miércoles, 28 de enero de 2015

miércoles, enero 28, 2015
The Weekend Interview

The Revolution at the Corner Drugstore

The CVS chief executive on upending the debate about costly specialty drugs and how he’s going to make sure you take your medicine.

By Joseph Rago

Jan. 23, 2015 6:42 p.m. ET

Woonsocket, R.I.

                                 Illustration: Ken Fallin      


For the better part of a year, the worlds of health-care finance and health-care politics have been scandalized by the specialty drug called Sovaldi. The $84,000 cost for a course of treatment of this hepatitis-C cure was said to reveal that pharmaceutical prices were irrational or abusive; that markets were helpless to respond; and that, absent government intercession, this new wave of complex biological therapies would bankrupt the nation.

Then, this winter, all of a sudden, discipline and competition arrived. The response has largely come in the form of new hep-C medicines and pharmacy-benefit managers, or PBMs, a kind of quasi-insurance company that purchases medications in bulk from drug makers, negotiates prices and oversees patient drug plans. The controversy continues to boil, though the CEO of the second-largest PBM in the U.S., Larry Merlo, exhibits little of the Sovaldi-fueled acrimony of his industry colleagues, much less the self-defeating policy responses.

“We saw the expected growth in specialty pharmacy coming. The latest trends around specialty say that unabated—unabated—we’re going to see midteens growth for the foreseeable future,” Mr. Merlo says of the rise of specialty-drug spending, tapping the table in his office with an index finger for emphasis. In other words, there are real problems, but there are solutions too, and the costs are manageable.

Mr. Merlo heads CVS Health, which in the age of the Affordable Care Act is expanding beyond the drugstore around the corner, sometimes radically. About 100 million Americans are CVS customers each year, whether in a brick-and-mortar outlet, paying a visit to one of its 960 “minute clinics,” or through its PBM unit, Caremark. CVS fills more than one of every five prescriptions in the U.S., either in-store or via mail. The company supplies fully 1% of all federal corporate-tax revenue.

In the case of specialty drugs, CVS is now the largest supplier and dispenses about 25% of prescriptions in the $86 billion business. Mr. Merlo expects these therapies to grow to 50% of total pharmaceutical spending, from 38% today, as innovations for unmet medical needs—or even common conditions like high cholesterol, which will be targeted by the forthcoming PCSK9 inhibitors—come to market.

So what to do? Think of an “illustrative trend” of a 20% growth rate in specialty drug costs, Mr. Merlo says. He estimates that CVS Caremark, which covers 65 million people, can erase as much as 16 percentage points. PBMs create tiers of preferred drugs, for example, which give patients an incentive to choose cheaper generics over name brands. Other management tools, like drug formularies, narrow pharmacy networks, care coordination, step therapy and the like, can add to the savings.

The hepatitis-C shakeout is more contested. The first-to-market maker of Sovaldi, Gilead Sciences, followed with a next-generation treatment called Harvoni, while AbbVie brought out Viekira Pak.

More are in the pipeline. Express Scripts , the largest PBM and a vocal Gilead critic, signed an exclusive deal with AbbVie. In January, CVS turned around and made Harvoni and Sovaldi the preferred hep-C treatments on its own PBM formularies. Both PBMs almost certainly received concessions on list prices in return for offering one therapy in lieu of competitors, though details haven’t been disclosed.

One way of reading all this is that the drug makers are being forced to compete, even while they retain intellectual-property protection. But it has stirred a new debate about patient access to needed medicines, and whether the limits of closed formularies will interfere with medical decision-making and in the long run cost patients or society more.

Obviously PBMs make individual exceptions and conduct clinical reviews, with a goal of generating the best value at the lowest cost. But the strategies do illustrate the trade-offs that are increasingly coming to define U.S. health care—and who will decide.

***

Mr. Merlo observes that CVS Caremark’s clients—whether health plans, self-insured employers or government programs like Medicare and Medicaid—“can pick and choose, they can mix and match, how aggressive they want to be to satisfy the goal of the appropriate level of cost, not at the expense of quality.” But as he sees it, individuals are increasingly dominant.

What Mr. Merlo calls “the retailization of health care” is accelerating, with consumers taking more responsibility for their own care choices, sharing more of the costs and becoming “part of the thought process and part of the solution. . . . I think consumers will have more decision-making, and with that comes more accountability.”

In part, this trend is a response to what Mr. Merlo sees as the defining challenge of American health care: “the quality-cost conundrum,” or how “to improve health outcomes at lower costs” amid a changing mix of how the U.S. finances health care. The Affordable Care Act is expanding insurance coverage, especially through Medicaid. What he calls the “silver tsunami,” or the 10,000 people turning 65 each day, is swelling the Medicare rolls. Employers and health plans are as “intensely focused” as ever “on reducing the cost of care.”

Mr. Merlo thinks the “ultimate answer” for high drug prices are payment methods that reward value and outcomes and allow everyone “to share the benefits.” He adds: “We’ve operated on a fee-for-service model, you know, forever.” That is changing, but “we’re in the top of the second inning. We’re very, very early.”

Still, “consumers have been left out of the process for years,” Mr. Merlo says, and now require new “education, tools and transparency.” The third-party-payer system for decades cast medicine as business-to-business transactions and thus left many health-care companies with no comprehension of normal people and their needs, preferences and sometimes irrationalities. Long retail experience is providing different answers.

“Obviously you think of our retail pharmacies,” says Mr. Merlo, a pharmacist by training and CVS chief since 2011. He is repositioning the company and thinks the better description of CVS is “an integrated pharmacy-care organization. Our purpose, our goal is to help people on their path to better health.”

Take CVS’s 960 walk-in clinics in 31 states and growing, which together constitute the biggest retail clinic in the country, with 23 million visits to date. Nurse practitioners treat minor acute ailments like strep throat, ear infections or sprains, and offer immunizations. Convenient (open on nights and weekends, with no appointments) and affordable (40% to 80% lower than traditional providers, with posted prices), these clinics can help solve one problem: “the confluence between more people entering the insured market and at the same time a growing shortage of primary-care physicians,” Mr. Merlo says.

They can also reduce spending by migrating treatment “at a fraction of the cost” from more-expensive settings like emergency rooms. “We have a lot of employees here at CVS Health”—about 200,000—“and sometimes that becomes our best learning,” Mr. Merlo explains. A recent internal study of CVS workers who used its walk-in clinics suggested their overall health costs are 8% lower than those with the same age and health status who don’t. A shelf of academic research shows the quality of care at such clinics is the same or sometimes better than the ER.

The pharmacist, Mr. Merlo says, isn’t often imagined on the front lines of medicine—but should be. Advanced pharmaceutical therapies, for diseases like multiple sclerosis and HIV, are often more complex than simply taking a pill. But sometimes the opposite is true, and Mr. Merlo notes that adherence—ensuring that patients take the medications they are prescribed—is one area where CVS can contribute.

About half of all Americans suffer from one or more chronic conditions such as high cholesterol, diabetes or asthma. “More times than not,” Mr. Merlo says, “the treatment for those diseases is prescription therapy, and that’s where the statistics start to get alarming—it’s a huge opportunity to take unnecessary costs out of the system. One out of four people drop off therapy. They don’t even get the first refill. By the time one year goes by after someone is newly diagnosed, as many as three of four will stop taking their medication or not take the medication as prescribed.”

One consensus economic estimate is that this adds about $300 billion a year to national health expenditures—as when a patient fails to take statins and has a heart attack or stroke. The tragedy is that the sickest people tend to be the least adherent.

“There’s no one reason, there’s no one answer,” Mr. Merlo says. Forgetfulness is common. The medication’s benefits may be imperceptible and patients may not feel any different as a result, or they experience side effects like the muscle cramps of statins, or they find a treatment regimen involving multiple drugs and doses too complex to understand.

CVS has launched a campaign “to make sure that the right patient is on the right therapy at the right time at the right dosage,” Mr. Merlo says. The company aims to improve adherence by as much as 15% by 2017. The goal is to “manage the pharmacy patient, not just the administration of the drug.”

To take one example, only a few years ago prescriptions were printed out and handed to the patient or submitted to the pharmacy by fax. Physicians and pharmacists often had no idea what happened next or any reliable method to know. Now 70% of prescriptions are submitted electronically, creating a digital trail and actionable information.

CVS technologists mine prescription and claims data and “identify gaps in care and keep people on their medications,” Mr. Merlo says. The system might then send a text message when someone has forgotten to refill a prescription. A pharmacist is prompted to discuss the importance of taking medication during the patient’s next visits, and CVS alerts the prescribing doctor.

But most often, a trusted clinician who listens and seems to care is best. For all the technological progress, CVS figures a one-on-one conversation with a pharmacist is two to three times more effective than any other method to change patient behavior—in a way, the human element that often goes missing in the U.S. health-care debate.

“I can pick up the phone and in a matter of minutes I can talk to the pharmacist, I can have a conversation,” Mr. Merlo says. “Can I really do that anywhere else across health-care delivery?”

Mark it down as another way that private innovation is finding ways to serve patients despite, or because of, the policy mess in Washington.


Mr. Rago is a member of the Journal editorial board. 

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