Western New York Health Care Consumers to Receive

Western New York Health Care Consumers to Receive Much-Needed Relief from the High Cost of Prescription Drug

AMHERST, N.Y. (Nov. 22, 2011) — Western New York health care consumers can expect some much-needed relief from the high cost of prescription drugs when the cholesterol-lowering pill Lipitor, the highest-selling drug of all time, becomes available in generic form on Nov. 30.

According to Michael W. Cropp, M.D., president and CEO, Independent Health, that’s just the tip of the iceberg as six of the nation’s best-selling drugs – including Plavix and Actos – and more than 40 brand-name drugs in total will see their patents expire over the next couple of years, opening the door for more affordable generic options.

“It’s estimated that up to one-third of the $300 billion spent annually in the U.S. on brand-name pharmaceuticals will be affected by what the industry is calling the ‘patent cliff’ – multiple drug companies losing their exclusive production rights to many popular and expensive drugs and medications,” said Dr. Cropp. “As the generic versions of these brand-name medicines become available, they have the potential to generate significant, long-term cost savings to patients, employers and the entire health care system.”

Dr. Cropp cited recent physician-led research to help underscore the financial impact and significance of the patent expirations.

A study conducted by physicians from the Mount Sinai Medical Center and the Weill Cornell Medical College published online in October in the Archives of Internal Medicine estimates 12 common medical practices identified as being “overused” accounted for $6.8 billion in medical costs in 2009. “The biggest-ticket item by far, accounting for a whopping $5.8 billion of the $6.8 billion total, was physicians ordering brand-name statins, such as Lipitor, before trying patients on a generic drug first,” said Dr. Cropp.

The 12 medical treatments and screenings examined were originally identified as being overused earlier this year in a study by another group of physicians, known as the Good Stewardship Working Group, under a grant from the American Board of Internal Medicine Foundation. Working group members were composed of internists, family physicians and pediatricians who are part of the National Physicians Alliance – a group of 22,000 doctors.

“One of the key actions to reforming health care involves greater alignment of the health system, including reducing wasteful, unnecessary spending and eliminating medical care that is redundant, or adds no value,” said Dr. Cropp. “Improving patient education and partnering with physicians can help us change practice patterns and improve efficiency.”

Martin Burruano, director of pharmacy services for Independent Health, stressed the less costly generic drugs are just as effective because they have the same active ingredients as their brand-name counterparts, and they are closely monitored by the Food and Drug Administration (FDA) to ensure safety. He also noted Independent Health members’ generic drug usage is already greater than 72 percent, far surpassing the national average which is about 65 percent (source: Takeda 2011-2012 Prescription Drug Benefit and Plan Design report).

Independent Health currently requires step therapy, or prior authorization, for several brand-name, non-preferred medications. For example, Independent Health added a step therapy requirement for all brand-name Proton Pump Inhibitor (PPI) drugs, which includes Nexium, Prevacid, Aciphex and Zegerid. Through step therapy, members try the generic alternatives of these PPI drugs first.

These efforts have proven successful, as generic usage among PPI-classified drugs is 77 percent among commercial Independent Health members; an improvement of 43 percent since 2008.

As part of its philosophy to reduce costs by improving quality, Independent Health has also expanded its medication therapy program. This effort assists Medicare members with managing their medications to make sure they are taking them correctly. That’s because not taking medication, or not taking it as prescribed, can lead to further complications and increased hospital/doctor visits and their resulting costs.

Under this management program, when a member is identified as being “high risk” (defined as having two or more chronic conditions, on seven or more medications to treat chronic conditions, and/or trending toward $3,000 in prescription costs) Independent Health’s pharmacy works with case management and health coaches to determine the best medication therapy program for the member.

So far the program has saved approximately $1.5 million in medical expenses through reduced emergency room visits, hospitalizations, etc. Because of the success the program has experienced with Medicare members, Independent Health is expanding the program to commercial members.

“Independent Health’s efforts to educate members and physicians about the benefits of generic prescription drugs speaks to our overall mission to address rising costs and provide quality, affordable, patient-centered care,” said Dr. Cropp.

Burruano estimates member out-of-pocket costs for the tier-one generic form of Lipitor will be about $7 for a month’s supply, compared to the current tier-three copayment of about $40 for the brand name.

Other initiatives underway at Independent Health to lower prescription drug costs and improve quality include the operation of Pharmacy Benefit Dimensions (PBD), a for-profit, self-funded pharmacy benefit management service. Founded in 2005 as a wholly owned subsidiary, PBD currently has more than 96,000 members and experienced a steady growth of 13 percent annually in 2009, 2010 and 2011.

In 2010, Independent Health established Reliance Rx, a new company that operates as a specialty pharmacy, providing high-tech, high-touch drugs to approximately 2,700 patients, most of who are living with severe and chronic medical conditions.

Headquartered in Buffalo, Independent Health began operations in 1980 and has consistently been rated among the top health plans in the country for customer service and member satisfaction. Independent Health’s comprehensive portfolio of product and service offerings include HMO, POS, PPO and EPO products, Medicare and Medicaid plans, traditional indemnity insurance, consumer-directed plans, coverage for self-funded employers, plus health savings account (HSA) and pharmacy benefit management (PBM) services. Combined, the company provides health benefits and services to nearly 375,000 individuals in Western New York and throughout the country. For more information, visit Independent Health’s website at www.independenthealth.com.