11 that it has signed a journal Health Affairs. Overall U.S. health care spending slowed to 6.9% in 2005, down from 7.2% Excellus BlueCross BlueShield and Univera growth in 2004 and 8.1% in 2003. The slowdown in Healthcare to provide specialty pharmacy ser- drug spending is a result of increasing generic drug vices to more than 1.4 million members. Under use, a proliferation of tiered-copayment benefit the agreement, OptionCare will provide specialty plans (which slowed the use of brand-name drugs), therapies and medication management programs to a drop in the number of new drug introductions, members of FLRx, the pharmacy benefit manage- and a “dramatic decrease in Medicaid prescription ment entity for these companies. These services will drug spending,” the article said. Total drug spend- be coordinated through OptionCare’s Specialty ing in 2005 was $200.7 billion, compared with Pharmacy Center located in Ann Arbor, Mich. Con- $189.7 billion in 2004, it added. Drug prices in- tact Raj Rai, president and CEO of OptionCare, at creased 3.5% in 2005, about the same rate as in 2004, according to the article. The average manu-facturer price increase for brand drugs in 2005 was ◆ HealthExtras, Inc. said the state of Louisiana 6.0%. “However, this strong price growth was off- has informed the company that it intends to set by a continued shift to generic drugs that cost, on average, 30%-80% less than brand-name drugs,” company’s PBM subsidiary. The award is subject the report said. Contact Caroline Broder for Health to final contract execution and is expected to be effective July 1, 2007. The contract would covermore than 225,000 beneficiaries. HealthExtras said ◆ PEOPLE ON THE MOVE: Edmund J. Pezalla, it will provide an update on this and other corpo- M.D., vice president and medical director at Pre- rate developments in its quarterly conference call, scription Solutions, has been named to the board of scheduled for Feb. 27. Contact Michael Donovan at trustees of the Pharmacy & Therapeutics Society, a nonprofit association, for a two-year term.…CIGNAHealthCare said Eric Elliott will rejoin CIGNA on ◆ Roughly 4,200 people submitted applications Jan. 17 to become president of CIGNA Pharmacy on the first day of enrollment Jan. 2 for CoverRx, Management. Among his duties, Elliott will oversee the state of Tennessee’s prescription-drug pro- CIGNA Tel-Drug, the company’s home-delivery and gram for the uninsured, or for people who have specialty pharmacy. Most recently Elliott held senior insurance that doesn’t cover drugs. The program executive positions at Aetna, Inc., leading its phar- is open to people ages 19 to 64 who earn no more macy and limited benefit/voluntary businesses.
than 2.5 times the federal poverty rate, which is Prior to that, he ran product, sales and e-business $24,500 for an individual and $50,000 for a family for CIGNA Pharmacy Management while leading of four. CoverRx is part of the state’s multipronged Call Bailey Sterrett at 202-775-9008, ext. 3034 for rates on bulk subscriptions or site licenses, electronic delivery to multiple readers, and customized feeds of selective news and data…daily, weekly or whenever you need it. If You Don’t Already Subscribe to the Newsletter, ☎ (1) Call us at 800-521-4323
(2) Fax the order form on page 2 to 202-331-9542
(3) Visit www.AISHealth.com and click on
“Shop at the AIS MarketPlace”
E-mail Edition to Others in Your Organization: Call Customer Service at 800-521-4323 to discuss AIS’s very reasonable
rates for your on-site distribution of each issue. (Please don’t forward
these e-mail editions without prior authorization from AIS, since strict
copyright restrictions apply.)

Source: http://www.elitebenefits.us/adobe/Drug_Benefit_News.pdf