Reining in prescription drug costs for individuals and for insurance providers is a perennial problem that needs meaningful solutions. The Center for Medicare and Medicaid Services is in the middle of a multi-year effort to make a dent in those prices for itself and for patients.
By its own calculations, CMS will save taxpayers $75.4 million during the next decade by phasing in real-time benefit checks on prescriptions — technology that suggests alternate, lower cost prescriptions to physicians and patients. Requiring these technologies be used within Medicare Part D is a smart and pragmatic move by CMS. We have seen in the private market that the technology works logistically and could save far more than $75 million if done correctly.
But, there’s a fatal flaw: Often, the data used to make these suggestions and price comparisons are worthless.
The datapoints that select potential alternative drugs are alarmingly rudimentary, basing recommendations only on broad categories or applications and rarely considering factors such as side effects. Combined, these factors can make the list of alternatives irrelevant.
For example, it is possible for antibiotic spectrums of coverage to be misaligned; for a drug not efficacious for heart failure to be recommended as an alternative to one that is; for a low-potency cholesterol medication to be recommended as an alternative to a high-potency cholesterol medication; and for a topical cream for infections to be suggested as a suitable replacement for an oral tablet for acne.
Rarely do these systems even attempt to calculate the different dosage an alternate drug may require compared against the original selection. Without this insight, suggested alternatives may be more expensive in the end.
To date, these systems have been invisible to patients. The physicians seeing these bad suggestions know better, move on, and over time, ignore them altogether.
Worryingly, this same slapdash data will soon be provided directly to patients.
As part of its phased approach to real-time benefits checks, CMS is requiring these potential therapeutic alternatives be communicated directly to patients in the Explanation of Benefits. In other words, Medicare Part D patients will receive information about possible cheaper drugs they could be using instead of the prescription they started weeks ago.
If insurance plan sponsors and their Pharmacy Benefit Managers are committed to providing good information — as CMS clearly intended — this is a huge win. Looking at the current track record, though, we’re heading toward a crash in patient confidence and trust.
Imagine the number of phone calls physician offices will field when patients see that they could be taking another drug that costs pennies on the dollar of what they currently spend (or so they think). The doctor then must explain why that drug isn’t a viable alternative for their condition.
The best outcome is the patient leaves the conversation embarrassed and unwilling to act on similar information in the future. The more likely scenarios are building mistrust between patients and their insurance provider or, worse yet, creating doubt between patients and their physician.
Current alternative drug suggestions lack the detail needed to be clinically useful. Further, formularies and alternative lists often prioritize the biggest rebate for the company rather than delivering the most effective alternative for the patient that happens to be cheaper. Price games like these were detailed in a recent Forbes article: “Price Transparency Or Price Obfuscation?”
This backwards prioritization is unfortunate but not inevitable.
It is possible to look at the specific drug, its dosage, its application, its clinical outcomes and its side effects. It is equally possible to break down a drug’s real-world cost to the patient and the payer — even calculating a patient’s specific copay and adjusting for the true daily use of the medication.
In other words, it is possible to offer the best alternative drug and still save tremendous amounts of money for everyone involved.
This is a problem that can be solved, and it is time for CMS, physicians and patients to demand it with our words and with the systems we buy and use. CMS should not back down from its mission to save costs by providing options and cost transparency surrounding prescription drugs. It is an absolutely necessary step in driving affordability in our healthcare system.
For more information about ActiveRADAR and its approach to therapeutic alternatives, visit ActiveRADAR.com.