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Pharmaceuticals and medicare managed care: pharmacoeconomic considerations
CLINICAL THERAPEUTICS®/VOL.20, NO. 6, 1998
Pharmaceuticals and Medicare Managed Care: Pharmacoeconomic Considerations
Emily R. Cox, Phi), and Stephen Joel Coons, PhD Center for Health Outcomes and PharmacoEconomic Research, and Department of Pharmacy Practice and Science, College of Pharmacy, The University of Arizona, Tucson, Arizona
CONFERENCE OVERVIEW This supplement includes papers from a conference titled "Pharmaceuticals and Medicare Managed Care: Pharmacoeconomic Considerations," held January 19-21, 1998, in Tucson, Arizona. The topic was selected because of the rapidly expanding enrollment of Medicare beneficiaries in managed care plans and the fact that the majority of these plans provide an outpatient prescription drug benefit. Although data indicating large disparities in satisfaction levels with Medicare health maintenance organizations (HMOs) are emerging, 1 the number of enrollees has increased by more than 100% since 1993, with 5 million individuals enrolled as of February 1997. 2 The implications of this shift for managed care organizations and the pharmaceutical industry have not been adequately explored. Enrollment in managed care plans by Medicare beneficiaries has been attractive partly because of the expanded services provided. In addition to the basic Medicare services, most of the managed care plans enrolling Medicare patients 1238
also provide some level of coverage for prescription drugs and preventive health services such as eye exams, routine physicals, and immunizations. Coverage for outpatient prescription drugs is especially appealing given that a majority of these costs are paid out of pocket by Medicare beneficiaries) It has been estimated that approximately 80% of HMOs with Medicare contracts offer outpatient prescription drug coverage and that most plans offering drug coverage use copayments, closed formulades, and/or annual dollar limits, or caps, to manage benefit costs. 4 However, prescription drug benefits for Medicare beneficiades are being eliminated or significantly reduced by some HMO plans. 5 Given that Medicare recipients account for a disproportionate share of total pharmaceutical expenditures, cost-effective prescription drug use in this population is essential. Questions being asked include: What are the procedures, programs, and policies that could be implemented to ensure access to and promote the appropriate use of prescription drugs by Medicare beneficiaries? How can the prescription 0149-291s/9s/$19.00
INTRODUCTION
drug benefit be structured to facilitate the achievement of optimal outcomes of appropriately prescribed pharmacotherapy? What additional data must be generated to provide evidence of a pharmaceutical product's value when used by Medicare beneficiaries within the managed care environment? The primary goal of this conference was to stimulate productive dialogue on these and related issues. The overall objectives of this conference were to: • describe the history and future of the movement of Medicare beneficiaries to managed care systems; • identify how prescription drug benefits are currently being offered to Medicare enrollees and the impact of these benefit designs on enrollee and prescriber behavior; • describe prescription drug use in older adults and explore innovative strategies that should be considered in the management of cost-effective drug therapy within this population; • define how the growing enrollment of Medicare beneficiaries in managed care plans has changed the information requirements for optimal drug therapy decision making; and • illustrate the increasing need for outcome measures and economic analyses relevant to an older managed care population. Although not all of these objectives are addressed in the selected papers that follow, our aim was to prox~ide an overview of a number of critical issues affecting the pharmacy benefit within Medicare HMOs. ACKNOWLEDGMENTS This conference was funded through unrestricted educational grants from the following firms: Allergan, Inc., Irvine, Cali-
fornia; Amgen, Inc., Thousand Oaks, California; Boehringer Ingelheim Pharmaceuticals Inc., Ridgefield, Connecticut; Bristol-Myers Squibb Company, Princeton, New Jersey; Dupont Pharma, Wilmington, Delaware; Eli Lilly and Company, Indianapolis, Indiana; Glaxo Wellcome Inc., Research Triangle Park, North Carolina; Hoechst Marion Roussel Inc., Kansas City, Missouri; Janssen Pharmaceutica, Titusville, New Jersey; Merck & Co., Inc., West Point, Pennsylvania; Muro Pharmaceutical, Inc., Tewksbury, Massachusetts; Novartis Pharmaceuticals Corporation, East Hanover, New Jersey; Pfizer Inc, New York, New York; Pharmacia & Upjohn Company, Kalamazoo, Michigan; Rhrne-Poulenc Rorer Pharmaceuticals, Inc., Collegeville, Pennsylvania; Searle Pharmaceuticals, Chicago, Illinois; Solvay Pharmaceuticals, Marietta, Georgia; Source Informatics, Phoenix, Arizona; TAP Pharmaceuticals, Inc., Deerfield, Illinois; and Whitehall-Robins Healthcare/Wyeth Ayerst Laboratories, Philadelphia, Pennsylvania. We sincerely thank all the participants and presenters for their part in making this conference a success. The efforts of Lynne Mascarella, Shilo Creek, and Denise deGeus in planning and conducting the conference are gratefully acknowledged. In addition, the editorial and logistical assistance of Shilo Creek in the preparation of these selected proceedings is greatly appreciated.
Address correspondence to: Emily R. Cox, PhD, College of Pharmacy, PO Box 210207, The University of Arizona, Tucson, AZ 85721--0207. 1239
CLINICAL THERAPEUTICS®
REFERENCES
1. Families USA Foundation. Comparing Medicare HMOs: Do They Keep Their Members? Washington, DC: Families USA Foundation; December 1997.
Medicare beneficiaries. National Medical Care Utilization and Expenditure Survey, Series B, Descriptive Report No. 12. DHHS Publication No. 86-20212. Washington, DC: Office of Research and Demonstrations, Health Care Financing Administration, US Government Printing Office; April 1987.
2. Chart Book 1998: A Profile of Medicare, Health Care Financing Administration [online]. Available from URL at: http:llwww.hcfa.govlpubformslchartbk.hma. May 1998.
4. Meyer JA, Bagby N, Tilton JM. HMO Pharmacy Benefits Under Medicare Risk Contracts. Washington, DC: New Directions for Policy; September 1997.
3. LaVange L, Silverman H. Outpatient prescription drug utilization and expenditure patterns of noninstitutionalized aged
5. Fleming H. Cruelest cuts: HMOs consider dropping Rx benefits for seniors. Drug Topics. 1998;142:74-75.
1240
Pharmaceuticals and Medicare Managed Care: Pharmacoeconomic Considerations
Emily R. Cox, Phi), and Stephen Joel Coons, PhD Center for Health Outcomes and PharmacoEconomic Research, and Department of Pharmacy Practice and Science, College of Pharmacy, The University of Arizona, Tucson, Arizona
CONFERENCE OVERVIEW This supplement includes papers from a conference titled "Pharmaceuticals and Medicare Managed Care: Pharmacoeconomic Considerations," held January 19-21, 1998, in Tucson, Arizona. The topic was selected because of the rapidly expanding enrollment of Medicare beneficiaries in managed care plans and the fact that the majority of these plans provide an outpatient prescription drug benefit. Although data indicating large disparities in satisfaction levels with Medicare health maintenance organizations (HMOs) are emerging, 1 the number of enrollees has increased by more than 100% since 1993, with 5 million individuals enrolled as of February 1997. 2 The implications of this shift for managed care organizations and the pharmaceutical industry have not been adequately explored. Enrollment in managed care plans by Medicare beneficiaries has been attractive partly because of the expanded services provided. In addition to the basic Medicare services, most of the managed care plans enrolling Medicare patients 1238
also provide some level of coverage for prescription drugs and preventive health services such as eye exams, routine physicals, and immunizations. Coverage for outpatient prescription drugs is especially appealing given that a majority of these costs are paid out of pocket by Medicare beneficiaries) It has been estimated that approximately 80% of HMOs with Medicare contracts offer outpatient prescription drug coverage and that most plans offering drug coverage use copayments, closed formulades, and/or annual dollar limits, or caps, to manage benefit costs. 4 However, prescription drug benefits for Medicare beneficiades are being eliminated or significantly reduced by some HMO plans. 5 Given that Medicare recipients account for a disproportionate share of total pharmaceutical expenditures, cost-effective prescription drug use in this population is essential. Questions being asked include: What are the procedures, programs, and policies that could be implemented to ensure access to and promote the appropriate use of prescription drugs by Medicare beneficiaries? How can the prescription 0149-291s/9s/$19.00
INTRODUCTION
drug benefit be structured to facilitate the achievement of optimal outcomes of appropriately prescribed pharmacotherapy? What additional data must be generated to provide evidence of a pharmaceutical product's value when used by Medicare beneficiaries within the managed care environment? The primary goal of this conference was to stimulate productive dialogue on these and related issues. The overall objectives of this conference were to: • describe the history and future of the movement of Medicare beneficiaries to managed care systems; • identify how prescription drug benefits are currently being offered to Medicare enrollees and the impact of these benefit designs on enrollee and prescriber behavior; • describe prescription drug use in older adults and explore innovative strategies that should be considered in the management of cost-effective drug therapy within this population; • define how the growing enrollment of Medicare beneficiaries in managed care plans has changed the information requirements for optimal drug therapy decision making; and • illustrate the increasing need for outcome measures and economic analyses relevant to an older managed care population. Although not all of these objectives are addressed in the selected papers that follow, our aim was to prox~ide an overview of a number of critical issues affecting the pharmacy benefit within Medicare HMOs. ACKNOWLEDGMENTS This conference was funded through unrestricted educational grants from the following firms: Allergan, Inc., Irvine, Cali-
fornia; Amgen, Inc., Thousand Oaks, California; Boehringer Ingelheim Pharmaceuticals Inc., Ridgefield, Connecticut; Bristol-Myers Squibb Company, Princeton, New Jersey; Dupont Pharma, Wilmington, Delaware; Eli Lilly and Company, Indianapolis, Indiana; Glaxo Wellcome Inc., Research Triangle Park, North Carolina; Hoechst Marion Roussel Inc., Kansas City, Missouri; Janssen Pharmaceutica, Titusville, New Jersey; Merck & Co., Inc., West Point, Pennsylvania; Muro Pharmaceutical, Inc., Tewksbury, Massachusetts; Novartis Pharmaceuticals Corporation, East Hanover, New Jersey; Pfizer Inc, New York, New York; Pharmacia & Upjohn Company, Kalamazoo, Michigan; Rhrne-Poulenc Rorer Pharmaceuticals, Inc., Collegeville, Pennsylvania; Searle Pharmaceuticals, Chicago, Illinois; Solvay Pharmaceuticals, Marietta, Georgia; Source Informatics, Phoenix, Arizona; TAP Pharmaceuticals, Inc., Deerfield, Illinois; and Whitehall-Robins Healthcare/Wyeth Ayerst Laboratories, Philadelphia, Pennsylvania. We sincerely thank all the participants and presenters for their part in making this conference a success. The efforts of Lynne Mascarella, Shilo Creek, and Denise deGeus in planning and conducting the conference are gratefully acknowledged. In addition, the editorial and logistical assistance of Shilo Creek in the preparation of these selected proceedings is greatly appreciated.
Address correspondence to: Emily R. Cox, PhD, College of Pharmacy, PO Box 210207, The University of Arizona, Tucson, AZ 85721--0207. 1239
CLINICAL THERAPEUTICS®
REFERENCES
1. Families USA Foundation. Comparing Medicare HMOs: Do They Keep Their Members? Washington, DC: Families USA Foundation; December 1997.
Medicare beneficiaries. National Medical Care Utilization and Expenditure Survey, Series B, Descriptive Report No. 12. DHHS Publication No. 86-20212. Washington, DC: Office of Research and Demonstrations, Health Care Financing Administration, US Government Printing Office; April 1987.
2. Chart Book 1998: A Profile of Medicare, Health Care Financing Administration [online]. Available from URL at: http:llwww.hcfa.govlpubformslchartbk.hma. May 1998.
4. Meyer JA, Bagby N, Tilton JM. HMO Pharmacy Benefits Under Medicare Risk Contracts. Washington, DC: New Directions for Policy; September 1997.
3. LaVange L, Silverman H. Outpatient prescription drug utilization and expenditure patterns of noninstitutionalized aged
5. Fleming H. Cruelest cuts: HMOs consider dropping Rx benefits for seniors. Drug Topics. 1998;142:74-75.
1240