GLG News by Tim Gallagher, RPh

Implications: An FDA advisory panel recently voted to stop the recommendation of otc cough and cold products in children less than 12 years of age. For decades parents have administered otc cough and could products to infants and young children. Even the FDA Advisory Committee had dissention amongst their members, voting 13 to 9 in favor of the change in the long standing treatment protocol of children's colds.

Analysis: For years we as healthcare professionals have recommended, when appropriate, certain otc medications for the treatment of the common cold.

Recently, the FDA Advisory Panel voted unanimously to stop the marketing of otc cough and cold products to children under the age of 2. There have been approximately 120 deaths in infants over the last 40 years attributed to the inappropriate use of otc decongestants and antihistamines. Discontinuing the use of these products in that age group is certainly appropriate. However, to say that no child under the age of 6 should receive otc medications for the treatment of cough and cold symptoms seems unreasonable.

While there may be no clinical studies to prove the efficacy of such products in that age group, we cannot infer lack of efficacy from lack of evidence in this case. Millions of parents have safely and effectively treated their children with otc cough and cold products for decades.

We all know that colds are self limiting and will resolve without treatment over time. We are not talking about curing colds, we are talking about treating symptoms. In my estimation it is certainly rational to use otc cough and cold products appropriately upon the consultation of a physician or pharmacist.

If these products are removed from the market or the dosage recommendations are changed to reflect only the treatment of adults and children over the age of 6, parents will not stop using the products.
Instead, parents and caregivers will attempt to determine dosing for children based on their "best guess" by interpolating adult dosing. This is a course we should not take.

Implications: Pfizer failed miserably in its attempt to provide diabetic patients with an easy-to-use inhaled insulin as an alternative to injectable insulin. A product they projected would generate sales of $2 billion a year recorded a disappointing $12 million in sales this year. CEO Kindler said he decided to pull the product to spend shareholders' money more wisely. Perhaps he should have thought about that a little sooner.

Analysis:

 Pfizer's introduction of Exubera, the first inhaled insulin, was a dramatic yet not surprising failure. The debacle was multifactorial.

The product required administration via a complicated, cumbersome inhalation device. The dosing was based on milligrams, not units of insulin, unlike current insulin products. There were pulmonary concerns necessitating spirometry assessments and additional physician visits and medical expense.
 
However, the greatest faux pas, in my estimation, is in the way they marketed the product. They expected physicians to take the time to educate patients on the administration of the drug. Most physicians simply do not have the time to spend to sit down with patients to explain how to administer drugs.

Pfizer's biggest mistake, and I told them this early on, was the fact that they didn't engage pharmacists in the introduction of this product. Pharmacists see their patients more often than any other health care providers and are responsible for managing their drug therapy outcomes. Pharmacists, therefore, are in the best position to educate patients on the indications, use, administration, storage, drug interactions, and side effects of their medications.
 
Had Pfizer provided pharmacists with demonstration inhalers and worked with pharmacists on ensuring the education of patients in regard to the administration of Exubera and compensated pharmacists for those efforts, the launch very possibly could have been successful.

I don't think we have seen the end of inhaled insulin. It is likely that another company, with more forethought, may yet resurrect the product.

Implications: The FDA recently approved a 250mg Soma® tablet manufactured by MedPointe Pharmaceuticals as a new recommended dose for the treatment of painful musculoskeletal problems such as backache. The drug is not new, in fact it has been around for nearly 50 years, first receiving FDA approval in 1959. The same drug was available at one time in a 250mg capsule but was discontinued.

Analysis: The approval of Soma® 250mg tablets does not strike me as a significant event in the treatment of musculoskeletal problems nor does it seem to offer any significant clinical benefit over existing products.

Carisoprodol and its metabolite meprobamate have been available for decades for use in the treatment of musculoskeletal problems. Carisoprodol is currently available in a 350mg tablet.

The use of both carisoprodol and meprobamate has been limited due their side effect profiles, including potential physical and/or psychological dependence. Although the drug is only indicated for "relief of discomfort associated with acute, painful musculoskeletal conditions in adults," and should only be used for up to 2 to 3 weeks, it is the experience of this practitioner that it is often prescribed for much longer periods of time and has a propensity for causing dependence.

With multiple other effective options available, I see little or no advantage in the use of this new product.

Implications: The FDA recently approved the expanded use of FluMist, the only nasal spray influenza vaccine, in children 2 to 5 years of age. Each year in the U.S up to 60 million Americans get the flu according to the CDC. The U.S. CDC recommends all children aged 6 to 59 months be vaccinated against the flu. FluMist uses a live, attenuated virus rather than an inactive virus.  A recent study indicates that the nasal spray may be more effective than the injection.

Analysis:

Last week, MedImmune (NASDAQ : AZN) received approval from the FDA for the administration of FluMist in children aged 2 to 5 years old.

In a pivotal study of over 4,000 children between the ages of 2 and 5 years old, there was a 54 percent reduction in cases of flu in children receiving FluMist compared to those receiving the traditional vaccine.

The flu is most prevalent in schoolage children. Children aged 2 to 17 years of age are twice as likely to get influenza as adults, including the elderly. Many parents are reluctant to get their children immunized due to their children's fear of needles. In addition, children less than 9 years of age receiving influenza vaccine for the first time need two doses at least 4 weeks apart.

This new indication should be a significant advancement in the effort to reduce the number of influenza cases in the United States. Look for sales of FluMist to increase substantially this year. The question is whether MedImmune is prepared to supply enough vaccine to meet the demand. The only drawback is the cost, since the nasal spray is more expensive than the traditional injection.

Implications: The transition from albuterol inhalers containing CFC propellants to those containing HFA propellants has certain ramifications for the health care market. The phaseout of existing generic albuterol inhalers has caused a constriction in the market and an increase in the cost of these products. Newer ozone-friendly products represent a significantly higher cost of therapy for patients. Some patients may cut back on the use of these products or forgo their use altogether. This may lead to more severe acute asthma attacks, more emergency room visits and hospitalizations, and increased health care costs.

Analysis: September 16th marked the celebration of the 20th anniversary of the signing of the Montreal Protocol,  and the observance of International Ozone Day for the Preservation of the Ozone Layer 2007.

The conversion of albuterol CFC inhalers to albuterol HFA inhalers in the United States is nearing completion. The FDA has mandated that by December 31, 2008 the production and sale of single-ingredient albuterol metered-dose inhalers (MDI's) must stop, by removing the essential use designation for albuterol MDI's which was granted in the EPA's Clean Air Act.

Since the phaseout began, the number of manufacturers of generic albuterol CFC inhalers has dwindled to one. Correspondingly, the average price for these inhalers has nearly quadrupled.

With the advent of the introduction, and subsequent mandate of the sale of albuterol HFA inhalers exclusively, the price of albuterol therapy will continue to rise. The average wholesale acquisition cost of one of the the currently available albuterol HFA inhalers is over $30.00 while the average cost of the currently available albuterol CFC inhaler is approximately $12.00

With the price of albuterol products increasing so drastically, the potential for a decrease in patient adherence is a real concern, especially in the case of uninsured patients.

While albuterol is typically not a drug used on a prophylactic basis in the treatment of asthma or COPD, many patients rely on it due to its heretofore low cost. Even patients with prescription drug insurance often cannot afford the higher copayments for the more expensive branded pharmaceuticals used to treat asthma and related conditions.

If patients discontinue the use if their albuterol inhalers and are not well-controlled on other forms of therapy, there undoubtedly will be an increase in acute asthma attacks, emergency room and urgent care visits, and hospitalizations. The cost to the health care system could be significant.

The bottom line is that as albuterol products increase in price it is inevitable that their use will decrease. One option would be for health plans to treat the new albuterol HFA inhalers like they would a generic product and place them in a preferred or "first tier" position on their drug formularies. This would afford the patients lower copayments and may increase utilization. Unfortunately, this does nothing to help those patients without health insurance or prescription drug coverage.

We have a year left before the change takes place. Hopefully there will be some constructive dialogue between the health care community and the payers, that can result in a reasonable solution. The outcome remains to be seen.

Implications: An analysis of a study looking at the effects of switching patients from Lipitor® to generic simvastatin was presented recently at the European Society of Cardiology Congress 2007. The data was generated from a retrospective analysis of 11,520 patients, 2,511 of whom were switched from Lipitor® to generic simvastatin after having been on Lipitor® for 6 or more months. The analysis indicated that patients switched to simvastatin had a 30 percent increase in the relative risk of a major cardiovascular event. A seconday analysis of the same data showed that patients switched from Lipitor® to simvastatin were twice as likely to discontinue therapy, though the reasons were not elucidated. While the study was merely an observational study, the results do raise the question: Is it safe to indiscriminately switch patients from drugs such as Lipitor® to less expensive generic alternatives. I appears further studies are warranted.

Analysis: While it is too early to determine the effect this will have on formularies and prescribing habits, it has the potential to have a negative impact on the generic cholesterol-lowering drug market.

Many health plans, including State Medicaid programs require less expensive generics to higher-priced brand name drugs. Some require step therapy where patients have to start on the least expensive drug in a therapuetic category and are only alllowed to receive more expensive drugs if they fail on the initial therapy. While this may seem prudent, this study at least should cause us to pause and further evaluate the data.

Implications: On September 5, 2007 First DataBank issued an update on the class action litigation pertaining to the publishing of AWP (Average Wholesale Price) for pharmaceuticals. AWP Settlement Update Both Medispan and First Databank have announced that they will adjust their method of calculating AWP prices on certain drugs to WAC or Direct Price times a factor of 1.20 rather than 1.25 as had been done previously. For pharmacies this translates into a 4% reduction in the reported AWP. Based on an average brand name prescription drug price of $150.00 this amounts to nearly a $6.00 reduction in pharmacy reimbursement or approximately a 35% reduction in gross profit. First DataBank will also cease publishing AWP's altogether two years after the effective date of the final court order. The fairness hearing related to the final approvement of the settlment is scheduled for Jaunuary 22, 2008. They will continue to publish alternative pricing information such as WAC, Direct Price, SWP and FUL.

Analysis: Obviously pharmacies can not withstand such a drastic change to the basis of cost for determinig pharmacy payments and the subsequent decrease in reimbursement. 

If and when these changes take place, there will have to be a complete overhaul and restructuring of third-party contracts between pharmacies and pharmacy benefit managers. (PBM's) 

With the pending changes to AMP prices that are imminent, the time to re-evaluate pharmacy reimbursement and develop a new standard for which the basis of the cost of a drug is determined for the purposes of reimbursement has arrived.

Hopefully a standardized, transparent, more equitable model can finally be developed. The question is: Can the process be facilitated before the reimbursement cuts take effect and what will impact will it have on pharmacies profitability in the meantime?

Implications: The number of mail order prescriptions dispensed in this country continues to rise. The major retail pharmacy chains all own or have a financial interest in the the PBM/mail order drug business. Large corporate benefit managers are beginning to question some of the dubious practices of PBM's.

Analysis:  Prescription drug costs continue to increase at a rate greater than that of most other health care expenditures. Increasing expenditures on prescription drugs can, in some cases, be a positive thing. In the case of medication therapy management services (MTM), many times drug expenditures will go up while other corresponding medical costs will decrease.

Despite the fact that the proper use of prescription drugs can lower overall health care costs, most corporate benefit managers are looking for ways to trim drug costs. In an effort to control or reign in drug costs, many uninformed or misinformed benefit managers look to PBM's and mail order pharmacies for their panacea.

Since most PBM's own their own mail order pharmacies it is not surprising that they self-refer and recommend a mail order option (or mandate) for their clients.

On the surface, these pharmacies offer a significant savings to their clients. This is ostensibly achieved by economies of scale related to their large purchasing power and their use of automated dispensing devices.

However, many coprorate benefit managers do not understand the intricacies of the retail pharmacy industry. The sophistry proffered by the PBM's is too often eagerly accepted by corporate managers in an effort to deal with ever-increasing drug costs. Most benefit managers do not understand the complicated pricing policies of drug manufacturers or PBM's, nor do they understand the differences in terms such as AWP, WAC, MAC, AMP, FUL, DP, etc.

What may appear to be a very attractive contract from a mail order pharmacy compared to a retail pharmacy often has manifold untold profit components for PBM's and mail order pharmacies. A large discount off of AWP on brand name drugs will often be more than offset by huge margins on generic drugs. When there are no generics available, drug formularies can be manipulated to maximize rebates on brand-name drugs from drug manufacturers to PBM's. These drug formularies often are based more on PBM profitability than product efficacy.

This recondite industry may be changing however. Until recently, most PBM's claimed to have have no fiduciary responsibility to their clients. Recent court decisions have found otherwise. In addition to this, many benefit managers are beginning to question PBM practices and are demanding full disclosure and transparency from PBM's and their mail order subsidiaries.

All the recent attention being cast on PBM's and their arcane business practices has spurred the development of newer "second generation"PBMs'. PBM's whose business models espouse transparency and disclosure to their clients. URAC, an independent, non-profit organization has recently developed accreditation standards for PBM's.

Will mail order pharmacies go away? I doubt it. As our population grows older and more patients take more prescription drugs, mail order prescription numbers will undoubtedly increase, although the trends may flatten out a bit. Are PBM's necessary and do they serve a purpose? Absolutely. PBM's are an essential element to maintaining and determining patient eligibility for drug benefit plans and for prescription claims processing. However, unless they are willing and able to provide full disclosure to their clients, they may be on the way out.