Are Big Rx Price Increases Actually Going Extinct?

--Terri Bernacchi, PharmD, MBA Most headlines these days (targeted at the Consumer) lament the egregious price hikes that some generic companies are taking that are passed along to the payer and the patient.  The stories cite the opportunistic, usurious price hikes taken on “old” products.  There is little mentioned in these stories of the problems with Medicaid/ Best Prices and some of the generic purchasing patterns that have fostered this environment.  (For example, see the link:     http://time.com/money/4551222/generic-drugs-more-expensive-than-brand-name/)  Then, when looking at the Trade Journals, you get a different picture when looking at Brand product price increases.   For example, in a FiercePharma article entitled, “Branded drug prices softening big time, distributors warn” by Eric Palmer on Oct 31, 2016, the author notes that “…drug distributors McKesson ($MCK) and Cardinal Health ($CAH) are sounding a warning for the industry: price hikes are slowing, price hikes are slowing. As a result, so are their earnings.”    For example, the article quotes Allergan’s CEO Brent Saunders reacting to the “growing hue and cry over prices with a promise to cap drug price increases as part of a “social contract” with patients, explaining the move in a full-page ad in The New York Times.”    He notes that “McKesson’s Hammergren said that it is too early to speculate about what will happen long-term or whether a change in administration in the White House will lead to ongoing pricing practices. Still, he said, the big price hikes of the near past look to be history.” It might be that the US health care system that grown accustomed to highly available and cheap generics and higher cost brands taking double digit price increases every year is undergoing fundamental change from within.  Perhaps the “go to market” cost of branded products and “price protection” terms in rebate and pricing agreements are also tamping down price increases after a product’s market entry.  (See the link to the article:   http://www.fiercepharma.com/manufacturing/branded-drug-prices-softening-big-time-distributors-warn)

Terri Bernacchi is the Founding Partner of SME Health Systems and Cambria Health Advisory Professionals.  Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA.  Contact Information:  Phone: 262-893-9049  Email:  terrib@healthadvisoryprofessionals.com

 

Specialty Pharmacy & The Manufacturer Relationship – White Paper

--Terri Bernacchi, PharmD, MBA & Tim Richards, MBA

Download our White Paper on “The Specialty Pharmacy & Manufacturer Relationship”. 

Tim Richards & Terri Bernacchi discuss contractual relationships between manufacturers and these key distribution and clinical partnerships. 

Currently, NCPDP Work Group 7 is crafting a “data standard” that should improve the efficiency of data & information exchanged between the parties. The agreements typically covers a myriad of needs in addition to discount or rebate payments, including facilitating safety recalls, reporting of REMS or Adverse Drug Reactions, patient experience, and competitive effectiveness. 

Download here by clicking on the hyperlink. (Please supply a valid email address and phone number.) 

 (See the link:      http://smehealthsystems.com/?page_id=115  )

 

Terri Bernacchi is the Founding Partner of SME Health Systems and Cambria Health Advisory Professionals.  Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA.  Contact Information:  Phone: 262-893-9049  Email:  terrib@healthadvisoryprofessionals.com

Tim Richards is a Senior Partner of SME Health Systems and Principal at Cambria Health Advisory Professionals.  Tim has over 30 years of experience in sales, managed markets, and managerial experience in mid-size pharmaceutical companies.  Tim has broad-based experience in managed markets strategy development, pricing and contracting strategies, managed markets new product launch plans, external corporate policy and communication and third party data profiles and functions.  Tim has led and managed Commercial teams focusing on all payer channels, as well as institutional and long-term care channels. Tim has a BS in Marketing from Marquette University and an MBA from DePaul University with a concentration in Finance and Marketing.  Contact Information:  Phone: 203-247-3023  Email:  tim.richards@healthadvisoryprofessionals.com

    

The Complex Reality of “Shared Decision Making” and Patient Autonomy

--By Marie Miller, Health Care Administrator & Personal Finance Professional

This author’s blog in the Yale Daily News posits some interesting things about how a patient and health care provider interact to come to a real decision that provides clarity for the patient and family and the provider alike.  

 (See the link:      http://yaledailynews.com/blog/2015/04/14/qa-ethical-persuasion-of-patients/ )

The author describes a few high level points regarding the, “ethics of persuading patients to pursue certain treatments and how physicians should navigate that tricky territory.”  The author is a PhD candidate who shared his thoughts on standard practice of decision-making in critical care, the power of framing information and how doctors should responsibly use that power. 

The balance of power in Shared Decision Making often lays in how well one party understands the facts, possibilities and repercussions of each potential path forward.

I am almost fully in line with what this researcher has to say.

In a skilled nursing facility, with transitional care capabilities, such as mine, labeled ‘sub-acute rehab’ as well as ‘long term care’ there are patients of varying ages, from early forties to over 100.

In managing this patient mix, one must learn to navigate the generational gap to be successful. In so doing, I have noticed certain qualities that the upper and lower ends of this spectrum share in common when it comes to the end-of-life discussion, in particular.

Furthermore, we have a ventilator unit in my facility, so end-of-life issues are constantly on my mind and necessarily part of my day to day job duties. I find that at the point of the admission process, where advanced directives are discussed as a matter of routine, a 90-something may be as indifferent to the conversation as a “young” (this term is obviously relative in the nursing home world) person. By indifferent I mean detached or so reluctant to think about the issue that they just want to move on and may more or less mentally shut-down. Because this is so reliably the case, I agree that physicians need to have a more direct hand in the decision making process.

It is indeed false to assume that patients and their families come in to the mix with predetermined values; I am constantly amazed at how often the exact opposite is true. “Young” patients or children of the elderly seem ignorant of the nature of end-of-life issues as well as the technical decisions involved in ventilator or feeding tube care. The elderly patients themselves are frequently past the point of making the decision or still in their generational stereotype of wanting the doctor to make the decisions (or allowing their children to do so).

Additionally, I concur with Dubov in his last statement about the presence of systematic failures in behavioral economics especially when linked so closely with emotions as in life and death health decisions.

I’ll give a brief example: a patient’s family made a split second (relatively) decision to put her on a ventilator though she had a living will stating her wishes were for no mechanical ventilation or artificial feeding. After many months of hoping for a miracle and going through the grieving process, they confronted the fact that she would not recover and put her on hospice. Hospice then used the living will as a means to justify decreasing her respiratory rate on the vent (without putting her in distress) and completely discontinuing the feeding tube (for legal reasons we are not cleared to just do an extubation at the facility). Though there was a system in place with the living will and prior physician/family discussions, it failed once the patient was incapable of communication and her family was faced with the immediate reality of losing their wife/mother.

This brings me to a final point about why doctors are in the best position to advise: a hospice marketer considered this example a “great success” because they were able to bring a vent patient on service without having to extubate at the ER then transport back to the facility (a logistical nightmare and big reason it is difficult to have vent patients on hospice). This meant having her linger for 11 days without nourishment.

Success, really? I don’t want this woman anywhere near my family at the time of our decision making process! I don’t feel comfortable with physicians directly making life/death decisions for their patients, especially given the lack of intimacy between a typical person and their physician and the monetary constraints already weighing on our system.  But at the end of the day, I can at least count on them having taken some course in ethics as well as I can hope that the Hippocratic Oath isn’t just a hollow recitation. We don’t have any hope for a functional, free, and fair healthcare system when the populace remains willfully ignorant about their choices. Until that root cause is addressed, physicians may be the best answer for an ethical outcome.  
 

Marie is health care and finance professional, working on the health care provider side in an administrative capacity.