News & Events

Drug Topics June 2019

Fred Gebhart writes about pharmacy technology maintenance in Drug Topics.  PHSI Consultant and Partner, Melissa Krause, was quoted in the June 2019 issue of the publication.  To see the entire article, “Why Technology Upkeep is Up to You,” visit https://www.drugtopics.com/technology/why-technology-upkeep-you/.

PHSI to Attend NACDS Total Store Expo

PHSI President Tim Kosty, Vice President Don Dietz, Consultants and Partners Ann Johnson and Melissa Krause, and Director of Business Development Fred Hamlin will be attending the 2019 NACDS Total Store Expo in Boston, Massachusetts on August 24-26. PHSI will have an exhibit set up at booth number 1618. If you would like to schedule a meeting with a PHSI team member, please click here to send us a message.

To learn more about this conference, visit the Total Store Expo website at http://tse.nacds.org

ComputerTalk for the Pharmacist May/June 2019

PHSI Consultant Dave Schuetz contributed to the May/June 2019 edition of ComputerTalk for the Pharmacist. In the Viewpoints article, Dave discusses the importance of regularly scheduled reviews of pharmacy invoices to ensure that wholesaler contractual terms are being met or exceeded.

Click here to read Dave’s article entitled “Wholesaler Agreements: Pricing Caveats”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

The Importance of PBM Contract Review Post Implementation

One of the biggest responsibilities of health plans and self-insured employer groups is selecting a PBM partner.  When that selection is being made, health plans and large self-insured employers frequently undertake an RFP (request for proposal) process, narrow down the candidates, and then perform a diligent review of the finalists.  Once a PBM is chosen, the health plan or employer group reviews and negotiates contract terms to finalize an agreement.

Health plans or employer groups enter into PBM contracts that make several guarantees, specifically as it relates to rebates, PBM operational performance (guarantees), and reimbursement rates.  Although a diligent review should be performed before the agreement is signed, what steps are health plans and employer groups taking after the agreement is in place to ensure that the contract terms are being met?  When dealing with PBM contracts, it is imperative that guarantee language is clearly defined.  A regularly scheduled review of the data is critical to ensuring contract obligations and guarantees are being met or exceeded.

When rebates are being calculated, the contract should clearly specify which claims are eligible for rebates.  Will rebates be paid on specialty drugs, and if so, how is a specialty drug defined?  Does the site of dispensing (retail vs. mail) impact the rebate?  How does the contract define a brand vs. generic drug?  Are there different rebate guarantees for 30-day vs. 90-day retail prescriptions? These are only some of the questions that should be answered in the contract language, but having well-defined terms is half the battle.  Once the contract is in place, an ongoing assessment is critical to ensure the plan performance meets the expectations.  For one of our employer group clients, this means a quarterly review of claims data and a comparison of the data against the rebate guarantee information provided by the PBM.  By monitoring the data, we proactively identify any discrepancies, estimate rebate dollars based on historical trends, and better negotiate future PBM contract extensions.  Whether the assessment is performed in-house or outsourced to consultants may depend on the individual health plan or employer group.

When evaluating reimbursement rates and effective rate guarantees, health plans and employer groups need to ensure that brand and generic drug definitions are clear.  The contract language should also include verbiage around different reimbursement scenarios.  Contracts should list what reimbursement rates will apply to single-source generics and prescriptions dispensed with different DAW (dispense as written) codes, such as DAW 5, brand dispensed as a generic.  Using the defined definitions, claims data is used to audit and ensure that the claims are being reimbursed appropriately and rate guarantees are being met or exceeded.  A review of the data can also identify scenarios that are negatively affecting the health plan or employer group, including identifying specific drugs that are having a negative financial effect.  Although some situations may be allowed under the current contract, a review can pinpoint problematic areas for future contract renegotiation discussions.

Negotiating PBM contracts with well-defined terms is crucial.  Concise contract language makes it easier to conduct post-contract audits and ensure that the PBM is meeting or exceeding the contractual terms.  Health plans and employer groups should have programs to monitor rebate guarantees, proactively identify discrepancies, and bring them to their PBM’s attention for resolution.  These reviews also assess other factors and provide insight into the PBM operations, enabling the health plan or employer group to negotiate better terms in future agreements.  PHSI has extensive experience helping health plans and employer groups evaluate PBM contracts and analyze data.  Let us know if we can help!

Posted May 2019

 

2019 Spring Newsletter:

Biologic Naming Update

Biologic Naming Update

The FDA has released “Nonproprietary Naming of Biological Products Guidance for Industry.”  This document includes guidance for both 351(a) products (original biologics) and 351(k) products (biosimilars).  Biosimilar suffixes have four letters and are devoid of meaning.  These suffixes are designed for tracking, adverse event reporting, and to aid in prescribing. Related biological products and biosimilars may have different indications for use, but pharmacists do not typically receive information on a patient’s disease state to know which manufacturers’ product to pick.  The biologic suffixes help by allowing prescribers to issue prescriptions using the correct suffix to cover the exact indication needed for the patient.

Reactions to the FDA’s guidance have been mixed.  Originally, the FDA proposed to apply the suffixes retroactively to existing biologic products.  On March 7, 2019, FDA released additional guidance on naming conventions for biologics.  The full guidance is available at: https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm632870.htm.

There are several important considerations for pharmaceutical manufacturers, pharmacies, and payers.

  • Existing biologic products that are currently FDA approved will not be assigned four-character suffixes – this is a reversal of the FDA’s previous guidance on this topic
    • Any new biologic or biosimilar introduced in the future would receive a four-character suffix.
  • New biologic products, including insulins and growth hormones (among others), will receive a four-character suffix.

PHSI’s view is that “nothing” will be sorted before “something”, so products that do not have a suffix may be listed before/above products that do have a suffix.  This means that the non-suffix originator products will likely appear before biosimilars in pharmacy systems and EMRs when showing chemical names, which may lead prescribers and pharmacists to see them before/above the biosimilar products for product selection purposes.

Beyond the chemical name field, there are EHR implications due to the RxNorm[1] listings for biologic products.  Biosimilars do not link to the original brand product in RxNorm and subsequently in electronic transactions that rely on RxCUI.  For example, each of the three available infliximab products (brand and two biosimilars) have different Generic RxCUIs[2] because of the 4 letter suffixes added to the “generic” name of the biosimilars.  So those biosimilar versions of infliximab do not link to the originator brand for product selection purposes.

From the compendia perspective, it will be interesting to see how product selection options are displayed for biologic products in the future.  Wolters Kluwer has announced that they are offering a file to help their customers determine potential substitution groups for biologic products.  Currently, compendia listings for biosimilar products do not directly link those products with the original biologic product of the same molecule.  In other words, originator biologics and biosimilars do not share a GPI or GCN.  Offerings like a substitution grouping file would provide additional insights to pharmacies, payers, prescribers, and EHRs regarding product selection options for biologics.

As biologic and biosimilar products evolve, more discussions will occur around how to properly identify specific biologic product selection options for prescribers.  For more information on the pharmacy, payer, and prescriber implications, contact PHSI.

 

[1] RxNorm, from the National Library of Medicine, “provides normalized names for clinical drugs and links its names to many of the drug vocabularies commonly used in pharmacy management and drug interaction software, including those of First Databank, Micromedex, Gold Standard Drug Database, and Multum. By providing links between these vocabularies, RxNorm can mediate messages between systems not using the same software and vocabulary.”  More information available at https://www.nlm.nih.gov/research/umls/rxnorm/.

[2] RxCUI stands for “RxNorm concept unique identifier.”  “Everything in RxNorm receives an RXCUI, which is unique to that concept. An RXCUI is essentially the “name” of a concept that computers read and understand.”  More information available at https://www.nlm.nih.gov/research/umls/rxnorm/overview.html.

Posted May 2019

 

2019 Spring Newsletter:

The Importance of PBM Contract Review Post Implementation

ComputerTalk for the Pharmacist January/February 2019

PHSI Consultant Alan Sekula contributed to the January/February 2019 edition of ComputerTalk for the Pharmacist. In the Viewpoints article, Alan discusses the 7 areas of focus in preparation for opening a specialty pharmacy.

Click here to read Alan’s article entitled “Considerations for Opening a Specialty Pharmacy”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.

Next Generation Data Metrics for Pharmacy Comparisons Presented at ASAP by Don Dietz

PHSI Vice President Don Dietz presented at the American Society for Automation in Pharmacy (ASAP) 2019 Annual Conference. Don discussed unique factors that differentiate pharmacies and require enhanced reporting. Click here to view Don’s presentation slides. You can access all of the 2019 ASAP Annual Conference presentations at http://www.asapnet.org.

FDA Proposed Framework for Digital Therapeutics: “Prescription Drug-Use-Related Software”

By now you may have seen FDA’s Federal Register Notice,  “Prescription Drug-Use-Related Software”, which establishes a docket seeking public input on digital therapeutics.  The proposed framework is for discussion purposes only; it is not a draft guidance but a way for FDA to seek input from stakeholders.  The document gives insight into how FDA may approach digital therapeutics, specifically the regulation of the software’s output.  The comment period for this proposed framework document closes on January 22, 2019.[1]

PHSI’s blog has previously discussed how countless new digital therapeutic technologies are being developed.  Stakeholders including prescribers, pharmacists, payers, and patients will be impacted by labeling and compendia listings for these products and the myriad of others with drug-use-related software in development.

One of the key components of the FDA’s proposed framework is the following:

“Software that is part of a system comprising a device constituent part or is itself a device constituent part of a prescription drug-led, drug-device combination product, and such software provides a function or information that is essential to one or more intended uses of the drug-led, drug-device combination product.  In that case, if such software meets the device definition, the software would be considered part of the device that is a constituent part of the combination product and would be regulated as such.”

PHSI’s interpretation of the framework is that drug labeling regulations (i.e. the labeling requirements of the Federal Food, Drug, and Cosmetic Act) will apply to the output of the software “disseminated by or on behalf of a drug sponsor for use with one or more of the drug sponsor’s prescription drugs” because it accompanies a specific drug.

Software not accompanying a specific drug would not be regulated as labeling, “unless its categorization changes.”  If a drug sponsor licenses software that was originally disseminated by an outside company and then disseminates that software for use in conjunction with a specific drug, it would not be regulated as labeling.

The two labeling types delineated are as follows:

  • FDA-required labeling
    • Drafted by the manufacturer
    • Reviewed and approved by FDA (part of NDA, ANDA, or BLA) initially and when most changes to the labeling are proposed
    • Includes information that is “essential for a provider to make an informed decision about the risks and benefits of prescribing the drug for a patient and the information needed to safely and effectively use the drug”
  • Promotional labeling
    • “Disseminated by or on behalf of a drug’s manufacturer, packer, or distributor”
    • Not approved by FDA in advance of dissemination – submitted to FDA at time of initial dissemination or publication
    • Can be submitted to a voluntary advisory comment process prior to dissemination if the sponsor chooses*
    • Generally devised for promotion of the product
    • May have other functions in addition to promotion
    • May include printed, audio, or visual matter descriptive of a drug

* The proposed framework specifies that, “for certain prescription drug use-related software output, the Agency will recommend under the proposed framework that a sponsor use the voluntary advisory comment process prior to dissemination.”

While the output of the prescription drug-use related software is the focus of the proposed framework, it notes that the software itself is the “responsibility of the drug sponsor to ensure the reliability” of the software.  FDA points out that the function of the software could impact the output, which is considered promotional labeling.

The compendia companies publish information provided by manufacturers as well as FDA when adding a new product to their databases.  Information gleaned from the FDA-required labeling is an important component of their processes.  Each compendium may approach digital therapeutics differently.  The proposed framework document in the Federal Register specifically mentions Abilify MyCite®.  PHSI expects that other examples may include inhalers, such as the newly approved ProAir Digihaler, and injection devices that contain sensors, modules, and/or apps.  Using Abilify MyCite as an example, one compendium appears to differentiate the listing from products with the same active ingredient by using the dosage form field.  The FDA approved dosage form for the product is “tablet with sensor.”  Another compendium identified the difference in the product name field only while keeping the same dosage form as existing Abilify tablets.  These differences could impact reimbursement of the product at the pharmacy.

Another digital therapeutics example is Sandoz and Pear Therapeutics jointly-developed app called “ReSET-O” that is cleared by the FDA via a 510(k) and is categorized as a Class II device.  “ReSET” was listed in the Elsevier Gold Standard compendium earlier in 2018 and is now listed in the Red Book as deactivated; as of this writing, it has not been listed in Medi-Span’s PriceRx, First Databank/Analysource, or Cerner Multum.

As additional products that combine a drug and prescription drug-use-related software are introduced, the strategies used to identify the products will continue to evolve.  Compendia, manufacturers, and healthcare professionals will want to be familiar with the FDA’s proposed framework and the potential implications for all stakeholders.  Current listings should be reviewed for potential negative impact on digital therapeutics reimbursement to prevent pull through issues during the launch process.  PHSI can assist manufacturers with this review and strategic planning to prevent launch challenges.

Additional Resources

[1] https://www.federalregister.gov/documents/2018/11/20/2018-25206/prescription-drug-use-related-software-establishment-of-a-public-docket-request-for-comments.

 

2019 Winter Newsletter:

The Evolution of Retail Discount Generic Programs

The Evolution of Retail Discount Generic Programs

PHSI has been following the discount generic program landscape for over a decade.  Over the past few years, $4 generic lists have slowly melted away into the shadows of retail pharmacy.  There are no longer banners hanging from store fronts promoting these programs or prominent displays appearing on retail pharmacy websites.  Specifically, PHSI has analyzed the number of product offerings on discount generic lists in 2015 and again in 2018.  Several retail pharmacies, including CVS and Giant Eagle, have stopped offering $4 lists altogether.  For chains that have discontinued the $4 lists, cash-paying patients may now see their prescriptions being charged at the minimum prescription cash price.  Knowing all of this, it is surprising to see the launch of Kroger’s Rx Savings Club.

The Kroger Rx Savings program is a new paid program ($36/individual and $72/family of up to six) that offers three tiers of low-cost medications.  The first tier will include free generic medications, including sertraline, amlodipine, metformin IR, and montelukast.  Tiers two and three will respectively offer $3 and $6 30-day supplies.  Kroger has partnered with GoodRx to develop the program.  PHSI expects that the generic medications included in the Kroger Rx Savings program will offer additional discounts above those seen on the GoodRx website.

Although other chain pharmacies are not overtly advertising their discount generic programs, a review of their websites shows these programs still exist.  An overview of the major retailer generic discount programs is shown in the chart below.

Discount Generic List Chart

Like the Kroger program, Walgreens discount program is a paid program that offers three tiers of generic medications.  As PHSI has mentioned in past newsletter articles, pharmacy chains have not been increasing the medications offered on their discount generic lists.  The Kroger Rx Savings Club may tout the inclusion of the popular (and somewhat new) generic atorvastatin, but, in general, the number of medications offered on discount generic lists has decreased.  Perhaps with the costlier membership fee, the Kroger program will have expanded drug offerings.  With high deductible health plans becoming more common, we may see renewed interest in discount generic programs, a la $4 lists.

Based on recent headlines, retailers are finding other ways to deliver value and entice customers to their stores.  Walmart recently revealed a deal with Express Scripts to launch InsideRx.  Inside Rx will provide uninsured patients with discounts on brand-name drugs, with Express Scripts estimating an average savings of 40%.  The PBM CVS Caremark also announced their new digital prescription savings card, Sharecare, which will help uninsured or underinsured patients.  The Sharecare App offers discounts within the CVS Caremark national pharmacy network, which includes not only CVS pharmacies, but Walmart, Rite Aid, and Walgreens stores.  With the plethora of options available, there is more competition than ever for the cash-paying patients.  PHSI will continue to monitor and report on these evolving retail pharmacy strategies.

 

2019 Winter Newsletter:

FDA Proposed Framework for Digital Therapeutics: “Prescription Drug-Use-Related Software”

ComputerTalk for the Pharmacist November/December 2018

PHSI Vice President Don Dietz and Consultant Melissa Krause contributed to the November/December 2018 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Don and Melissa discuss themes expected to impact pharmacy in 2019, including that pharmacies will continue to gain ground as healthcare destinations, through the expansion of immunizations administered by pharmacists; managing at-risk opioid patients; and continued market consolidation.

Click here to read Don and Melissa’s article entitled “Predictions for 2019”. You can read full versions of current and past ComputerTalk issues at https://www.computertalk.com/issue-archive/.