The Debate

The following debate among Leslie Fish, RPh, PharmD, Diana I. Brixner, RPh, PhD, and Wayne M. Lednar, MD, PhD, is based on a moderated session held at the annual meeting of the Academy of Managed Care Pharmacy in Nashville, Tennessee, on October 7, 2005. Attendees of this meeting also participated by asking questions of the debaters and by responding to quick-polling questions posed by Mark Zitter.

Mr Zitter: I'm hearing that more and more

payers as well as purchasers feel that we

can't go too much further in the cost-sharing

arena. Let's talk about some of those

issues.

Dr Fish, at what point does the health

plan start to get concerned about either a

bad public relations hit or even legal action

for somebody to say, "Look, I only make

$35 000 per year and you want me to pay

$6000 per year for therapy that my doctor

says I need. You are not really covering me."

That's really denying access altogether. Is

that a consideration?

Dr Fish:

Actually, no. We haven't had that conversation, because I don't think our outof- pocket, what patients pay, is anywhere near that figure. There are a few things we need to remember here. The first thing is that we haven't decided what costs or coinsurances should be. We're not saying they should be 30%, 40%, 50%. We wouldn't be true believers in the very high cost. I think you have to have that perfect cost, one that brings the patient back into the discussion, engages them, makes them understand that there is actually a value that they have to be respective of, enough to be sufficient, but not enough to break the bank. This is one of the things that we have to worry about when we worry about cost and the price for patients. We don't know what that perfect cost is. In fact, I'm interested in knowing the others' thoughts.

Dr Brixner:

It's a great question. If we start taking all of these different cost aspects into consideration, maybe we can determine what that perfect cost is. Right now, it's like a balloon if we push in on one end. We want to keep our out-of-pocket maximums low and we don't want to increase the burden on our members. It's almost like catastrophic insurance for drugs now, because the drugs are so high. If we believe that this is all shifting, and the biologics are going to be used earlier and for more diseases, ultimately, we are going to have out-of-pocket maximums for probably 20% or 30% of our dollar volume utilization of drugs, and then the balloon suffers again. How do we push? Who is going to pay for that? Who is going to decide what the value is of that huge increase in costs for drug treatment?

Dr Lednar:

The thought that comes to my mind is price sensitivity. When employers have open enrollments for their employees' selection of health plans, the question has been asked, how much of a price differential among the options of health plan choices seems to have enough money to allow choice to the extent that out-of-pocket costs are part of that choice? It turns out that there is not much of a dollar difference in monthly or biweekly premiums to choose a health plan. Many working people don't make a lot of money, and this is a substantial part of their family's income. If we're seeing choices of health plan enrollment that differentiate by as much as $20 to $30 biweekly in payroll deduction, what are we going to do with big-ticket biologics when you have a coinsurance payment for therapy? It is going to prompt a very difficult conversation for the patient and his/her doctor, because the doctor has a therapy that could work, but it is bankrupting to the patient. Although the patient has an illness and needs treatment, they could lose their job if they don't recuperate, but they cannot afford to pay for it. It's a big balloon, and there is no clear answer right now.

Dr Fish:

Most employers say, "This is the amount of money we have. We know there are new biologics, new medications, and new technology, but we're not giving any more. This is really going to break our bank." Do we think there would be legal action? I think we worry more about not being able to give any therapy. So, again, we have X amount of dollars that we can use, than we have. At a certain point, if we do use the new medications for pulmonary hypertension and for Crohn's and for rheumatoid arthritis, we may have to say, "We are not going to be able to afford these medications." We don't want to say, "We have to take this group of medications away, because we have to add all of these new medications." There must be a balance.

Mr Zitter: So, we must do something. Dr

Lednar, from your perspective, to what

extent does an employer want to get

involved in setting some kind of policy?

Dr Lednar:

Keep in mind it is an employer's choice whether or not to offer health benefits. There is a pot of money that has been defined as available, and employers want that pot of money to be used to the very best advantage of their company's families. This is a big challenge, because spending at the far end of the clinical spectrum could steal away all of the money for those who could apply it for prevention, risk factor modification, or early disease management. Eventually, those people will get older and move into the more severe clinical progression. This is really where we need everyone's help. If we look at this pot of money today and see how wisely it is being spent, we might have some ideas. In our healthcare treatment system, we may have some resources that are not utilized, and they are costly to all of us. We need to spend our money on good patient treatment.

Mr Zitter: Because costs are increasing too

fast, we should talk about ways to increase

efficiency in the system. Dr Fish suggested

that a good way to tackle that is through

patient cost sharing, whether that means

saving money or influencing patient behavior,

particularly with biologics. Dr Brixner,

let's say that cost sharing is a good way to

approach this situation. Should we focus

on cost sharing for hospital care, primary

care physician services, or small molecules?

What about cost sharing for biologic

therapies?

Dr Brixner:

If you look at high-ticket items in healthcare, the cost of biologics now are in competition with the cost for hip replacement surgery and other major surgeries. The cost for major surgery and hospitalization is $15 000 to $18 000. Now, we have these biological drugs that compete with that. If we look at cost sharing for biologics, we must break these silos down and look at cost sharing for hospitalizations as well. Traditionally, medical costs were usually completely covered, and this cost-sharing aspect was predominantly on the drug plan side. Part of the answer to this is looking across the spectrum and the continuum of healthcare. We must focus on the issues of medical costs, physician costs, and these drug costs, and how they interact together to decrease the overall expense based on their increased value.

The one other comment I wanted to make is that you can make more out of the money that you have, but we must demonstrate with evidence that there are genuine benefits.

Dr Lednar:

What Dr Brixner describes is really going to be a significant and monumental mind shift in business.

Dr Fish:

Speaking as a Pharmacy and Therapeutics Committee member, we do talk about decreasing utilization in other areas, such as physician visits. However, we don't see this done as much as we would expect.

Mr Zitter: What are our alternatives? What

if the government made patient cost sharing

illegal? What are the alternatives to try

to save money on the pharmacy side that

we haven't tried enough, particularly when

you are looking at high-tech biologics?

Dr Brixner:

It's not about saving money. What we want to do is take that money and use it appropriately. At that point, we would go back to leaning on the physician to make the choice with the patient. The doctors don't want that full decision; they want the patients to know more about the decision. I would say the emphasis would be on the doctor to explain the medication and how it works.

Mr Zitter: You mentioned that there are no

good data for the impact of cost sharing on

biologic therapies. Couldn't it be argued for

biologic therapies, because they tend to

treat the diseases that are often much more

serious and they're usually not the first-line

therapies people take in many cases, cost

sharing may have a lesser impact on adherence

or outcomes, because they're so important

that people would be more likely to

continue to adhere?

Dr Brixner:

I absolutely agree. If we began to collect data on the adherence impact of cost sharing in biologics, it would be far less than what we're seeing in the more common medicines. There are 2 reasons for that. First, the seriousness of the disease will make the patient more committed. But, there is also the frequency aspect. Many of these biologics are subacute therapies once per month, once every 4 weeks, or sometimes even longer intervals. So, the direct impact on adherence would be far less than what we're seeing on drugs that we take once or more than once per day.

Dr Fish:

One thing that's interesting is that biologics are now designed for the more common diseases and the non-life-threatening areas. We've switched from the very rare to the very serious to the more common areas. That's where our thought processes have to go.

Mr Zitter: Of course, in the more common

diseases, biologics wouldn't be first-line

therapies, and they would only be used in

extremely serious cases.

Audience Participant: In terms of response

and better management of the high-cost biologics,

there is certainly some good evidence

that the specialty pharmacies have done

some good work in that area. As a comparison,

health plans have spent a good deal of

money per member per month for smoking

cessation and coronary heart failure programs.

Is there an opportunity now for better

solutions for medication therapy management

in the high-cost biologics area that

deliver the kind of value that we really

should be getting from them?

Dr Lednar:

Without good care plans, we're just throwing money up in the air, whether it is for expensive biologics or for less expensive small-molecule medication. Part of the solution is effectively bringing together the care from many avenues and making sure that there is adherence, so that you don't get the transplant patient 6 months out who is not taking their medications. However, I think there is also some shared responsibility in consequence management that we need to examine. If the patient has the medication and is not taking it, we must understand why, be supportive, and try to find solutions to help people through side-effect profiles and other issues. If they don't take the medicine, then what should be the consequence? Some of that [behavior] may be more cost generated.

Dr Brixner:

We're familiar with case management. Looking at total costs, patients taking these specialty therapies in biologics are going to move to the top and hopefully be attended by case management and medication therapy management.

Mr Zitter: This question raised a good

point, can utilization management be an

alternative to or supplement to cost sharing?

We would hope the answer is yes.

Audience Participant: My question is for

Dr Lednar. You talked about cost shifting to

employees, and you made the statement

that many employers are maximally cost

shifted. What does maximally cost shifted

mean, and how does an employer determine

what maximally cost shifted is?

Dr Lednar:

As we see copays increasing in dollar amounts, and as we move increasingly to coinsurance and realize the amount of money that that means, given the amount of money that people have, we feel we're at the point where increasing that cost on to employees will result in medications not being taken and therapy not applied. It will increase the negative adverse consequences. We don't have an actual fixed dollar amount, but we see what the total cost of healthcare and the cost of current therapies and biologics are, and they are a huge expense. We clearly see what is coming, and we want to anticipate and work with that preemptively. In the small-molecule world, people are already at the point where they're not filling prescriptions because they can't afford them, and that's without a coinsurance approach to specialty biologics.

Audience Participant: Dr Lednar, what initiatives

or what feelings are you getting

from other employer groups about evaluating

the need to take a stand with pharmaceutical

companies on pricing?

Dr Lednar:

What is very hard for many employers to understand from a purchasing point of view is that, in most areas of company spending, it is understood that there is a close working relationship with the partners to improve efficiencies. What seems to be the one exception to this whole dynamic is healthcare. The reality for employers is that they understand earnings, the competition, and new product improvements. That does not appear to be the dynamic in healthcare understanding. We may be reaching a point where employers will need to come together and say, "Why is it so much, and why, once it is introduced, is it taking so long for it to be less expensive?"

Audience Participant: Dr Brixner, you

talked about justifying the incremental

differences between the cost of traditional

therapies and biologicals. I'd like you to

address what should happen when those

costs cannot be justified in any way.

Dr Brixner:

Your question brings us exactly to some of these really tough choices that we need to make. First of all, you need to feel confident that you have collected all of the available evidence and looked at all of the potential benefits to various aspects across society. However, when the value does not justify the incremental cost difference, the decision most likely is simply not to cost share but to simply not cover [the treatment]. If you have the supportive evidence, the answer may be that you will not offer the coverage.

Audience Participant: Is this all about cost

sharing, or are there other opportunities

here that frame all of this in a medical

model that includes how the physician is

making a decision? Are they making a decision

that is the best for that particular

patient?

Dr Lednar:

One initial thought to that answer may be the creation of a useable evidence base that helps people in the usual and common practice setting. If a patient with a certain diagnosis has exhausted certain therapeutic options, at a point in their care management the very best medical decision may be to add the high-ticket biologic. This will make it harder to not apply the high-ticket biologic in that situation if we have an evidence base which is useable.

Dr Fish:

The New England Journal of

Medicine

You're right. There are physician incentives out there that we are trying to change around, because we want to have target guidelines. There is one other thing that we haven't talked about, the fact that drugs aren't 100% effective, and right now we have a really hard time saying no to people. In a recent issue of , an oncologist wrote that perhaps we should start thinking about cost along with how we are treating patients. We must encourage both physicians and patients to think about what we're doing.

Dr Lednar:

We should think about living wills or end-of-life directives. Some patients don't want the extensive application of lifesaving treatments, and yet they still occur. We really need to understand more about what patients' wishes are before we go to the full court press. In addition, what is the role of the tax structure? Many employers have pretaxed monies set aside for employees to use for out-of-pocket expenses, and they ease some of the financial burden.

Audience Participant: Cost sharing is obviously

something that is becoming much

more common, and the other real issue is

adherence. Has any plan or organization

combined these? I realize there are administrative

challenges to claims payment, but

I would think that as a patient becomes

adherent on a therapy, there is a potential

reduction in the cost sharing as well as a

reduction in their financial burden over a

period of time.

Mr Zitter: If you are suggesting that if

someone is more adherent they could receive

a reduction in cost sharing, I haven't

seen this in plan designs. However, we

have seen some innovative programs from

Pitney Bowes and other places that have

reduced or eliminated copayments and enhanced

adherence. What are your thoughts,

Dr Lednar?

Dr Lednar:

More and more employers are providing financial incentives to encourage employees to complete a health risk appraisal. In addition, some employers are producing some savings from employees who have certain risk factors and who are enrolling in programs to work with those risk factors. For biologics, the idea of reducing cost share for more adherence is already being tried at the early end of the spectrum with really good results. This is a concept that we should further explore.

Mr Zitter: Another question we have to ask

ourselves is the issue we pointed out earlier,

that the total cost of biologics to the

healthcare system is far less than, say, the

cost of hospital treatment. The question is,

when we think about other areas, how do

we compare them? If we think about cost

sharing for biologic therapies, we can also

explore the pros and cons of doing the

same for surgeries or hospitalizations.

What would be different about areas that

have a much higher overall impact on total

healthcare expenditures versus biologics

that are now a small percentage of these

expenditures?

Dr Lednar:

We've had tiered prescription drugs, and what is beginning to emerge are tiered hospital networks. In-network and out-of-network structures are choices predicated on cost and cost share. If you really want to do the best for your patients in terms of care and outcome, you try to get your patients to the very best place for treatment for their conditions and then finance that in a way that encourages people to make those choices based on performance. Having said that, I also know that there will be some hospitals and employers that will not agree with their placement in that performance continuum.

Mr Zitter: These are big issues that we need

to resolve, but within the context of healthcare,

we want to think about whether cost

sharing is a tool we are going to use, and

we want to think about how it could be

applied across the board into some of the

other big-ticket areas as well.

Dr Lednar:

One other thought that I'm hearing from employers is that if you buy a car and the car comes with a warranty, and the product you buy isn't performing, you bring it back to the dealership and parts are replaced under warranty. In that scenario, the providers stand behind their product and their service, and if they don't perform as advertised, they pay to fix it. Healthcare is not like that. If you go into a hospital and you contract an infection from receiving bad care, or there is some misadventure, you must pay again.

Mr Zitter: Thank you for engaging in such a

spirited debate. We all agree we need to do

something about rising healthcare costs. Is

patient cost sharing a sound approach to

managing expensive biologics? Cost

sharing is a blunt instrument that blurs

the distinction between appropriate and

inappropriate care in terms of reducing

demand. Employers care very deeply about

costs, but many feel tapped out in terms of

their ability to use cost sharing–particularly

for pharmaceuticals–as a cost-saving

tool. But we're left with unsustainable cost

increases. Are there ways in addition to, or

instead of, cost sharing for biologics to manage these expenses? Can we find alternative

methods to influence patient behavior so that

we can have more positive outcomes and

positive behaviors without the downsides of

cost sharing? If a therapy can be used for

both rheumatoid arthritis and psoriasis, do

we want to have different cost shares for

those different areas? Is that possible? Could

we have income-related cost sharing? Can

we make better use of utilization controls to moderate costs and ensure appropriate care? Can we make more creative and effective use of living wills and patient assistance programs? We thank Genentech for its support of this illuminating debate.

After the Debate: The Vote

At the conclusion of the formal presentations and the debate, Academy of Managed Care Pharmacy participants at this session were asked to cast their votes via instant polling on the following questions.

Download PDF: The Debate