For every 10 percent increase in the use of generic, rather than brand-name, statins, Medicare costs could be reduced by about $1 billion annually. These would be direct Part D savings achieved via the price difference between the brand and generic, according to John F. Hoadley, PhD, a health policy analyst at the Georgetown University Health Policy Institute and lead author of a study in Health Affairs that makes this point. However, the saving that might accrue from the health benefits of statins is not part of this particular calculation, says the study. The researchers further point out that private insurers could apply a zero copayment approach to generic drugs, increase their use, and lower their costs.

The researchers observed that adherence is higher when patients take the less expensive generics. To the extent that adherence increases after patients make the switch, there is the potential for further savings.

The study looked at 2008 data to see whether cost sharing and utilization management influence use of generic statins. This class of drug was chosen because it is one of the most-prescribed drug classes, used by 44 percent of Medicare beneficiaries, and studies have found that it doesn’t ­really matter which statin is prescribed to patients not at high risk.

After the researchers compiled data on the estimated effect of generic drug and branded drug copayments and on utilization management techniques (prior authorization and step therapy), they created five possible drug plans. Plans A and B have no copayment for generic drugs but differ in their treatment of brand-name drugs and use of step therapy. Of the three plans with copayments for generic drugs, plan E has the lowest copayments for Lipitor and Crestor, and plan D requires prior authorization.

Predicted rates of generic use for beneficiaries in the five plans range from 51 to 88 percent. This range is similar to the actual range of generic use for prescription drug plans in 2008, the researchers say.

Plan A has the largest spread between generic and brand-name copayments and achieves the highest predicted rate of generic use. The lowest predicted rates are for plans C and E, which combine generic copayments with relatively low copayments for popular brand-name drugs and have no utilization management requirements.

Predicted rates of use for generic statins
Plan Generic drug Lipitor Crestor Other brand-name drug Prior authorization Step therapy Predicted generic use
A $0 $115 $99 $126 No No 88%
B 0 34 30 126 No Yes 62
C 7 30 75 75 No No 59
D 10 43 26 26 Yes No 73
E 7 24 93 93 No No 51

Source: Hoadley JF, Merrell K, Hargrave E, Summer L. In Medicare Part D plans, low or zero copays and other features to encourage the use of generic statins work, could save billions. Health Aff. 2012;31(10);2266–2275.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.