Saturday, April 28, 2007
I have written about the hiring practices of Pharmaceutical Companies in A Picture is Worth 1000 words and Prilosec OTC, Wine & Cheese.
A Hat tip to Joe Padua at Managed Care Matters for providing details on a 21 year old pharmacy rep in South Florida without a degree yet but with the title of Miss FHM 2006 whose picture I have included here.
So now I have another image for use in enrollment meetings to illustrate how certain drugs come to be commonly prescribed and trust me the employees get the picture immediately as to what is really happening.
You really cannot make this stuff up.
I ran across this explanation last week from the Kaiser Foundation on pharmacy trend and am reprinting it in full below to expose its true nature as pure cow dung.
Daily Health Policy ReportPrescription Drugs | Prescription Drug Spending Growth Rate Expected To Increase, Report Finds[Apr 26, 2007]
Prescription drug costs increased at a slower rate in 2006 than in 2005, but the growth rate is projected to increase in 2008 and 2009 because of fewer generic drug releases and higher spending on specialty drugs, according to Express Scripts' annual drug trend report, the St. Louis Post-Dispatch reports. The report, released on Wednesday at the company's annual Outcomes Conference in St. Louis, examines data from its three million members to estimate national prescription drug costs. Express Scripts found that drug prices rose 8.2% in 2006, compared with 9% in 2005. The report projected that prescription drug spending would increase at higher rates in 2008 and beyond, according to the Post-Dispatch. Express Scripts attributes the future higher growth rates to fewer blockbuster drugs losing patent protection in 2008 and 2009. In 2006, several blockbuster drugs went off patent and lower drug spending resulted from patients switching to generics. In addition, because companies have launched aggressive campaigns to encourage patients to use generic drugs, much of the costs savings already have been realized, according to Tim Simpson, a principal at Mercer Human Resource Consulting. The report also found that certain drugs had higher levels of cost growth in 2006, including medications to treat diabetes, which experienced a 15.5% growth -- the second year of double-digit increases. Express Scripts expects the costs of diabetes medications to continue to grow at double-digit rates for the next four years, according to Julayna Meyer, vice president of trend management for the company. Spending on specialty medications -- high-cost, often injectable drugs -- is experiencing the fastest growth rate. Spending on those drugs is expected to reach $99 million by 2010, nearly double the $54 million spent in 2006. One in four dollars of prescription drug spending will go toward specialty drugs by 2010, Express Scripts predicts. Express Scripts CEO George Paz said employers could use the same cost-control measures on specialty drugs as are used on traditional drugs to limit spending (Feldstein, St. Louis Post-Dispatch, 4/26).
On the surface you get the distinct impression that there is absolutely nothing which can be done to mitigate rising drug costs and for corroboration we have evidence from Express Scripts' annual drug trend report as well as from Tim Simpson, a principal at Mercer Human Resource Consulting. Since no big drugs are moving from brand to generic in 2007 we all just have to suck it up and take it. What is worse we are told is that by 2010 specialty drugs will account for $1 out of every $4 spent on prescription drugs. Well BOHICA! Think of employers across America struggling to manage their health care spend while standing up, because the pain when they sit is too great. What an utter load of excrement. There is quite a bit employers can do to whip this problem.
- The truth of the matter is that employers with a drug spend of at least $250,000 annually can adopt a plan design which encourages members to request the low cost in class generic because if they do the co-pay is zero.
- You need a PBM with a bullet-proof process to move your population into the low cost generic in therapeutic class.
- You need to negotiate the right to audit claims to make sure you are not subsidizing a huge generic mark-up like those I mentioned here.
- You need to understand plan design can change behavior which can reduce cost and higher admin fees for a truly transparent PBM are more than offset by lower claims costs as I wrote about in Lowering Rx Co-pays Produces Big Savings.
- You need to internalize that project driven consultants are transactionally oriented and in many cases may be using the same PBM RFP Template in Word and doing a find & replace all for your companies name and emailing it to CareMark, Express Scripts and MEDCO.
- If you let your PBM set your formulary you might not sit comfortably for some time.
- If your experience relative to pharmacy trend is reminiscent of Bill Murray's Groundhog's Day Movie you may need a new PBM or a new consultant or both.
At a deeper level, astute HR and Benefits personnel may want to ask whether you can ever obtain solutions to employee benefit cost problems from employees at a consulting firm. In the US market for professional services, the best professionals are principal owners not employees and this is true of attorneys, physicians, geologists, engineers, bankers and employee benefit consultants. As owners they can focus on working for their customers not on growing their departments fee revenue by 20% annually to meet Wall Street's earnings expectations.
The WSJ Health Blog recently pointed out the wide swings on the generic version of Ambien.
A Rite Aid spokesman tells Health Blog that generic Ambien will be available chain-wide today. A 30-pill supply of both the 5 milligram and 10 milligram doses will retail for $124.99. That’s a hefty markup over the wholesale prices–ranging from $9.74 to $25.01 for 100 tablets–that Health Blog found Tuesday. The margins on generics make them among pharmacies’ most-profitable lines of business.
Drugstore.com will be offering the generic sleeping pills as early as next week. The Web site partners with Rite Aid and handles the pharmacy chain’s online prescriptions. Prices are likely to be in line with store prices, the Rite Aid spokesman says.
For those not too exhausted to hunt for a bargain, online pharmacy RxUSA.com is offering a 30-day generic supply of the 5 mg dose for $15; the 10 mg dose is $19.50.
Obviously it pays not to be too exhausted to search for lower costs.
Wednesday, April 25, 2007
In an effort to encourage more employers to provide health insurance, Mayor Bill White proposed a plan Tuesday that would require about half the city's contractors to offer health benefits to employees or contribute to a fund that would help cover the costs of medical care for the uninsured.
The proposal, expected to be considered by the City Council today, is largely a symbolic move since most city contractors already provide workers with insurance. But it sets an example, White said, that he hopes other public and private employers will follow.
"If enough employers did this, we would create a fund that could be used to make health care more accessible to the residents of Houston and to defray some of those costs that we are currently encountering in our emergency rooms because of the uninsured," he said.
I must give credit to the comical for at least inferring that many contractors will simply;
Yet one would have to be obtuse to miss those points, no?
- Stop bidding on City contracts and stick with private sector jobs ;
- Build the cost into their contracts on a cost plus basis;
The good news is Harris County collected $22M from Big tobacco so hopefully the new smoking ban will not inhibit future health care for all in the Bayou City.
Walter Olson has written a lucid account of the role privacy laws like HIPAA and others contributed in preventing VA Tech authorities from acting to avoid the recent shooting. It is worth two minutes of your life to read it here.
File this one under unintended consequences.
In a way it is akin to all the employers trying to engage their workforce in a serious good faith wellness effort who are hindered by ADA & HIPAA and bad thoughts of the EEOC in your workplace asking "What were you thinking?" So you water down the effort to keep the lawyers and Fed's out of the benefit department. Yet the whole time you must ask whether the intent of the ADA & HIPAA was to prevent making a member conscious of what they are at risk for absent an intervention? I mean a disability is imminent from a cursory scan of a lot of pharmacy records in many cases not to mention the Health Risk Assessment right? How Ironic. The Americans With Disabilities Act actually results in more disabilities. Unintended Consequences.
I can almost picture Ronald Reagan whispering, "I Told Ya."
Tuesday, April 24, 2007
On the heels of the VT shootings Houston has seen murder suicides at Johnson Space Center last Friday as well as another murder suicide at an upscale apartment complex yesterday.
On a personal note my own 6 year old niece was spending Sunday evening with her nanny when the nanny's spouse attempted suicide. He had been depressed recently.
60 Minutes ran a very interesting piece Sunday night highlighting similarity between school shooters and presidential assassins.
As 60 Minutes noted;
"With the school attackers that we studied there’s no profile, there’s no set of demographics that they share. But there are certain behaviors that they undertake," Georgeann Rooney, a threat assessment specialist at the Secret Service, tells 60 Minutes.HR & Benefit managers are frequently challenged to justify the ROI associated with EAP programs. Yet after every tragic event we are faced with evidence friends, families and co-workers were often aware of a problem manifested in behavior.
Behaviors that, she says, are like those of assassins. "This isn’t an individual who just snaps and wakes up and decides they are going to attack their school. There’s a planning process," Rooney says. "This planning, a lot of times, if you know what to look for it can be detectable."
And one theme they detected was bullying: two-thirds of the school shooters were victims of bullies. "They'd call you gay, call you stupid or fat or whatever. Kids would sometimes throw rocks at me and push me and kick me and hit me and stuff like that," Luke Woodham [school shooter]told researchers.
The Secret Service research reads like a road map to the mind of Virginia Tech killer Seung-Hui Cho; he mentioned suicide to others, and he planned for months, buying one of his guns nearly three months before the attack.
Murder is the Number One cause of on-the-job death for women in the workplace and 20% of those women, on average, are murdered by their partner at the workplace (Bureau of Labor Statistics, 1993). Here are some tips for managers and supervisors to make your workforce safer
Monday, April 23, 2007
At a TD Club meeting many years before his death, Coach Paul "Bear" Bryant told the following story, which was typical of the way he operated.
"I had just been named the new head coach at
Getting hungry I spied an old cinder block building with a small sign out front that simply said "Restaurant."
I pull up, go in and every head in the place turns to stare at me. Seems I'm the only white 'fella' in the place. But the food smelled good.
So I skip a table and go up to a cement bar and sit. A big ole man in a tee shirt and cap comes over and says, "What do you need?" I told him I needed lunch and what did they have today?
He says, "You probably won't like it here, today we're having chitlins, collared greens and black eyed peas with cornbread. I'll bet you don't even know what chitlins are, do you?"
I looked him square in the eye and said, "I'm from
When he comes back he says, "You ain't from around here then?"
And I explain I'm the new football coach up in Tuscaloosa at the University and I'm here to find whatever that boy's name was and he says, yeah I've heard of him, he's supposed to be pretty good. And he gives me directions to the school so I can meet him and his coach. As I'm paying up to leave, I remember my manners and leave a tip, not too big to be flashy, but a good one and he told me lunch was on him, but I told him for a lunch that good, I felt I should pay.
The big man asked me if I had a photograph or something he could hang up to show I'd been there. I was so new that I didn't have any yet. It really wasn't that big a thing back then to be asked for, but I took a napkin and wrote his name and address on it and told him I'd get him one.
I met the kid I was 'lookin' for later that afternoon and I don't remember his name, but do remember I didn't think much of him when I met him. I had wasted a day, or so I thought.
When I got back to
Now let's go a whole 'buncha' years down the road. Now we have black players at
Two days later, I'm in my office in
Well, I didn't know his granddad from Adam's housecat so I asked him who his granddaddy was and he said, "You probly don't remember him, but you ate in his restaurant your first year at
I was floored. But I learned that the lessons my mama taught me were always right. It don't cost nuthin' to be nice. It don't cost 'nuthin' to do the right thing most of the time, and it costs a lot to lose your good name by breakin' your word to someone. When I went back to sign that boy, I looked up his Grandpa and he's still running that place, but it looks a lot better now; and he didn't have chitlins that day, but he had some ribs that 'woulda' made Dreamland proud and I made sure I posed for a lot of pictures; and don't think I didn't leave some new ones for him, too, along with a signed football. I made it clear to all my assistants to keep this story and these lessons in mind when they're out on the road. And if you remember anything else from me, remember this - It really doesn't cost anything to be nice, and the rewards can be unimaginable."
Coach Bryant was in the presence of these few gentlemen for only minutes, and he defined himself for life, to these gentlemen, as a nice man.
Regardless of our profession, we do define ourselves by how we treat others, and how we behave in the presence of others, and most of the time, we have only minutes or seconds to leave a lasting impression - we can be rude, crude, arrogant, cantankerous, or we can be nice. Nice is always a better choice.
Trying to buy individual health insurance is akin to seeking credit; When you really need it, you just cannot get it.
Sunday, April 15, 2007
The Houston Comical treated their readers to a page one story on the uninsured in TX. Here are a few of the facts presented.
WHO ARE THE UNINSURED?
The Texas Health Institute, a nonpartisan health advocacy group, described them this way in a report that was released in January:
• They work. At least 72 percent live in households where one or more family members work full time.
• They are young. Twenty-three percent are children, and an additional 36 percent are between 18 and 34.
• They are not all poor. Forty percent of families without coverage have incomes of $40,000 a year or more.
• Geography matters. Almost half of the uninsured live in Texas' five largest urban centers, and Harris County leads the pack with about 1.1 million, according to state estimates.
• Ethnicity matters. Hispanics are three times more likely to be uninsured than whites; blacks are twice as likely.
Now the Comical neglected to include some of their very telling demographic charts on the uninsured population in this online version but if memory serves me the magnitude of the uninsured Hispanic population in Texas under age 45 is in the neighborhood of 70%.
What they did include is that in South Texas 1/3 of the Hispanic population is uninsured. i would call that figure extremely conservative as noted below.
So you have half the the uninsured in TX living in the 5 largest Metropolitan areas and 90 of the patients in deep south Texas' Hidalgo County lack private insurance although 51% have Medicaid coverage. In this area people historically go across the border for free coverage, a point that is not referenced in the article. I know this because I have seen the loss ratios on valley accounts and it has historically been highly profitable for insurers. Why pay a deductible or coinsurance when you can cross the border and get treated for free? It remains to be seen what effect the new passport requirements will have on border crossings on foot. In the 5 largest metropolitan areas of Texas people without coverage regardless of citizenship access free coverage through hospital districts often in the ER. By the way, most of the best paying jobs for unskilled or semi-skilled labor are in the 5 largest metropolitan areas
'Mecca of uninsured'An even greater percentage of Texans are uninsured in the Rio Grande Valley. In Hidalgo, Cameron and Webb counties, all on the border, roughly one of every three residents is uninsured.
"We are ... the mecca of uninsured in our state," says Linda Villareal, an Edinburg physician and chairwoman of the Rio Grande Valley Health Service District. "We have the fastest-growing population but the lowest in terms of socioeconomics."
Medicaid is far and away the largest insurer here. The South Texas Health System, the largest health care provider in Hidalgo County with six hospitals, reports that 51 percent of its patients in 2006 were Medicaid recipients and only 10 percent had private insurance.
"South of San Antonio, if a doctor doesn't take Medicaid he's going to lose his business," Villareal said.
The Valley also has a large population of people who earn just enough to be disqualified from Medicaid. A family of four, for example, cannot earn more than $20,650 annually to get Medicaid coverage for children older than 6.
And there are thousands who qualify for Medicaid or CHIP but are not enrolled either out of ignorance or because they find it too difficult to keep up with the programs' myriad requirements.
Some legal residents are afraid to apply for aid because they have undocumented family members.
Now understand I am making no value judgement here but it should be noted that there is a safety net in place. Further, when Comical reporters begin to put out wire service stories like this one its time to call them out on general laziness for not presenting the whole picture. I was once a paperboy for the Comical in my youth and must admit the only redeeming components are the paper today are the comics, the sports page and the obituaries. They certainly do not cover items like this story.
Property taxes are already an enormous political issue in Texas so when Health Care becomes free as a basic human right for all regardless of citizenship, expect more reporting as the masses initiate pilgrimages to Mecca. Be careful what you wish for over at TPM Cafe . How are senior citizens in Texas on fixed incomes going to stomach additional property taxes to fund free or subsidized health care for non U.S. citizens? This is not time for another unfunded federal mandate.
You ain't seen nothing yet folks.
Saturday, April 14, 2007
There is an interesting and frequently amusing debate underway at The TPM Cafe discussing Jonathan Cohn's new book Sick:The Untold Story Of America's Health Care Crisis and The People Who Pay The Price.
The discussion has devolved into what you might encounter if you happened to be a physicist who stumbled into a watering hole in Berkeley, CA or Cambridge, MA and overheard a large group of undergraduates discussing the next breakthrough in Theoretical Physics despite no obvious familiarity among most particpants with Calculus or Quantum Mechanics. But, there is the passion of youth and idealism, and fueled by relatively cheap pitchers of beer and the occasional jager-bomb the theories just flow. You notice an older participant guiding the discussion and recall your own undergraduate days when liberal arts professors like Jengs in Animal House provided the cool-aid and had no issues spewing forth theory on subjects outside their field like political reality. That is what the whole discussion reminds me of at TPM except Donald Sutherland has been cloned .
The comments are fascinating. I keep waiting for Mr Hand to show up and ask, "What's wrong with you people? Are you on Dope?" Single payer seems to be the mantra at TPM but no one is discussing the fact that 67% of the US population is either obese or overweight and preventable disease today accounts for 65-70% of our Health Care spend. So how does single-payer change behavior? Or does that come later in phase 2? Who is going to mention the elephant in the room?
Not a single person has mentioned the abject failure of a culture and an educational system which produces citizens who do not seem to comprehend the relationship between their behavior and their health much less the importance of a good education to securing employment with great benefits including Health care and disability income in the event sickness strikes. There are a lot of victims stepping out as policymakers. But I digress and find myself about to quote a great rock n roll song thats not very PC.
I guess I find the discussion somewhat comical only because my clients deal in reality, but I certainly recognize the subject of financial ruin due to sickness is very serious. Reality requires employers to do what they can right now to achieve results. The emphasis is on tactical programs like engaging members to become active participants in their own health and well being. This involves behavioral changes in diet, exercise,pharmacy compliance and disease management among others. Employers have no choice but to act or be acted upon.
Friday, April 13, 2007
Wednesday, April 11, 2007
Two former executives of Marsh went on trial April 10, 2007 in Manhattan's NY Supreme Court with scheme to defraud, grand larceny and restraint of trade and the details are covered in an AP story by Samuel Maull here.
Their lawyers say the state attorney general's office did not like the way their clients worked but the defendants did nothing criminal.
The prosecution says the defendants and others conspired with brokers and other insurance companies to arrange noncompetitive bids for New York-based Marsh & McLennan's corporate customers from November 1998 to September 2004.(defense lawyers)...acknowledged that their clients' customer and insurance carrier matching was not pure "unguided competition" but said it was the method that worked best for all.
They said some carriers are not suited to, nor are they interested in, insuring specific kinds of businesses. They also said Marsh helped companies keep a client's business because of benefits to both: There are no gaps in coverage, and there is more stability in premium costs.
They face 25 years if convicted. Whether they are ultimately convicted who knows? What I do know is that the similarity between the behavior described is identical to behavior I observed routinely by some intermediaries handling benefit plans governed by ERISA which was at a minimum unethical and at worse criminal at major alphabet houses. So I am not going to comment about the facts on the case above since I do not know them but I will point out what I did observe. Here are just a handful of examples.
- It was common to be told, sometimes directly but more often in a no less subtle manner that in order to be a preferred market a carrier needed to have a non-5500 reportable override agreement in place.
- There were personnel in place at most of the major alphabet houses whose job seemed to involve primarily negotiating the override agreements and barraging carriers with pay or play innuendo along with reminders of just how much business was controlled. In short there was the A list and the B list. Guess who earned most of the business?
- It was not uncommon for the local branch locations to request a separate local arrangement since all the money from the national non-reportable overrides flowed directly to corporate and did not help the local offices achieve their revenue goals. "Can you help us, so we can help you with your goals?"
- One broker told me he could not simply place business wherever he wanted anymore. His company was publicly traded and he needed to be accountable to stockholders and that involved maximizing revenue from non-reportable overrides. He needed a level 15% commission plus a level 5% override. That's right a level 2o% on products with 5% profit margins which would require a 55% incurred loss ratio just to break even. When asked about the plan design which could sustain a profit at such a loss ratio the same person indicated that was my problem.
- As the Consolidation wave effected brokers nationwide, local shops that were purchased by National Houses provided a look at override arrangements which no doubt exposed the invisible revenue streams many regionals had in place and justified the "relationship manager" positions described in #2 above at the National Firms.
- Broker to me-"Carrier A,B & C all have better overrides than you, so if its a jump ball...are you sure we could not beef up the arrangement? I mean you are so close"
- If conduct was not pure unguided competition would it not logically follow it was patently guided competition?
So lets hear from a few carrier personnel. Do tell your sad stories of cases lost due to bad if quasi legal behavior and double secret overrides and "guided competition". Use the anonymous button if you must.
Recently, I wrote about the relationship between unhealthy behavior and healthcare costs at a macro level.
There is an excellent article appearing in the The Seattle Post Intelligencer by Dan Richman which provides insights into the micro economic impact a properly structured health risk assessment, wellness and care management program can have on an employers health insurance premiums.
Health insurance aims to spread the cost of care among an entire insured group. But 10 percent of the U.S. population generates between 70 percent and 80 percent of health care costs, through large claims from serious illnesses such as cancer, strokes, diabetes and heart disease.
That means the other 90 percent of the population is paying a share of the costs disproportionate to its consumption of health care. But 70 percent of cancer, 71 percent of cardiovascular disease and 92 percent of adult-onset diabetes can be avoided if people change their behavior, said ClearPoint managing partner Kevin Overbey, citing journals of occupational medicine.
A popular hypothesis states that if 30 percent of people improved their diets, simply moved about more and dealt better with stress, health care costs could be reduced 24 percent per year nationwide, he said.
The right Group Guy can impact your costs as Kevin is doing in Seattle. Nice work.
Tuesday, April 10, 2007
After years of raising co-payments and deductibles for prescription pharmaceuticals, some employers are taking an unorthodox approach to lowering health-care costs in an experimental program by -- get this -- paying for diabetes drugs and consultations.
For patients the savings could amount to $2,000 a year.
If the program proves successful it could be expanded to include other common diseases and chronic conditions such as asthma, depression or arthritis and extended beyond its one-year pilot phase, according to the Midwest Business Group on Health, a Chicago-based coalition of employers that is coordinating the program.
Nationally, more than 30 employer groups are rolling out similar programs this year in cities including Milwaukee, Pittsburgh and Los Angeles.
I have written on the Black Hole of STD as well as Lowering Rx Co-pays to reduce costs so here is a related item which focuses on the connection.
Results from a model project launched in 1997 by the city of Asheville, N.C., show a 50 percent reduction in sick days and no worker's compensation claims filed by the diabetes patients in the program between 1997 and 2003.
Asheville has expanded its program to people with asthma and high blood pressure.
So far, Chicago-area employers Pactiv Corp., the City of Naperville and the Jewish Federation of Metropolitan Chicago have agreed to participate in the program.
"Employers are beginning to realize that cost-shifting by itself will not change behaviors," said Larry Boress, chief executive of the Midwest Business Group on Health. "This is not just an isolated incentive where you are giving away trinkets or dollars but is part of a change in employee-benefits strategy to move people away from an entitlement mentality. The idea is that in order to change employee behavior and change the attitude in the way employees manage their health, employers are moving to value-based benefit designs."
Direct and indirect costs of diabetes to the U.S. health-care system are more than $130 billion a year, including emergency room visits, extended hospital stays and absenteeism, the Chicago group said, citing national studies. Some 20 million people have diabetes, including 600,000 in Chicago.
Monday, April 9, 2007
Here is an interview of Dr Steven Aldana conducted by WELCOA president Dr David Hunnicut.
Some of the key points are;
- Sedentary Lifestyles account for 15% OF ALL HEALTHCARE COSTS and only 20-25% of the population achieves the recommended 30 minutes of daily physical activity
- The total healthcare costs associated with a male 24 year old tobacco user are $220,000 which breaks down to a healthcare cost of $40 per pack of cigarettes of paid for by someone besides the smoker. 23% OF AMERICANS USE TOBACCO.
- Obesity accounts for 12% of healthcare costs and 67% of the US population is either overweight or obese today.
- Factoring in preventable health conditions aside from smoking you have an additional 40% of healthcare costs.
- For those without an actuarial background we now have 70% of healthcare costs tied directly to lifestyle decisions. Physical Inactivity, Diet, Tobacco Use and preventable disease.
- 70% OF deaths in America are attributable to strokes, heart attacks, diabetes and cancer which are all influenced very significantly by diet.
We have seen the enemy and its us.
video documentary features contributions of respectful professionals, such as FDA scientist Dr. David J. Graham, who addressed the prescription of Vioxx (a very dangerous drug presently withdrawn from the market) before the US Senate Finance Committee and firmly believes the FDA is "letting people down".Here is more from the interview transcript available here
MANETTE: Dr. Graham, it's truly a pleasure to have the opportunity to interview you. Let me begin by asking you how long you've been with the FDA and what your current position is?
DR. GRAHAM: I've been with the FDA for 20 years. I'm currently the Associate Director for Science and Medicine in the Office of Drug Safety. That's my official job. But when I'm here today I'm speaking in my private capacity on my own time, and I do not represent the FDA. We can be pretty certain that the FDA would not agree with most of what I have to say. So with those disclaimers you know everything is okay.
MANETTE: On November 23, 2004 PBS Online News Hour Program you were quoted as making the following statement. “I would argue that the FDA as currently configured is incapable of protecting America against another Vioxx. Simply put, FDA and the Center for Drug Evaluation Research (CDER) are broken.” Since you've made that statement, has anything changed within the FDA to fix what's broken and, if not, how serious is the problem that we're dealing with here?
DR. GRAHAM: Since November, when I appeared before the Senate Finance Committee and announced to the world that the FDA was incapable of protecting America from unsafe drugs or from another Vioxx, very little has changed on the surface and substantively nothing has changed. The structural problems that exist within the FDA, where the people who approve the drugs are also the ones who oversee the post marketing regulation of the drug, remain unchanged. The people who approve a drug when they see that there is a safety problem with it are very reluctant to do anything about it because it will reflect badly on them. They continue to let the damage occur. America is just as at risk now, as it was in November, as it was two years ago, and as it was five years ago.
MANETTE: In that same PBS program, you were also quoted saying, “The organizational structure within the CDER is currently geared towards the review and approval of new drugs. When a serious safety issue arises at post marketing, the immediate reaction is almost always one of denial, rejection and heat. They approved the drugs, so there can't possibly be anything wrong with it. This is an inherent conflict of interest.” Based on what you're saying it appears that the FDA is responsible for protecting the interests of pharmaceutical companies and not the American people. Do you believe the FDA can protect the public from dangerous drugs?
DR. GRAHAM: As currently configured, the FDA is not able to adequately protect the American public. It's more interested in protecting the interests of industry. It views industry as its client, and the client is someone whose interest you represent. Unfortunately, that is the way the FDA is currently structured. Within the Center for Drug Evaluation and Research about 80 percent of the resources are geared towards the approval of new drugs and 20 percent is for everything else. Drug safety is about five percent. The “gorilla in the living room” is new drugs and approval. Congress has not only created that structure, they have also worsened that structure through the PDUFA, the Prescription Drug User Fee Act, by which drug companies pay money to the FDA so they will review and approve its drug. So you have that conflict as well.
Tuesday, April 3, 2007
Interested observers will also want to consider what all this purchased based on the timeline prepared in conjunction with the study abovewhich is available here.
WASHINGTON, April 1, 2007 — Manufacturers of pharmaceuticals, medical devices and other health products spent nearly $182 million on federal lobbying from January 2005 through June 2006, a Center for Public Integrity study of disclosure records shows.
Here is but one sample of pure red meat in 2002;
The Best Pharmaceuticals for Children Act is signed into law. It extends "pediatric exclusivity" provision of the FDA Modernization Act of 1997 that gives prescription drug makers an additional six months of patent protection during which generic drugs cannot be sold, in exchange for the manufacturer conducting studies of the drug's effects in children. The Congressional Budget Office estimates that, in the long run, prices for prescription drugs will increase as a result of the bill.
Prescription Drug Users Fee Act renewed. Included in the legislation are industry requests to speed up product reviews and use third-party advisors recommended by the companies to assess products.
Greater Access to Affordable Pharmaceuticals Act is defeated. The Act would have weakened patent restrictions on pharmaceuticals, making way for more generic drugs.
Here is a very useful study of Depression in the workplace--warning funded by Pharma--so make sure you have therapuetic infusion baked into your Rx & DM plan design.
Lowering or eliminating co-pays for low cost or OTC generics while raising brand co-pays can produce dramatic results by raising your overall generic utilization rate while at the same time lowering your pharmacy trend to a negative number.
But do not allow your pharmacy claim data to languish on some PBM rep or pharmacy consultants hard drive. There is meaningful and compelling data there which can be mined to provide a prospective picture of your "at risk population to become a chronic "whose behavior needs further modification beyond just the pharmacy co-pay if your strategic objectives of controling benefit costs are to be achieved. You need analysis from someone with an understanding of your overall objectives in benefits as well as deep practical experience in arriving at proper plan design recommendations in your other benefit offerings--Medical, Dental, STD, LTD, Behavioral & EAP to allow the data from your pharmacy claims to impact all of your benefit offerings. You need an integrated view.
One of the observations on the health care space in the last 3-5 years I would make is that employers who have adopted consumer driven long term strategies have a much greater appreciation of the interdependence of their benefit offerings than many of the intermediaries who serve them. You see many intermediaries are transaction oriented, they are historically project or account acquisition driven. Essentially, at many consulting firms you have a partially extroverted actuary functioning as a relationship manager who trots out subject matter experts for absence management, disease management, disability management, behavioral & EAP and Pharmacy. The problem with such a business model is it does not lend itself to integrating thought leadership very well across product lines. No offense to actuaries but communication has never been what one could refer to as a group strength. If you take offense at that statement perhaps you should scan this proof statement (Its a letter from The American Academy of Actuaries on the lessons learned from the 1st year under Medicare Part D) and comment below on the salient points below. Do tell. There will be a prize for the best comment or barring that anyone who can finish and still talk.
The point is mining data will provide useful data. Putting that data together to arrive at appropriate plan design changes across multiple products requires the application of both plan design and cross- product expertise. Since most actuaries are so specialized-health, life, disability, pensions, good luck with that as the person with that skill set in America works for themself, especially if they are an actuary, because they can.
Monday, April 2, 2007
So if only 12% of Business has planned for expected retirements that leaves 88% vulnerable. One of the first areas impacted unfortunately will be an employers Short and Long Term Disability plan. In the absence of a flexible work schedule which permits the boomers desire to cut-back their schedule to spend time with grandchildren in another state or with a spouse who has retired, some boomers will notice peers going out on disability and ask; Why ot me? Since some Americans over 55 work everyday with physical problems which are disabling for many will choose disability especially where there is pain involved. Dr Scott Haig wrote on this in Time recently in an article focused on pain;
The oldest boomers will qualify for Social Security's early retirement benefits in less than a year, but a large part of corporate America isn't prepared for the tens of millions of employees who will quit their jobs or scale back their hours over the next decade.
"Most companies haven't seen their boomer employees retire yet, and if it's something not happening in this quarter, CEOs believe they have time to think about it," said Marcie Pitt-Catsouphes, co-director of Boston College's Center on Aging and Work.
The research center surveyed 578 businesses and found that only 12 percent have planned in-depth for the wave of boomer retirements that are projected to create a worker shortage. Twenty-six percent of the companies haven't planned at all.
Labor analysts predict the U.S. economy will face shortages of 6 million workers by 2012 and 35 million workers by 2030. Some industries will be hit harder than others, but the boomer brain drain is expected to ripple through the entire economy.
A Federal Reserve official recently told Congress that the nation's economic growth may slow to 2.2 percent annually by 2015 because of the surge in boomer retirements. That's a full percentage point below the average growth rate for the last 40 years.
Generation X is only three-fourths as large as the boomer generation it follows. Analysts predict that some businesses will be hard-pressed to find replacements for the senior managers, technicians and other employees approaching retirement
As an orthopedist who has seen a lot of tough older men with painless, yet arthritic joints, I'm suspicious of there being a peripheral pain blockade that sometimes occurs around joints that are simply not given a chance to rest when they hurt. These are the ones who when asked "Don't you have any pain? say something like "not really but what does it matter, I still have to work to put the food on the table."
The population between 55-64 will grow by 48% over the next 5 years. Incidence rates for disability explode exponentially over 55. When employees realize they can go on disability for many the concern about putting food on the table is suddenly removed. These are some of cultural factors cited by employers in my march 28, 2007 post The Black Hole In Your Benefits Plan.
To see how just a small percentage of the disabled population can drive costs up exponentially in a disability plan see my 3/30/2007 post Surveillance exposes Disability Fraud-Black Hole II
Most people in business would readily acknowledge its considerable less expensive to keep the customers you have than to acquire new ones. This is also true of employees. So while employers should look to be senior friendly in hiring they should also consider return-to-work plans and job accommodation as critical retention tools for talent with a very high ROI. Employers should consider engaging a consultant with significant expertise at evaluating plan loss experience data and formulating recommendations for return-to-work plans as well as plan design for short and long term disability to achieve the optimal ROI outcome.
Sunday, April 1, 2007
The episode has been well covered at Pharmalot.
I have never been a big fan of 60 Minutes but have to admit they got this story right.
Prepare yourself for non-stop media coverage of all things pharmacy and PBM related through the 2008 elections. Have no delusions this attention will leap the firebreak into employer sponsored plans and be a featured part of The Healthcare Debate, as well it should. Employers should not have any illusions they fare any better via their formulary/rebate driven PBMS. Psst, they are doing it to you as well. Quick somebody find me a Physician on the Board at Express Scripts, MEDCO, or CVS CareMark.
Spring is here and 12 months from the 2008 primaries we have 60 Minutes airing a story that will be whipping Seniors into righteous indignation. It is interesting how 60 minutes waited 3.5 years after the vote to run the story though--just had to wait for the 1st candidate to promise free health care. Imagine what was talked about in retirement communities all over Florida tonight? I bet it had to do with this;
"You push this bill through that produces a windfall for the drug companies. And then a short time later, you go to work for the drug lobby at a salary of $2 million. That doesn't look good," says Kroft.As this story gets legs, and it will, quite a few HR/Benefits People may be answering questions about how they know with certainty they are getting the best deals on Drugs from their PBM? Prudent employers should be prepared with data for the phone call. It is time to get ahead of the snowball before it becomes an avalanche.
"There was nothing I could've done in my life after leaving Congress that wouldn't have had — I didn't have some impact on in 25 years in Congress … If that looks bad to you, have at it," Tauzin says. "That's the truth."
In fairness to Tauzin and former Medicare chief Tom Scully, they weren't the only public officials involved with the prescription drug bill who later went to work for the pharmaceutical industry.
Just before the vote, Tauzin cited the people who had been most helpful in getting it passed. Among them:
John McManus, the staff director of the Ways and Means subcommittee on Health. Within a few months, he left Congress and started his own lobbying firm. Among his new clients was PhRMA, Pfizer, Eli Lilly and Merck. Linda Fishman, from the majority side of the Finance Committee, left to become a lobbyist with the drug manufacturer Amgen.
Pat Morrisey, chief of staff of the Energy and Commerce Committee, took a job lobbying for drug companies Novartis and Hoffman-La Roche. Jeremy Allen went to Johnson and Johnson. Kathleen Weldon went to lobby for Biogen, a Bio-tech company. Jim Barnette left to lobby for Hoffman-La Roche.
In all, at least 15 congressional staffers, congressmen and federal officials left to go to work for the pharmaceutical industry, whose profits were increased by several billion dollars.
"I mean, they — they have unlimited resources. Unlimited," Burton says. "And when they push real hard to get something accomplished in the Congress of the United States, they can get it done."