Are We Aligned Yet? A Medicare Part D Roundtable - Pharmaceutical Executive


Are We Aligned Yet? A Medicare Part D Roundtable

Pharmaceutical Executive

JOEL WINTERTON, owner, SET Enterprises: It seems that Medicare is relying a lot on the states to sign up people for low-income subsidies, handle dual-eligibles, and go out and recruit people. But there is going to be a wide gap between the states that do those things well and states that struggle. When Medicaid started up, there was quite a delay in understanding what the real program was, how big it was, and how fast it was growing. Most manufacturers after '91 and '92 dramatically underestimated the impact of Medicaid in '93, '94, and '95.

Pharmacists are overworked already and could become disenchanted with Part D, argues Accenture's Bill Davies. If so, they could hinder smooth operation of the drug program.
CLINTON: The increase in the nation's drug bill is coming mostly from increased utilization, not price increases. Is Part D set up to deal with increased utilization?

METRO: I think they've put a bit of a fig leaf there in terms of the Medication Therapy Management Program requirements, but it remains to be seen how active that will be at the plan level. In the long term, now that they have all the pieces together, the real question is: Do they try to coordinate it? Do they try to work more with disease management and the like?

The key to success in the new Medicare world is the ability to collaborate, says Model N's Stephen Zocchi.
PATER SHERMAN, vice president, pharmaceutical contracting, Medco Health Solutions: For people who are entering Part D having had zero drug benefit in '04 and '05, utilization is going to go way up, because now they have a "funded" drug benefit. On the other hand, Medco manages the drug benefit today for roughly nine million Medicare-eligible people. Those people have incredibly rich benefits—de minimis co-pays, no deductibles, no doughnut holes, no nothing. As employers get out of retiree drug benefits, some of them are going to transition to Part D benefits or Part D-like benefits.

LONG: The conventional wisdom is that when you have a benefit and you didn't have one before, you consume. When you have a better benefit than you had before, you consume more. But some of those people are going to have less of a benefit than they had before. And the question is: How big is that group compared to the other group? That is probably going to have more impact a year from now, because a lot of people are getting a subsidy at least for the first year, but you may see the subsidy drop at year two.

When you talk about utilization, I would say co-pays have certainly been a brake on consumption. But one side effect of higher co-pays is more noncompliance than we've ever seen before. I always wonder how much demand potential is out there, when you figure that a good number of people who start on chronic-care medications are off of them six months later.

SHERMAN: I agree. And from the viewpoint of a stand-alone drug benefit, noncompliance is not such a horrible thing. In a stand-alone Part D plan, it is much tougher for them to make profits based on pharmacoeconomic value.

BILL DAVIES, partner, Accenture: I agree that the Medicaid Therapy Management Programs are a kind of fig leaf. The ceiling they kick in at is so high, it's like closing the barn door after the horse has gotten out. And that's where industry and the payers and providers can become more creative in trying to monitor disease-management programs or monitor therapy utilization, so you can get the appropriate utilization.

SHERMAN: Medicare leaves a huge cost share to the patient. Our initial plan design at Medco is making sure that consumers have all the tools to be well educated, and letting them decide.

SCHOCK: That's a good point, but I think we have seen that these patients are not well educated. A lot of them have literacy issues. How do you address that?


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