CVS Caremark study: Less-restrictive generic laws could curb state Medicaid costs
WOONSOCKET, R.I. Changing generic substitution laws in favor of less-restrictive regulations could save states struggling to pay for increasing healthcare costs through their Medicaid programs more than $100 million over the next several years, according to a new CVS Caremark study.
The study, published in the July edition of Health Affairs, looked at the generic substitution of simvastatin for cholesterol brand drug Zocor over six quarters beginning June 23, 2006, when Zocor’s patent expired. The study examined how quickly Medicaid recipients moved to the generic equivalent medications under three different state statutes — mandatory versus permissive substitution, with and without prior authorization, and with and without requiring patient approval for substitution. The generic substitutions discussed in the study are for chemically identical generics for brand name drugs.
The study involved a review of Medicaid claims data between June 2006 and 2008 in 48 states and the District of Columbia.
"Requiring patients to provide consent prior to generic substitution led to an approximately 25% reduction in generic substitution," stated Dr. William H. Shrank, the study’s lead author, an assistant professor of medicine at Harvard Medical School in the division of pharmacoepidemiology at Brigham and Women’s Hospital in Boston. During the six consecutive quarters reviewed, the study determined that states could have saved almost $20 million if the substitution from Zocor to the chemically-identical simvastatin were made more quickly for that one medication.
"This study has important implications. We determined states can stem the rising cost of medications paid for by Medicaid programs by modifying statutes to make it easier to replace brand name medication with generics," stated Troyen Brennen, EVP and chief medical officer of CVS Caremark. "There are many brand medications that will lose their patent protection over the next several years and, as a consequence, we will see the introduction of generic equivalents for these brand medications. In particular, we can expect significant activity with the upcoming patent expirations of Lipitor, Plavix and Zyprexa over the next 18 months."
In fact, the study found that state Medicaid programs could save more than $100 million on those three medications — Lipitor, Plavix and Zyprexa — alone by adopting regulations that allow pharmacists to make a change following the patent expiration, without requiring direct patient approval.
NCPA responds to CMS’ diabetes competitive bidding program
ALEXANDRIA, Va. A group representing the nation’s independent pharmacies is urging caution as the Centers for Medicare and Medicaid Services continues its Medicare Part B durable medical equipment, prosthetics, orthotics and supplies competitive bidding program.
The National Community Pharmacists Association issued a statement Thursday urging caution against actions that possibly could “undermine or reverse the benefits of coordinated care,” as community pharmacies work on a daily basis with diabetes patients and physicians to improve health outcomes and lower healthcare costs.
“[The] inclusion of small pharmacies in the bidding program or reimbursing them at the newly announced mail order rates eventually would result in the virtual elimination of independents from the program. Independents don’t operate with the purchasing power of large-chains or mail order competitors and thus can’t always match those prices,” NCPA president Joseph Harmison said.
The group also pointed out that seniors in rural or underserved areas depend on community pharmacies for consultations and diabetes testing supplies; the DMEPOS competitive bidding program should continue without interferring with small chain pharmacies’ operations.
“When seniors cannot consult their local pharmacists about their medications and testing supplies, inevitably problems will arise. It’s common for mail order customers to end up in independent pharmacies seeking instruction on how to use the testing supplies — care for which the local pharmacist is not compensated. Plus, many supplies are changing, so the way seniors use them needs to change. Local pharmacists help ensure patients get accurate blood glucose readings – not a false sense of security or an unnecessary state of panic,” Harmison concluded.
Jean Coutu Group reports increase in revenue
LONGUEUIL, Quebec The Jean Coutu Group on Tuesday reported a 3.8% increase in revenues to $611.6 million for the first quarter.
“The expansion of our network [by nine locations] and the solid operating performance of our organization have allowed us to reach our objectives,” stated Francois Coutu, JCG president and CEO.
During the first quarter of fiscal year 2011, on a same-store basis, PJC network retail sales grew 2.9%, pharmacy sales gained 3.8% and front-end sales increased by 1%, compared with the first quarter of the previous fiscal year. Sales of non-prescription drugs, which represent 9% of total retail sales, increased by 2.2%, whereas these sales had increased by 7.2% during the first quarter of the previous fiscal year, Coutu noted.
The recent announcement from the Minister of Health and Social Services of Quebec around lower reimbursement rates associated with generic drugs may pose a challenge going forward. The Minister on June 25 stated that as of July, 2010, the price of generic drugs will generally be established at 25% of the price for the original equivalent. The Minister also mentioned that the implementation of this reduction in prices will be postponed for a period of 4 to 8 weeks in order to consult interested parties.
In the nearby Ontario province, the Minister there recently enacted “prescription drug reform” that will not only reduce the price of generic drugs but also reduce the professional allowances paid to pharmacists by generic drug manufacturers. If that legislation were replicated in Quebec, that could have a material impact on sales, Coutu said.
“We strongly believe that the government of Quebec must recognize that a reduction in the price of generic drugs must be adopted concurrently with measures in order to assist market participants with the transition to lower generic drug prices,” Coutu said.