NCPDP Releases New White Paper on E Prescribing & Formulary Compliance

---Terri Bernacchi, PharmD, MBA,  President, Cambria Health Advisory Professionals

 

For the past 3 years, two workgroups associated with the National Council of Prescription Drugs has worked on a white paper to inform readers about the positive benefits (and related challenges) of the new “electronic prescribing” process.  I worked with this group personally.

The benefits of better record keeping, greater efficiencies and fewer errors due to physician handwritten prescriptions are associated with a technology that has also generated some new challenges.  For example, the group focused this paper on challenges relating to current processes between pharmaceutical companies who pay rebates based upon how formularies are implemented by health plans to offset costs. 

Interested parties will want to stay informed and work toward continued improvement in these processes, promoting a greater understanding regarding how this technology can be used to improve patient care, product selection, and still support business relationships. 

Just this week, NCPDP has released this daunting, but collaborative effort describing the following about e prescribing, formulary compliance and the manufacturer-payer trading partner relationships:   

ü  How the actual process of e prescribing works and the parties involved in the process. 

ü  That the contract language between manufacturers and payers is generally loose and proprietary.  This has fostered variability in some components of data exchanged in support of the invoicing and payment processes.

ü  That contracts between parties often establish rebate/discount eligibility based upon how therapy options are depicted in a formulary drug class, offering differential discounts based on whether rules have been properly applied in the formulary. (For example, a higher rebate is applied if the product is one of two in a preferred category, versus one of three.)

ü  These contracts may also employ language that spells out requirements regarding how the product should be displayed to the prescriber.

ü  That the process involves dynamic data used to illustrate, for any point in time, an accurate depiction of how a product or many products are depicted in any version of a Formulary, as well as how the patient’s benefit and coverage rules (including out-of-pocket, copay or co-insurance amounts) are impacted by the formulary.

ü  That formulary information is made available to EHR/electronic prescribing vendors with various levels of data elements supplied by processors/payers and plans, and at variable intervals.

ü  That formulary information is displayed in different ways by the vendors that support the electronic prescribing process. 

 

Interested parties can download a copy of the whitepaper here:  http://www.ncpdp.org/Whitepaper.aspx  

 

Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers, clients nor other Valiant Health colleagues. 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. 

 

Drug Coupon Programs, the Empowered Patient, and the New Debate

by Terri Bernacchi, PharmD, MBA, Health Advisory Professionals 

Not that it’s a spectator pass-time, exactly, but I’ve been avidly watching from the sidelines the development of a new contact sport between pharmaceutical companies and health plans:  the war that is being waged over the propriety of drug coupon programs. 

On the one side is a pharmaceutical manufacturer trying to squeeze as much as it can out of a finite and rapidly-expiring patent, surmounting obstacles involving managed care, formularies, REMS, health care reform with new mandates like the Coverage Gap discount, and countless new compliance questions, not to mention a generally bad economy.  Who can blame the product manager for trying to effectively market a product with savings coupons to a patient whose doctor has just prescribed it for an appropriate use?  The empowered patient may actually begin to demand them.   (It’s done all the time in consumer products.) 

On the other side is the health plan (also pressured by competition, cost concerns and the looming reality of reform) that is picking up the tab for whatever is left over after the patient pays his or her established copayment. 

When a coupon is introduced into that drug selection decision, reducing the person’s out-of-pocket cost, it may have negative effects on the plan’s loss ratio (assuming the plan’s cost is higher than an alternate product).  The coupon undermines the formulary and benefit design that underwriters used to predict costs against the premium.  No wonder they’re upset.  It’s wreaking havoc in a cost forecast!  And the cost benefit goes all to the patient and not to the health plan!

According to the Bloomberg article attached to this link, sales using these copay-reduction coupons have more than tripled in the past four years.   It is this growth that has stimulated a lot of dialogue and debate.  And the FDA is reviewing them in the context of “safety”.  (See:  http://webcache.googleusercontent.com/search?q=cache:nKMRppUOPwoJ:www.bloomberg.com/news/2010-10-27/drug-coupon-use-soars-prompting-safety-and-spending-concerns.html+Bloomberg+article+coupon+drug&cd=1&hl=en&ct=clnk&gl=us )

Certainly, there will be more discussion on this topic as the debate goes national and some payers are advocating for local, state or federal regulation that would put a halt to these practices.  

For my part, I think these programs can provide benefit to all parties if they can be done in a collaborative way.  The challenges to the patient, the plan, and the pharma company are real----the copay subsidy or coupon can provide each side with a win-win-win opportunity if structured properly. 

I think the future will show that it would be a mistake to eliminate these programs and lose that prospect altogether.

Terri currently works for a large health sciences firm serving payers, pharmaceutical and device manufacturers and other stakeholders in health care as a Senior Principal in Managed Markets.  The thoughts put forth on these postings are not necessarily reflective of the views of her employer nor other Health Thought Leader colleagues.   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 experience as founder and primary servant of a health technology company which was sold to her current employer three years ago.   She has both a BS and a PharmD in Pharmacy and an MBA.