Some time back I wrote about “The Rewards of Performance“. In that piece, I discussed the existence of Generic Dispensing Rates (GPR) as one of the measures used by a plan to “reward” a pharmacy for clinical performance. Since that time, several additional plans have announced their 2016 Prescription Drug Plans, and several have a form of reward or penalty based on the pharmacy’s GPR.
Economics 101
In every pharmacy I have ever worked, a generic drug was always offered to the patient if it was or is available. Generic drugs have always benefitted the health system by reducing overall drug spending by health plans. Back several years ago, pharmacies even made a better margin on generic drugs, so the pharmacy was rewarded for the helping increase the adoption of genetic drug options.
Today, pharmacy is facing a plague of Maximum Allowable Cost (MAC) prices for generics that are essentially pricing most generic drugs at or just above the pharmacy’s acquisition cost. Given this drastic reduction in pharmacy reimbursement over the last 5 years, one would expect that overall drug costs would actually be way down, just like pharmacy profits. In fact, this does not appear to be the case. See “Examining Medicare Part D Transparency” for a quick analysis.
Clinical Measures
Clinically, we are interested in many different types of outcomes. These might be specific to the disease being treated, or they could be global, like total health spend for the patient. Consider the cholesterol lowering “statin” drugs as an example. Typical outcomes might include:
- Degree of lowered LDL (Bad Cholesterol)
- Possible increased HDL (Good Cholesterol)
- The existence of Adverse Drug Effects (ADRs), especially muscle weakness / rhabodomyolosis.
- Overall cost the the health system.
From a clinical standpoint, atorvastatin is a great product to lower cholesterol compared to some of the older products like simvastatin. It is also now generically available and very inexpensive. At lower doses, it has a low incidence of ADRs. If a patient does not achieve their LDL / HDL goals, the dose can be increased, but with an increased likelihood of ADRs. If ADRs do appear, a choice has to be made to balance the overall reduction in LDL with the existence of ADRs. This can be handled two different ways. First, choose a different generic drug like pravastatin, which has a lower incidence of ADRs, but also is not as effective at reducing LDL. Second, choose to use a lower dose of the brand name drug like Crestor, which may lower LDL more than atorvastatin at a lower dose and without any ADRs.
Based solely on drug cost, Crestor is much more expensive to the patient and the plan. What is unknown, however, is the long term cost associated with the choice of this medication. Any decrease in morbidity that results in fewer doctor visits, fewer hospitalizations, or fewer emergency room visits could easily outweigh the marginally higher cost of the brand name drug. Other examples of brand name medications that can save the health system money include the new anticoagulants. Overall reductions in required monitoring, unplanned ER visits and other costs may actually save the system money over time. A one-size-fits all approach to generic drugs like a GDR incentive does not address patient care.
The existence of GDR is therefore entirely an economic measure. If PBMs want to encourage generic drug use, this is one way. The goal GDR needs to be accessible in order to actually encourage pharmacies to buy in to the concept, and not all PDMs are realistic in their expectations. Consider one 2016 Medicare Part D plan that includes a Direct and Indirect Renumeration (DIR) fee with a GDR based incentive to reduce a pharmacy’s DIR fee. The required GDR for this incentive to apply is 95%. For a point of reference, our pharmacy typically has a GDR at or slightly above 90%. All of the stores in our franchise (thousands of stores) average closer to 80%. A 95% GDR is virtually impossible to achieve unless the pharmacy works tirelessly to switch all brand-only drugs to generic drugs without respect to clinical outcomes.
Treat the Patient, Not the Numbers
Back in pharmacy school, I was told to treat the patient, not the numbers. Unfortunately, the current attempt to quantify quality in pharmacy benefit portion of Medicare (Medicare Part ) is currently limited to numbers. EQuIPP scores curtently measure the compliance, measured as the Percentage of Days Covered (PDC) for several categories of drugs along with the prevalence of high risk drugs and the pharmacy’s ability to perform assigned comprehensive medication reviews. These numbers are arguably more closely related to clinical outcomes than GDR, but they still fall short of actually measuring the impact a pharmacy can have on patient care and total health spend.
I have faith that the measures used by Medicare and others will expand to include more direct measures of care. Until then, however, I believe that if GDR is going to be used as a basis for “reward” on any plan, it should be reasonable, and not lumped into “clinical” performance. The GDR “goal” for the incentive outlined in “The Rewards of Performance” was 86%. Based on the thousands of pharmacies represent by my PSAO, this level encourages those on the lower end to improve, and offers them a reachable goal.
Do not forget, though, that the focus of pharmacy is the patient and their outcomes. Pharmacists can impact these outcomes in many ways, including not dispensing medications. Be sure you answer three questions with each patient you care for:
- What can you do to ensure the patient achieves their therapeutics outcome(s).
- Is the patient’s therapy is safe, without unnecessary ADRs
- How can you help the patient maximize the effectiveness of their therapy
In other words, make every encounter count.