Generics Step Therapy as a Tool to Influence Current Drug Trend

Atlanta—In a Managed Care Essentials session at the AMCP meeting, Anita Allemand, PharmD, vice president, and Anna Theodorou, RPh, MBA, director, industry analytics, both of CVS Caremark, presented Understanding Pharmacy Trend and Its Impact on Forecasting. The session reviewed important influencers of drug trend and stressed the value of generic utilization in controlling costs and improving adherence. The session began with a review of major drivers of drug trend, including utilization, demographics, price, and drug mix. The presenters noted these influencers of drug trend have become more complicated with important changes in patient populations and demographics, therapeutic class dynamics, and the marketplace. For instance, recent economic changes, such as increases in unemployment, declines in consumer confidence, increases in copay, increases in the Medicaid population, and a decline in office visits, have considerably influenced drug trend in recent years. Specifically, utilization has been heavily influenced by a variety of underlying factors such as the economy, demographics, healthcare reform, over-the-counter (OTC) availability, off-label use, more aggressive treatment guidelines, earlier disease identification and intervention, and direct-to-consumer advertising, according to the presenters. Efforts to curb inappropriate utilization and promote appropriate utilization have also affected utilization, they added. They provided the specific example of safety issues negatively influencing utilization. Dr. Allemand and Ms. Theodorou predicted that specialty utilization growth would continue to outpace other sectors due to new product launches and expanded indications. Demographics is another important driver of drug trend, the presenters added, citing specific aspects such as the aging population, the approval of new drugs for specific demographic populations, the identification of appropriate therapies with pharmacogenomics, healthcare reform, the economic downturn, changes in prescribing guidelines, and generation-specific drug mixes. The presenters explained that the influence of demographics on drug trend is measured by drug spend and utilization by generation, shifts in age bands, drug cost and utilization by gender, geographic location of member populations, and the generic dispensing ratio and generic substitution ratio relative to demographics. Differences in generational drug-use patterns are prominent and highlight the varying impact of each generation on drug trend, Dr. Allemand and Ms. Theodorou stressed. In discussing price, the presenters highlighted the fact that manufacturer price inflation continues to be a significant trend driver. Fundamental factors related to this price inflation were discussed by the presenters and included the growing availability of generics, new indications and patent extensions, product competition, company mergers and acquisitions, and government regulations. The presenters reviewed specific strategies that organizations use to help control price, including generic utilization programs, delivery channel optimization, restricted pharmacy networks, formulary management, consumer-driven plan designs, and e-prescribing. Drug mix also has an important effect on current drug trend, and the presenters listed specific contributing factors, such as new drug and generic introductions, OTC and behind-the-counter drug availability, pharmaceutical marketing, and changes in prescribing guidelines. They noted that these trends could be impacted by generous generic plan designs, generic step-therapy programs, formulary management, consumer-driven plan designs, member education, evidence-based prescribing, and e-prescribing. The session included an overview of generic step-therapy plans as one specific strategy to improve health and reduce total costs among plan members. The presenters stressed the value of controlling costs, noting that healthcare costs have grown at a rate of >7% in the past year, and costs from medication nonadherence are estimated to total $300 billion. Generics could represent an important opportunity to control these costs, according to the presenters, as they cost, on average, less than one-quarter of their branded counterparts. In addition, the presenters cited data demonstrating that patients started on generics are 60% more adherent to treatment than those started on branded medications. They stressed that a comprehensive generic strategy, including generics step therapy, helps drive generic utilization. They suggested targeting high-impact drug classes with generics step therapy, adding that >70% of plan sponsors are currently using or considering the use of generic first step therapy. The presenters concluded by discussing specific forecasting trends that will influence the market in the future, including predicted increases in generic utilization.