The Bottom Line
It remains to be seen how e-Rx will alter relationships between PBMs and drug companies, and affect overall spending on prescription
drugs. Health plans and payers are looking at the potential return on investment from the millions of dollars they may spend
on these information systems. There may be long-term gains from reduced medication errors, higher quality of care, and improved
patient compliance that keeps people out of hospitals, but the concrete savings are hard to calculate.
Plans may save some real money through increased generic prescribing and improved compliance with formularies. But a system
that makes it easier to prescribe and increases the number of patients who actually pick up their prescriptions is likely
to boost total expenditures. Marketers may applaud more prescribing, but probably should not cheer too loudly if the end result
is a rise in spending on drugs.
New information technologies are also central to the ongoing campaign to thwart drug counterfeiting. FDA believes electronic
track-and-trace systems offer the best hope for distinguishing genuine, approved drugs from bogus products. Manufacturers
object that e-tracking systems based on radio frequency identification tags (RFID) won't be ready for primetime by 2007. That's
when FDA expects public and private efforts to permit widespread use of tiny RFID chips to track every prescription drug package
and vial through the pharmaceutical distribution chain.
A May FDA update on its anti-counterfeiting efforts claims that RFID implementation is on track. A white paper from PhRMA
calls FDA's plan "overly optimistic" and says it will take at least five years to establish standards and resolve a host of
complex legal and technical issues. In the interim, PhRMA wants FDA to implement a paper-based drug pedigree tracking system
to guard against counterfeit drugs. Pharmacists oppose such a fallback, and FDA continues to delay implementing a rule that
would require paper pedigrees.
Meanwhile, a number of manufacturers and purchasers are testing electronic tracking systems for specific high-risk drugs.
Pfizer, GlaxoSmithKline and Eli Lilly have initiated RFID tests. Manufacturers also are examining whether RFID tags can affect
the quality and integrity of certain drugs, particularly protein-based biologics.
FDA reports that criminal investigations against counterfeiters are on the rise. This may reflect increased public attention,
plus more cooperation among federal, state, and international law enforcers. FDA recently sounded loud warnings for consumers
to watch out for counterfeit versions of Lipitor (atorvastatin), Viagra (sildenafil), and "generic Evista"(raloxifene) from
pharmacies in Mexican border towns.
Repackagers on the Run
Another anti-counterfeit effort involves limiting the role of repackagers and secondary wholesalers in the drug distribution
chain. Although most of these firms provide legitimate services, supplying retailers and wholesalers with specialty products
and items in short supply, this segment of the industry has been identified as an avenue through which fraudulent operators
can move bogus and adulterated drugs into the US distribution system.
While policymakers weigh options, CVS pharmacy announced in May that it no longer will purchase drugs from wholesalers that
trade in the secondary market, but only from manufacturers or wholesalers that certify that they do not obtain products from
repackagers or secondary wholesalers. Wholesaler Cardinal Health similarly said that it will purchase drugs only direct from
manufacturers or from established distributors, and that it is closing a division that trades in the secondary market.
This move may be a response to ongoing investigations into inter-wholesaler purchasing. New York attorney general Eliot Spitzer
sent out subpoenas for information related to purchases among wholesalers, and industry leaders are eager to distance themselves
from the secondary market.
Jill Wechsler is Pharmaceutical Executive's Washington correspondent.