April/May 2009, Vol 2, No 3 by Dalia Buffery

THE PEER-REVIEWED FORUM FOR EVIDENCE IN BENEFIT DESIGN ™ APRIL/MAY 2009

VOLUME 2, NUMBER 3

EDITORIAL

The Paradox of Public Policy Reform: Change or Continuum? Robert E. Henry

Are You Kidding Me? Clinical Comparative Effectiveness or Evidence-Based Medicine Thomas Kaye RPh, MBA, FASHP REGULATORY ™

MIPPA: First Broad Changes to Medicare Part D Plan Operations Jean D. LeMasurier; Babette Edgar, PharmD, MBA Stakeholder Perspective by Mark A. Newsom, MSc CLINICAL

ProvenCare: Geisinger’s Model for Care Transformation through Innovative Clinical Initiatives and Value Creation Interview with Ronald A. Paulus, MD, MBA Perspective

The Integrated Patient-Centered Medical Home: Tools for Transforming Our Healthcare Delivery System Matias A. Klein BUSINESS

Increased Patient Cost-Sharing, Weak US Economy, and Poor Health Habits: Implications for Employers and Insurers Melinda C. Haren, RN; Kirk McConnell; Arthur F. Shinn, PharmD, FASCP Stakeholder Perspective by Paul Anthony Polansky, BSPharm, MBA DEPARTMENTS ◆ Generic Drug Trends New Legislations on Generics and Biosimilars Brewing in Congress ◆ Industry Trends Paying for Cancer Care: Economic Models Start to Emerge, Dovetailing Healthcare Reform

This year, 1 in 5 Americans will have PHN pain after shingles 1

FOR RELIEF OF PAIN ASSOCIATED WITH PHN

A Custom Fit for Their Body Important Safety Information LIDODERM速 (lidocaine patch 5%) is indicated for relief of pain associated with post-herpetic neuralgia (PHN). Apply only to intact skin. LIDODERM is contraindicated in patients with a history of sensitivity to local anesthetics (amide type) or any product component. Even a used LIDODERM patch contains a large amount of lidocaine (at least 665 mg). The potential exists for a small child or a pet to suffer serious adverse effects from chewing or ingesting a new or used LIDODERM patch, although the risk with this formulation has not been evaluated. It is important to store and dispose of LIDODERM out of the reach of children, pets, and others. Excessive dosing, such as applying LIDODERM to larger areas or for longer than the recommended wearing time, could result in increased absorption of lidocaine and high blood concentrations leading to serious adverse effects. Avoid contact of LIDODERM with the eye. If contact occurs, immediately wash the eye with water or saline and protect it until sensation returns. Patients with severe hepatic disease are at greater risk of developing toxic blood concentrations of lidocaine, because of their inability to metabolize lidocaine normally. LIDODERM should be used with caution in patients receiving Class I antiarrhythmic drugs (such as tocainide and mexiletine) since the toxic effects are additive and potentially synergistic. LIDODERM should also be used with caution in pregnant (including labor and delivery) or nursing mothers. Allergic reactions, although rare, can occur. During or immediately after LIDODERM treatment, the skin at the site of application may develop blisters, bruising, burning sensation, depigmentation, dermatitis, discoloration, edema, erythema, exfoliation, irritation, papules, petechia, pruritus, vesicles, or may be the locus of abnormal sensation. These reactions are generally

A first-line therapy, alone or with oral analgesics 2,3

■ The first and only lidocaine-based topical medication for the treatment of PHN pain. Apply only to intact skin —More than a decade of use ■ Customized application for your patients with PHN pain —Patches can be cut to custom fit the areas of pain —Patients can wear up to 3 patches simultaneously for 12 hours, followed by 12 hours off 4

mild and transient, resolving spontaneously within a few minutes to hours. Other reactions may include dizziness, headache, and nausea. When LIDODERM is used concomitantly with local anesthetic products, the amount absorbed from all formulations must be considered. Immediately discard used patches or remaining unused portions of cut patches in household trash in a manner that prevents accidental application or ingestion by children, pets, or others.

Before prescribing LIDODERM, please refer to the accompanying brief summary of full Prescribing Information. References: 1. Cluff RS, Rowbotham MC. Pain caused by herpes zoster infection. Neurol Clin. 1998;16(4): 813-832. 2. Dworkin RH, O’Connor AB, Backonja M, et al. Pharmacologic management of neuropathic pain: evidence-based recommendations. Pain. 2007;132(3):237-251. 3. Dubinsky RM, Kabbani H, El-Chami Z, Boutwell C, Ali H. Practice parameter: treatment of postherpetic neuralgia. An evidence-based report of the Quality Standards Subcommittee of the American Academy of Neurology. Neurology. 2004;63(6):959-965. 4. Lidoderm Prescribing Information. Chadds Ford, PA: Endo Pharmaceuticals Inc; 2008.

LIDODERM® (Lidocaine Patch 5%) Rx only Brief Summary (For full Prescribing Information refer to package insert.) INDICATIONS AND USAGE LIDODERM is indicated for relief of pain associated with post-herpetic neuralgia. It should be applied only to intact skin. CONTRAINDICATIONS LIDODERM is contraindicated in patients with a known history of sensitivity to local anesthetics of the amide type, or to any other component of the product. WARNINGS Accidental Exposure in Children Even a used LIDODERM patch contains a large amount of lidocaine (at least 665 mg). The potential exists for a small child or a pet to suffer serious adverse effects from chewing or ingesting a new or used LIDODERM patch, although the risk with this formulation has not been evaluated. It is important for patients to store and dispose of LIDODERM out of the reach of children, pets, and others. (See HANDLING AND DISPOSAL) Excessive Dosing Excessive dosing by applying LIDODERM to larger areas or for longer than the recommended wearing time could result in increased absorption of lidocaine and high blood concentrations, leading to serious adverse effects (see ADVERSE REACTIONS, Systemic Reactions). Lidocaine toxicity could be expected at lidocaine blood concentrations above 5 μg/mL. The blood concentration of lidocaine is determined by the rate of systemic absorption and elimination. Longer duration of application, application of more than the recommended number of patches, smaller patients, or impaired elimination may all contribute to increasing the blood concentration of lidocaine. With recommended dosing of LIDODERM, the average peak blood concentration is about 0.13 μg/mL, but concentrations higher than 0.25 μg/mL have been observed in some individuals. PRECAUTIONS General Hepatic Disease: Patients with severe hepatic disease are at greater risk of developing toxic blood concentrations of lidocaine, because of their inability to metabolize lidocaine normally. Allergic Reactions: Patients allergic to para aminobenzoic acid derivatives (procaine, tetracaine, benzocaine, etc.) have not shown cross sensitivity to lidocaine. However, LIDODERM should be used with caution in patients with a history of drug sensitivities, especially if the etiologic agent is uncertain. Non-intact Skin: Application to broken or inflamed skin, although not tested, may result in higher blood concentrations of lidocaine from increased absorption. LIDODERM is only recommended for use on intact skin. Eye Exposure: The contact of LIDODERM with eyes, although not studied, should be avoided based on the findings of severe eye irritation with the use of similar products in animals. If eye contact occurs, immediately wash out the eye with water or saline and protect the eye until sensation returns. Drug Interactions Antiarrhythmic Drugs: LIDODERM should be used with caution in patients receiving Class I antiarrhythmic drugs (such as tocainide and mexiletine) since the toxic effects are additive and potentially synergistic. Local Anesthetics: When LIDODERM is used concomitantly with other products containing local anesthetic agents, the amount absorbed from all formulations must be considered. Carcinogenesis, Mutagenesis, Impairment of Fertility Carcinogenesis: A minor metabolite, 2, 6-xylidine, has been found to be carcinogenic in rats. The blood concentration of this metabolite is negligible following application of LIDODERM. Mutagenesis: Lidocaine HCl is not mutagenic in Salmonella/mammalian microsome test nor clastogenic in chromosome aberration assay with human lymphocytes and mouse micronucleus test. Impairment of Fertility: The effect of LIDODERM on fertility has not been studied. Pregnancy Teratogenic Effects: Pregnancy Category B. LIDODERM (lidocaine patch 5%) has not been studied in pregnancy. Reproduction studies with lidocaine have been performed in rats at doses up to 30 mg/kg subcutaneously and have revealed no evidence of harm to the fetus due to lidocaine. There are, however, no adequate and well-controlled studies in pregnant women. Because animal reproduction studies are not always predictive of human response, LIDODERM should be used during pregnancy only if clearly needed. Labor and Delivery LIDODERM has not been studied in labor and delivery. Lidocaine is not contraindicated in labor and delivery. Should LIDODERM be used concomitantly with other products containing lidocaine, total doses contributed by all formulations must be considered. Nursing Mothers LIDODERM has not been studied in nursing mothers. Lidocaine is excreted in human milk, and the milk: plasma ratio of lidocaine is 0.4. Caution should be exercised when LIDODERM is administered to a nursing woman.

Pediatric Use Safety and effectiveness in pediatric patients have not been established. ADVERSE REACTIONS Application Site Reactions During or immediately after treatment with LIDODERM (lidocaine patch 5%), the skin at the site of application may develop blisters, bruising, burning sensation, depigmentation, dermatitis, discoloration, edema, erythema, exfoliation, irritation, papules, petechia, pruritus, vesicles, or may be the locus of abnormal sensation. These reactions are generally mild and transient, resolving spontaneously within a few minutes to hours. Allergic Reactions Allergic and anaphylactoid reactions associated with lidocaine, although rare, can occur. They are characterized by angioedema, bronchospasm, dermatitis, dyspnea, hypersensitivity, laryngospasm, pruritus, shock, and urticaria. If they occur, they should be managed by conventional means. The detection of sensitivity by skin testing is of doubtful value. Other Adverse Events Due to the nature and limitation of spontaneous reports in postmarketing surveillance, causality has not been established for additional reported adverse events including: Asthenia, confusion, disorientation, dizziness, headache, hyperesthesia, hypoesthesia, lightheadedness, metallic taste, nausea, nervousness, pain exacerbated, paresthesia, somnolence, taste alteration, vomiting, visual disturbances such as blurred vision, flushing, tinnitus, and tremor. Systemic (Dose-Related) Reactions Systemic adverse reactions following appropriate use of LIDODERM are unlikely, due to the small dose absorbed (see CLINICAL PHARMACOLOGY, Pharmacokinetics). Systemic adverse effects of lidocaine are similar in nature to those observed with other amide local anesthetic agents, including CNS excitation and/or depression (light-headedness, nervousness, apprehension, euphoria, confusion, dizziness, drowsiness, tinnitus, blurred or double vision, vomiting, sensations of heat, cold, or numbness, twitching, tremors, convulsions, unconsciousness, respiratory depression, and arrest). Excitatory CNS reactions may be brief or not occur at all, in which case the first manifestation may be drowsiness merging into unconsciousness. Cardiovascular manifestations may include bradycardia, hypotension, and cardiovascular collapse leading to arrest. OVERDOSAGE Lidocaine overdose from cutaneous absorption is rare, but could occur. If there is any suspicion of lidocaine overdose (see ADVERSE REACTIONS, Systemic Reactions), drug blood concentration should be checked. The management of overdose includes close monitoring, supportive care, and symptomatic treatment. Dialysis is of negligible value in the treatment of acute overdose with lidocaine. In the absence of massive topical overdose or oral ingestion, evaluation of symptoms of toxicity should include consideration of other etiologies for the clinical effects, or overdosage from other sources of lidocaine or other local anesthetics. The oral LD50 of lidocaine HCl is 459 (346-773) mg/kg (as the salt) in nonfasted female rats and 214 (159-324) mg/kg (as the salt) in fasted female rats, which are equivalent to roughly 4000 mg and 2000 mg, respectively, in a 60 to 70 kg man based on the equivalent surface area dosage conversion factors between species. DOSAGE AND ADMINISTRATION Apply LIDODERM to intact skin to cover the most painful area. Apply up to three patches, only once for up to 12 hours within a 24-hour period. Patches may be cut into smaller sizes with scissors prior to removal of the release liner. (See HANDLING AND DISPOSAL) Clothing may be worn over the area of application. Smaller areas of treatment are recommended in a debilitated patient, or a patient with impaired elimination. If irritation or a burning sensation occurs during application, remove the patch (es) and do not reapply until the irritation subsides. When LIDODERM is used concomitantly with other products containing local anesthetic agents, the amount absorbed from all formulations must be considered. HANDLING AND DISPOSAL Hands should be washed after the handling of LIDODERM, and eye contact with LIDODERM should be avoided. Do not store patch outside the sealed envelope. Apply immediately after removal from the protective envelope. Fold used patches so that the adhesive side sticks to itself and safely discard used patches or pieces of cut patches where children and pets cannot get to them. LIDODERM should be kept out of the reach of children. Store at 25°C (77°F); excursions permitted to 15°-30°C (59°-86°F). [See USP Controlled Room Temperature]. Manufactured for: Endo Pharmaceuticals Inc. Chadds Ford, Pennsylvania 19317 LIDODERM® is a Registered Trademark of Hind Health Care, Inc. Copyright© Endo Pharmaceuticals Inc. 2008 Rev. February, 2008 6524-11 E1 LD-1664 / December 2008

LIDODERM® is a registered trademark of Hind Health Care, Inc.

CHADDS FORD, PENNSYLVANIA 19317

LD-1652R/MARCH 2009

www.lidoderm.com

1-800-462-ENDO

EDITORIAL BOARD

CLINICAL EDITOR

HEALTH OUTCOMES RESEARCH

PHARMACY BENEFIT DESIGN

Thomas G. McCarter, MD, FACP Chief Clinical Officer Executive Health Resources, PA

Gordon M. Cummins, MS Director, IntegriChain

Jan Berger, MD, MJ President, Health Intelligence Partners

Kavita V. Nair, PhD Associate Professor, School of Pharmacy University of Colorado at Denver

Joel V. Brill, MD Chief Medical Officer, Predictive Health, Phoenix, AZ

Gary M. Owens, MD President, Gary Owens Associates Glen Mills, PA

Leslie S. Fish, PharmD Sr. Director of Pharmacy Services Fallon Community Health Plan, MA

David Williams Health Consultant Milliman, Windsor, CT

Timothy S. Regan, BPharm, RPh Executive Director, Xcenda Palm Harbor, FL

Paul Anthony Polansky, BSPharm, MBA Executive VP and Chief Pharmacy Officer Sanovia Corp., Philadelphia, PA

CARDIOLOGY RESEARCH

MANGED CARE & GOVERNMENT AFFAIRS

Michael A. Weber, MD Professor of Medicine Department of Medicine (Cardiology) State University of New York

Sharad Mansukani, MD Chief Strategic Officer, Nations Health Senior Advisor, Texas Pacific Group, FL

Scott R. Taylor, RPh, MBA Associate Director, Industry Relations Geisinger Health System, Danville, PA

GOVERNMENT EDITOR

Kevin B. “Kip” Piper, MA, CHE President, Health Results Group Sr. Counselor, Fleishman-Hillard Washington, DC ACTUARY

POLICY & PUBLIC HEALTH MANAGED MARKETS

ENDOCRINOLOGY RESEARCH

James V. Felicetta, MD Chairman, Dept. of Medicine Carl T. Hayden Veterans Affairs Medical Center, Phoenix, AZ EMPLOYERS

Alberto M. Colombi, MD, MPH Corporate Medical Director PPG Industries, Pittsburgh, PA Wayne M. Lednar, MD, PhD Global Chief Medical Officer Director, Integrated Health Services DuPont, Wilmington, DE Arthur F. Shinn, PharmD, FASCP President, Managed Pharmacy Consultants, Lake Worth, FL

Jeffrey A. Bourret, MS, RPh, FASHP Executive Director, Customer-Centric Strategy and Innovation, Healthcare Systems Marketing Wyeth Pharmaceuticals, Collegeville, PA Charles E. Collins, Jr, MS, MBA Associate Director, Managed Markets Marketing, Boehringer-Ingelheim Ridgefield, CT ONCOLOGY RESEARCH

Samuel M. Silver, MD, PhD, FACP Professor, Internal Medicine Director, Cancer Center Network Division of Hematology/Oncology Assistant Dean for Research University of Michigan Health Systems

F. Randy Vogenberg, RPh, PhD Chief Strategy Officer Employer-based Pharmaceutical Strategies Senior Scholar, Department of Health Policy, Thomas Jefferson University

William E. Fassett, BSPharm, MBA, PhD Professor of Pharmacy Law & Ethics Vice Chair, Dept. of Pharmacotherapy College of Pharmacy, Washington State University, Spokane, WA

EPIDEMIOLOGY RESEARCH

PERSONALIZED MEDICINE

Nirav R. Shah, MD, MPH Assistant Professor of Medicine NYU School of Medicine, NYC Senior Investigator, Geisinger Health System, Danville, PA

Wayne A. Rosenkrans, Jr, PhD Chairman and President, Personalized Medicine Coalition, Distinguished Fellow, MIT Center for Biomedical Innovation PHARMACOECONOMICS

HEALTH INFORMATION TECHNOLOGY

J. B. Jones, PhD, MBA Research Associate, Geisinger Health System, Danville, PA

VOL. 2

NO. 3

Jack E. Fincham, PhD, RPh Professor of Pharmacy, School of Pharmacy University of Missouri, Kansas City, MO Alex Hathaway, MD, MPH, FACPM Senior Medical Policy Advisor Government Programs GlaxoSmithKline, Philadelphia, PA J. Warren Salmon, PhD Professor of Health Policy & Administration School of Public Health University of Illinois at Chicago REIMBURSEMENT POLICY

PATIENT ADVOCACY

Joshua N. Liberman, PhD Vice President, Strategic Research CVS Caremark Hunt Valley, MD

Joseph R. Antos, PhD Wilson H. Taylor Scholar in Health Care Retirement Poloicy American Enterprise Institute

Jeff Jianfei Guo, BPharm, MS, PhD Associate Professor of Pharmacoeconomics & Pharmacoepidemiology, College of Pharmacy, University of Cincinnati Medical Center, OH

Grant D. Lawless, BSPharm, MD, FACP Executive Director for Payor Relations Corporate Account Amgen, Thousand Oaks, CA Michael Schaffer, PharmD, MBA Director, Pharmacy Programs Sanovia Co., Philadelphia, PA RESEARCH & DEVELOPMENT

Michael F. Murphy, MD, PhD Chief Medical Officer and Scientific Officer Worldwide Clinical Trials Faculty, Center for Experimental, Pharmacology and Therapeutics, HarvardMIT Division of Health Sciences and Technology, Cambridge, MA SPECIALTY PHARMACY

James T. Kenney, RPh, MBA Pharmacy Operations Manager, Harvard Pilgrim Health Care, Wellesley, MA

www.AHDBonline.com

APRIL/MAY 2009

VOLUME 2, NUMBER 3

™

TABLE OF CONTENTS EDITORIAL

106 The Paradox of Public Policy Reform: Change or Continuum? Robert E. Henry

Publisher Nicholas Englezos nick@engagehc.com 732-992-1884 Associate Publisher Maurice Nogueira maurice@engagehc.com 732-992-1895

108 Are You Kidding Me? Clinical Comparative Effectiveness or Evidence-Based Medicine Thomas Kaye RPh, MBA, FASHP

Editorial Director Dalia Buffery dalia@AHDBonline.com 732-992-1889

REGULATORY

111 MIPPA: First Broad Changes to Medicare Part D Plan Operations Jean D. LeMasurier; Babette Edgar, PharmD, MBA

Associate Editor Dawn Lagrosa 732-992-1892

117 Stakeholder Perspective by Mark A. Newsom, MSc

Senior Production Manager Lynn Hamilton

CLINICAL

Business Manager Blanche Marchitto

122 ProvenCare: Geisinger’s Model for Care Transformation through Innovative Clinical Initiatives and Value Creation Interview with Ronald A. Paulus, MD, MBA

Editor-in-Chief Robert E. Henry rhenry@AHDBonline.com 732-992-1885

128 Perspective The Integrated Patient-Centered Medical Home: Tools for Transforming Our Healthcare Delivery System Matias A. Klein Continued on page 102

Mission Statement American Health & Drug Benefits is founded on the concept that health and drug benefits have undergone a transformation: the econometric value of a drug is of equal importance to clinical outcomes as it is to serving as the basis for securing coverage in formularies and benefit designs. Benefit designs are greatly affected by clinical, business, and policy conditions. This publication provides benefit design decision makers the integrated industry information they require to devise formularies and benefit designs that stand up to today’s special healthcare delivery and business needs.

American Health & Drug Benefits is included in the following indexing and database services: CINAHL: Cumulative Index to Nursing and Allied Health Literature EBSCO: EBSCO research databases

100

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April/May 2009

Contact Information: For reprints, subscription information, and editorial queries, please contact: editorial@AHDBonline.com T: 732-992-1880 F: 732-992-1881

VOL. 2

NO. 3

756,000 patients enrolled in pharmacy adherence programs

products for diabetes and mental health

happier, healthier, more compliant patient

If it matters to patients, it matters to us. That’s why Eli Lilly and Company is committed to providing the programs, services, and manpower that help you deliver positive outcomes for the patients under your care. And while health care may be a numbers game, we’re interested in the one number that matters most.

One focus. One promise. One patient at a time.

APRIL/MAY 2009

VOLUME 2, NUMBER 3

™

TABLE OF CONTENTS

™

(Continued)

BUSINESS

134 Increased Patient Cost-Sharing, Weak US Economy, and Poor Health Habits: Implications for Employers and Insurers Melinda C. Haren, RN; Kirk McConnell; Arthur F. Shinn, PharmD, FASCP 141 Stakeholder Perspective by Paul Anthony Polansky, BSPharm, MBA DEPARTMENTS

120 GENERIC DRUG TRENDS New Legislations on Generics and Biosimilars Brewing in Congress Dalia Buffery, MA, ABD 131 INDUSTRY TRENDS Paying for Cancer Care: Economic Models Start to Emerge, Dovetailing Healthcare Reform By Caroline Helwick

UNMANAGED MOMENT

118

127

WEB EXCLUSIVE www.AHDBonline.com

• Effects of High-Deductible Plans on Employers and Employees • Caption Contest

AMERICAN HEALTH & DRUG BENEFITS

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142 EXECUTIVE SUMMARIES CAPTION CONTEST

American Health & Drug Benefits, ISSN 19422962 (print); ISSN 1942-2970 (online), is published 6 times a year by Engage Healthcare Communications, LLC, 241 Forsgate Drive, Suite 205A, Monroe Township, NJ 08831. Copyright © 2009 by Engage Healthcare Communications, LLC. All rights reserved. American Health & Drug Benefits and The Peer-Reviewed Forum for Evidence in Benefit Design are trademarks of Engage Healthcare Communications, LLC. No part of this publication may be reproduced or transmitted in any form or by any means now or hereafter known, electronic or mechanical, including photocopy, recording, or any informational storage and retrieval system, without written permission from the Publisher. Printed in the United States of America.

April/May 2009

VOL. 2

NO. 3

NOW AVAILABLE

THE PPI WITH A DUAL DELAYED RELEASE (DDR) FORMULATION ™

KAPIDEX is indicated for: • Healing all grades of erosive esophagitis (EE) for up to 8 weeks • Maintaining healing of EE for up to 6 months • Treating heartburn associated with symptomatic non-erosive gastroesophageal reﬂux disease (GERD) for 4 weeks Important Safety Information • KAPIDEX is contraindicated in patients with known hypersensitivity to any component of the formulation. • Symptomatic response with KAPIDEX does not preclude the presence of gastric malignancy. • Most commonly reported treatment-emergent adverse reactions (≥2%): diarrhea, abdominal pain, nausea, upper respiratory tract infection, vomiting, and ﬂatulence. • KAPIDEX should not be co-administered with atazanavir. KAPIDEX may interfere with absorption of drugs for which gastric pH is important for bioavailability (e.g., ampicillin esters, digoxin, iron salts, ketoconazole). Patients taking concomitant warfarin may require monitoring for increases in international normalized ratio (INR) and prothrombin time. Please see adjacent brief summary of prescribing information for KAPIDEX.

www.KAPIDEX.com

BRIEF SUMMARY OF FULL PRESCRIBING INFORMATION KAPIDEXâ&#x201E;¢ (dexlansoprazole) delayed release capsules INDICATIONS AND USAGE KAPIDEX is indicated for: s THE HEALING OF ALL GRADES OF EROSIVE ESOPHAGITIS %% FOR UP TO WEEKS s MAINTAINING HEALING OF %% FOR UP TO MONTHS AND s THE TREATMENT OF HEARTBURN ASSOCIATED WITH NON EROSIVE GASTROESOPHAGEAL REmUX DISEASE '%2$ FOR WEEKS CONTRAINDICATIONS +!0)$%8 IS CONTRAINDICATED IN PATIENTS WITH KNOWN HYPERSENSITIVITY TO ANY COMPONENT OF THE FORMULATION (YPERSENSITIVITY AND ANAPHYLAXIS HAVE BEEN REPORTED WITH +!0)$%8 USE [see Adverse Reactions] WARNINGS AND PRECAUTIONS Gastric Malignancy 3YMPTOMATIC RESPONSE WITH +!0)$%8 DOES NOT PRECLUDE THE PRESENCE OF GASTRIC MALIGNANCY ADVERSE REACTIONS Clinical Trials Experience 4HE SAFETY OF +!0)$%8 WAS EVALUATED IN PATIENTS IN CONTROLLED AND UNCONTROLLED CLINICAL STUDIES INCLUDING PATIENTS TREATED FOR AT LEAST MONTHS AND PATIENTS TREATED FOR ONE YEAR 0ATIENTS RANGED IN AGE FROM TO YEARS MEDIAN AGE YEARS WITH FEMALE #AUCASIAN "LACK !SIAN AND OTHER RACES 3IX RANDOMIZED CONTROLLED CLINICAL TRIALS WERE CONDUCTED FOR THE TREATMENT OF %% MAINTENANCE OF HEALED %% AND SYMPTOMATIC '%2$ WHICH INCLUDED PATIENTS ON PLACEBO PATIENTS ON +!0)$%8 MG PATIENTS ON +!0)$%8 MG AND PATIENTS ON LANSOPRAZOLE MG ONCE DAILY

HYPERSENSITIVITY Infections and Infestations: CANDIDA INFECTIONS INmUENZA NASOPHARYNGITIS ORAL HERPES PHARYNGITIS SINUSITIS VIRAL INFECTION VULVO VAGINAL INFECTION Injury, Poisoning and Procedural Complications: FALLS FRACTURES JOINT SPRAINS OVERDOSE PROCEDURAL PAIN SUNBURN Laboratory Investigations: ALP INCREASED !,4 INCREASED !34 INCREASED BILIRUBIN DECREASED INCREASED BLOOD CREATININE INCREASED BLOOD GASTRIN INCREASED BLOOD GLUCOSE INCREASED BLOOD POTASSIUM INCREASED LIVER FUNCTION TEST ABNORMAL PLATELET COUNT DECREASED TOTAL PROTEIN INCREASED WEIGHT INCREASE Metabolism and Nutrition Disorders: APPETITE CHANGES HYPERCALCEMIA HYPOKALEMIA Musculoskeletal and Connective Tissue Disorders: ARTHRALGIA ARTHRITIS MUSCLE CRAMPS MUSCULOSKELETAL PAIN MYALGIA Nervous System Disorders: ALTERED TASTE CONVULSION DIZZINESS HEADACHES MIGRAINE MEMORY IMPAIRMENT PARESTHESIA PSYCHOMOTOR HYPERACTIVITY TREMOR TRIGEMINAL NEURALGIA Psychiatric Disorders: ABNORMAL DREAMS ANXIETY DEPRESSION INSOMNIA LIBIDO CHANGES Renal and Urinary Disorders: DYSURIA MICTURITION URGENCY Reproductive System and Breast Disorders: DYSMENORRHEA DYSPAREUNIA MENORRHAGIA MENSTRUAL DISORDER; Respiratory, Thoracic and Mediastinal Disorders: ASPIRATION ASTHMA BRONCHITIS COUGH DYSPNOEA HICCUPS HYPERVENTILATION RESPIRATORY TRACT CONGESTION SORE THROAT Skin and Subcutaneous Tissue Disorders: ACNE DERMATITIS ERYTHEMA PRURITIS RASH SKIN LESION URTICARIA Vascular Disorders: DEEP VEIN THROMBOSIS HOT mUSH HYPERTENSION Additional adverse reactions that were reported in a long-term uncontrolled study and were considered related to KAPIDEX by the treating physician included: anaphylaxis, auditory hallucination, B-cell lymphoma, central obesity, cholecystitis acute, decreased hemoglobin, dehydration, diabetes mellitus, dysphonia, epistaxis, folliculitis, gastrointestinal pain, gout, herpes zoster, hyperglycemia, hyperlipidemia, hypothyroidism, increased neutrophils, MCHC decrease, neutropenia, oral soft tissue disorder, rectal tenesmus, restless legs syndrome, somnolence, thrombocythemia, tonsillitis.

!S CLINICAL TRIALS ARE CONDUCTED UNDER WIDELY VARYING CONDITIONS ADVERSE REACTION RATES OBSERVED IN THE CLINICAL TRIALS OF A DRUG CANNOT BE DIRECTLY COMPARED TO RATES IN Other adverse reactions not observed with KAPIDEX, but occurring with the THE CLINICAL TRIALS OF ANOTHER DRUG AND MAY NOT REmECT THE RATES OBSERVED IN PRACTICE racemate lansoprazole can be found in the lansoprazole package insert, ADVERSE REACTIONS section. -OST #OMMONLY 2EPORTED !DVERSE 2EACTIONS 4HE MOST COMMON ADVERSE REACTIONS r THAT OCCURRED AT A HIGHER INCIDENCE DRUG INTERACTIONS Drugs with pH-Dependent Absorption Pharmacokinetics FOR +!0)$%8 THAN PLACEBO IN THE CONTROLLED STUDIES ARE PRESENTED IN 4ABLE +!0)$%8 CAUSES INHIBITION OF GASTRIC ACID SECRETION +!0)$%8 IS LIKELY TO SUBSTANTIALLY Table 2: Incidence of Treatment-Emergent Adverse DECREASE THE SYSTEMIC CONCENTRATIONS OF THE ()6 PROTEASE INHIBITOR ATAZANAVIR WHICH Reactions in Controlled Studies IS DEPENDENT UPON THE PRESENCE OF GASTRIC ACID FOR ABSORPTION AND MAY RESULT IN A Placebo KAPIDEX KAPIDEX KAPIDEX Lansoprazole LOSS OF THERAPEUTIC EFFECT OF ATAZANAVIR AND THE DEVELOPMENT OF ()6 RESISTANCE 4HEREFORE +!0)$%8 SHOULD NOT BE CO ADMINISTERED WITH ATAZANAVIR 30 mg 60 mg Total 30 mg (N=896) (N=455) (N=2218) (N=2621) (N=1363) )T IS THEORETICALLY POSSIBLE THAT +!0)$%8 MAY INTERFERE WITH THE ABSORPTION OF Adverse Reaction % % % % % OTHER DRUGS WHERE GASTRIC P( IS AN IMPORTANT DETERMINANT OF ORAL BIOAVAILABILITY $IARRHEA E G AMPICILLIN ESTERS DIGOXIN IRON SALTS KETOCONAZOLE !BDOMINAL 0AIN

.AUSEA

5PPER 2ESPIRATORY Tract Infection

6OMITING

Warfarin #O ADMINISTRATION OF +!0)$%8 MG AND WARFARIN MG DID NOT AFFECT THE PHARMACOKINETICS OF WARFARIN OR ).2 (OWEVER THERE HAVE BEEN REPORTS OF INCREASED ).2 AND PROTHROMBIN TIME IN PATIENTS RECEIVING 00)S AND WARFARIN CONCOMITANTLY )NCREASES IN ).2 AND PROTHROMBIN TIME MAY LEAD TO ABNORMAL BLEEDING AND EVEN DEATH 0ATIENTS TREATED WITH +!0)$%8 AND WARFARIN CONCOMITANTLY MAY NEED TO BE MONITORED FOR INCREASES IN ).2 AND PROTHROMBIN TIME

&LATULENCE USE IN SPECIFIC POPULATIONS !DVERSE 2EACTIONS 2ESULTING IN $ISCONTINUATION Pregnancy )N CONTROLLED CLINICAL STUDIES THE MOST COMMON ADVERSE REACTION LEADING TO Teratogenic Effects DISCONTINUATION FROM +!0)$%8 THERAPY WAS DIARRHEA 0REGNANCY #ATEGORY " 4HERE ARE NO ADEQUATE AND WELL CONTROLLED STUDIES WITH DEXLANSOPRAZOLE IN PREGNANT WOMEN 4HERE WERE NO ADVERSE FETAL EFFECTS IN /THER !DVERSE 2EACTIONS /THER ADVERSE REACTIONS THAT WERE REPORTED IN CONTROLLED STUDIES AT AN INCIDENCE ANIMAL REPRODUCTION STUDIES OF DEXLANSOPRAZOLE IN RABBITS "ECAUSE ANIMAL REPRODUCTION STUDIES ARE NOT ALWAYS PREDICTIVE OF HUMAN RESPONSE +!0)$%8 OF LESS THAN ARE LISTED BELOW BY BODY SYSTEM Blood and Lymphatic System Disorders: ANEMIA LYMPHADENOPATHY Cardiac SHOULD BE USED DURING PREGNANCY ONLY IF CLEARLY NEEDED Disorders: ANGINA ARRHYTHMIA BRADYCARDIA CHEST PAIN EDEMA MYOCARDIAL ! REPRODUCTION STUDY CONDUCTED IN RABBITS AT ORAL DEXLANSOPRAZOLE DOSES UP TO INFARCTION PALPITATION TACHYCARDIA Ear and Labyrinth Disorders: EAR PAIN TINNITUS MG PER KG PER DAY APPROXIMATELY FOLD THE MAXIMUM RECOMMENDED HUMAN VERTIGO Endocrine Disorders: GOITER Eye Disorders: EYE IRRITATION EYE SWELLING DEXLANSOPRAZOLE DOSE ; MG= BASED ON BODY SURFACE AREA ;"3!= REVEALED NO Gastrointestinal Disorders: ABDOMINAL DISCOMFORT ABDOMINAL TENDERNESS EVIDENCE OF HARM TO THE FETUS DUE TO DEXLANSOPRAZOLE )N ADDITION REPRODUCTION ABNORMAL FECES ANAL DISCOMFORT "ARRETT S ESOPHAGUS BEZOAR BOWEL SOUNDS STUDIES PERFORMED IN PREGNANT RATS WITH ORAL LANSOPRAZOLE AT DOSES UP TO MG ABNORMAL BREATH ODOR COLITIS MICROSCOPIC COLONIC POLYP CONSTIPATION DRY MOUTH PER KG PER DAY TIMES THE RECOMMENDED HUMAN DOSE BASED ON "3! AND IN DUODENITIS DYSPEPSIA DYSPHAGIA ENTERITIS ERUCTATION ESOPHAGITIS GASTRIC POLYP PREGNANT RABBITS AT ORAL LANSOPRAZOLE DOSES UP TO MG PER KG PER DAY TIMES THE GASTRITIS GASTROENTERITIS GASTROINTESTINAL DISORDERS GASTROINTESTINAL HYPERMOTILITY RECOMMENDED HUMAN DOSE BASED ON "3! REVEALED NO EVIDENCE OF IMPAIRED FERTILITY DISORDERS '%2$ ') ULCERS AND PERFORATION HEMATEMESIS HEMATOCHEZIA OR HARM TO THE FETUS DUE TO LANSOPRAZOLE HEMORRHOIDS IMPAIRED GASTRIC EMPTYING IRRITABLE BOWEL SYNDROME MUCUS STOOLS NAUSEA AND VOMITING ORAL MUCOSAL BLISTERING PAINFUL DEFECATION PROCTITIS PARESTHESIA ORAL RECTAL HEMORRHAGE General Disorders and Administration Site Conditions: ADVERSE DRUG REACTION ASTHENIA CHEST PAIN CHILLS FEELING ABNORMAL INmAMMATION MUCOSAL INmAMMATION NODULE PAIN PYREXIA Hepatobiliary Disorders: BILIARY COLIC CHOLELITHIASIS HEPATOMEGALY Immune System Disorders:

Nursing Mothers It is not known whether dexlansoprazole is excreted in human milk. However, lansoprazole and its metabolites are present in rat milk following the administration of lansoprazole. As many drugs are excreted in human milk, and because of the potential for tumorigenicity shown for lansoprazole in rat carcinogenicity studies [see Carcinogenesis, Mutagenesis, Impairment of Fertility], a decision should be made whether to discontinue nursing or to discontinue the drug, taking into account the importance of the drug to the mother. Pediatric Use Safety and effectiveness of KAPIDEX in pediatric patients (less than 18 years of age) have not been established. Geriatric Use )N CLINICAL STUDIES OF +!0)$%8 OF PATIENTS WERE AGED YEARS AND OVER .O OVERALL DIFFERENCES IN SAFETY OR EFFECTIVENESS WERE OBSERVED BETWEEN THESE PATIENTS AND YOUNGER PATIENTS AND OTHER REPORTED CLINICAL EXPERIENCE HAS NOT IDENTIlED SIGNIlCANT DIFFERENCES IN RESPONSES BETWEEN GERIATRIC AND YOUNGER PATIENTS BUT GREATER SENSITIVITY OF SOME OLDER INDIVIDUALS CANNOT BE RULED OUT] Renal Impairment No dosage adjustment of KAPIDEX is necessary in patients with renal impairment. The pharmacokinetics of dexlansoprazole in patients with renal impairment are not expected to be altered since dexlansoprazole is extensively metabolized in the liver to inactive metabolites, and no parent drug is recovered in the urine following an oral dose of dexlansoprazole.

Lansoprazole produced dose-related gastric ECL cell hyperplasia and ECL cell carcinoids in both male and female rats [see Clinical Pharmacology]. In rats, lansoprazole also increased the incidence of intestinal metaplasia of the gastric epithelium in both sexes. In male rats, lansoprazole produced a dose-related increase of testicular interstitial cell adenomas. The incidence of these adenomas in rats receiving doses of 15 to 150 mg per kg per day (4 to 40 times the recommended lansoprazole human dose based on BSA) exceeded the low background incidence (range = 1.4 to 10%) for this strain of rat. Testicular interstitial cell adenoma also occurred in 1 of 30 rats treated with 50 mg lansoprazole per kg per day (13 times the recommended lansoprazole human dose based on BSA) in a 1-year toxicity study. )N A MONTH CARCINOGENICITY STUDY #$ MICE WERE TREATED ORALLY WITH LANSOPRAZOLE DOSES OF MG TO MG PER KG PER DAY TO TIMES THE RECOMMENDED HUMAN DOSE BASED ON "3! ,ANSOPRAZOLE PRODUCED A DOSE RELATED INCREASED INCIDENCE OF GASTRIC %#, CELL HYPERPLASIA )T ALSO PRODUCED AN INCREASED INCIDENCE OF LIVER TUMORS HEPATOCELLULAR ADENOMA PLUS CARCINOMA 4HE TUMOR INCIDENCES IN MALE MICE TREATED WITH MG AND MG LANSOPRAZOLE PER KG PER DAY TO TIMES THE RECOMMENDED LANSOPRAZOLE HUMAN DOSE BASED ON "3! AND FEMALE MICE TREATED WITH MG TO MG LANSOPRAZOLE PER KG PER DAY TO TIMES THE RECOMMENDED HUMAN DOSE BASED ON "3! EXCEEDED THE RANGES OF BACKGROUND INCIDENCES IN HISTORICAL CONTROLS FOR THIS STRAIN OF MICE ,ANSOPRAZOLE TREATMENT PRODUCED ADENOMA OF RETE TESTIS IN MALE MICE RECEIVING TO MG PER KG PER DAY TO TIMES THE RECOMMENDED LANSOPRAZOLE HUMAN DOSE BASED ON "3!

Hepatic Impairment No dosage adjustment for KAPIDEX is necessary for patients with mild hepatic impairment (Child-Pugh Class A). KAPIDEX 30 mg should be considered for patients with moderate hepatic impairment (Child-Pugh Class B). No studies have been conducted in patients with severe hepatic impairment (Child-Pugh Class C).

4HE POTENTIAL EFFECTS OF DEXLANSOPRAZOLE ON FERTILITY AND REPRODUCTIVE PERFORMANCE WERE ASSESSED USING LANSOPRAZOLE STUDIES ,ANSOPRAZOLE AT ORAL DOSES UP TO MG PER KG PER DAY TIMES THE RECOMMENDED LANSOPRAZOLE HUMAN DOSE BASED ON "3! WAS FOUND TO HAVE NO EFFECT ON FERTILITY AND REPRODUCTIVE PERFORMANCE OF MALE AND FEMALE RATS PATIENT COUNSELING INFORMATION

OVERDOSAGE

[see FDA-Approved Patient Labeling in the full prescribing information]

4HERE HAVE BEEN NO REPORTS OF SIGNIlCANT OVERDOSE OF +!0)$%8 -ULTIPLE DOSES OF +!0)$%8 MG AND A SINGLE DOSE OF +!0)$%8 MG DID NOT RESULT IN DEATH OR OTHER SEVERE ADVERSE EVENTS $EXLANSOPRAZOLE IS NOT EXPECTED TO BE REMOVED FROM THE CIRCULATION BY HEMODIALYSIS )F AN OVERDOSE OCCURS TREATMENT SHOULD BE SYMPTOMATIC AND SUPPORTIVE

Information for Patients To ensure the safe and effective use of KAPIDEX, this information and instructions provided in the FDA-approved patient labeling should be discussed with the patient. Inform patients of the following:

CLINICAL PHARMACOLOGY

KAPIDEX is available as a delayed release capsule.

KAPIDEX may be taken without regard to food. Pharmacodynamics KAPIDEX should be swallowed whole. !NTISECRETORY !CTIVITY 4HE EFFECTS OF +!0)$%8 MG N OR LANSOPRAZOLE MG N ONCE s !LTERNATIVELY +!0)$%8 CAPSULES CAN BE OPENED AND ADMINISTERED AS FOLLOWS DAILY FOR lVE DAYS ON HOUR INTRAGASTRIC P( WERE ASSESSED IN HEALTHY SUBJECTS n /PEN CAPSULE IN A MULTIPLE DOSE CROSSOVER STUDY n 3PRINKLE INTACT GRANULES ON ONE TABLESPOON OF APPLESAUCE n 3WALLOW IMMEDIATELY 3ERUM 'ASTRIN %FFECTS 4HE EFFECT OF +!0)$%8 ON SERUM GASTRIN CONCENTRATIONS WAS EVALUATED IN $ISTRIBUTED BY APPROXIMATELY PATIENTS IN CLINICAL TRIALS UP TO WEEKS AND IN PATIENTS Takeda Pharmaceuticals America, Inc. FOR UP TO TO MONTHS 4HE MEAN FASTING GASTRIN CONCENTRATIONS INCREASED $EERlELD ), FROM BASELINE DURING TREATMENT WITH +!0)$%8 MG AND MG DOSES )N PATIENTS TREATED FOR MORE THAN MONTHS MEAN SERUM GASTRIN LEVELS INCREASED 5 3 0ATENT .OS DURING APPROXIMATELY THE lRST MONTHS OF TREATMENT AND WERE STABLE FOR THE AND REMAINDER OF TREATMENT -EAN SERUM GASTRIN LEVELS RETURNED TO PRE TREATMENT +!0)$%8 IS A TRADEMARK OF 4AKEDA 0HARMACEUTICALS .ORTH !MERICA )NC AND LEVELS WITHIN ONE MONTH OF DISCONTINUATION OF TREATMENT USED UNDER LICENSE BY 4AKEDA 0HARMACEUTICALS !MERICA )NC !LL OTHER TRADEMARK NAMES ARE THE PROPERTY OF THEIR RESPECTIVE OWNERS %NTEROCHROMAFlN ,IKE #ELL %#, %FFECTS 4HERE WERE NO REPORTS OF %#, CELL HYPERPLASIA IN GASTRIC BIOPSY SPECIMENS Ă&#x161; 4AKEDA 0HARMACEUTICALS !MERICA )NC OBTAINED FROM PATIENTS TREATED WITH +!0)$%8 MG MG OR MG FOR &OR MORE DETAILED INFORMATION SEE THE FULL PRESCRIBING INFORMATION FOR +!0)$%8 UP TO MONTHS 0) 2 *ANUARY OR CONTACT 4AKEDA 0HARMACEUTICALS !MERICA )NC AT $URING LIFETIME EXPOSURE OF RATS DOSED DAILY WITH UP TO MG PER KG PER DAY OF LANSOPRAZOLE MARKED HYPERGASTRINEMIA WAS OBSERVED FOLLOWED BY %#, CELL , ,0$ PROLIFERATION AND FORMATION OF CARCINOID TUMORS ESPECIALLY IN FEMALE RATS [see Nonclinical Toxicology ] Effect on Cardiac Repolarization A study was conducted to assess the potential of KAPIDEX to prolong the QT/QTc interval in healthy adult subjects. KAPIDEX doses of 90 mg or 300 mg did not delay cardiac repolarization compared to placebo. The positive control (moxiďŹ&#x201A;oxacin) produced statistically signiďŹ cantly greater mean maximum and time-averaged QT/QTc intervals compared to placebo. NONCLINICAL TOXICOLOGY Carcinogenesis, Mutagenesis, Impairment of Fertility The carcinogenic potential of dexlansoprazole was assessed using lansoprazole studies. In two 24-month carcinogenicity studies, Sprague-Dawley rats were treated orally with lansoprazole at doses of 5 to 150 mg per kg per day, about 1 to 40 times the exposure on a body surface (mg/m2) basis of a 50 kg person of average height (1.46 m2 BSA) given the recommended human dose of lansoprazole (30 mg per day).

Reference: KAPIDEX (dexlansoprazole) package insert, Takeda Pharmaceuticals America, Inc KAPIDEXâ&#x201E;˘ and Dual Delayed Releaseâ&#x201E;˘ are trademarks of Takeda Pharmaceuticals North America, Inc., and are used under license by Takeda Pharmaceuticals America, Inc.

ÂŠ2009 Takeda Pharmaceuticals North America, Inc. LPD-00021 2/09 Printed in U.S.A.

FROM THE EDITOR

The Paradox of Public Policy Reform: Change or Continuum?

his is shaping up to be a watershed year for public health reform. Pressures of cost, quality, and access that have been building up under the healthcare boiler are about to produce their own peculiar set of eruptions, and the American healthcare system will look far different once the ensuing systems changes have taken effect. As they come into play, it will be instructive to keep an eye on the prize: will these changes favor cost, quality, or access, or will they produce the desired balance between them? In like fashion, will there be obvious winners and losers in the wake of these reforms, or will the needs of all stakeholders be accommodated? Above all, is public policy the dominant force stimulating healthcare, or simply the final stage in it? Mankind’s needs are infinite, and so, it would seem, are those of the healthcare system. Several front-runners for the foreseeable future are: biosimilars legislation, comparative effectiveness research (CER), funding of the National Institutes of Health (NIH), and Medicare reform. Expect federal legislation to create a new regulatory pathway for approval of biosimilars. This must be done carefully to prevent a disincentive for development of new biologics. More than 40% of Medicare Part B spending on biologics is for oncology drugs. How will Congress use the projected $6 billion in federal savings? CER has moved, somewhat precipitously, from a good idea to a serious proposition, displacing evidencebased medicine as the perceived “best of all possible worlds.” It remains to be seen how, and how efficiently, the federal government will spend the $1.1 billion earmarked for CER. What matters now is setting research priorities, and the influence that CER will have on coverage and reimbursement decisions in Medicare, Medicaid, and private health plans. The economic stimulus bill injects $10 billion in additional funding to NIH over the next 2 years, and President Obama has proposed to further increase NIHfunded cancer research as part of a multiyear commitment to double cancer research funding. Medicare reform all by itself would have been a sufficient challenge; adding it to these other issues makes it all the more compelling, given the wide range of issues facing policymakers. Unless Congress acts to reform the Medicare physician payment formula, physicians will suffer a 20% fee cut in January 2010. Because this is

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obviously untenable, Congress knows it must act to fix payment rates, but it also knows why the problem has remained unresolved: it could cost more than $250 billion to bring payment levels up to real-world provider needs. Meanwhile, many on Capitol Hill are also eager to cut payments to Medicare Advantage plans and create a government-run “public plan” to compete with commercial health and drug plans in Medicare. The American healthcare system is a force for extraordinary progress. Cancer outcomes have never been better. The United States is a powerhouse for new drug development. Quality-of-care measures are being pursued by payers, providers, and purchasers at an unprecedented rate. Each stakeholder group is hard at work identifying ways to bring value—that amalgam of cost, quality, and access—to healthcare. As American demographics and evidentiary standards change, it is important to take a step back to gain perspective on how well we have been allocating precious healthcare resources to date. Public policy reforms are needed, but they hardly act in a vacuum, as clinical and business system changes and best practices define how public policy can support them. The view should be constructive, optimistic, and collegial. At its core, the American healthcare system is strong for the very reason that it insists on improving a good thing. As policy is proposed, it should be done in recognition of the need to preserve, not shatter, a system with the flexibility and tenacity to demand improvement and the strength to achieve it. The public policy reform that is about to take place has been brewing for a very long time, proceeding along lines established over the past decade, often by the other 2 legs of the triangle—the clinical and business sectors. If action is to take place on the government level, it would be a mistake to conclude that we need a government-dominated healthcare system—that government could solve what the clinical and business sectors could not. Rather, public policy should conclude the issues defined for it by the clinical and business sectors, thereby fulfilling its proper role in the triad of forces that have always driven healthcare. ■

Robert E. Henry Editor-in-Chief

VOL. 2

NO. 3

Are your plan members with type 2 diabetes reaching goal? The recommendation for early treatment • Many patients are not reaching their ADA A1C target goal of <7%, and many are stopping their medications.1,2 • Recent data show a drop in the use of oral antidiabetic medications.3 • In 2008, data published showed that 44% of patients with diabetes were not at goal based on A1C values.1

Early and aggressive diabetes management has the potential to help get patients to A1C goals as quickly as possible AACE initial pharmacologic treatment recommendation*4

A1C Levels

6%–7%

Initiate monotherapy

7%–8%

Initiate combination therapy

8%–10%

Initiate/intensify combination therapy

>10%

Initiate/intensify insulin therapy

*For patients naïve to pharmacological therapy.

Early combination approach5 Diet + exercise OAD monotherapy OAD combinations

HbA1c (%)

OADs up-titration OAD + basal insulin OAD + multiple p dailyy insulin injections

9 8 7

HbA1c=7% HbA1c=6.5%

• The Global Partnership for Effective Diabetes Management†‡ recommends a shift from the reactive “stepwise” management to a proactive approach including early introduction of combination therapy as needed, addressing underlying pathophysiology, and including treatment of insulin resistance.5

Duration of diabetes Adapted from Goldstein.

• Patients who initially started on ﬁxed-dose combinations stayed on therapy at least 50 days longer than those who started on monotherapy.3 †The Global Partnership for Effective Diabetes Management was established with the aim of uncovering the barriers to good glycemic control and identifying ways to help people overcome them. ‡The Global Partnership for Effective Diabetes Management is industry supported. References: 1. Hoerger TJ, Segel JE, Gregg EW, Saaddine JB. Is glycemic control improving in U.S. adults? Diabetes Care. 2008;31:81-86. 2. Rodgers K. Ensuring compliance in patients with diabetes. In: Diabetes: Disease Management Guide. 4th ed. Montvale, NJ: Thomson PDR; 2004:501-505. 3. Data on ﬁle, Takeda Pharmaceuticals North America, Inc. 4. AACE Diabetes Mellitus Clinical Practice Guidelines Task Force. American Association of Clinical Endocrinologists medical guidelines for clinical practice for the management of diabetes mellitus. Endocr Pract. 2007;13(suppl 1):3-68. 5. Goldstein BJ, Gomis R, Lee H-K, Leiter LA, on behalf of the Global Partnership for Effective Diabetes Management. Type 2 diabetes–treat early, treat intensively. Int J Clin Pract. 2007;61(suppl 157):16-21. ©2008 Takeda Pharmaceuticals North America, Inc.

XPIO-01287

11/08

Printed in U.S.A.

COMMENTARY

Are You Kidding Me? Clinical Comparative Effectiveness or Evidence-Based Medicine Thomas Kaye, RPh, MBA, FASHP

he panel for the new Federal Coordinating Council for Comparative Effectiveness Research has been appointed by the new administration, and the Recovery and Reinvestment Act has allocated $1.1 billion for comparative effectiveness research. So the ministers of change agents have been released, to empower and direct “comparative efficacy” processes intended to fix the medical needs of our country. But this hand-selected federal council includes no pharmacists or drug experts, even though the major portion of the work likely will involve pharmaceuticals. Furthermore, this administration has a great amount of explaining to do to ensure healthcare stakeholders a useful outcome could result from this. The rapid-fire implementation of rope-a-dope stimulus packages continues to lack significant and sufficient details to embrace the hope for useful outcomes. Let us not forget the noble attempts to bring useful and fruitful clinical drug evidence to light for decisionmaking by the “Blues,” the National Institutes of Health, or by others engaged in developing clinical comparative evidence data to seek value and improved outcomes. All such previous attempts have been lacking appropriate funding—but now there is money, yet not for programs with a solid track record for solutions, or for those who already have a footing and the ability to provide nonbiased results. Indeed, what America needs now is comparative effectiveness. This cannot wait; crisis looms large, and a rush to this cause is in full stride. Most of the members of this enlightened council have been servants placed in public jobs for most of their lives,1 sheltered from the carnage of real-life medical practice, life experiences, and the day-to-day drama of actually helping our citizens plow through the neverending bureaucratic paper maze, attempting to get a semblance of healthcare. Why use an old term like evidence-based medicine? It’s not snappy enough, and it is truly too descriptive. This may lead the public to expect to see a superior outcome resulting from such a clear approach. The simple renaming of a process has worked for other projects in the economic stimulus coming from this administration. The

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metamorphosis to comparative effectiveness is clever and can be effectively substituted; slightly obscure, mysterious, with just a hint of respectability toward medicine. Adoption of rewording has been met with enthusiasm for many projects we see coming from this administration. Is there a difference between evidence-based medicine and clinical comparative effectiveness? The creators of the latter would certainly suggest there is. Comparative effectiveness, being voiced from Washington as the next solution to our healthcare problems, is buzzing around at light speed. New programs that may be adopted in these times of change may include Medical Complementary Research Associative Program (CRAP) or Perfunctory Operational Referendum Collaboration (PORC). Regardless of the slogans, the new and hyped terminology indicates that this is a charade, attempting to show advancement where none exists. Perhaps the new word for drug profits should be “clinical derivatives” when referencing comparative evidence outcomes. Don’t you miss the days when we spoke in terms that had simple and shared meaning—when TARP (Troubled Asset Recovery Program) would have been understood as “stupid investing”? With the basis of solid comparative evidence for medications currently available from many nonbiased databases, it is wasteful and inefficient to reinvent this process. Evidence-based medicine has enhanced the care delivery and reduced mortality and morbidity, while providing a logical pathway for value to follow. The Pharma lobby has exerted pressure to carefully carve out the inclination of relative clinical effectiveness associated with value. As with other administrative initiatives, value is not a good word any more. Pharma’s strong lobby against value is associated with the inability to have value removed from evidence-based medicine. So let’s rename value, using a specifically nonspecific prestidigitation gyration to eulav. ■ Reference 1. US Department of Health and Human Services. Federal Coordinating Council for Comparative Effectiveness Research membership. www.hhs. gov/recovery/programs/os/cerbios.html. Accessed March 25, 2009.

VOL. 2

NO. 3

2.5 mg, 5 mg, 10 mg and 20 mg Rx Only Brief Summary: For complete details please see full Prescribing Information for BYSTOLIC. INDICATIONS AND USAGE BYSTOLIC is indicated for the treatment of hypertension. BYSTOLIC may be used alone or in combination with other antihypertensive agents. CONTRAINDICATIONS BYSTOLIC is contraindicated in patients with severe bradycardia, heart block greater than first degree, cardiogenic shock, decompensated cardiac failure, sick sinus syndrome (unless a permanent pacemaker is in place), or severe hepatic impairment (Child-Pugh >B), and in patients who are hypersensitive to any component of this product. WARNINGS Abrupt Cessation of Therapy Patients with coronary artery disease treated with BYSTOLIC should be advised against abrupt discontinuation of therapy. Severe exacerbation of angina and the occurrence of myocardial infarction and ventricular arrhythmias have been reported in patients with coronary artery disease following the abrupt discontinuation of therapy with β-blockers. Myocardial infarction and ventricular arrhythmias may occur with or without preceding exacerbation of the angina pectoris. Even patients without overt coronary artery disease should be cautioned against interruption or abrupt discontinuation of therapy. As with other β-blockers, when discontinuation of BYSTOLIC is planned, patients should be carefully observed and advised to minimize physical activity. BYSTOLIC should be tapered over 1 to 2 weeks when possible. If the angina worsens or acute coronary insufficiency develops, it is recommended that BYSTOLIC be promptly reinstituted, at least temporarily. Cardiac Failure Sympathetic stimulation is a vital component supporting circulatory function in the setting of congestive heart failure, and β-blockade may result in further depression of myocardial contractility and precipitate more severe failure. In patients who have compensated congestive heart failure, BYSTOLIC should be administered cautiously. If heart failure worsens, discontinuation of BYSTOLIC should be considered. Angina and Acute Myocardial Infarction BYSTOLIC was not studied in patients with angina pectoris or who had a recent MI. Bronchospastic Diseases In general, patients with bronchospastic diseases should not receive β-blockers. Anesthesia and Major Surgery If BYSTOLIC is to be continued perioperatively, patients should be closely monitored when anesthetic agents which depress myocardial function, such as ether, cyclopropane, and trichloroethylene, are used. If β-blocking therapy is withdrawn prior to major surgery, the impaired ability of the heart to respond to reflex adrenergic stimuli may augment the risks of general anesthesia and surgical procedures. The β-blocking effects of BYSTOLIC can be reversed by β-agonists, e.g., dobutamine or isoproterenol. However, such patients may be subject to protracted severe hypotension. Additionally, difficulty in restarting and maintaining the heartbeat has been reported with β-blockers. Diabetes and Hypoglycemia β-blockers may mask some of the manifestations of hypoglycemia, particularly tachycardia. Nonselective β-blockers may potentiate insulin-induced hypoglycemia and delay recovery of serum glucose levels. It is not known whether nebivolol has these effects. Patients subject to spontaneous hypoglycemia, or diabetic patients receiving insulin or oral hypoglycemic agents, should be advised about these possibilities and nebivolol should be used with caution. Thyrotoxicosis β-blockers may mask clinical signs of hyperthyroidism, such as tachycardia. Abrupt withdrawal of β-blockers may be followed by an exacerbation of the symptoms of hyperthyroidism or may precipitate a thyroid storm. Peripheral Vascular Disease β-blockers can precipitate or aggravate symptoms of arterial insufficiency in patients with peripheral vascular disease. Caution should be exercised in these patients. Non-dihydropyridine Calcium Channel Blockers Because of significant negative inotropic and chronotropic effects in patients treated with β-blockers and calcium channel blockers of the verapamil and diltiazem type, caution should be used in patients treated concomitantly with these agents and ECG and blood pressure should be monitored. PRECAUTIONS Use with CYP2D6 Inhibitors Nebivolol exposure increases with inhibition of CYP2D6 (see Drug Interactions). The dose of BYSTOLIC may need to be reduced. Impaired Renal Function BYSTOLIC should be used with caution in patients with severe renal impairment because of decreased renal clearance. BYSTOLIC has not been studied in patients receiving dialysis. Impaired Hepatic Function BYSTOLIC should be used with caution in patients with moderate hepatic impairment because of decreased metabolism. Since BYSTOLIC has not been studied in patients with severe hepatic impairment, BYSTOLIC is contraindicated in this population (see CLINICAL PHARMACOLOGY, Special Populations and DOSAGE AND ADMINISTRATION). Risk of Anaphylactic Reactions While taking β-blockers, patients with a history of severe anaphylactic reactions to a variety of allergens may be more reactive to repeated challenge either accidental, diagnostic, or therapeutic. Such patients may be unresponsive to the usual doses of epinephrine used to treat allergic reactions. In patients with known or suspected pheochromocytoma, an α-blocker should be initiated prior to the use of any β-blocker. Information for Patients Patients should be advised to take BYSTOLIC regularly and continuously, as directed. BYSTOLIC can be taken with or without food. If a dose is missed, the patient should take the next scheduled dose only (without doubling it). Patients should not interrupt or discontinue BYSTOLIC without consulting the physician. Patients should know how they react to this medicine before they operate automobiles, use machinery, or engage in other tasks requiring alertness. Patients should be advised to consult a physician if any difficulty in breathing occurs, or if they develop signs or symptoms of worsening congestive heart failure such as weight gain or increasing shortness of breath, or excessive bradycardia.

Patients subject to spontaneous hypoglycemia, or diabetic patients receiving insulin or oral hypoglycemic agents, should be cautioned that β-blockers may mask some of the manifestations of hypoglycemia, particularly tachycardia. Nebivolol should be used with caution in these patients. Drug Interactions BYSTOLIC should be used with care when myocardial depressants or inhibitors of AV conduction, such as certain calcium antagonists (particularly of the phenylalkylamine [verapamil] and benzothiazepine [diltiazem] classes), or antiarrhythmic agents, such as disopyramide, are used concurrently. Both digitalis glycosides and β-blockers slow atrioventricular conduction and decrease heart rate. Concomitant use can increase the risk of bradycardia. BYSTOLIC should not be combined with other β-blockers. Patients receiving catecholamine-depleting drugs, such as reserpine or guanethidine, should be closely monitored, because the added β-blocking action of BYSTOLIC may produce excessive reduction of sympathetic activity. In patients who are receiving BYSTOLIC and clonidine, BYSTOLIC should be discontinued for several days before the gradual tapering of clonidine. CYP2D6 Inhibitors: Use caution when BYSTOLIC is co-administered with CYP2D6 inhibitors (quinidine, propafenone, fluoxetine, paroxetine, etc.) (see CLINICAL PHARMACOLOGY, Drug Interactions). Carcinogenesis, Mutagenesis, Impairment of Fertility In a two-year study of nebivolol in mice, a statistically significant increase in the incidence of testicular Leydig cell hyperplasia and adenomas was observed at 40 mg/kg/day (5 times the maximally recommended human dose of 40 mg on a mg/m2 basis). Similar findings were not reported in mice administered doses equal to approximately 0.3 or 1.2 times the maximum recommended human dose. No evidence of a tumorigenic effect was observed in a 24-month study in Wistar rats receiving doses of nebivolol 2.5, 10 and 40 mg/kg/day (equivalent to 0.6, 2.4, and 10 times the maximally recommended human dose). Co-administration of dihydrotestosterone reduced blood LH levels and prevented the Leydig cell hyperplasia, consistent with an indirect LH-mediated effect of nebivolol in mice and not thought to be clinically relevant in man. A randomized, double-blind, placebo- and active-controlled, parallel-group study in healthy male volunteers was conducted to determine the effects of nebivolol on adrenal function, luteinizing hormone, and testosterone levels. This study demonstrated that 6 weeks of daily dosing with 10 mg of nebivolol had no significant effect on ACTH-stimulated mean serum cortisol AUC0-120 min, serum LH, or serum total testosterone. Effects on spermatogenesis were seen in male rats and mice at ≥40 mg/kg/day (10 and 5 times the MRHD, respectively). For rats the effects on spermatogenesis were not reversed and may have worsened during a four-week recovery period. The effects of nebivolol on sperm in mice, however, were partially reversible. Mutagenesis: Nebivolol was not genotoxic when tested in a battery of assays (Ames, in vitro mouse lymphoma TK+/-, in vitro human peripheral lymphocyte chromosome aberration, in vivo Drosophila melanogaster sex-linked recessive lethal, and in vivo mouse bone marrow micronucleus tests). Pregnancy: Teratogenic Effects. Pregnancy Category C: Decreased pup body weights occurred at 1.25 and 2.5 mg/kg in rats, when exposed during the perinatal period (late gestation, parturition and lactation). At 5 mg/kg and higher doses (1.2 times the MRHD), prolonged gestation, dystocia and reduced maternal care were produced with corresponding increases in late fetal deaths and stillbirths and decreased birth weight, live litter size and pup survival. Insufficient numbers of pups survived at 5 mg/kg to evaluate the offspring for reproductive performance. In studies in which pregnant rats were given nebivolol during organogenesis, reduced fetal body weights were observed at maternally toxic doses of 20 and 40 mg/kg/day (5 and 10 times the MRHD), and small reversible delays in sternal and thoracic ossification associated with the reduced fetal body weights and a small increase in resorption occurred at 40 mg/kg/day (10 times the MRHD). No adverse effects on embryo-fetal viability, sex, weight or morphology were observed in studies in which nebivolol was given to pregnant rabbits at doses as high as 20 mg/kg/day (10 times the MRHD). Labor and Delivery Nebivolol caused prolonged gestation and dystocia at doses ≥5 mg/kg in rats (1.2 times the MRHD). These effects were associated with increased fetal deaths and stillborn pups, and decreased birth weight, live litter size and pup survival rate, events that occurred only when nebivolol was given during the perinatal period (late gestation, parturition and lactation). No studies of nebivolol were conducted in pregnant women. BYSTOLIC should be used during pregnancy only if the potential benefit justifies the potential risk to the fetus. Nursing Mothers Studies in rats have shown that nebivolol or its metabolites cross the placental barrier and are excreted in breast milk. It is not known whether this drug is excreted in human milk. Because of the potential for β-blockers to produce serious adverse reactions in nursing infants, especially bradycardia, BYSTOLIC is not recommended during nursing. Geriatric Use Of the 2800 patients in the U.S.-sponsored placebo-controlled clinical hypertension studies, 478 patients were 65 years of age or older. No overall differences in efficacy or in the incidence of adverse events were observed between older and younger patients. Pediatric Use Safety and effectiveness in pediatric patients have not been established. Pediatric studies in ages newborn to 18 years old have not been conducted because of incomplete characterization of developmental toxicity and possible adverse effects on long-term fertility (see Carcinogenesis, Mutagenesis, and Impairment of Fertility). ADVERSE REACTIONS The data described below reflect worldwide clinical trial exposure to BYSTOLIC in 6545 patients, including 5038 patients treated for hypertension and the remaining 1507 subjects treated for other cardiovascular diseases. Doses ranged from 0.5 mg to 40 mg. Patients received BYSTOLIC for up to 24 months, with over 1900 patients treated for at least 6 months, and approximately 1300 patients for more than one year. In placebo-controlled clinical trials comparing BYSTOLIC with placebo, discontinuation of therapy due to adverse events was reported in 2.8% of patients treated with nebivolol and 2.2% of patients given placebo. The most common adverse events that led to discontinuation of BYSTOLIC were headache (0.4%), nausea (0.2%) and bradycardia (0.2%). Adverse Reactions in Controlled Trials Table 1 lists treatment-emergent signs and symptoms that were reported in three 12week, placebo-controlled monotherapy trials involving 1597 hypertensive patients treated with either 5 mg, 10 mg or 20-40 mg of BYSTOLIC and 205 patients given placebo and for which the rate of occurrence was at least 1% of patients treated with nebivolol and greater than the rate for those treated with placebo in at least one dose group.

Table 1. Treatment-Emergent Adverse Events with an Incidence (over 6 weeks) ≥1% in BYSTOLIC-Treated Patients and at a Higher Frequency than PlaceboTreated Patients Placebo

Headache Fatigue Dizziness Diarrhea Nausea Insomnia Chest pain Bradycardia Dyspnea Rash Peripheral edema

(n = 205) (%) 6 1 2 2 0 0 0 0 0 0 0

Nebivolol 5 mg (n = 459) (%) 9 2 2 2 1 1 0 0 0 0 1

Nebivolol 10 mg (n = 461) (%) 6 2 3 2 3 1 1 0 1 1 1

Nebivolol 20-40 mg (n = 677) (%) 7 5 4 3 2 1 1 1 1 1 1

Other Adverse Events Observed During Worldwide Clinical Trials Listed below are other reported adverse events with an incidence of at least 1% in the more than 5300 patients treated with BYSTOLIC in controlled or open-label trials, whether or not attributed to treatment, except for those already appearing in Table 1, terms too general to be informative, minor symptoms, or events unlikely to be attributable to drug because they are common in the population. These adverse events were in most cases observed at a similar frequency in placebo-treated patients in the controlled studies. Body as a Whole: asthenia. Gastrointestinal System Disorders: abdominal pain Metabolic and Nutritional Disorders: hypercholesterolemia and hyperuricemia Nervous System Disorders: paraesthesia Laboratory In controlled monotherapy trials, BYSTOLIC was associated with an increase in BUN, uric acid, triglycerides and a decrease in HDL cholesterol and platelet count. Events Identified from Spontaneous Reports of BYSTOLIC Received Worldwide The following adverse events have been identified from spontaneous reports of BYSTOLIC received worldwide and have not been listed elsewhere. These adverse events have been chosen for inclusion due to a combination of seriousness, frequency of reporting or potential causal connection to BYSTOLIC. Events common in the population have generally been omitted. Because these events were reported voluntarily from a population of uncertain size, it is not possible to estimate their frequency or establish a causal relationship to BYSTOLIC exposure: abnormal hepatic function (including increased AST, ALT and bilirubin), acute pulmonary edema, acute renal failure, atrioventricular block (both second- and third-degree), bronchospasm, erectile dysfunction, hypersensitivity (including urticaria, allergic vasculitis and rare reports of angioedema), myocardial infarction, pruritus, psoriasis, Raynaud’s phenomenon, peripheral ischemia/claudication, somnolence, syncope, thrombocytopenia, various rashes and skin disorders, vertigo, and vomiting. OVERDOSAGE In clinical trials and worldwide postmarketing experience there were reports of BYSTOLIC overdose. The most common signs and symptoms associated with BYSTOLIC overdosage are bradycardia and hypotension. Other important adverse events reported with BYSTOLIC overdose include cardiac failure, dizziness, hypoglycemia, fatigue and vomiting. Other adverse events associated with β-blocker overdose include bronchospasm and heart block. The largest known ingestion of BYSTOLIC worldwide involved a patient who ingested up to 500 mg of BYSTOLIC along with several 100 mg tablets of acetylsalicylic acid in a suicide attempt. The patient experienced hyperhidrosis, pallor, depressed level of consciousness, hypokinesia, hypotension, sinus bradycardia, hypoglycemia, hypokalemia, respiratory failure and vomiting. The patient recovered. Due to extensive drug binding to plasma proteins, hemodialysis is not expected to enhance nebivolol clearance. If overdose occurs, BYSTOLIC should be stopped and general supportive and specific symptomatic treatment should be provided. Based on expected pharmacologic actions and recommendations for other β-blockers, the following general measures should be considered when clinically warranted: Bradycardia: Administer IV atropine. If the response is inadequate, isoproterenol or another agent with positive chronotropic properties may be given cautiously. Under some circumstances, transthoracic or transvenous pacemaker placement may be necessary. Hypotension: Administer IV fluids and vasopressors. Intravenous glucagon may be useful. Heart Block (second or third degree): Patients should be carefully monitored and treated with isoproterenol infusion. Under some circumstances, transthoracic or transvenous pacemaker placement may be necessary. Congestive Heart Failure: Initiate therapy with digitalis glycoside and diuretics. In certain cases, consideration should be given to the use of inotropic and vasodilating agents. Bronchospasm: Administer bronchodilator therapy such as a short-acting inhaled β2-agonist and/or aminophylline. Hypoglycemia: Administer IV glucose. Repeated doses of IV glucose or possibly glucagon may be required. In the event of intoxication where there are symptoms of shock, treatment must be continued for a sufficiently long period consistent with the 12-19 hour effective half-life of BYSTOLIC. Supportive measures should continue until clinical stability is achieved. Call the National Poison Control Center (800-222-1222) for the most current information on β-blocker overdose treatment. Forest Pharmaceuticals, Inc. Subsidiary of Forest Laboratories, Inc. St. Louis, MO 63045, USA Licensed from Mylan Laboratories, Inc. Under license from Janssen Pharmaceutica N.V., Beerse, Belgium Rev. 08/08 © 2008 Forest Laboratories, Inc.

For the treatment of hypertension

BYSTOLIC. Significant blood pressure reductions with a low incidence of side effects.1-3 www.BYSTOLIC.com Important Safety Information Patients being treated with BYSTOLIC should be advised against abrupt discontinuation of therapy. Severe exacerbation of angina and the occurrence of myocardial infarction and ventricular arrhythmias have been reported following the abrupt cessation of therapy with beta blockers. When discontinuation is planned, the dosage should be reduced gradually over a 1- to 2-week period and the patient carefully monitored. BYSTOLIC is contraindicated in severe bradycardia, heart block greater than first degree, cardiogenic shock, decompensated cardiac failure, sick sinus syndrome (unless a permanent pacemaker is in place), severe hepatic impairment (Child-Pugh >B), and in patients who are hypersensitive to any component of this product. BYSTOLIC should be used with caution in patients with peripheral vascular disease, thyrotoxicosis, in patients treated concomitantly with beta blockers and calcium channel blockers of the verapamil and diltiazem type (ECG and blood pressure should be monitored), severe renal impairment, and any degree of hepatic impairment or in patients undergoing major surgery. In patients who have compensated congestive heart failure, BYSTOLIC should be administered cautiously. If heart failure worsens, discontinuation of BYSTOLIC should be considered. Caution should also be used in diabetic patients as beta blockers may mask some of the manifestations of hypoglycemia, particularly tachycardia. Use caution when BYSTOLIC is co-administered with CYP2D6 inhibitors (quinidine, propafenone, fluoxetine, paroxetine, etc). When BYSTOLIC is administered with fluoxetine, significant increases in d-nebivolol may be observed (ie, an 8-fold increase in AUC). In general, patients with bronchospastic disease should not receive beta blockers. BYSTOLIC should not be combined with other beta blockers. The most common adverse events with BYSTOLIC versus placebo (approximately â&#x2030;Ľ1% and greater than placebo) were headache, fatigue, dizziness, diarrhea, nausea, insomnia, chest pain, bradycardia, dyspnea, rash, and peripheral edema. Please see brief summary of Prescribing Information on adjacent page. ÂŠ2009 Forest Laboratories, Inc

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References: 1. BYSTOLIC [package insert]. St. Louis, Mo: Forest Pharmaceuticals, Inc.; 2008. 2. Data on file. Forest Laboratories, Inc. 3. Saunders E, Smith WB, DeSalvo KB, Sullivan WA. The efficacy and tolerability of nebivolol in hypertensive African American patients. J Clin Hypertens. 2007;9:866-875.

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MIPPA: First Broad Changes to Medicare Part D Plan Operations Jean D. LeMasurier; Babette Edgar, PharmD, MBA In July 2008, as part of broad Medicare reform, Congress passed the first major legislative changes to Medicare Part D since its enactment in 2003— the Medicare Improvements for Patients and Providers Act. This new legislation has significant implications for how Part D plans can market and enroll Medicare beneficiaries. The new legislation also strengthened beneficiary protections, expanded the low-income subsidy provisions originally included in Part D, and expanded Part D coverage. These changes have significant implications for the operation of Part D plans and can affect those involved in benefit design, including specialty pharmacy coverage. Jean D. LeMasurier Babette Edgar This article discusses the major changes that took effect on January 1, 2009, and have immediate implications for Part D plan sponsors, including Medicare Advantage plans and standalone prescription drug plans. [AHDB. 2009;2(3):111-118.]

he Medicare Part D Prescription Drug Program was enacted on December 8, 2003, as part of the Medicare Prescription Drug Improvement and Modernization Act of 2003 and was implemented on January 1, 2006. Because the program was the largest major enhancement of Medicare since its inception in 1965 and was controversial in its original design, Congress chose not to amend the legislation until last summer. As part of a broad Medicare reform, on July 15, 2008, Congress overrode a Bush White House veto and passed new legislation—PL 110-275—the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).1 MIPPA includes the first broad legislative changes to improve the Medicare Part D program, which are designed to strengthen beneficiary protections, help low-income beneficiaries, address marketing abuses, and enhance Part D coverage and transparency. The new legislation codifies the elimination of the late-enrollment penalty for low-income subsidy (LIS) beneficiaries and the designation of protected drug categories for disease states for which interruption in drug therapy could have severe negative consequences on patients, all changes that will affect Part D plans and their members. Other changes affecting those in charge

Ms LeMasurier is Director, Employer Group Practice, and Dr Edgar is Senior Vice President, Operations and Quality Assurance, Gorman Health Group, Washington, DC.

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of Part D benefit design include greater compendia coverage to be consistent with Part B drug coverage. Table 1 provides a summary of the MIPPA provisions that affect Part D plans.2 Most of these new Part D provisions were focused on strengthening beneficiary protections and correcting sales and marketing abuses. These changes were driven by Democrats who assumed the congressional majority in the 2006 midterm elections and were responding to remaining challenges in the program. The Government Accountability Office (GAO) documented some of the problems in its reports, for example, the report on beneficiaries filing grievances to plan sponsors.3 In addition, a series of GAO reports in 2007 and 2008—GAO-07555,4 GAO -08-812T,5 and GAO-08-8246—documented problems with the low-income subsidy provisions in the Part D program and helped drive the legislative agenda to expand federal subsidies to low-income Medicare beneficiaries and to strengthen protections for vulnerable beneficiaries, concerns that are now reflected in MIPPA. Another goal was to improve Part D access and coverage to the extent possible under the congressional “pay for” rules. These rules say that when a bill expands benefit coverage, there is a new cost, which must be funded by reduced costs elsewhere in the program. For example, MIPPA added 2 new Part D drugs, but these could not be paid for until 2013. The Centers for Medicare & Medicaid Services (CMS) provided the MIPPA provisions to Part D in 3

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Table 1 MIPPA: Key Provisions Affecting Medicare Part D Plans Medicare Advantage • Reduces overpayments to private Medicare Advantage plans by phasing out an adjustment for indirect medical education • Requires private fee-for-service plans to establish provider networks and to measure and report on the quality of care they deliver • Reduces money in the Medicare Advantage Stabilization Fund Marketing Reforms • Prohibits and limits certain sales and marketing activities under Medicare Advantage and Part D prescription drug plans Beneficiary Improvements • Provides Medicare mental health parity • Offers new preventive benefits to Medicare beneficiaries • Extends the exceptions process for therapy caps • Provides better care for patients with kidney disease, also known as end-stage renal disease Low-Income Individuals • Extends the qualifying individual program • Raises allowed asset levels in the Medicare Savings Program • Codifies suspension of the late enrollment penalty for Part D beneficiaries who qualify for low-income subsidy • Excludes the value of life insurance policies and in-kind support from resource calculations for low-income subsidy Part D Drug Benefit Improvements • Requires Part D plans to cover benzodiazepines and barbiturates in 2013 • Codifies a requirement for Part D plans to cover most drugs in certain important classes of drugs Physician Services under Part B • Blocks the scheduled 10.6% cut to physician fees • Incentivizes adoption of electronic prescribing by physicians • Increases incentives for physician quality reporting Source: National Committee to Preserve Social Security and Medicare. The Medicare Improvements for Patients and Providers Act (MIPPA): summary of key provisions. July 2008.

rules—(1) a final rule (CMS-4131-F) and (2) an interim final rule (CMS-4138-IFC), which were published on September 18, 20087; and (3) an interim and final rule with a comment period (CMS 4138-IFC4), published on January 16, 2009.8

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Marketing Changes During the first 2 years of the Part D program, more than 17 million Medicare beneficiaries were enrolled in stand-alone Part D plans, and an additional 8 million beneficiaries were enrolled in Medicare Advantage plans that included Part D coverage. This was a phenomenal accomplishment in such a short amount of time and was largely made possible through plan use of contracted sales brokers and agents. Before the introduction of the Medicare Part D program, Medicare Advantage plans primarily employed sales agents, and use of contracted sales agents was limited to the Medigap supplemental insurance market.9 With the establishment of the Medicare Part D program, many new plans entered the Medicare marketplace for the first time, and with them many new agents who were unfamiliar with selling managed care products. CMS’s attempts at regulating the marketplace can be seen in the marketing guidelines issued in 2005 and revised in 2006.10 The sales agents for the new Part D plan had the task of selling more than 5000 plans nationwide, with multiple benefit designs and formulary structures that included a limited enrollment period of 45 days. Inevitably, abuses occurred in the marketplace, including large commissions that encouraged churning, misunderstanding of complicated plan designs, and outright fraud and abuse, resulting in beneficiaries being enrolled in plans they did not choose, or plans that did not meet their needs.11,12 Information on CMS’s corrective action plans13 and enforcement actions14 is open to the public and helps ensure that Medicare regulations of health plans are followed properly. MIPPA imposes major changes in the marketing of Part D plans.1 The changes include a number of prohibitions and limitations on sales and marketing activities by Medicare Advantage and prescription drug plan (PDP) sponsors and their agents, brokers, or other third parties that represent them.1 Effective January 1, 2009, Medicare Part D plans and their representatives are prohibited from the following promotional activities: • Unsolicited direct contact of prospective enrollees, such as door-to-door sales and cold calling (telemarketing) • Selling non–health-related products (cross-selling) • Providing meals at promotional and sales events • Selling or marketing in healthcare settings and at educational events. Other marketing requirements in MIPPA include: • Advance agreement with a prospective enrollee on

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the scope of products to be discussed during marketing appointments • Limitations on the use of the name or logo of a network provider (co-branding) • Limitation on gifts to prospective enrollees to nominal dollar value • Compensation of brokers and agents: plans must comply with guidelines established by the Health and Human Services (HHS) Secretary that provide incentives to enroll individuals in plans that best meet their healthcare needs • Annual training and testing of agents, brokers, and other parties • Inclusion of plan type in plan name in 2010 • Plans can only use state licensed agents and brokers and must comply with state appointment laws and state investigations of agent, broker, or third-party conduct. CMS did its utmost to publish regulations in time for the beneficiaries’ annual election period, leading up to the January 1, 2009, enrollment. However, the development of policy on the new commission structure proved difficult, and CMS’s policy on the interim final rule with comment (IFC) was modified twice after industry and consumer groups responded that the initial policy was unworkable or did not accomplish the objective to reduce churning. The final policy (in the final regulation) adopted a 6-year structure similar to the compensation structure used in the Medigap insurance industry. It is too early to assess the impact of the new MIPPA requirements and regulations, because much activity during the 2008 selling season was delayed as a result of uncertainty on the commission requirements. To date, we are aware of only a few reports of potential abuses that are currently under investigation, as noted by CMS in the draft Call Letter for 2010.15 Overall, CMS oversight has been strengthened, and congressional scrutiny will certainly follow.

Low-Income Subsidy One of the major changes introduced by the Medicare Part D program was to shift dual-eligible beneficiaries (ie, those eligible for Medicare and Medicaid) from drug coverage under state Medicaid programs to drug coverage under the Medicare Part D program with federal LIS.4 A number of members of Congress were concerned that during the first 3 years of the Part D program, an estimated 3 million beneficiaries who had been expected to be eligible for LIS had not signed up.5 One of the problems that emerged was that LIS eligibility require-

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KEY POINTS

MIPPA offers the first broad legislative changes to the Medicare Part D program that are intended to increase beneficiary protections, provide subsidies to low-income beneficiaries, impose major changes to the marketing of Part D plans, and enhance coverage and transparency. Changes directly affecting drug benefit design include the coverage of all drugs in 6 protected classes, increased compendia coverage for Part D plans consistent with Part B, a new definition of medically accepted indications, and coverage of barbiturates and benzodiazepines. MIPPA imposes stringent prompt payment requirements to pharmacies, as well as regular updates of drug prices by Part D plans to their network pharmacies. Despite these changes, basic structural concerns with the Part D program—such as the coverage gap or a competing government drug program with governmental drug price negotiation authority— were not addressed by MIPPA. ments as part of the Social Security and state Medicare Savings Program imposed eligibility processes that proved too restrictive. As a result, MIPPA relaxed the requirements for qualifying for LIS.1 Specifically, MIPPA exempts life insurance policies and in-kind support from family members from LIS eligibility determinations. In addition, MIPPA included funds for expanded outreach efforts. As a result of these changes, more beneficiaries are expected to sign up for the Part D LIS program and enroll in Part D plans. To further protect beneficiaries, MIPPA includes the current Part D policy that eliminates the late-enrollment penalty for LIS beneficiaries in statute. CMS had implemented a demonstration project to waive the late-enrollment penalty for LIS beneficiaries, which had been scheduled to expire at the end of 2008. MIPPA also codifies a beneficiary’s right to federal court review for denial of LIS. This latter provision corrects an oversight in the Part D legislation and provides LIS beneficiaries the same protections that are provided by Medicare and Social Security. To ensure that low-income beneficiaries continue to be eligible for Part D, MIPPA increased the allowable resources under the Medicare Savings Program to the amount for full subsidy of the Part D LIS and extended the qualifying individual program through December 2009.

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Table 2 MIPPA: The 6 Protected Drug Classes in Part D Drug class Anticonvulsants Antidepressants Antineoplastics Antipsychotics Antiretrovirals Immunosuppressants

Uses covered Epilepsy, bipolar disorder, neuropathy Depressive disorders Cancers (different types) Psychotic disorders, schizophrenia HIV infection/AIDS Organ transplant rejection prophylaxis

Drug Coverage Changes Formulary Protected Classes When Medicare Part D was enacted, CMS identified drug categories for disease states in which interruption of drug therapy could have severe negative consequences for patients. Many of these disease states correlate directly with conditions that are prevalent among low-income beneficiaries. To ensure that therapies would not be interrupted and that vulnerable populations had the widest choice of plans, CMS included policy in subregulatory guidance that requires Part D plans to provide coverage substantially for all drugs within the 6 drug classes of clinical concern (Table 2). Because Congress was concerned that a future HHS Secretary could retrench on this coverage, it included a provision in MIPPA to codify the current policy on protected drug classes under the Medicare Part D program. One of the surprising provisions in MIPPA is the establishment of a process to potentially expand the protected classes under Part D. MIPPA provides that the HHS Secretary, beginning in 2010, shall identify categories and classes of drugs that: 1. If restricted, would have a major or life-threatening clinical effect, and 2. Are needed by individuals who use multiple drugs in a drug category/class, because of the unique chemical actions and pharmacologic effects of those classes, such as cancer drugs. According to the statute, the HHS Secretary must use a public rule-making process to identify protected classes that meet these criteria. When final rules are issued, Part D plan sponsors will be required to cover all drugs in the category/class that the HHS Secretary identifies for that purpose, unless there are exceptions based on scientific evidence and medical standards of practice. The January 16, 2009, regulation8 identifies the process that will be used to implement this new provision, and indicates that there will be no changes in

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2010. However, many observers believe that the clinical standards included in MIPPA are very stringent, and that combined with the public rule-making process, it will preclude broad expansion of the currently protected classes.

New Definition of Medically Accepted Indications In 1994, Medicare Part B started to cover off-label indications for US Food and Drug Administration (FDA)-approved anticancer drugs, if those uses were published in specified compendia or in 1 or more approved peer-reviewed journals, provided that the carrier determined the unlabeled use to be medically accepted as safe and effective for the particular use. The list of Part B drug compendia was updated in 2008; it now includes the following 5 compendia: • The American Hospital Formulary Service Drug Information (AHFS DI) • The US Pharmacopeia Dispensing Information (USP DI), which is no longer published and which incorporates the also no-longer published American Medical Association Drug Evaluations (AMA-DE) • The National Comprehensive Cancer Network (NCCN) Drugs and Biologics Compendium • DRUGDEX • Clinical Pharmacology. An analysis conducted by the Agency for Healthcare Research and Quality (AHRQ) and published in May 2007 revealed 14 off-label uses for cancer treatment listed across all compendia.16 For example, the following 3 drugs—bevacizumab (Avastin), oxaliplatin (Eloxatin), and irinotecan (Comptosar)—at that time were not approved by the FDA for the treatment of breast cancer, but were listed by various compendia as off-label options for such use. (Bevacizumab has since received a new indication for the treatment of some forms of breast cancer.) Expanded Oncology Compendia for Part D Before MIPPA, the list of compendia for Part D coverage of drugs used off-label was more limited than the drug coverage under the Part B program. The regulations that implemented Part D prohibited coverage of offlabel use of prescription drugs, unless the prescribed use was supported in 1 of 3 medical compendia used to define “medically accepted indications” in the Medicaid program. The 3 compendia that were accepted by the Part D program were AHFS DI, USP DI (or its successor), and DRUGDEX. If the drug was not listed in any of these 3 specified compendia, Part D plans could not cover the drugs, regardless of any medical necessity or

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evidence of clinical effectiveness, including evidence from clinical research published in peer-reviewed medical journals. Under MIPPA, Congress has expanded the Medicare Part D drug coverage to off-label uses of anticancer drugs, to be consistent with the compendia used for Part B coverage. The impetus for the change in Part D came from pressure from consumer groups that identified numerous circumstances where beneficiaries were better off with their drug coverage before Medicare Part D. For example, a report issued by the Medicare Rights Center in August 2007 on the exclusion of off-label use from Medicare Part D coverage points out that before Part D, many beneficiaries were prescribed medically necessary drugs for off-label uses.17 The report states that more than 20% of prescriptions written for the most often used drugs were for off-label uses, and such off-label uses were most prevalent for the treatment of patients with cancer or with HIV infection.17 The report also cites studies by the GAO and the American Cancer Society, showing that more than 50% of patients with cancer are prescribed at least 1 drug for an off-label use.17 The Medicare Rights Center recommended that Congress change the Part D statute to include medically necessary off-label prescriptions outside the then 3 compendia used for regulating Part D coverage, to improve the lives and health of Medicare beneficiaries. The Medicare Rights Center also argued that expansion of the compendia would be consistent with common medical practice and with the intent of the Part D statute. Congress adopted part of the consumer group recommendations in MIPPA; effective January 1, 2009, Part D now covers off-label uses of drugs for the treatment of cancer if they are listed in any of the CMSrecognized compendia for determining coverage under the Part B program. But unlike Part B, MIPPA does not allow Medicare Advantage Part D plans or PDPs to use peer-reviewed studies as guidance for determining offlabel uses. The regulation implementing the new MIPPA provision does not impose significant changes under Part D, because most cancer-related drugs are covered under the Part B program. Coverage for off-label use of non–cancer-related drugs did not change under MIPPA. Effective in 2010, MIPPA requires all compendia to have a publicly transparent process for evaluating drug therapies, as well as disclose any conflicts of interest.

Coverage of Barbiturates and Benzodiazepines MIPPA expands Part D coverage to include barbiturates and benzodiazepines if they are used for the treat-

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ment of epilepsy, cancer, or a chronic mental disorder. These 2 drug classes were excluded from Part D coverage before MIPPA, even though many older adults in nursing homes and in outpatient settings are prescribed these drugs. However, this new coverage does not go into effect until 2013, because of the associated increased cost anticipated to the Part D program.

Most cancer-related drugs are covered under the Part B program. Effective in 2010, MIPPA requires all compendia to have a publicly transparent process for evaluating drug therapies, as well as disclose any conflicts of interest. Prompt Payment to Pharmacies With the implementation of Part D, some pharmacies, particularly community pharmacies, were concerned that Part D plans were paying claims for Part D drugs too slowly.18,19 Under the Part D rules, clean claims had to be paid within 30 days. Many pharmacies restocked their supplies every 2 weeks and received discounts from suppliers if their orders were paid quickly. According to the National Community Pharmacists Association (NCPA), the delays in Part D payments to local pharmacies presented severe financial difficulties and threatened the existence of many pharmacies.19 It is further believed that this delayed payment was a major contributor to the closing of many pharmacies during the first year of Medicare Part D. The NCPA lobbied hard for a prompt payment requirement similar to the commercial sector.20 Therefore, MIPPA includes a more stringent prompt payment requirement to pharmacies. Effective in 2010, Part D plan sponsors will be required to pay clean claims from all pharmacies— except for mail order and long-term care (LTC) pharmacies (pharmacies located in or contracting with LTC facilities)—within 14 days after transmission if submitted electronically, or within 30 days if submitted otherwise, starting on the fifth day after the postmark or transmission date. If claims are not paid in a timely manner, Part D plan sponsors will pay interest to the pharmacy. MIPPA does not include a prompt payment requirement for claims from LTC pharmacies; however, MIPPA establishes a time period for LTC pharmacies to submit claims to their Part D plan sponsors—not less than 30 days or more than 90 days.

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The September 18, 2008, IFC regulation that implements this prompt payment provision states in the preamble that there will be no distinction between a pharmacy and its agent for purposes of the prompt payment provision.7 Furthermore, Part D sponsors must include the prompt payment provision in their contracts with pharmacies.

Another change included in MIPPA is a requirement that Part D plans provide timely and regular updates of their drug prices to their pharmacies. Updating Drug Pricing Another change included in MIPPA is a requirement that Part D plans provide timely and regular updates of their drug prices to their pharmacies. Specifically, if plans pay pharmacies based on the cost of a drug, they must provide updates at least weekly, beginning with an initial annual update every January 1. This new policy would affect payments on the basis of drug costs, such as the average wholesale price (AWP). The September 18, 2008, IFC rule clarifies that Part D plan sponsors that contract with pharmacies, providers, first-tier, downstream, and related entities must include provisions for regular drug pricing updates.7 Access to Part D Data MIPPA includes a provision that Part D data may be used for research, to improve public health, and for congressional oversight. This provision codifies policy that was published in final regulations on May 28, 2008, which stipulates who can have the data and for what purposes (eg, for research or for congressional oversight, among other uses).21 Electronic Prescribing For Part B covered drugs, MIPPA provides incentive payments for clinicians to use qualified electronic-prescribing (e-prescribing) systems in the coming years. The bonus payment schedule is: • 2% in 2009 and 2010 • 1% in 2011 and 2012 • 0.5% in 2013. Clinicians would be required to use qualified e-prescribing systems by 2011. Payments to clinicians who fail to e-prescribe will be reduced incrementally: • 1% in 2012 • 1.5% in 2013

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• 2% annually thereafter. Currently, these incentive payments and penalties do not apply to Part D prescriptions (except for Medicare Advantage private fee-for-service plans, and providers who do not contract with Medicare Advantage plans). MIPPA includes an authority that allows the HHS Secretary to use Part D data in lieu of Part B claims data for e-prescribing reporting. It also authorizes the HHS Secretary to change the reporting requirements in the future, based on the number of Part D prescriptions. The regulations implementing the MIPPA e-prescribing provisions do not currently address the Part D program.

Conclusions MIPPA includes the first extensive legislative changes to the Medicare Part D program. Nevertheless, these changes are relatively modest program improvements to strengthen beneficiary protections and lowincome individuals, address marketing abuses, and enhance coverage and transparency. The basic structural concerns with the Part D program, such as the coverage gap, and the ideological issues, such as a competing government drug program with governmental drug price negotiation authority, were not addressed by MIPPA. We anticipate that these issues will be discussed vigorously during the 111th Congress. Indeed, during the first weeks of the session of the new Congress, bills have already been introduced to address these issues. ■ Acknowledgment The authors wish to acknowledge the editorial and literature research assistance provided by Stephen Cutts, PharmD candidate, University of Rhode Island, College of Pharmacy. Disclosure Statement The authors have no potential conflict of interest relevant to this article.

References 1. Medicare Improvements for Patients and Providers Act of 2008. Pub L No 110-275, 122 Stat 2494. http://frwebgate.access.gpo.gov/cgi-bin/get doc.cgi?dbname=110_cong_public_laws&docid=f:publ275.110.pdf. Accessed March 10, 2009. 2. National Committee to Preserve Social Security and Medicare. The Medicare Improvements for Patients and Providers Act (MIPPA): summary of key provisions. July 2008. www.ncpssm.org/news/archive/mippa_ summary/. Accessed January 30, 2009. 3. Government Accountability Office (GAO-08-719). Medicare Part D: complaint rates are declining, but operational and oversight challenges remain. June 2008. www.gao.gov/new.items/d08719.pdf. Accessed March 19, 2009.

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4. Government Accountability Office (GAO-07-555). Medicare Part D low-income subsidy: additional efforts would help social security improve outreach and measure program effects. May 2007. www.gao.gov/new.items/ d07555.pdf. Accessed February 20, 2009. 5. Government Accountability Office (GAO-08-812T). Medicare Part D low-income subsidy: SSA continues to approve applicants, but millions of individuals have not applied. May 22, 2008. www.gao.gov/new.items/ d08812t.pdf. Accessed March 19, 2009. 6. Government Accountability Office (GAO-08-824). Medicare Part D low-income subsidy: assets and income are both important in subsidy denials, and access to state and manufacturer drug programs is uneven. September 2008. www.gao.gov/new.items/d08824.pdf. Accessed March 19, 2009. 7. Medicare Advantage and prescription drug benefit programs: final marketing provisions. Fed Regist. 2008;73(182):54208-54223. http://edocket. access.gpo.gov/2008/pdf/E8-21674.pdf. Accessed January 30, 2009. 8. Medicare Advantage and prescription drug programs: MIPPA drug formulary & protected classes policies. Fed Regist. 2009;74(11):28812888. http://edocket.access.gpo.gov/2009/pdf/E9-783.pdf. Accessed January 30, 2009. 9. Medicare. Medigap (supplemental insurance) policies. www.medicare. gov/medigap/Default.asp. Accessed January 30, 2009. 10. CMS. Medicare marketing guidelines for Medicare Advantage plans (MAs), Medicare Advantage prescription drug plans (MA-PDs), prescription drug plans (PDPs), 1876 cost plans. August 15, 2005; revised, July 25, 2006. www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/Final MarketingGuidelines.pdf. Accessed February 20, 2009. 11. US Senate Committee on Finance Hearings. Selling to seniors: the need for accountability and oversight of marketing and sales by Medicare private plans. February 13, 2008. http://finance.senate.gov/sitepages/ hearing021308.htm. Accessed March 19, 2009. 12. Subcommittee on Health. Hearings on Medicare Advantage. February 28, 2008. http://waysandmeans.house.gov/hearings.asp?for mmode=detail&hearing=613. Accessed March 19, 2009.

13. CMS. Medicare Advantage/Part D contract and enrollment data. Enforcement actions. January 2006-March 2009. www.cms.hhs.gov/MCR AdvPartDEnrolData/EA/list.asp#TopOfPage. Accessed March 10, 2009. 14. CMS. Medicare Advantage/Part D contract and enrollment data. Corective action plans. January 2006-March 2009. www.cms.hhs.gov/ MCRAdvPartDEnrolData/CAP/list.asp#TopOfPage. Accessed March 10, 2009. 15. CMS. Re-issuance of the 2010 draft Call Letter and new public comment period. February 23, 2009. www.cms.hhs.gov/PrescriptionDrugCov Contra/Downloads/Draft2010CallLetter.pdf. Accessed March 19, 2009. 16. Agency for Healthcare Research and Quality. Technology assessment: compendia for coverage of off-label uses of drugs and biologics in an anticancer chemotherapeutic regimen. Final Report, May 7, 2007. www.cms. hhs.gov/mcd/viewtechassess.asp?from2=viewtechassess.asp&where=index &tid=46&. Accessed January 30, 2009. 17. Medicare Rights Center. Off-base: the exclusion of off-label prescriptions from Medicare Part D coverage. August 2007. www.medicarerights. org/pdf/Off_Base.pdf. Accessed January 30, 2009. 18. Shepherd M, Richards K, Winegar A. Length of prescription drug payment time by Medicare Part D plans: executive summary. Center for Pharmacoeconomic Studies: The University of Texas at Austin. August 2007. www.utexas.edu/pharmacy/research/institutes/pharmacoeconomics/ length.pdf. Accessed February 20, 2009. 19. National Association of Community Pharmacists. Berry and Jones’ letter to Chairman Pete Stark, Subcommittee on Health, House Committee on Ways and Means. September 6, 2007. www.ncpanet.org/pdf/leg/letterhr1474jonesberrytostark20070905.pdf. Accessed February 20, 2009. 20. Office of Inspector General. Review of the relationship between Medicare Part D payments to local, community pharmacists and the pharmacists’ drug acquisition costs. January 3, 2008. www.ncpanet.org/pdf/ legal/oig_report_011508.pdf. Accessed February 20, 2009. 21. CMS. Fact sheet: final Medicare Part D data regulations (CMS-4119F). May 22, 2008. www.cms.hhs.gov/PrescriptionDrugCovGenIn/Down loads/PartDClaimsDataFactSheet.pdf. Accessed March 19, 2009.

STAKEHOLDER PERSPECTIVE Part D under the Medicare Improvements for Patients and Providers Act of 2008 PAYERS: The Bush administration and the congressional Republican leadership went to extraordinary lengths to secure final passage of the Medicare Prescription Drug and Modernization Act of 2003 and the creation of the Medicare prescription drug benefit (Part D). That process—and the ongoing challenges involved in developing bipartisan consensus for major health reform efforts—led to immediate and vigorous criticisms of the Part D program from the left and from the right on issues ranging from the costs of the program to the now-infamous coverage gap in the benefit design, more often referred to as the “doughnut hole.” However, facts on the ground often contrasted the politically driven criticisms. For example, Part D plan premium costs ended up being lower than pro-

jected, as the Centers for Medicare & Medicaid Services (CMS) announced (in a press release on August 13, 2007). Moreover, satisfaction rates have been very high, as reported in several surveys in 2006 and 2007 conducted by the AARP, JD Power and Associates, and others. These realities strengthened the Bush administration’s resolve in opposing any legislative reform efforts. Concurrently, the natural operational challenges—such as the enrollment processing glitches in early 2006—associated with a new program of this size, helped to bolster the critics. Part D was lambasted in many congressional hearings held between 2006 and 2008. Ultimately, the momentum of these hearings resulted in a veto override of President Bush, leading to the first major legislative changes to Continued

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Continued Part D in the third coverage year of the program in the form of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). With early-2008 passage and several legislatively mandated January 2009 deadlines, the implementation process of MIPPA was less than ideal for CMS and for Part D plan sponsors. CMS operates the Part D program in annual cycles that include plan bids, development of benefit designs, and approval of plan marketing materials. For operational reasons, these activities need to be completed in the spring and summer, before the start of a new coverage year. Illtimed legislative mandates such as MIPPA put substantive operational strain on CMS and on Part D plan sponsors as they work through the rule-making and implementation-design processes. MIPPA has had an immediate and profound effect on Part D plan marketing, while strengthening existing CMS policies around coverage and benefits

CAPTION CONTEST

administration. MIPPA represents the starting point for more intense CMS oversight of Part D plan sponsors. Indeed, in its annual 2010 Call Letter (released on March 30, 2009), CMS announced that it would perform “more targeted, data-driven and risk-based audits,” with the goal of the “earliest possible detection and correction of issues and improvement in quality and performance of Part D sponsors.” MIPPA did not address, however, the more politicized reform proposals, including the public plan option, closing the doughnut hole, and government negotiation of drug prices. Plan sponsors can expect to see proposals debated through the legislative process in the immediate future. Mark A. Newsom, MSc Director, Medicare Policy and Compliance Coventry Health Care (The opinions expressed here are solely those of the author)

Submit your caption at www.AHDBonline.com

Winners Receive $50 Submission deadline: April 24, 2009 Winners’ names posted: April 27, 2009

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Partnership. People. Programs. Passion. The Flexibility You Need. The Integrity You Deserve.

| MANAGED MARKETS

Leaders in Business. Partners in Care. Visit Takeda on the Web at www.tpna.com.

GENERIC DRUG TRENDS

New Legislations on Generics and Biosimilars Brewing in Congress Dalia Buffery, MA, ABD

arch was a busy month for makers of generics and biologics, with several bills being introduced in the 111th Congress proposing new legislations on generics and biosimilars. While these bills are making the rounds in committee reviews, responses from industry stakeholders run the gamut from bipartisan support to partisan rejection, with few surprises. H.R. 1706, Protecting Access to Generic Drugs Act of 2009, was introduced by Rep. Bobby Rush (D-IL) on March 25, 2009.1 This act proposes to “prohibit brandname drug companies from compensating generic drug companies to delay the entry of a generic drug into the market.”1 This practice is perceived by supporters of the bill as hurting consumers by postponing access to cheaper medications. In this economic climate, compounded by the ever-growing rates of chronic diseases, reports of Americans forgoing medications because of cost issues are common, adding fuel to the fire.2 The flip side is, says Rep. Joe Barton (R-TX), the ranking Republican on the House Energy and Commerce Committee (where the bill is being reviewed), that this legislation “could eliminate the motivation for drug makers to settle drug-patent challenges, causing lengthy litigation that ultimately ‘erodes any benefit to the consumer.’”3 This sentiment is echoed by others in the industry, who suggest that this bill may stunt drug innovation, or that “fewer generic drugs may be developed because of this.”3 Responding to critics, Rep. Rush says “the bill is opposed by both PhRMA and most generic companies. The fact that both innovator and generic companies oppose the bill is striking, because brand-name and generic companies are not supposed to agree on anything.”4 Furthermore, the bill “does not ban all settlements in drug patent cases,” and it “will save taxpayers, businesses, and consumers tens of billions of dollars.”4 In contrast, H.R. 1427, Promoting Innovation and Access to Life-Saving Medicine Act—which aims “to provide the licensing of biosimilar and biogeneric biological products”5 and was reintroduced to the new Congress by Rep. Henry Waxman (D-CA) on March 11, 20095—was met by bipartisan support in Congress. It does not offer an extended protection period, which likely led Jim Greenwood, president of the Biotechnology

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Industry Organization, to say, “the bill seeks to cut prices but instead cuts corners,” adding that “this proposal leads us off the map as we seek an effective, fair, and safe pathway to a biosimilar market.”6 A variation on the Waxman bill—H.R. 1548, Pathway for Biosimilars Act—was reintroduced on March 17, 2009, by Rep. Anna Eshoo (D-CA).7 Eli Lilly offered strong support, saying this pathway “carefully weighs the needs of patients and stakeholder companies. This balance…would assure patients and payers the benefits that come from greater competition, preserve incentives for biotechnology innovation and foster investments that will produce more high-paying jobs in the life sciences.”8 Unlike H.R. 1427, this bill offers a 14-year “data protection period.”8 This legislative focus reflects the push toward healthcare reform, cost-reduction, and increased access promoted by the new administration. Stay tuned. And while this drama has been playing in the halls of Congress, the US Food and Drug Administration has been, quietly, approving a slew of new generics since the start of 2009. ■ References 1. H.R. 1706: Protecting Consumer Access to Generic Drugs Act of 2009. www. govtrack.us/congress/billtext.xpd?bill=h111-1706. Accessed March 29, 2004. 2. Caryn Rabin R. More Americans skipping necessary prescriptions, survey finds. New York Times. January 23, 2009. www.nytimes.com/2009/01/23/health/ 23drug.html?_r=1. Accessed March 29, 2009. 3. Hughes DA. Bill to stop deals delaying generic drugs could hurt consumers. Wall Street Journal. March 31, 2009. http://online.wsj.com/article/BT-CO20090331-720508.html. Accessed March 31, 2009. 4. Statement by the Honorable Bobby L. Rush, Chairman Subcommittee on Commerce, Trade and Consumer Protection. March 31, 2009. http://energycom merce.house.gov/Press_111/20090331/rush_open.pdf. Accessed March 31, 2009. 5. H.R. 1427: Promoting Innovation and Access to Life-Saving Medicine Act. March 11, 2009. www.govtrack.us/congress/bill.xpd?bill=h111-1427. Accessed March 29, 2009. 6. Van Arnum P. Bipartisan bill for biosimilars and biogenerics introduced in the House. March 18, 2009. http://pharmtech.findpharma.com/pharmtech/ Ingredients/Bipartisan-Bill-for-Biosimiliars-and-Biogenerics-I/Article Standard/Article/detail/587445?contextCategoryId=35097. Accessed March 29, 2009. 7. Open Congress. Text of H.R. 1548 as introduced in House for Pathway for Biosimilar Act. March 17, 2009. www.openaccess.orgbill/111-h1548/ text. Accessed March 29, 2009. 8. Pathway for Biosimilars Act protects patients, promotes competition, preserves innovation and creates quality jobs, Lilly says. March 17, 2009. www.pr newswire.com/cgi-bin/micro_stories.pl?ACCT=916306&TICK=LLY& STORY=/www/story/03-17-2009/0004990291&EDATE=Mar+17,+2009. Accessed March 29, 2009.

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American Roots. Global Reach.

For 48 years, the generic products from Mylan Pharmaceuticals have met the uncompromising standards established by Chairman and Co-Founder Milan (Mike) Puskar. His philosophy—“We either do it right or we don’t do it at all”—has helped Mylan become the largest U.S.-based manufacturer of generics by total prescriptions.* As patients’ demands for a wider array of generics have increased, Mylan has responded. Under the leadership of Vice Chairman and CEO Robert J. Coury and COO Heather Bresch, Mylan now provides products to patients in more than 140 countries and territories. As we have expanded, one constant has remained… the philosophy upon which our company was established. That’s why all Mylan generics will continue to offer the quality and affordability that patients need and the peace of mind that pharmacists have always counted on.

CLINICAL

ProvenCare: Geisinger’s Model for Care Transformation through Innovative Clinical Initiatives and Value Creation Interview with Ronald A. Paulus, MD, MBA Geisinger’s system of care can be seen as a microcosm of the national delivery of healthcare, with implications for decision makers in other health plans. In this interview, Dr Ronald A. Paulus focuses on Geisinger’s unique approach to patient care. In its core, this approach represents a system of quality and value initiatives based on 3 major programs— Proven Health Navigation (medical home); the ProvenCare model; and transitions of care. The goal of such an approach is to optimize disease management by using a rational reimbursement paradigm for appropriate interventions, providing innovative incentives, and engaging patients in their own care as part of any intervention. Dr Paulus explains the reasons why, unlike Geisinger, other stakeholders, including payers, providers, patients, and employers, have no intrinsic reasons to be concerned with quality and value initiatives. In addition, he says, an electronic infrastructure that could be modified as management paradigms evolve is a necessary tool to ensure the healthcare delivery system’s ability to adapt to new clinical realities quickly to ensure the continuation of delivering best value for all stakeholders. [AHDB. 2009;2(3):122-127.]

Robert Henry: Two recent articles on ProvenCare discussed Geisinger’s innovative approach to patient care.1,2 Could you provide a quick synopsis of ProvenCare, and consider whether this system could help transform US healthcare from a sickness-based to a wellness-based system? Ronald A. Paulus: Geisinger’s approach to patient care can be seen as a microcosm of the broader national landscape of healthcare delivery. ProvenCare represents 1 of the 3 core strategies that comprise Geisinger’s healthcare system of quality and value initiatives that are transforming care. These 3 strategies are: (1) Proven Health Navigation, which is our name for our advanced medical home; this means wrapping a bundle of services around a patient, or a consumer, and his/her family. The goal of Proven Health Navigation is to address healthy behaviors, disease prevention, and disease management once a patient has past the point where prevention is no longer working; (2) ProvenCare, whose model recognizes that no matter how well we incorporate prevention strategies, even with the technology and the knowledge base we have today, a cerDr Paulus is Executive Vice President and Chief Technology and Innovation Officer, Geisinger Health System, Danville, PA.

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tain percentage of patients (ideally a declining percentage) will ultimately require an acute intervention. And ProvenCare is all about optimizing that intervention and rationalizing the reimbursement paradigm for that intervention, as well as engaging the consumer more actively in his/her own self-care during the time of intervention; and (3) transitions of care, recognizing the many handoffs between outpatient and inpatient, between inpatient and outpatient, between inpatient and nursing home, between home and nursing home— particularly vulnerable points for ensuring care safety, quality, and efficiency. So to answer your question about transforming the US healthcare system, the ProvenCare model cannot transform our healthcare into a wellness-based system by itself, but the combination of those 3 strategies— with ProvenCare as its central component—can move us quite far toward that goal. Henry: What gave Geisinger the sense that it could get tracking for this idea? Dr Paulus: It was the leadership of our board of directors, headed by our Chief Executive Officer (CEO), Glenn Steele, Jr, MD, PhD, who observed that the

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reimbursement status quo no longer made sense.1 The current reimbursement system includes, although not intentionally so, perverse incentives. Clinicians are paid more if their patients’ outcomes are poor rather than good, because they are paid more for addressing complications of care. All providers recognize that if they have more office visits, their reimbursement increases; if they do more interventions, they are reimbursed more dollars. At the same time, there is a lack of focus on preventive services and on patient education. There is no emphasis today on disease prevention. That led our board of directors to challenge the medical leadership to do something innovative about pay-for-performance (P4P),1 to rationalize reimbursement by involving the consumer, the care-delivery system, and the payer in the process, and by aligning the incentives for improved outcomes across the board. The result is an innovative model of payment whose goal is not just to measure performance steps as process metrics but rather to actively do something to affect better outcomes. Our CEO suggested a program that would incorporate all the current best practice evidence into a series of steps of care, document the steps of care being delivered, and bundle together the entire care process.2 He challenged our medical leaders to take on the initiative, and the Director of Cardiothoracic Surgery, Alfred Casale, MD, stepped up to the plate. Henry: One of the goals of this journal is the alignment of stakeholder incentives. How do you get all the stakeholders—patients, providers, payers, and others—to win in this environment? Dr Paulus: When we discussed the new approach with our payers, they suggested that we should look at different ways of implementing this process. Ultimately we also discussed this with buyers (ie, self-funded employers) and with our own health plan. We introduced to them this model of all-inclusive professional services, hospital services, and the idea of a preoperative through 90 days postoperative “warranty.” The 90day care warranty balanced all these considerations and made this process acceptable to everyone. Because Geisinger is an integrated healthcare delivery system, it was easier to establish the program. It was important to align incentives so we could have a dialogue. Among other things, we created a steering committee that included payer representation, the clinical enterprise representation, as well as surgical and professional group practice representation. As chair of

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KEY POINTS

Geisinger’s integrated healthcare delivery system comprises an advanced medical home, the ProvenCare model, and transitions of care.

A key component of Geisinger’s approach to healthcare is an innovative model of incentives for the consumer, the provider, and the payer.

ProvenCare’s unique approach to risk management revolves around a 90-day so-called care warranty (for participating payers), initially applied to elective coronary artery bypass surgery but has since been expanded to other procedures, including hip replacement surgery, knee replacement surgery, perinatal care, angioplasty, and cataract surgery.

In the short-term, Congress is not overly concerned with cost control relative to stimulus of the economy. The policy over the next year is not likely to be very motivated by demographic or by social problems.

“Quality” and “value” represent the bottom line for Geisinger, which strives to create an all-inclusive delivery system that offers best value for patients, payers, and providers.

Applying electronic infrastructure in healthcare is necessary today. Within the Geisinger medical home, the routinization of processes with electronic infrastructure enable all providers to practice to their outmost capacity.

The lesson drawn from the Geisinger experience is that such an approach could be successfully applied to other plans, and with other payers.

that committee, I functioned as a “neutral facilitator”— a facilitator across all those different parties. Although we have an integrated delivery system, each operating unit has its own budget, its own financial and clinical quality goals, and its own metrics, against which it is being measured. And 2 of our 3 hospitals are open-staffed, that is, they have a mix of Geisingeremployed and non-Geisinger physicians. We also had to confront real-world issues, such as— if you are getting a bundled payment, how do you pay fee-for-service physicians who are not part of this system? But we all realized that the current payment model did not make sense, and there had to be alternative ways. ProvenCare is a nice half-step between the traditional fee-for-service approach and capitation; it aligns incentives but around specific things that are far

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less comprehensive and far less prone to underutilization than a pure capitation model. The big leap of faith that had to be taken to implement this approach involved a half-step forward by the clinical enterprises and a half-step forward by the payer. The payer agreed to a bundled rate that included all the evidence-based services that are required, which meant they were funding the care that people truly needed. And the clinicians said they could improve patient care by doing all these process steps correctly 100% of the time and hardwiring those into the electronic health records (EHRs) infrastructure of the organization.

The big leap of faith that had to be taken to implement this approach involved a half-step forward by the clinical enterprises and a half-step forward by the payer. Henry: Could you briefly explain your innovative approach to risk management? Dr Paulus: Geisinger addressed risk in 2 ways: First, we agreed to accept a bundled rate—including a 90-day care warranty—so if things go awry, we absorb the cost of care. Second, those responsible for the clinical services said they could likely reduce their readmission rate as one measure of complication. This meant we give back 50% of the cost of our historical readmission rate to the payer upfront, in exchange for locking the future 50% of the historical readmission rate. We figured that if we reduced our readmission rate by more than 50%, it would be an opportunity for incremental profit margin creation on the clinical enterprise side. It also means immediate gain for the payer, because whether or not we reduced the readmission rate, the payer saves 50% of what the payer would have paid historically, in addition to getting a locked-in bundled rate; so any given buyer has less risk of an outlier case. Henry: Fascinating. And is this related to the coronary artery bypass graft (CABG) surgery used in ProvenCare? Dr Paulus: Although this was initially applied to CABG,2 we have since applied that principle to several other procedures, including hip surgery and cataract surgery, as well as angioplasties. We are now actively delivering and working on bariatric surgery and on a perinatal program. The perinatal program covers the

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duration of pregnancy, delivery, and the postdelivery follow-up period. We have also added chronic disease optimization initiatives for coronary artery vascular disease, diabetes, chronic kidney disease, and most recently a preventive care bundle, where we optimize care in the same way. But instead of applying the same sort of bundled payment rate, we apply performance metrics and bonuses more akin to traditional P4P. It is easy to figure out when CABG starts, and what the follow-up period is. Similarly, it is relatively easy in perinatal care, given the nature of pregnancy and delivery, what those periods are. But when it comes to chronic conditions, such as diabetes, which last a lifetime, defining the bundle’s appropriate window period isn’t as clear-cut. For acute intervention, the 90-day warranty is only for events related to the procedure, such as surgical wound infection, required follow-up, or extended cardiac rehabilitation. Henry: And is reaching consensus among different clinical schools of thought more complicated in relation to chronic diseases? Dr Paulus: ProvenCare’s clinical approach to CABG surgery applied the 2004 American College of Cardiology/American Heart Association guidelines for CABG surgery.3 It was initially difficult to reach consensus among all the clinicians even in relation to those guidelines. For this reason, we gave each clinician the guidelines that he or she was most skeptical of and asked them to review the literature, agreeing to revise our model if they found the guidelines lacking. However, after reviewing the literature, the clinicians agreed, with no exceptions, that these guidelines were the right ones to follow. In part it was an attempt to take advantage of existing guidelines and in part to engage the clinicians and acknowledge their skepticism, by asking them to come up with the evidence. Another subtle but absolutely critical aspect of this approach is that even with guidelines, we allow clinicians to opt out of the guideline for any reason related to the procedure; the only requirement is that they document the reason for it. Our experience shows that very few opt out of the guidelines. We track 40 different components on every patient undergoing CABG.2 We have had hundreds of patients who had undergone CABG, so 250-plus times 40 is a large number, but we have had less than a handful of opt-outs. Nevertheless, the ability to opt out and the fact that the procedure is not being dictated to

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them, provide clinicians an appropriate degree of freedom and comfort. Henry: Does this represent the difficulty in achieving a value-based healthcare system? Dr Paulus: For Geisinger, quality and value are the bottom line. Quality and value are intrinsic to our integrated delivery system model, because we have the payer and the provider sides of our organization. Ultimately, as an integrated healthcare delivery system we wanted to optimize quality and value to create a competitive differentiation for our health plan. That way we could offer a product to the marketplace that is a win-win system for the payer and the provider. It may be a provocative statement, but in today’s healthcare marketplace, very few stakeholders are truly concerned with quality and value. And those who could or should be do not actualize it. The reasons vary by stakeholders. Payers are not concerned with value because they are regulated or pseudoregulated and essentially make a fixed profit margin; therefore, the higher the total spending, the more money they make. So at the end of the day, I am not sure what would be the incentive for an insurance company to lower cost or to enhance value. For example, if premiums actually fell, and fell year after year, as in the case of personal computers, insurance plans would not like that business model. Providers have not necessarily had the desire to increase quality and value, because they either do not accrue any benefit other than psychological, missionbased, or professional-based benefit, or they are actually penalized for it. For example, if a hospital invested in remote monitoring devices for its patients and was able to reduce readmissions by 50%, and if it is not an integrated system with a payer, this would reduce its revenue from potential admissions, meaning that it could not cover its fixed operating costs. Patients are also not concerned with cost, because they have not borne a high degree of out-of-pocket cost, traditionally, once they get past their deductible; thus they have not had any incentive to manage costs. And, as for quality, they assume that they get it every step of the way. Employers have probably been in the most painful position; they either have not had the buying power to be able to effectuate the desire to have better value, or they have traded off convenience and geographic proximity to their employees over value. So the US healthcare system lacks players who truly care about value for their own population, although everybody cares about value at the societal level. No

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one is instigating the desire for value creation in the current healthcare system, which is not like a traditional, consumer-driven market, where people are paying out of pocket and vote with their dollars (which is what drives value in that situation).

As an integrated healthcare delivery system we wanted to optimize quality and value to create a competitive differentiation for our health plan. In today’s healthcare marketplace, very few stakeholders are truly concerned with quality and value. Henry: Does value creation also relate to reimbursement issues and stakeholder collaboration? Dr Paulus: Indeed. We recognize that we are never going to be a hermetically sealed organization (such as the Kaiser Foundation), in which we insure the population and provide the care for that population only. But the more efficient we can become, and the more quality and value we can provide, the more we help the payer. It helps us have a higher profit margin on other payers, while offering competitive rates. When we look at the current and looming healthcare crisis in Medicare and Medicaid, it is clear that over time reimbursement will become an issue. We have to prepare our delivery system to be successful in that Medicare/Medicaid environment; if we can be successful there, we can be successful anywhere. This relates directly to value creation—recognizing that this value needs to be shared across the consumer, the payer, and the delivery system. We are trying to create the value that enables that sharing to happen. Because Geisinger has an integrated delivery system, we decided we could afford to care about quality and value, and in patients for whom we provide the majority of the care we could afford to take risk—we could innovate—and make investments in the value creation. And we accrue that back. We can also apply that value principle to other markets or other payers. We provide the same clinical care with ProvenCare, regardless of who the payer is, but our own insurance company is the only firm that reimburses us (we have not been approached by other payers). We can selectively choose when to deploy that component of ProvenCare to other payers. So our 3-part strategy has improved resource utilization and has led to improved patient outcomes,2 which is the true value.

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Henry: What is the role of electronic records or other electronic technology in Geisinger’s model of care? Dr Paulus: Applying health information technology (HIT) and electronic infrastructure in healthcare is even more important to being able to scale the activity. We could have been successful in CABG surgery or in any given thing through paper checklists and individual heroism and hypervigilance around processes and people and all that. But that rugged individualist, heroic model breaks down when you want to scale it across tens or hundreds of diseases.

A major barrier of technology and its ability to affect care is the time it takes for known benefits to work their way into more than 80% of healthcare. We are quickly approaching a scenario where working without an electronic infrastructure will be impossible or dangerous.

To apply this model to a variety of diseases, scaling becomes important. By scaling it, and keeping it from going back to the way things were done before, we need to involve people and electronic resources to monitor the process and report data seamlessly. Using HIT allows you to make the process low cost enough to afford to maintain and scale it, as needed. We know that this knowledge is going to change over time, when new drugs, devices, or the approach to care become available. We are therefore not wedded to any given component of the bundle of things that are part of the overall ProvenCare program, whether in CABG, hip replacement surgery, perinatal care, or in any future ProvenCare initiative. We focused on creating a reliable, reproducible, scalable infrastructure to take whatever the current state of knowledge is and translate that into a reliable care process that could be reproduced over time, thereby enabling the delivery system and care process to evolve with time. A major barrier of technology and its ability to affect care is not whether the technology is good or bad but rather the time it takes—on average 17 years—for known benefits to work their way into more than 80% of healthcare. We have tried to take an existing apparatus across multiple disease areas that can translate

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new knowledge into practice in weeks or months rather than in years or decades. We are quickly approaching a scenario where working without an electronic infrastructure will be impossible or dangerous. In the ProvenCare model, this is not just an EHR infrastructure but rather it is an EHR system that is in the hands of people who can maintain it, deploy it, and facilitate it. And it will be particularly beneficial for subtypes and subdisease states that complicate the care delivery process. HIT has a great capacity to provide decision support for such care processes. Henry: Could you briefly discuss the way in which your medical home is integrated within the Geisinger approach to care? Dr Paulus: The medical home is a primary care– based function, which is today one of the most undercompensated services at the pediatric and the adult levels. The ProvenCare pilot introduced payment of an incremental fee to the primary care physician and an additional fee to the primary care practice. This amount of reimbursement is not trivial; it could be as high as $20,000 per primary care physician annually. The issue of underpayment of cognitive services is a big deal across many specialties, and in particular in primary care, where preventive services, interventions, and lifestyle interventions have the biggest opportunity. Also, within the medical home environment, and within ProvenCare, the routinization of the processes and the augmentation with HIT infrastructure enable all providers—nurses, pharmacists, physicians, and midlevel clinicians (eg, nurse practitioners, physician assistants)—to practice to their utmost cognitive and licensure capacity. In ProvenCare we have hardwired nurse and midlevel clinician participation in a robust way, because we are going to face a staff shortage no matter how you slice it. Even if the reimbursement model changes now, changing the staff shortage will take a long time, because it involves many years of training in medical school, residency programs, and fellowships. We also need to push the capacity of clinicians to work to the high-end rather than the low-end of their license. These things are linked together directly—as odd as this may seem—to medical home and to ProvenCare; they are directly linked to transitions of care, because of the importance of how the team-based approach works for each of those environments; transitions, medical home, and ProvenCare are all teambased initiatives.

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Henry: Finally, as mentioned earlier, AHDB is dedicated to the idea of healthcare stakeholder collaboration. Can the ProvenCare model be applied in other plans or by other providers or employers? Dr Paulus: The lessons we have learned from this experience lead us to believe that this approach could be applied and implemented in other plans, and with other payers. We have had interests from providers and payers who have asked us to work with them in other markets, potentially to help facilitate ProvenCare programs in other places. We have also been approached by providers like ourselves (ie, health systems) and by payers to collaborate with them. Increasingly we feel that this approach could be applicable in other markets. There is no reason why other providers and payers could not collaborate in a similar manner. In addition, from Medicare’s perspective, there is an interest in episode of care-based payment demonstrations, including the current one that has recently been announced. A group called Prometheus is looking at this from a payer perspective—how to model these episodes; how to create warranties around care. They have been partially informed by what we have done with ProvenCare, and we have likely been partially informed by what they have done. So there is a broad sense that the current piecemeal payment model does not make sense in the long-term. We have looked at some of the things that the Centers for Medicare & Medicaid Services has been trying to do, and we are participating in the physician group practice demonstration projection. The episode-based demo is another good idea. The work the Commonwealth Fund is doing around highperformance delivery systems is important, and our CEO, Dr Glen Steele, is involved in this. We have worked with the Institute of Medicine concerning the learning healthcare system—how do healthcare systems learn and reproduce that knowledge and redeploy it quickly. The work of the Agency for Healthcare Research and Quality is very important, and so is the work done at some of our peer institutions around the country, such as the Mayo Clinic and the Cleveland Clinic. We are looking to collaborate with and learn from our peers as much as we can. Finally, Geisinger’s model of care can accommodate significant changes quickly, to ensure flexibility and adaptability to new clinical realities and guidelines, as well as administrative needs—all geared toward the

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goal of creating and sustaining best patient outcomes at optimized costs. The Geisinger experience exemplifies a successful approach to healthcare transformation that could be applied to other health plans, as well as help transform the US healthcare system by aligning the needs of all stakeholders, containing costs, and improving outcomes. ■

References 1. Paulus RA, Davis K, Steele GD. Continuous innovation in health care: implications of the Geisinger experience. Health Aff (Millwood). 2008;27:1235-1245. 2. Casale AS, Paulus RA, Selna MJ, et al. “ProvenCare”: a providerdriven pay-for-performance program for acute episodic cardiac surgical care. Ann Surgery. 2007;246:613-621. 3. Eagle KA, Guyton RA, Davidoff R, et al. ACC/AHA 2004 guideline update for coronary artery bypass graft surgery: a report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines. J Am Coll Cardiol. 2004;44:213-310.

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The Integrated Patient-Centered Medical Home: Tools for Transforming Our Healthcare Delivery System Matias A. Klein

he patient-centered medical home (PCMH) continues to attract increasing attention from many industry stakeholders.1 The PCMH model has the potential to enhance the US healthcare system by rejuvenating primary care in a way that improves clinical outcomes, lowers costs, promotes wellness, and increases patient and physician satisfaction.1 PCMH pilots are currently being tested in almost all states,2 including a 3-year Medicare medical home demonstration project overseen by the Centers for Medicare & Medicaid Services.3 However, few organizations have scaled the PCMH across their entire healthcare network, and the existing implementations appear to remain focused on care management at the expense of patient wellness. The value of focusing equally on promoting wellness (although an underappreciated nuance in the implementation of a PCMH) is a critical factor in effectively leveraging the PCMH model to improve clinical outcomes and the US healthcare system. The PCMH model, as its name suggests, is centered on the patient. The underlying thought is that if a comprehensive, longitudinal view of a patient is taken throughout a patient’s lifespan, the patient’s health could be better “managed” and better aligned with best medical practices. It is well documented that physicians do not consistently or frequently apply evidencebased, recommended care to patients.4 Therefore, a major goal of the PCMH model is to improve the consistent application of evidence-based guidelines and best practices,1,5 by making longitudinal information about the patient available to providers and to patients—including any risks and recommended “intervention opportunities.” And although adherence to best practices in disease management is crucial, the PCMH model also focuses on preventing costly episodes by promoting and incentivizing wellness.1,5

Mr Klein is Vice President, General Manager, Clinical Quality and Collaboration, Portico Systems, Blue Bell, PA. Portico Systems provides integrated provider management solutions for the healthcare industry.

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To effectively manage a patient’s health and promote wellness, primary care physicians—designated as medical homes—need to act as health “quarterbacks” or “coaches.” In such a role, these physicians will assist in aggregating a patient’s health information, making best practices transparent, offering health education and counseling, as well as coordinating the provisioning of any healthcare services the patient may need. With physicians spending significant time coaching and making critical clinical decisions, these services will be delivered with the support of care management nurses, who will handle the majority of the information processing and operational activity.6,7 The PCMH model is an important innovation in care delivery and has the potential to reduce medical and administrative costs, while improving the quality of care.1 However, how to implement the PCMH model within a care-delivery system remains unclear. Providers need the requisite infrastructure and capabilities at their locations to meaningfully participate in a PCMH. Patients must be engaged over long periods of time in proactively managing and improving their health. Outcomes and quality must be objectively measured to optimize the delivery of best possible patient care. To realize the potential value of the PCMH, 3 distinct stakeholders—patients, providers, and health plans— must work in a collaborative way. Getting these stakeholders synchronized (ie, aligned in their goals, using interoperable tools, and collaborating on an operational level) is no small feat but can be accomplished with the smart application of technology. Bringing these 3 stakeholder groups together on a common, collaborative technology platform results in what some are beginning to call the integrated PCMH.8 The integrated approach to the PCMH can best ensure that implementing a PCMH model does not create additional administrative burdens to health plans or provider organizations. An integrated PCMH provides a framework for stakeholders to collaborate in a transparent fashion, and where quality, best practices, and outcomes are incentivized.5,9 The integrated PCMH also provides a pathway

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to transforming primary care providers en mass by quickly being awarded a medical home designation.5,9 The key to deploying an integrated PCMH is an endto-end vertical integration of the care-delivery process— that is, a process in which the provider network management, automation, information exchange, and analytics solutions are tightly integrated with patient and provider information. With so much complexity and so many “moving parts” in the delivery of the PCMH model, this end-to-end vertical integration is a practical solution that enables effective coordination of care and accurate measurement of quality: with such system integration, the provider network (eg, the health plan) can bring economies of scale to even the smallest provider offices to optimize the quality of care delivery. The 5 key components for such an integrated PCMH are: • A source-of-truth for mapping medical home–designated providers, patients, as well as the associated relationships with health plans and other medical professionals; a central medical home fact checking is critical for effectively identifying, managing, and communicating with medical homes and their networks • A set of collaborative workflows that align stakeholders with best practices, incentives, and quality measures reporting; these collaborative workflows help each stakeholder understand where a given patient is in the care-delivery process, potential intervention opportunities, why certain interventions are being emphasized, and what incentives are available for executing specific interventions • An infrastructure for clinical integration and distribution of intervention opportunities, clinical reference content, education, alerts, and reminders. This infrastructure allows all stakeholders to have access to up-to-date, accurate patient information; it aligns stakeholders and helps reduce or eliminate duplication of procedures and tests • Interoperable clinical applications and collaboration tools to enable patients and physicians to engage in medical home processes; these tools—which include electronic medical records, e-prescribing, e-labs, secure e-mail, personal health records, and document management and exchange technology—can help manage health information, assist with decision-making, and improve communication between patients, providers, and health plans • Incentive management and analytics tools for modeling, setting, measuring, and rewarding incentives based on quality measures and outcomes; these tools

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must span the entire PCMH delivery process and are required for objectively evaluating and optimizing the performance of a medical home. When considering the multiplicity of stakeholders, information, software systems, and knowledge that has to be coordinated in the context of a PCMH model, implementing a medical home pilot and scaling it to a full-blown network may seem a daunting task. The integrated PCMH offers a real-world solution for deploying a scalable and flexible infrastructure for the management of this emerging care-delivery model. Early evaluations of the PCMH model show promising, albeit inconclusive, outcomes.10,11 The integrated PCMH model offers a practical road map for deploying a management system that will enable objective measurement of PCMH performance and outcomes. Although the jury is still out on the ultimate value of the PCMH, deploying an integrated PCMH system can help position PCMH pilots in a way that enhances their flexibility and scalability to support full-scale network transformation. ■ References 1. The Patient-Centered Primary Care Collaborative. General presentation materials: PCPCC PowerPoint slides ppt.www.pcpcc.net/content/ general-presentation-materials. Accessed March 24, 2009. 2. The Patient-Centered Primary Care Collaborative. The patient-centered medical home: building evidence and momentum. A compendium of PCMH pilot and demonstration project. November 2008. www.pcpcc. net/content/pcpcc-pilot-projects (free registration required). Accessed March 24, 2009. 3. CMS. The Medicare medical home demonstration project. October 2008. www.cms.hhs.gov/OpenDoorForums/Downloads/Medicalhomede mo102808.pdf. Accessed March 24, 2009. 4. McGlynn EA, Asch SM, Adams J, et al. The quality of health care delivered to adults in the United States. N Engl J Med. 2003;348:2635-2645. 5. Bridges to Excellence. Medical Home Recognition: Process and Reward Model. January 2008. www.bridgestoexcellence.org/Documents/BTE% 20Medical%20Home%20Recognition.pdf. Accessed March 24, 2009. 6. Dark Daily. Statewide medical home programs launched in Rhode Island and North Dakota. January 7, 2009. www.darkdaily.com/ebriefings/ statewide-medical-home-programs-launched-in-rhode-island-and-northdakota. Accessed March 24, 2009. 7. Barr JE, Burgess R. Case Studies from Diabetes Medical Home Pilots: Key Processes, Tools, Metrics and Outcomes. The Healthcare Intelligence Network. May 2008. www.researchandmarkets.com/reports/617098. Accessed March 24, 2009. 8. Vermont Department of Health. Vermont Blueprint for Health. Blueprint Integrated Pilot Programs. January 2009. www.mcph.org/Events/ Past_Events/FOCUS/Presentations/9_VT.pdf. Accessed March 24, 2009. 9. NCQA. Physician practice connections—Patient-Centered Medical Home: standards and guidelines. 2008. www.ncqa.org/tabid/629/Default. aspx#pcmh. Accessed March 24, 2009. 10. Mercer Government Human Services Consulting. Lodh M. ACCESS cost savings—state fiscal year 2004 analysis. March 24, 2005. www.pcpcc. net/files/Mercer%20SFY04.pdf. Accessed March 24, 2009. 11. RAND. Improving chronic illness care evaluation. A RAND health project. Findings. www.rand.org/health/projects/icice/findings.html. Accessed March 24, 2009.

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INDUSTRY TRENDS

Paying for Cancer Care: Economic Models Start to Emerge, Dovetailing Healthcare Reform By Caroline Helwick

hanks to biologics, cancer is becoming not only a more chronic disease but also a resoundingly expensive one. In this economic climate, the financial framework for cancer care is headed for change, but how? At a recent webinar sponsored by Oncology Business Review (www.oncbiz.com), opinion leaders discussed the challenges and the options for meeting them.

“Collisions” Causing Change The collision of the aging population, a faltering economy, and soaring drug costs will trigger dramatic changes to relieve the “tectonic stresses” on the healthcare system, said Thomas Barr, MBS, Chief Operating Officer of Oncology Metrics. In spite of skyrocketing spending, “we as a society are no healthier than societies that spend less,” he pointed out. “This leads us to suspect that there is too little value for the healthcare dollar.” Oncologists are now seeing more patients and prescribing more complex and expensive drugs, while facing increasing demands for transparency—against a backdrop of new workforce and technology challenges, Mr Barr pointed out. But, the increased demand and soaring cost of drugs come at a time when revenue into the Medicare system is declining. Mr Barr likened this to an “explosion” that requires “shock absorbers.” One shock absorber is the development of biomarkers to guide the use of targeted agents toward specificity of treatment. “This moves the field beyond evidence-based medicine to value-based medicine,” he noted. “We can expect that effective value-laden therapies will be demanded and will get rapidly deployed by policy makers and embraced by payers.” “Buy and Bill” Must Go The traditional “buy-and-bill” system is on the way out, but its replacement is still up for grabs, and there are “challenges for each potential framework on technical and ethical grounds,” according to Peter Bach, MD, Associate Attending Physician at Memorial SloanKettering Cancer Center, and former Senior Policy Adviser on cancer policy at the Centers for Medicare & Medicaid Services (CMS).

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Under a “market-based view,” high drug prices are addressed by creating better competition—the old supply and demand idea—which drives prices down. The notion is that through transparency on price and value, the consumer will discover that less expensive goods can deliver what they want, Dr Bach said. “But the question is, ‘whose demand is of interest?’” In healthcare, the purchaser (of drugs) is rarely the consumer (or the patient). Under the “strong government view,” the challenge is identifying the appropriate metric for pricing by regulatory authorities. Value-based pricing becomes relevant, that is, using a fixed dollar amount for each unit of health gained. For example, a potential survival gain of 2 months may be valued at $8000, based on the generally accepted metric of $50,000 per quality-adjusted life-year gained. In the alternative “top-down” approach to this constraint pricing system, physicians would be allotted a certain number of dollars annually for cancer drugs and would determine how to use them based on relative value. “The notion is a fixed basket of dollars to be used the most effective way, based on ranking of value, until it is depleted,” Dr Bach said. The “physician-autonomy model” gives oncologists more incentive to prescribe cost-effective treatments. Currently, the more expensive the drug, the greater the dollar margin (ie, profit) for the physician, because the physician receives a percentage on the drugs that are delivered. The patient is worse off, being responsible for copayments and a proportion of the total cost. To ensure that physicians choose the best care and not the least expensive care, evidence-based medicine would dictate what is acceptable. The goal would be treatment that is above and beyond this threshold. “It is the excess spending that is of concern,” Dr Bach emphasized. If drugs were comparable in efficacy and physicians could profit equally from lower-priced drugs, there would be more incentive to practice valuebased care. Change can also come from regulatory channels, Dr Bach added. Today, individual drugs are considered

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biologically unique, and therefore, for average sales price calculation they are “sole sources” and not subject to commodity pricing. “Many feel that this sole sourceness is a driver of high prices and is not clinically rational,” Dr Bach said. Instead, the use of clinical or therapeutic equivalency, rather than biologic equivalency, would support market-based lowering of prices, and would yield better spreads, for the physician, on the less expensive choices.

Even less realistic is the idea of “consumer-directed healthcare,” in which consumers would receive funds commensurate with the average cost of treating their illness. They would learn the “health returns” of the various treatments and make their own choices; however, in its extreme form, “healthcare providers and pharmaceutical companies would compete with cruise ships and Walmart for the consumers’ dollars,” he noted. Dr Bach concluded that although these models are intriguing, most are “narrowly applicable,” and there is still a lack of data to support most of these ideas.

is all well and good, but we know there may be other priorities during the economic crisis, which will make these goals more challenging,” Dr Bailes said. The new administration is also interested in valuebased purchasing. Legislation will be introduced to “restructure” Medicare, according to Dr Bailes. Specifically, legislators will address the sustainable growth rate formula (which will expire at the end of 2009), evaluate cuts to Medicare Advantage, attempt to strengthen Medicare Part D, propose drug price negotiation between the government and manufacturers, and extend the therapy-cap exceptions. A major healthcare reform bill will probably be introduced by the Health, Education, Labor, and Pensions Committee, currently led by Senator Kennedy. There is bipartisan support for a number of concepts: comparative effectiveness, US Food and Drug Administration oversight, and the advancement of health information technology, probably tied to value-based purchasing. “There is a bipartisan view that a lot of these things must be fixed relatively soon if we are to have any stability in the system,” Dr Bailes added. “Out of the chute there are already issues to be addressed that will make for a robust health agenda.” The pharmaceutical industry will feel the impact, probably in terms of an examination of drug pricing structures (especially the “buy-and-bill” model), a reduction in reimbursements, greater interest in biosimilars (related to cost savings), and continued scrutiny of offlabel uses.

What to Expect from Washington One thing is sure: the new administration is genuinely interested in healthcare reform in 2009. According to Joseph Bailes, MD, past President and Chair of the Government Relations Council of the American Society of Clinical Oncology, the Obama administration’s “cancer plan” includes doubling the funding for cancer research, with a focus on prevention and value, dovetailing with the goal of affordable healthcare coverage. The 21st-Century Cancer ALERT (Access to Lifesaving Early Detection, Research and Treatment) Act is expected to be introduced soon by Senators Edward Kennedy and Kay Bailey Hutchison. This is a national cancer program that facilitates coordination between agencies and includes a centralized institutional review board, emphasis on prevention and early detection of cancer, mandated coverage of routine patient care costs for clinical trial enrollees, patient navigator programs, and a demonstration project on cancer treatment. “This

Reimbursement For Medicare reimbursement, off-label use of drugs must be supported by approved compendia—US Pharmacopeia and American Hospital Formulary Service Drug Information (AHFS DI). CMS recently recognized 3 other sources: NCCN Drugs and Biologics Compendium, Clinical Pharmacology, and Thomson Micromedex’s DrugDex (but not Thomson Micromedex’s DrugPoints). Off-label uses that are not in the compendia are authorized based on peer-reviewed studies in journals specified by CMS, now totaling 26 journals that carriers can consider for uses not listed in the compendia. Finally, a major challenge is to clearly define “healthcare reform,” Dr Bailes concluded. “This may sound sophomoric, but if you listen to policy proposals, you see there are many definitions,” he said. “The public expects healthcare reform to be accomplished rapidly. This probably won’t happen, in light of the government’s other priorities and the political obstacles.” ■

The Obama administration’s “cancer plan” includes doubling the funding for cancer research, with a focus on prevention and value, dovetailing with the goal of affordable healthcare coverage.

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Increased Patient Cost-Sharing, Weak US Economy, and Poor Health Habits: Implications for Employers and Insurers Melinda C. Haren, RN; Kirk McConnell; Arthur F. Shinn, PharmD, FASCP Many healthcare stakeholders, including insurers and employers, agree that growth in healthcare costs is inevitable. But the current trend toward further cost-shifting to employees and other health plan members is unsustainable. In 2008, the Zitter Group conducted a large national study on the relationship between insurers and employers, to understand how these 2 healthcare stakeholders interact in the creation of health benefit design. The survey results were previously summarized and discussed in the February/March 2009 issue of this journal. The present article aims to assess the implications of those results in the context of the growing tendency to increase patient cost-sharing, a weak US economy, and poor health habits. Increasing cost-sharing is a blunt instrument: although it may reduce utilization of frivolous Melinda C. Haren services, it may also result in individuals forgoing medically necessary care. Increases in deductibles will lead to an overall decrease in optimal care-seeking behavior as families juggle healthcare costs with a weak economy and stagnating wages. [AHDB. 2009;2(3):134-141.]

n the spring of 2008, the Zitter Group conducted a large national study of the insurerâ&#x20AC;&#x201C;employer relationship to understand how these 2 stakeholders interact in the creation of healthcare benefit design. The 2-arm study consisted of concurrent web-based quantitative surveys with commercial managed care executives, large employers, and major employer benefits consultants.1 It was designed to provide a richly detailed snapshot of trends in employer-sponsored healthcare coverage. Despite having varying ideas on specific healthcare benefit design strategies, employers and insurers assign similar weights to the importance of cost, quality, and access when making benefit design decisions.1,2 For both groups, the importance assigned to cost is 1.5 times higher in value than healthcare access or healthcare quality.1 Throughout the survey, both groups cited access and quality concerns, but in the current environment of steadily rising cost growth, the importance assigned to cost takes on an even greater significance. The survey results were summarized in the February/March issue of this journal.1 The present arti-

Ms Haren is Director of Business Content, The Zitter Group, Millburn, NJ; Mr McConnell is Senior Analyst, The Zitter Group, Millburn, NJ; Dr Shinn is Founder and President, Managed Pharmacy Consultants, Lake Worth, FL.

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cle is a follow-up to that article, and its goal is to place those survey results in the context of increased patient cost-sharing, a weak US economy, and the poor health habits that are characteristic of many segments of the American population. According to the data from the Benefit Design Index, in the absence of clear alternatives to traditional benefit designs, cost-shifting to patients through increases in copayments, deductibles, and premiums remains the primary cost-containment strategy used by employers and insurers. More than half of employers and three quarters of insurers have increased their premiums and deductibles between June 2007 and June 2008.1 Furthermore, two thirds of insurers and half of employers do not believe that the recent slowing growth rate of premiums is sustainable and, as a result, expect to increase all forms of patient cost-sharing.1 However, employers remain aware of the dangers of passing too many costs to employees; high out-of-pocket costs can translate into reduced adherence to medical treatments and, ultimately, deteriorating employee health and productivity.1,2 In 2003, 30% of employees reported having a chronic health condition.3 That rate was likely to be even higher in 2008.4 The American Hospital Association reported that approximately 69 million workers took 1

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or more sick days in 2003, totaling 407 million lost work days.3 In addition, 50% of employees reported being distracted at work by health concerns, reducing their productivity.3 Although absenteeism and lost productivity cost estimates vary widely, it is likely that they cost US businesses several million dollars a year.5,6 Combine the burdens of high employer healthcare costs, deteriorating employee health, and a weak US economy, and you have the ingredients for a “perfect storm”—one that is likely to lead to an insurance “death spiral,” from which we may not be able to recover.

KEY POINTS

Weakness of Cost-Shifting as a Cost-Control Strategy The cost-shifting strategy has several important weaknesses, some of which remain only partially understood. The seminal cost-sharing research was that of the RAND’s Health Insurance Experiment (HIE),7 which began in 1971 and continued for 15 years. This multimillion-dollar research was funded by the Department of Health and Human Services and was designed to answer 2 key questions7: • How much more medical care will people use if it is provided free of charge? • What are the consequences for their health? Economics teaches us that when the prices of services rise, demand falls. It is therefore not surprising that the RAND’s HIE results indicated that increased patient cost-sharing decreased utilization of health services.8,9 The reasons for this are not fully understood, but it is clear that cost-shifting is a blunt instrument, with the reduction in utilization occurring for necessary as well as unnecessary services. This problem is most pronounced in low-income families (ie, the “working poor”). Household resources are finite, and the financial resources available for health expenditures will be increased or reduced as other outlays—such as energy or food—rise or fall. Therefore, it is expected that increases in the cost of necessary items, such as food or energy, will limit the share of resources available for healthcare expenditures. This was confirmed by the RAND’s HIE, which showed that poorer participants in the study had worse health outcomes.10 Results of another study, by Goldman and colleagues, have shown that increased cost-sharing in one area can lead to reductions in use for other products and services, with potentially negative consequences for health outcomes.11 The more ill patients are, the more therapies or healthcare services they consume. Therefore, the patients most affected by increased costsharing are those whom society can least afford to

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Employes and insurers assign a 1.5 greater value to healthcare costs than to access or quality of care. Cost-shifting to patients through rising copayments, deductibles, and premiums remains the main cost-containment strategy used by employers and insurers. More than 50% of employers and 75% of insurers increased their premiums and deductibles from June 2007 to June 2008. The RAND’s Health Insurance Experiment and other studies indicate that increased patient costsharing decreases utilization of health services. Not surprisingly, poor participants in the RAND study also had worse health outcomes. Despite 2 new benefit design trends—consumerdirected health plans and value-based benefit designs—the marketplace is not moving toward this type of innovation and remains focused on cost. Willingness to pay is used as a measure of the value of a particular healthcare service, but this is misleading, because willingness to pay depends on one’s income or ability to pay, not necessarily on the value of the service. Restructuring the healthcare system must focus on paying for disease prevention rather than for each sickness episode. Prevention is key to moving past the failed policies of shifting costs to patients and perpetuating poor health.

reduce their consumption of medically necessary care. The problem of poor health outcomes becomes only larger as more time passes; as patients forgo needed care, the risk of serious clinical consequences increases. Underinsured and uninsured adults report access and medical bill problems at remarkably similar rates. In 2007, an estimated 25 million American adults (aged 19-64 years) were underinsured, a 60% increase from 2003.12 According to an analysis by the Commonwealth Fund, cost-shifting to the member (or employee) has exacerbated the underinsurance phenomenon. Premiums consume 5% or more of family income for 41% of underinsured Americans; they consume 10% or more of family income for 19%.12 As reported by the Center for Studying Health System Change, underinsured as well as uninsured status undermines optimal care-seeking behavior.4 For the 59 million Americans reporting healthcare access problems, cost was the most frequently cited obstacle to care.

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Figure 1 Changes in Per Capita Health Expenditures and Average Hourly Earnings (Adjusted for Inflation), 1982-2005 8

Net per capita increase in medical expenditures Annual change in average hourly earnings

7 6

Annual change, %

5 4 3 2 1 0 -1 -2 1982

1984

1986

1988

1990

1992

1994 Year

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In 2007, 69% of people who went without or delayed needed care cited worries about cost, a 3.8% increase from 2003.4 But results from the Benefit Design Index indicate that the rate of underinsured Americans is likely to continue to climb, reflecting likely increases in premiums, deductibles, and coinsurance.1,2 It must be understood that rising healthcare costsharing comes at the expense of wages. Under our current healthcare system, employers pay premiums to health insurance companies, who in turn pay for care. This has the effect of insulating employers as well as employees from the direct cost of healthcare. As a result, employers adjust to rising healthcare premiums by either reducing employee wages or by shifting higher premium costs to employees. In the current economic climate, employee wages have remained relatively flat, further moving healthcare out of reach for many Americans (Figure 1).13 A key concept in the debate is “willingness to pay” (WTP), which indicates how much a consumer is able or willing to pay for a product. Although it is used as a

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measure of value of a particular healthcare service, WTP is a misleading measure of value, because it depends on the consumer’s income. For products and services with high intrinsic value, a lack of sufficient income leads to a misleadingly small WTP.14 Nevertheless, the literature on WTP does not seem widely believed by either insurers or employers.14,15 According to the Benefit Design Index, both groups estimate that cost-sharing burdens for prescription drugs must be significant—in excess of $35—before utilization patterns change, or demand for necessary care begins to fall.2 This $35 estimate significantly overstates a patient’s WTP, as reported in the health economic literature,15 with negative implications for plan design and downstream behavior. Insurers and employers seem to be ignoring the research on WTP as a way to justify continuing to shift costs to patients. As more costs are shifted, patients become less able to afford needed medical care. This becomes especially troubling when considering sick patients. It is well established in the literature that for certain chronic conditions, forgoing early treatment

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Figure 2 Predicted Change in Annual Days Supplied when Copayments Doubled by Drug Class, Population Full Sample

Chronically Ill

Therapeutic class

Antiasthmatics

Chronic condition Allergic rhinitis Arthritis Diabetes Asthma

Antiulcerants

Gastric acid disorder

Antihistamines NSAIDs Antidiabetics

Antihyperlipidemics

Dyslipidemia

Antihypertensives

Hypertension Depression

Antidepressants 0

5 10 15 20 25 30 35 40 45

Reduction in days supplied when copayments double, %

Within drug class

Outside drug class

5 10 15 20 25 30 35

Reduction in days supplied when copayments double, %

5 10 15 20 25 30 35

Reduction in days supplied when copayments double, %

will lead to progressively poorer outcomes. Diabetes, elevated cholesterol levels, and hypertension are generally conditions treated with a combination of pharmacologic and lifestyle modifications, such as diet and exercise—relatively low-cost treatment methods. In many cases, these lower-cost treatments have been shown to reduce or delay later medical costs.16-18 However, in the face of increased cost-sharing, patients forgo necessary treatment.19-21 Furthermore, some early experiments in innovative plan designs reduce cost-sharing for treatments deemed valuable, such as medications for diabetes.22 These experiments seem to indicate that these more sophisticated benefit designs can actually improve compliance and downthe-line healthcare outcomes.22 Goldman and colleagues found that doubling the copayment of tier-2 drugs from $6.31 for generics and $12.62 for preferred brands to $12.62 and $25.70, respectively, reduced utilization of drugs for chronic diseases that stall disease progression—such as antihyperlipidemics, antihypertensives, antidiabetics—as well as drugs that treat symptoms or intermittent conditions, such as nonsteroidal antiinflammatory drugs (NSAIDs) and antihistamines. The largest decreases occurred in NSAIDs (45%) and antihistamines (44%), but all drug classes were affected (Figure 2).11 The costsharing levels studied for generics and preferred brands were well below the $35 limit widely believed necessary by insurers and employers,1 as mentioned earlier. Although the relationship between increased patient cost-sharing and underutilization of necessary

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medical care has been well documented, there is a lack of longitudinal data that measure the long-term cost implications that may be related to forgoing needed care because of increased cost-sharing. It is reasonable to postulate that if patients are forgoing needed medical care, and if treating chronic conditions early on is cheaper than treating them later—then over the longterm healthcare costs for these individuals will increase as their disease worsens, and forgoing care can no longer be an option. To our knowledge, no studies have followed patients over the long-term and documented the long-term impact on healthcare costs. In addition, little work has been done to study the link between increasing medical spending and the impact on health outcomes. If increased cost-sharing negatively affects health outcomes, we would expect the opposite to be true: decreased patient cost-sharing should improve health outcomes. Martin and collegues developed a theoretical model to study this question. The model was based on data from the British healthcare system. By adjusting for the relative healthcare needs of the studied population, Martin and colleagues showed (in a theoretical model) that increased expenditure by the government (and therefore decreased levels of patient cost-sharing) would be associated with fewer deaths.23 How does this fit with the traditional view of health insurance economics?

Moral Hazard and Health Insurance Traditional health insurance economics rests on specific assumptions about the impact of insured status on

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individual behavior. Since the late 1960s, economists have suggested that because health insurance lowers the price of healthcare to consumers but leaves its costs unchanged, the additional care consumed by insured persons is inefficient.11 The term moral hazard is used to describe situations in which an individual does not bear the full consequences of his or her actions and, therefore, has a tendency to act less carefully than he or she otherwise would.14 Economists assume that reduced prices will generate excess or inefficient utilization by increasing demand for products and services with limited benefits, citing cosmetic procedures and prescription sunglasses as examples. In other words, insured people will automatically consume more healthcare services, even if those services are not necessary. Costsharing represents an attempt to offset the theorized effects of moral hazard.14

Although higher cost-sharing burdens may reduce healthcare expenditures, there is no way to ensure that only inappropriate utilization will be so affected. In fact, Martin and colleagues demonstrated that the opposite is true. However, accumulating clinical evidence24-28 presents an increasingly stark contrast to economic theory. Nyman suggests that health insurance actually represents an income transfer from the healthy to the sick, facilitating the consumption of products and services that would otherwise be unaffordable.14 As a consequence, the moral hazard associated with insurance— the changes in behavior that result from being insured—consists primarily of patients seeking standard treatments for common diseases. This reinforces the fact that although higher cost-sharing burdens may reduce healthcare expenditures, there is no way to ensure that only inappropriate utilization will be so affected. In fact, Martin and colleagues demonstrated that the opposite is true.23 Increased health spending by the British government that limits the individual’s financial burden would reduce systemic healthcare costs because of the better health of the average citizen.23

Innovations in Benefit Design Current efforts at healthcare reform have resulted in 2 new benefit design trends—consumer-directed health plans (CDHPs) and value-based benefit designs (VBBDs). CDHPs are benefit designs that consist of

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tax-advantaged health savings accounts, coupled with high-deductible health plans.29 Theoretically, CDHPs should make patients become savvy buyers of healthcare services by shopping for the best “deal” of any needed healthcare expenses. However, there is considerable debate regarding whether CDHPs may result in increased costs related to increasingly poor health outcomes as patients forgo needed medical care.29 Experts express concern that many patients do not have the understanding necessary to make discretionary decisions regarding healthcare decisions. Furthermore, for a CDHP design to be successful, patients must have access to cost and quality data, which are generally not available for most healthcare providers.30 According to the Benefit Design Index, there is a significant difference in the rate of adopting CDHPs between insurers and employers. Whereas the majority of insurers (61.2%) have adopted such plans, only a minority of employers (24.1%) have done so.2 Employers continue to express concern regarding down-theline healthcare costs and CDHPs.2 However, the current economic climate may force more employers into a situation in which they must choose between adopting a CDHP or offering no health benefits. CDHPs are also a more sophisticated form of increasing patient cost-sharing. Without the tools, education, and information that will turn the average healthcare consumer into a sophisticated buyer of health services, it is likely that many patients will default to making these decisions based on cost rather than true valuation of care. Because CDHPs are a relatively new benefit phenomenon, there is a dearth of published data on the long-term health outcomes of patients enrolled in CDHPs. Mark Snyder, Director of Health, Wellness and Benefits, Owens Corning Corporation, presented longitudinal healthcare outcomes from his company’s CDHP program, at the February 2009 Employer Health and Human Capital Congress.31 Mr Snyder reported that Owens Corning has had 71% of its employees enrolled in a CDHP benefit-design program since 2004. The company has found that the CDHP population performs similarly to its preferred provider organization (PPO) population in metrics such as office visits, emergency department visits, cervical and colon cancer screenings, mammograms, and cholesterol levels. However, Mr Snyder acknowledged that neither the PPO nor the CDHP groups performed well on any health measure. The company did report a significant dip in preventive care in 2004-2005. To compensate for that, Owens Corning added a rider to cover all preventive care at 100%. Mr Snyder also reported that

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although the company realized significant savings in 2004, 2005, and 2006, it is now tracking with industry averages for costs.31 As often happens with health interventions, Owens Corning may now be seeing a regression to the mean32 in its benefit costs and, therefore, has not realized any true success with its CDHP program. Furthermore, Mr Snyder acknowledged that the results presented were not statistically robust, because Owens Corning does not have access to all data streams or the resources for a full analysis. This presentation highlights a warning signal for CDHPs—without access to all data and the resources to analyze that data, employers cannot be certain whether employees’ health may be declining under CDHP benefit designs. By the time Owens Corning and other employers with this type of benefit design have the answer to that question, it may be too late, because employees’ health may have deteriorated too far to implement lower-cost preventive measures. VBBD is a second recent innovation in benefit design. VBBDs are benefit designs that lower patient cost-sharing for healthcare services that are deemed valuable in preventing long-term health complications such as annual physicals or medications for diabetic patients.33 VBBDs are an attempt to correct the problems of moral hazard. Using cost-sharing becomes a tool to promote informed healthcare decisions by patients. Patients are encouraged to use services that may prevent high-cost conditions, such as cancer or diabetes, as well as remain adherent to treatments for chronic conditions.34 Early data on VBBDs have shown that if implemented properly, they can be successful35; however, they require an upfront investment that many employers may not be able to afford in the current economy. Often, it takes 2 to 3 years to see a return on that investment,36 too long for employers struggling to stay afloat in a poor economy. Insurers remain reluctant to invest in VBBDs when their customers are not buying them. As a result, the marketplace is not moving in the direction of innovation but rather is staying focused on cost.

Impact on the Insurance Risk Pool Another consideration in this debate is the impact cost-sharing may have on the insurance risk pool. Health insurance relies on the assumption that the majority of those insured would have limited utilization of medical services. The premiums paid by healthy members offset the medical costs of the sick members, making health insurance affordable for all insured.37 As healthcare costs continue to skyrocket, we must

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consider the viability of the third-party payer system in the United States. Increasing premiums have a direct link to the number of uninsured and underinsured, with the largest impact on low-income families.37-39 As more and more Americans are forced to choose between health insurance and other necessities (eg, food and housing), the insured risk pool will decrease. This may lead to a situation in which we do not have enough healthy insured people in the risk pool to offset the costs of the sick members, which will result in further increases in premiums and will force more individuals to forgo health insurance.40

Early data on VBBDs have shown that if implemented properly, they can be successful; however, they require an upfront investment that many employers may not be able to afford in the current economy.

Cost-Shifting: A Double-Edged Instrument Payers and employers agree that growth in healthcare costs is inevitable. At the same time, further costshifting to individuals is unsustainable. Increasing costsharing is a blunt instrument: although it may reduce utilization of care that is not medically necessary, it may also result in individuals forgoing necessary care that may prevent healthcare complications down the line. Increases in deductibles will lead to an overall decrease in optimal care-seeking behavior, as families juggle healthcare costs with rising prices and stagnating wages. Continued increases in premiums will have detrimental effects on the health insurance risk pool: younger, healthier individuals will be priced out of the market, leaving sicker, older individuals in the pool, thereby leading to an insurance “death spiral” that may be hard to recover from. Most notably, costs continue to grow dramatically, and American health outcomes do not compare favorably with those in other developed countries,41 suggesting the broad failure of the strategy. Further analysis of the RAND’s HIE data showed that, “If, as is widely believed, cost increases are driven by treatment expense and new technologies, cost-sharing can contribute to reducing costs at each point in time but may have little effect on the overall rate of cost growth.”7 Despite accumulating evidence that cost-shifting leads to undesirable health and cost consequences and,

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more important, has largely failed to slow healthcare cost growth, employers and insurers continue to rely on this method as their primary cost-containment strategy. Our current healthcare system has not met its fundamental goal of good health for most Americans. Rates of diabetes, hypertension, stroke, heart disease, pulmonary conditions, and mental illness are all on the rise42—pointing to a broken system.

The system needs to be realigned so that all stakeholders are invested in improving health rather than in treating the sick. Conclusion As we move forward, a new solution must be implemented, one in which we move away from antiquated thinking on how health insurance should be implemented. A restructuring of our system, in which healthcare providers are paid for preventing poor health rather than being paid for each episode of care, is fundamental to moving past the failing cycle of cost-shifting to patients, increasing healthcare costs, and continuing the poor health of Americans. The system needs to be realigned so that all stakeholders are invested in improving health rather than in treating the sick. VBBDs are a step in the right direction, but without support from health insurers and the government, this innovation is likely to remain out of reach of most employers. ■ References 1. Haren M, McConnell K. Patient cost-sharing on the rise: results from the Benefit Design Index. Am Health Drug Benefits. 2009;2:70-77. 2. The Zitter Group. Benefit Design Index. Spring 2008. Data on file at the Zitter Group. 3. American Hospital Association. Healthy people are the foundation for a productive America. TrendWatch. Spring 2007. www.aha.org/aha/trend watch/2007/twoct2007health.pdf. Accessed January 31, 2009. 4. Cunningham PJ, Felland LE. Falling behind: Americans’ access to medical care deteriorates, 2003-2007. Center for Studying Health System Change. Tracking Report. No. 19. www.hschange.com/CONTENT/993. Accessed January 21, 2009. 5. Lang SS. Economists coin new word, ‘presenteeism,’ to describe worker slowdowns that account for up to 60 percent of employer health costs. Cornell News. April 20, 2004. www.news.cornell.edu/releases/April04/ cost.illness.jobs.ssl.html. Accessed January 21, 2009. 6. Cost of lost productivity. Apples for Health. March 7, 2003. www.apples for health.com/HealthyBusiness/coslosprod4.html. Accessed January 21, 2009. 7. RAND Health. RAND’s Health Insurance Experiment (HIE). www.rand.org/health/projects/hie/. Accessed September 4, 2008. 8. Chernew ME, Newhouse JP. What does the RAND Health Insurance Experiment tell us about the impact of patient cost-sharing on health outcomes? Am J Manag Care. 2008;14:412-414. 9. Fairman KA. The future of prescription drug cost-sharing: real progress

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or dropped opportunity? J Manag Care Pharm. 2008;14:70-82. 10. RAND Health. The Health Insurance Experiment: a classic RAND study speaks to the current healthcare reform debate. 2006. www.rand.org/ pubs/research_briefs/RB9174/index1.html. Accessed September 4, 2008. 11. Goldman DP, Joyce GF, Escarce JJ, et al. Pharmacy benefits and the use of drugs by the chronically ill. JAMA. 2004;291:2344-2350. 12. Schoen C, Collins SR, Kriss JL, Doty MM. How many are underinsured? Trends among U.S. adults, 2003 and 2007. Health Aff (Millwood). 2008;27:w298-w309. 13. Emanuel EJ, Fuchs VR. Who really pays for health care? The myth of “shared responsibility.” JAMA. 2008;299:1057-1059. 14. Nyman J. The Theory of Demand for Health Insurance. Palo Alto, CA: Stanford Economics and Finance; 2002. 15. Palmer AJ, Annemans L, Roze S, et al. Cost-effectiveness of early irbesartan treatment versus control (standard antihypertensive medications excluding ACE inhibitors, other angiotensin-2 receptor antagonists, and dihydropyridine calcium channel blockers) or late irbesartan treatment in patients with type 2 diabetes, hypertension, and renal disease. Diabetes Care. 2004;27:1897-1903. 16. Eddy DM, Schlessinger L, Kahn R. Clinical outcomes and cost-effectiveness of strategies for managing people at high risk for diabetes. Ann Intern Med. 2005;143:251-264. 17. Mattola MF. The role of exercise in the prevention and treatment of gestational diabetes mellitus. Curr Diab Rep. 2008;8:299-304. 18. Yang LY, Gutin B, Barbeau P, et al. Cost-effectiveness of a school-based obesity prevention program. J Sch Health. 2008;78:619-624. 19. Stagnitti MN. Medical Expenditure Panel Survey Statistical Brief #5: Medical care and treatment for chronic conditions, 2000. www.meps.ahrq. gov/mepsweb/data_files/publications/st5/stat05.pdf. Accessed September 22, 2008. 20. Cohen SB, Yu W. Medical Expenditure Panel Survey Statistical Brief #191: The persistence in the level of health expenditures over time: estimates for the U.S. population, 2004-2005. November 30, 2007. www. meps.ahrq.gov/mepsweb/data_files/publications/st191/stat191.pdf. Accessed September 22, 2008. 21. CDC data show that millions of uninsured adults forgo needed treatment for chronic health conditions. www.prnewswire.com/cgi-bin/stories. pl?ACCT=109&STORY=/www/story/05-02-2005/0003536443& EDATE=. Accessed September 22, 2008. 22. Mahoney JJ. Value-based benefit design: using a predictive modeling approach to improve compliance. J Managed Care Pharm. 2008;14(6 suppl B):3-8. 23. Martin S, Rice N, Smith PC. Does health care spending improve health outcomes? Evidence from English programme budgeting data. J Health Econ. 2008;27:826-842. 24. Tamblyn R, Laprise R, Hanley JA, et al. Adverse events associated with prescription drug cost-sharing among poor and elderly persons. JAMA. 2001;285:421-449. 25. Kennedy J, Erb C. Prescription noncompliance due to cost among adults with disabilities in the United States. Am J Public Health. 2002;92: 1120-1124. 26. Heisler M, Langa KM, Eby EL, et al. The health effects of restricting prescription medication use because of cost. Med Care. 2004;42:626-634. 27. Huskamp HA, Deverka PA, Epstein AM, et al. The effect of incentivebased formularies on prescription-drug utilization and spending. N Engl J Med. 2003;349:2224-2232. 28. Wong MD, Andersen R, Sherbourne CD, et al. Effects of cost-sharing on care seeking and health status: results from the Medical Outcomes Study. Am J Public Health. 2001;91:1889-1894. 29. Berenson RA, Cassel CK. Consumer-driven healthcare may not be what patients need—caveat emptor. JAMA. 2009;301:321-323. 30. Jost TS. Health Care at Risk: A Critique of the Consumer-Driven Movement. Durham, NC: Duke University Press; 2007. 31. Snyder M. Consumer directed healthcare [online presentation]. Employer Health and Human Capital Congress. February 2009. www.world congress.com/presentations/v2/index.cfm?p=presentations.cfm&confCode =HH09035&letter=s. Accessed February 10, 2009. 32. Research Methods Knowledge Base. Regression to the mean.

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October 2006. www.socialresearchmethods.net/kb/regrmean.php. Accessed February 10, 2009. 33. Atlantic Information Services. Plans experiment with ‘value-based’ benefit designs, but cite operational challenges. www.aishealth.com/ ManagedCare/DM/MCW_Value-Based_Benefit_Designs.html. Accessed February 10, 2009. 34. Midwest Business Group on Health. MBGH Annual Employer Benefit Survey reveals growing shift to value-based benefit design [press release]. May 2, 2008. http://benefitslink.com/pr/detail.php?id=41884. Accessed February 10, 2009. 35. Malley JJ. An ounce of prevention: the potential for value-based pharmacy benefits in cost containment. Benefits Q. 2008;24:25-28. 36. Goff VV. Pharmacy benefits: new concepts in plan design. NHPF Issue Brief. 2002;(772):1-16. 37. Pauly M, Herring B. Risk pooling and regulation in today’s individual health insurance market. December 15, 2006. http://aspe.hhs.gov/ daltcp/reports/2006/riskpool.htm. Accessed September 26, 2008. 38. National Bureau of Economic Research. Health insurance subsidies,

coverage, and costs. www.nber.org/aginghealth/spring03/w9567.html. Accessed September 26, 2008. 39. Kasier Commission on Medicaid and the Uninsured. The Uninsured: A Primer: Key Facts About Americans Without Health Insurance. January 2006. www.kff.org/uninsured/upload/7451.pdf. Accessed September 26, 2008. 40. Starr Sered S, Fernandopulle R. Uninsured in America: Life and Death in the Land of Opportunity. April 2005. Berkeley, CA: University of California Press; 2005. 41. Davis K, Schoen C, Schoenbaum SC, et al. Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Healthcare. May 2007. The Commonwealth Fund. www.commonwealth fund.org/Content/Publications/Fund-Reports/2007/May/Mirror--Mirroron-the-Wall--An-International-Update-on-the-Comparative-Perform ance-of-American-Healt.aspx. Accessed March 11, 2009. 42. Arvantes J. Chronic diseases spark dramatic increase in treatment cost while lowering productivity, study says. AAFP News. June 4, 2008. www. aafp.org/online/en/home/publications/news/news-now/health-of-the-public/20080604milken-report.html. Accessed February 10, 2009.

STAKEHOLDER PERSPECTIVE The Cost-Sharing Conundrum: Greater Stakeholder Collaboration Needed EMPLOYERS: This follow-up article provides additional information about the negative effects of increasing the cost-share to employees. The stated impact of increased cost-share is that many will forego necessary treatments or medications, deciding that the extra cost cannot be managed without an increased salary offset. The cost of insurance is rising primarily because of the less-than-optimal use of current medical and pharmaceutical technologies and the rise in new technologies that are substantially more expensive than older ones. This put employers in a very uncomfortable predicament, because the costs increases they are facing have had little effect on driving better health outcomes or on decreasing the overall cost of employees’ long-term health expenditures. The immediate thought would be to find a way to hold cost-share at or below the current level to obtain optimal outcomes, but as the authors also state, this is not the case. Even when employers have been able to absorb increases in health costs, allowing employees to continue to receive proper care, outcomes have not improved beyond what has been, for the most part, measured historically. Not surprisingly, some of the blame lies in the lack of concern exhibited by patients for following recommendations such as lifestyle changes in diet

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and exercise that, when adhered to with other treatment regimens, result in improved outcomes. In addition, patients do not have the knowledge to make the best decisions about their care or know their potentially least expensive options. Therefore, assuming that consumer-directed health plans will deliver value is not logical. Until all constituents, including patients, have a vested interest in the value chain, employers will need to mitigate the effects of cost increases they face by passing some of them on to employees. Just the increase in costs that will be driven by the current pharmaceutical pipeline will be significantly more than employers could pay for without relief either from government or from patients paying for more to access those therapies. Employers are pursuing many methods to drive optimal health outcomes for employees, while also trying to keep employee cost-share at affordable levels. It is apparent that it will take a greater level of involvement by all stakeholders to find a solution that will result in positive, long-term health outcomes that are driven by good, affordable options. Paul Anthony Polansky, BSPharm, MBA Executive Vice President and Chief Pharmacy Officer Sanovia Corporation, Philadelphia, PA

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MIPPA: First Broad Changes to Medicare Part D Plan Operations Jean D. LeMasurier; Babette Edgar, PharmD, MBA

Last year, Congress passed the first major legislative changes to Medicare Part D—the Medicare Improvements for Patients and Providers Act (MIPPA). This new legislation has immediate ramifications for the operation of Part D plans, such as the marketing of plans, how to enroll Medicare beneficiaries, and new drug coverage and benefit parameters. Changes to drug coverage in Part D include (1) coverage of all available drugs in 6 protected classes, (2) coverage of all cancer drug compendia that are covered under the Part B program, (3) and the coverage of barbiturates and benzo-

diazepine. MIPPA also provides a new definition of medically accepted indications, imposes prompt payments by Part D plans to pharmacies, and requires at least weekly updates of drug prices by plans to their network pharmacies. But basic structural issues that have raised many concerns with Part D, such as the coverage gap (doughnut hole), have not been addressed by MIPPA. Ms LeMasurier and Dr Edgar predict that some of these issues will be addressed by the new administration, which has assigned great urgency to healthcare reform.

ProvenCare: Geisinger’s Model for Care Transformation through Innovative Clinical Initiatives and Value Creation Interview with Ronald A. Paulus, MD, MBA

Geisinger’s system of care can be seen as a microcosm of the national delivery of healthcare, with implications for decision makers in other health plans. Dr Paulus describes Geisinger’s approach to patient care that comprises quality and value initiatives involving 3 programs—Proven Health Navigation (medical home); the ProvenCare model; and transitions of care. The goal is to optimize disease management by using a rational reimbursement paradigm for appropriate interventions, providing innovative incentives, and engaging patients

in their own care as part of any intervention. Unlike Geisinger, other stakeholders—including payers, providers, patients, and employers—have no intrinsic reasons to be concerned with quality and value initiatives, says Dr Paulus. An electronic infrastructure that could be modified as the management paradigms evolve is a necessary tool, he emphasizes, to ensure the healthcare delivery system’s ability to adapt to new clinical realities quickly, as well as the continuation of delivering best value for all stakeholders.

Increased Patient Cost-Sharing, Weak US Economy, and Poor Health Habits Melinda C. Haren, RN; Kirk McConnell; Arthur F. Shinn, PharmD, FASCP

This article continues the discussion began in the previous issue of this journal about the increasing cost-shifting to patients, using data from the Zitter Group’s Benefit Design Index survey. Many employers and insurers have increased their premiums and deductibles in the past year and are expecting to increase all forms of patient costsharing in the coming years. The authors suggest that continuing to raise premiums will have detrimental effects on the health insurance risk pool: younger, healthier individuals will be priced out of the market, leaving sicker, older individuals in the pool, thereby leading to an insurance “death spiral” that may be hard to recover from. Results from large studies indicate that increased patient cost-sharing decreases utilization of health services, resulting in patients forgoing necessary treatments in the face of increased costs. Early experi-

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ments in innovative plan designs reveal that some benefit designs can improve patient compliance—key to improving health outcomes. Data from value-based benefit designs have shown that if implemented properly, they can be successful, but they require an up-front investment that many employers can ill afford these days. Despite the current economic pressure on employers and insurers, the authors advise that restructuring our healthcare system so that providers are paid for preventing disease rather than for each episode of care is fundamental to reforming the system past the failing cycle of cost-shifting to patients, increasing overall healthcare costs, and further deterioration of Americans’ health. The system needs to be realigned, they say, so that all stakeholders are invested in improving health rather than in treating the sick.

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Table 3 !DVERSE 2EACTIONS FOR 3TUDY !LL 'RADESa:

MedDRA (v. 7.1) 1 Year Herceptin Adverse Event Preferred Term (n= 1678) Cardiac Hypertension 64 (4%) Dizziness 60 (4%) Ejection Fraction Decreased 58 (3.5%) Palpitations 48 (3%) Cardiac Arrhythmiasb 40 (3%) Cardiac Failure Congestive 30 (2%) Cardiac Failure 9 (0.5%) Cardiac Disorder 5 (0.3%) Ventricular Dysfunction 4 (0.2%) Respiratory Thoracic Mediastinal Disorders Nasopharyngitis 135 (8%) Cough 81 (5%) Influenza 70 (4%) Dyspnea 57 (3%) URI 46 (3%) Rhinitis 36 (2%) Pharyngolaryngeal Pain 32 (2%) Sinusitis 26 (2%) Epistaxis 25 (2%) Pulmonary Hypertension 4 (0.2%) Interstitial Pneumonitis 4 (0.2%) Gastrointestinal Disorders Diarrhea 123 (7%) Nausea 108 (6%) Vomiting 58 (3.5%) Constipation 33 (2%) Dyspepsia 30 (2%) Upper Abdominal Pain 29 (2%) Musculoskeletal & Connective Tissue Disorders Arthralgia 137 (8%) Back Pain 91 (5%) Myalgia 63 (4%) Bone Pain 49 (3%) Muscle Spasm 46 (3%) Nervous System Disorders Headache 162 (10%) Paraesthesia 29 (2%) Skin & Subcutaneous Tissue Disorders Rash 70 (4%) Nail Disorders 43 (2%) Pruritus 40 (2%) General Disorders Pyrexia 100 (6%) Edema Peripheral 79 (5%) Chills 85 (5%) Asthenia 75 (4.5%) Influenza-like Illness 40 (2%) Sudden Death 1 (0.06%) Infections Nasopharyngitis 135 (8%) UTI 39 (3%) Immune System Disorders Hypersensitivity 10 (0.6%) Autoimmune Thyroiditis 4 (0.3%)

Observation (n= 1708) 35 (2%) 29 (2%) 11 (0.6%) 12 (0.7%) 17 (1%) 5 (0.3%) 4 (0.2%) 0 (0%) 0 (0%) 43 (3%) 34 (2%) 9 (0.5%) 26 (2%) 20 (1%) 6 (0.4%) 8 (0.5%) 5 (0.3%) 1 (0.06%) 0 (0%) 0 (0%) 16 (1%) 19 (1%) 10 (0.6%) 17 (1%) 9 (0.5%) 15 (1%) 98 (6%) 58 (3%) 17 (1%) 26 (2%) 3 (0.2%) 49 (3%) 11 (0.6%) 10 (0.6%) 0 (0%) 10 (0.6%) 6 (0.4%) 37 (2%) 0 (0%) 30 (2%) 3 (0.2%) 0 (0%) 43 (3%) 13 (0.8%) 1 (0.06%) 0 (0%)

The incidence of Grade 3/4 adverse reactions was <1% in both arms for each listed term. bHigher level grouping term.

The data from Studies 1 and 2 were obtained from 3206 patients enrolled, of which 1635 patients received Herceptin; the median treatment duration was 50 weeks. 4HE MEDIAN AGE WAS YEARS RANGE OF PATIENTS WERE 7HITE AND WERE "LACK WERE (ISPANIC AND WERE !SIAN )N 3TUDY ONLY 'RADE n ADVERSE EVENTS TREATMENT RELATED 'RADE EVENTS AND Grade 2â&#x20AC;&#x201C;5 dyspnea were collected during and for up to MONTHS FOLLOWING PROTOCOL SPECIFIED TREATMENT 4HE FOLLOWING NON CARDIAC ADVERSE REACTIONS OF 'RADE occurred at an incidence of at least 2% greater among patients randomized to Herceptin plus chemotherapy as compared to chemotherapy alone: arthralgia (31% vs. 28%), fatigue (28% vs. 22%), infection (22% vs. 14%), hot flashes (17% vs. 15%), anemia (13% vs. 7%), dyspnea (12% vs. 4%), rash/desquamation (11% vs. 7%), neutropenia (7% vs. 5%), headache (6% vs. 4%), and insomnia (3.7% vs. 1.5%). The majority of these events were Grade 2 in severity. In Study 2, data collection was limited to THE FOLLOWING INVESTIGATOR ATTRIBUTED TREATMENT RELATED ADVERSE REACTIONS .#) #4# 'RADE AND HEMATOLOGIC

TOXICITIES 'RADE n NON HEMATOLOGIC TOXICITIES

selected Grade 2â&#x20AC;&#x201C;5 toxicities associated with taxanes (myalgia, arthralgias, nail changes, motor neuropathy, sensory neuropathy) and Grade 1â&#x20AC;&#x201C;5 cardiac toxicities occurring during chemotherapy and/or Herceptin TREATMENT 4HE FOLLOWING NON CARDIAC ADVERSE REACTIONS of Grade 2â&#x20AC;&#x201C;5 occurred at an incidence of at least 2% greater among patients randomized to Herceptin plus chemotherapy as compared to chemotherapy alone: arthralgia (11% vs. 8.4%), myalgia (10% vs. 8%), nail changes (9% vs. 7%), and dyspnea (2.5% vs. 0.1%). The majority of these events were Grade 2 in severity. Safety data from Study 4 reflect exposure to Herceptin as part of an adjuvant treatment regimen from 2124 patients RECEIVING AT LEAST ONE DOSE OF STUDY TREATMENT ;!# 4( n = 1068; TCH: n = 1056]. The overall median treatment DURATION WAS WEEKS IN BOTH THE !# 4( AND 4#( arms. The median number of infusions was 26 in the !# 4( ARM AND IN THE 4#( ARM INCLUDING WEEKLY infusions during the chemotherapy phase and every THREE WEEK DOSING IN THE MONOTHERAPY PERIOD !MONG these patients, the median age was 49 years (range 22 to 74 years). In Study 4, the toxicity profile was similar to that reported in Studies 1, 2, and 3 with the exception of a low incidence of CHF in the TCH arm. Metastatic Breast Cancer Studies The data below reflect exposure TO (ERCEPTIN IN ONE RANDOMIZED OPEN LABEL STUDY 3TUDY 5, of chemotherapy with (n=235) or without (n=234) trastuzumab in patients with metastatic breast cancer, AND ONE SINGLE ARM STUDY 3TUDY N IN PATIENTS with metastatic breast cancer. Data in Table 5 are based ON 3TUDIES AND !MONG THE PATIENTS TREATED IN Study 5, the median age was 52 years (range: 25â&#x20AC;&#x201C;77 YEARS %IGHTY NINE PERCENT WERE 7HITE "LACK !SIAN AND OTHER RACIAL ETHNIC GROUPS !LL PATIENTS received 4 mg/kg initial dose of Herceptin followed by 2 mg/kg weekly. The percentages of patients who received Herceptin treatment for r6 months and r MONTHS WERE AND RESPECTIVELY !MONG the 352 patients treated in single agent studies (213 patients from Study 6), the median age was 50 years (range 28â&#x20AC;&#x201C;86 years), 100% had breast cancer, WERE 7HITE WERE "LACK WERE !SIAN AND 8% in other racial/ethnic groups. Most of the patients received 4 mg/kg initial dose of Herceptin followed by 2 mg/kg weekly. The percentages of patients who received Herceptin treatment for r6 months and r12 months were 31% and 16%, respectively. Table 4 0ER 0ATIENT )NCIDENCE OF !DVERSE 2EACTIONS Occurring in r5% of Patients in Uncontrolled Studies or AT )NCREASED )NCIDENCE IN THE (ERCEPTIN !RM 3TUDIES and 6) (Percent of Patients)

Herceptin Single + Paclitaxel Herceptin ACb Agenta Paclitaxel Alone + ACb Alone n = 352 n = 91 n = 95 n = 143 n = 135 Body as a Whole Pain 47 61 62 57 42 Asthenia 42 62 57 54 55 Fever 36 49 23 56 34 Chills 32 41 4 35 11 Headache 26 36 28 44 31 Abdominal pain 22 34 22 23 18 Back pain 22 34 30 27 15 Infection 20 47 27 47 31 Flu syndrome 10 12 5 12 6 Accidental injury 6 13 3 9 4 Allergic reaction 3 8 2 4 2 Cardiovascular Tachycardia 5 12 4 10 5 Congestive heart failure 7 11 1 28 7 Digestive Nausea 33 51 9 76 77 Diarrhea 25 45 29 45 26 Vomiting 23 37 28 53 49 Nausea and 8 14 11 18 9 vomiting Anorexia 14 24 16 31 26 Heme & Lymphatic Anemia 4 14 9 36 26 Leukopenia 3 24 17 52 34

Metabolic Peripheral edema Edema Musculoskeletal Bone pain Arthralgia Nervous Insomnia Dizziness Paresthesia Depression Peripheral neuritis Neuropathy Respiratory Cough increased Dyspnea Rhinitis Pharyngitis Sinusitis Skin Rash Herpes simplex Acne Urogenital Urinary tract infection

10 8

22 10

20 8

20 11

17 5

7 6

24 37

18 21

7 8

7 9

14 13 9 6

25 22 48 12

13 24 39 13

29 24 17 20

15 18 11 12

2 1

23 13

16 5

2 4

26 22 14 12 9

41 27 22 22 21

22 26 5 14 7

43 42 22 30 13

29 25 16 18 6

18 2 2

38 12 11

18 3 3

27 7 3

17 9 <1

Data for Herceptin single agent were from 4 studies, including 213 patients from Study 6. b!NTHRACYCLINE DOXORUBICIN OR epirubicin) and cyclophosphamide.

The following subsections provide additional detail regarding adverse reactions observed in clinical trials of adjuvant breast, metastatic breast cancer, OR POST MARKETING EXPERIENCE Cardiomyopathy Serial measurement of cardiac function (LVEF) was obtained in clinical trials in the adjuvant treatment of breast cancer. )N 3TUDY THE MEDIAN DURATION OF FOLLOW UP WAS months (12.4 months in the observation arm; 12.6 months IN THE YEAR (ERCEPTIN ARM AND IN 3TUDIES AND MONTHS IN THE !# 4 ARM MONTHS IN THE !# 4( ARM )N Studies 1 and 2, 6% of patients were not permitted to initiate (ERCEPTIN FOLLOWING COMPLETION OF !# CHEMOTHERAPY DUE to cardiac dysfunction (LVEF < 50% or r15 point decline IN ,6%& FROM BASELINE TO END OF !# &OLLOWING INITIATION OF (ERCEPTIN THERAPY THE INCIDENCE OF NEW ONSET DOSE limiting myocardial dysfunction was higher among patients receiving Herceptin and paclitaxel as compared to those receiving paclitaxel alone in Studies 1 and 2, and in patients receiving Herceptin monotherapy compared to observation in Study 3 (see Table 5, Figures 1 and 2). Table 5a 0ER PATIENT )NCIDENCE OF .EW /NSET -YOCARDIAL Dysfunction (by LVEF) Studies 1, 2, 3 and 4

LVEF <50% and Absolute Absolute LVEF Decrease from Baseline Decrease LVEF r 10% r 16% <20% and <50% decrease decrease r 10% r 20% Studies 1 & 2b ACJTH 22.8% 18.3% 11.7% 33.4% 9.2% (n=1606) (366) (294) (188) (536) (148) ACJT 9.1% 5.4% 2.2% 18.3% 2.4% (n=1488) (136) (81) (33) (272) (36) Study 3 Herceptin 8.6% 7.0% 3.8% 22.4% 3.5% (n=1678) (144) (118) (64) (376) (59) Observation 2.7% 2.0% 1.2% 11.9% 1.2% (n=1708) (46) (35) (20) (204) (21) Study 4c TCH 8.5% 5.9% 3.3% 34.5% 6.3% (n=1056) (90) (62) (35) (364) (67) ACJTH 17% 13.3% 9.8% 44.3% 13.2% (n=1068) (182) (142) (105) (473) (141) ACJT 9.5% 6.6% 3.3% 34% 5.5% (n=1050) (100) (69) (35) (357) (58) a For Studies 1, 2 and 3, events are counted from the beginning of Herceptin treatment. For Study 4, events are counted from the date of randomization. bStudies 1 and 2 regimens: doxorubicin and cyclophosphamide followed by paclitaxel !#J4 OR PACLITAXEL PLUS (ERCEPTIN !#JTH). cStudy 4 regimens: doxorubicin and cyclophosphamide followed by DOCETAXEL !#J4 OR DOCETAXEL PLUS (ERCEPTIN !#JTH); docetaxel and carboplatin plus Herceptin (TCH).

Figure 1 Studies 1 and 2: Cumulative Incidence of Time to First LVEF Decline of r 0ERCENTAGE 0OINTS FROM "ASELINE AND TO "ELOW WITH $EATH AS A #OMPETING 2ISK %VENT

4IME IS INITIATION OF PACLITAXEL OR (ERCEPTIN PACLITAXEL therapy. Figure 2 Study 3: Cumulative Incidence of Time to First LVEF Decline of r 0ERCENTAGE 0OINTS FROM "ASELINE AND TO "ELOW 50% with Death as a Competing Risk Event

Time 0 is the date of randomization. Figure 3 Study 4: Cumulative Incidence of Time to First LVEF Decline of r 0ERCENTAGE 0OINTS FROM "ASELINE AND TO "ELOW WITH $EATH AS A #OMPETING 2ISK %VENT

Time 0 is the date of randomization. The incidence of treatment emergent congestive heart failure among patients in the metastatic breast cancer trials was classified for severity using the New York Heart !SSOCIATION CLASSIFICATION SYSTEM )n)6 WHERE )6 IS THE most severe level of cardiac failure) (see Table 2). In the metastatic breast cancer trials the probability of cardiac dysfunction was highest in patients who received Herceptin concurrently with anthracyclines. Infusion Reactions During the first infusion with Herceptin, the symptoms most commonly reported were chills and fever, occurring in approximately 40% of patients in clinical trials. Symptoms were treated with acetaminophen, diphenhydramine, and meperidine (with or without reduction in the rate of Herceptin infusion); permanent discontinuation of Herceptin for infusional toxicity was required in <1% of patients. Other signs and/or symptoms may include nausea, vomiting, pain (in some cases at tumor sites), rigors, headache, dizziness, dyspnea, hypotension, elevated blood pressure, rash, and asthenia. Infusional toxicity occurred in 21% and 35% of patients, and was severe in 1.4% and 9% of patients, on second or subsequent Herceptin infusions administered as monotherapy or in combination with chemotherapy, RESPECTIVELY )N THE POST MARKETING SETTING SEVERE INFUSION reactions, including hypersensitivity, anaphylaxis, and angioedema have been reported. Anemia In randomized controlled clinical trials, the overall incidence of anemia VS ;3TUDY = OF SELECTED .#) #4# 'RADE n anemia (12.5% vs. 6.6% [Study 1]), and of anemia requiring transfusions (0.1% vs. 0 patients [Study 2]) were increased in patients receiving Herceptin and chemotherapy compared with those receiving chemotherapy alone. Following the administration of Herceptin as a single AGENT 3TUDY THE INCIDENCE OF .#) #4# 'RADE ANEMIA was <1%. Neutropenia In randomized controlled clinical trials in the adjuvant setting, the incidence of selected .#) #4# 'RADE n NEUTROPENIA VS ;3TUDY = and of selected Grade 2â&#x20AC;&#x201C;5 neutropenia (7.1% vs. 4.5 % [Study 1]) were increased in patients receiving Herceptin and chemotherapy compared with those receiving chemotherapy alone. In a randomized, controlled trial in patients with metastatic breast cancer, the incidences of .#) #4# 'RADE NEUTROPENIA VS AND OF febrile neutropenia (23% vs. 17%) were also increased in

patients randomized to Herceptin in combination with myelosuppressive chemotherapy as compared to chemotherapy alone. Infection The overall incidences of INFECTION VS ;3TUDY = OF SELECTED .#) #4# Grade 2â&#x20AC;&#x201C;5 infection/febrile neutropenia (22% vs. 14% [Study 1]) and of selected Grade 3â&#x20AC;&#x201C;5 infection/febrile neutropenia (3.3% vs. 1.4%) [Study 2]), were higher in patients receiving Herceptin and chemotherapy compared with those receiving chemotherapy alone. The most common site of infections in the adjuvant setting involved the upper respiratory tract, skin, and urinary tract. In Study 4, the overall incidence of infection was higher with THE ADDITION OF (ERCEPTIN TO !# 4 BUT NOT TO 4#( ; !# 4( 4#( !# 4 = 4HE INCIDENCES OF .#) #4# GRADE INFECTION WERE SIMILAR ; !# 4( 4#( !# 4 = ACROSS THE THREE ARMS )N A RANDOMIZED

controlled trial in treatment of metastatic breast cancer, the reported incidence of febrile neutropenia was higher (23% vs. 17%) in patients receiving Herceptin in combination with myelosuppressive chemotherapy as compared to chemotherapy alone. Pulmonary Toxicity !DJUVANT "REAST #ANCER !MONG WOMEN RECEIVING ADJUVANT THERAPY FOR BREAST CANCER THE INCIDENCE OF SELECTED .#) CTC Grade 2â&#x20AC;&#x201C;5 pulmonary toxicity (14% vs. 5% [Study 1]) AND OF SELECTED .#) #4# 'RADE n PULMONARY TOXICITY and spontaneous reported Grade 2 dyspnea (3.4% vs. 1% [Study 2]) was higher in patients receiving Herceptin and chemotherapy compared with chemotherapy alone. The most common pulmonary toxicity was dyspnea (NCI CTC 'RADE n VS ;3TUDY = .#) #4# 'RADE n vs. 0.1% [Study 2]). Pneumonitis/pulmonary infiltrates occurred in 0.7% of patients receiving Herceptin compared with 0.3% of those receiving chemotherapy alone. Fatal respiratory failure occurred in 3 patients receiving (ERCEPTIN ONE AS A COMPONENT OF MULTI ORGAN SYSTEM failure, as compared to 1 patient receiving chemotherapy alone. In Study 3, there were 4 cases of interstitial PNEUMONITIS IN (ERCEPTIN TREATED PATIENTS COMPARED TO none in the control arm. -ETASTATIC "REAST #ANCER !MONG women receiving Herceptin for treatment of metastatic breast cancer, the incidence of pulmonary toxicity was also increased. Pulmonary adverse events have been REPORTED IN THE POST MARKETING EXPERIENCE AS PART OF THE symptom complex of infusion reactions. Pulmonary events include bronchospasm, hypoxia, dyspnea, pulmonary INFILTRATES PLEURAL EFFUSIONS NON CARDIOGENIC PULMONARY edema, and acute respiratory distress syndrome. For a detailed description, see Warnings and Precautions. Thrombosis/Embolism In 4 randomized, controlled clinical trials, the incidence of thrombotic adverse events was higher in patients receiving Herceptin and chemotherapy compared to chemotherapy alone in three studies (3.0% vs. 1.3% [Study 1], 2.5% and 3.7% vs. 2.2% [Study 4] and 2.1% vs. 0% [Study 5]). Diarrhea !MONG WOMEN RECEIVING ADJUVANT THERAPY FOR BREAST CANCER THE INCIDENCE OF .#) CTC Grade 2â&#x20AC;&#x201C;5 diarrhea (6.2% vs. 4.8% [Study 1]) and of .#) #4# 'RADE n DIARRHEA VS ;3TUDY = AND of Grade 1â&#x20AC;&#x201C;4 diarrhea (7% vs. 1% [Study 3]) were higher in patients receiving Herceptin as compared to controls. In Study 4, the incidence of Grade 3â&#x20AC;&#x201C;4 diarrhea was higher ; !# 4( 4#( VS !# 4= AND OF 'RADE n WAS HIGHER ; !# 4( 4#( VS !# 4= AMONG women receiving Herceptin. Of patients receiving Herceptin as a single agent for the treatment of metastatic BREAST CANCER EXPERIENCED DIARRHEA !N INCREASED incidence of diarrhea was observed in patients receiving Herceptin in combination with chemotherapy for treatment of metastatic breast cancer. Glomerulopathy )N THE POST marketing setting, rare cases of nephrotic syndrome with pathologic evidence of glomerulopathy have been reported. The time to onset ranged from 4 months to approximately 18 months from initiation of Herceptin therapy. Pathologic findings included membranous glomerulonephritis, focal glomerulosclerosis, and fibrillary glomerulonephritis. Complications included volume overload and congestive heart failure. Immunogenicity !S with all therapeutic proteins, there is a potential for IMMUNOGENICITY !MONG WOMEN WITH METASTATIC BREAST CANCER HUMAN ANTI HUMAN ANTIBODY (!(! TO (ERCEPTIN WAS DETECTED IN ONE PATIENT USING AN ENZYME LINKED IMMUNOSORBENT ASSAY %,)3! 4HIS PATIENT DID NOT experience an allergic reaction. Samples for assessment OF (!(! WERE NOT COLLECTED IN STUDIES OF ADJUVANT BREAST cancer. The incidence of antibody formation is highly dependent on the sensitivity and the specificity of the ASSAY !DDITIONALLY THE OBSERVED INCIDENCE OF ANTIBODY (including neutralizing antibody) positivity in an assay may be influenced by several factors including assay methodology, sample handling, timing of sample collection, concomitant medications, and underlying disease. For these reasons, comparison of the incidence of antibodies to Herceptin with the incidence of antibodies to other products may be misleading. USE IN SPECIFIC POPULATIONS Pregnancy Teratogenic Effects: Category D [see Warnings and Precautions] Herceptin can cause FETAL HARM WHEN ADMINISTERED TO A PREGNANT WOMAN 0OST

marketing case reports suggest that Herceptin use during pregnancy increases the risk for oligohydramnios during the second and third trimester. If Herceptin is used during pregnancy or if a woman becomes pregnant while taking Herceptin, she should be apprised of the potential hazard TO A FETUS )N THE POST MARKETING SETTING OLIGOHYDRAMNIOS was reported in women who received Herceptin during pregnancy, either alone or in combination with chemotherapy. In half of these women, amniotic fluid index increased after Herceptin was stopped. In one case, Herceptin was resumed after the amniotic fluid index IMPROVED AND OLIGOHYDRAMNIOS RECURRED 7OMEN USING Herceptin during pregnancy should be monitored for oligohydramnios. If oligohydramnios occurs, fetal testing should be done that is appropriate for gestational age and CONSISTENT WITH COMMUNITY STANDARDS OF CARE !DDITIONAL intravenous (IV) hydration has been helpful when oligohydramnios has occurred following administration of other chemotherapy agents; however, the effects of additional IV hydration with Herceptin treatment are not known. Reproduction studies in cynomolgus monkeys at doses up to 25 times the recommended weekly human dose of 2 mg/kg trastuzumab have revealed no evidence of harm to the fetus. However, HER2 protein expression is high in many embryonic tissues including cardiac and neural tissues; in mutant mice lacking HER2, embryos died in early gestation. Placental transfer of trastuzumab DURING THE EARLY $AYS OF GESTATION AND LATE $AYS OF GESTATION FETAL DEVELOPMENT PERIOD WAS observed in monkeys. [See Nonclinical Toxicology] "ECAUSE ANIMAL REPRODUCTION STUDIES ARE NOT ALWAYS predictive of human response, Herceptin should be used during pregnancy only if the potential benefit to the mother justifies the potential risk to the fetus. Nursing Mothers It is not known whether Herceptin is excreted in human milk, but human IgG is excreted in human milk. Published data suggest that breast milk antibodies do not enter the neonatal and infant circulation in substantial amounts. Trastuzumab was present in the breast milk of lactating cynomolgus monkeys given 12.5 times the recommended weekly human dose of 2 mg/kg of Herceptin. Infant monkeys with detectable serum levels of trastuzumab did not have any adverse effects on growth or development from birth to 3 months of age; however, trastuzumab levels in animal breast milk may not ACCURATELY REFLECT HUMAN BREAST MILK LEVELS "ECAUSE many drugs are secreted in human milk and because of the potential for serious adverse reactions in nursing infants from Herceptin, a decision should be made whether to discontinue nursing, or discontinue drug, TAKING INTO ACCOUNT THE ELIMINATION HALF LIFE OF TRASTUZUMAB and the importance of the drug to the mother. Pediatric Use The safety and effectiveness of Herceptin in pediatric patients has not been established. Geriatric Use Herceptin has been administered to 386 patients who were 65 years of age or over (253 in the adjuvant treatment and 133 in metastatic breast cancer treatment settings). The risk of cardiac dysfunction was increased in geriatric patients as compared to younger patients in both those receiving treatment for metastatic disease in Studies 5 and 6, or adjuvant therapy in Studies 1 and 2. Limitations in data collection and differences in study design of the 4 studies of Herceptin in adjuvant treatment of breast cancer preclude a determination of whether the toxicity profile of Herceptin in older patients is different from younger patients. The reported clinical experience is not adequate to determine whether the efficacy improvements (ORR, TTP, OS, DFS) of Herceptin treatment in older patients is different from that observed in patients <65 years of age for metastatic disease and adjuvant treatment. OVERDOSAGE There is no experience with overdosage in human clinical trials. Single doses higher than 8 mg/kg have not been tested. PATIENT COUNSELING INFORMATION s !DVISE PATIENTS TO CONTACT A HEALTH CARE professional immediately for any of the following: new onset or worsening shortness of breath, cough, swelling of the ankles/legs, swelling of the face, palpitations, weight gain of more than 5 pounds in 24 hours, dizziness or loss of consciousness [see Boxed Warning: Cardiomyopathy= s !DVISE WOMEN WITH REPRODUCTIVE potential to use effective contraceptive methods during treatment and for a minimum of six months following Herceptin [see Pregnancy= s %NCOURAGE PREGNANT WOMEN who are using Herceptin to enroll in the Cancer and Childbirth Registry [see Pregnancy].

HERCEPTINÂŽ [trastuzumab] Manufactured by: 4839802 Genentech, Inc. )NITIAL 53 !PPROVAL 3EPT $.! 7AY 2EVISION $ATE -AY 3OUTH 3AN &RANCISCO #! ,+ Ă&#x161; 'ENENTECH 53!

HERCEPTINÂŽ (trastuzumab) Brief Summary For full Prescribing Information, see package insert.

WARNING: CARDIOMYOPATHY, INFUSION REACTIONS, and PULMONARY TOXICITY Cardiomyopathy Herceptin can result in sub-clinical and clinical cardiac failure manifesting as CHF and decreased LVEF. The incidence and severity of left ventricular cardiac dysfunction was highest in patients who received Herceptin concurrently with anthracyclinecontaining chemotherapy regimens. Evaluate left ventricular function in all patients prior to and during treatment with Herceptin. Discontinue Herceptin treatment in patients receiving adjuvant therapy and strongly consider discontinuation of Herceptin treatment in patients with metastatic breast cancer for clinically significant decrease in left ventricular function. [see Warnings and Precautions and Dosage and Administration] Infusion Reactions; Pulmonary Toxicity Herceptin administration can result in serious infusion reactions and pulmonary toxicity. Fatal infusion reactions have been reported. In most cases, symptoms occurred during or within 24 hours of administration of Herceptin. Herceptin infusion should be interrupted for patients experiencing dyspnea or clinically significant hypotension. Patients should be monitored until signs and symptoms completely resolve. Discontinue Herceptin for infusion reactions manifesting as anaphylaxis, angioedema, interstitial pneumonitis, or acute respiratory distress syndrome. [see Warnings and Precautions] INDICATIONS AND USAGE Adjuvant Breast Cancer Herceptin is indicated for adjuvant treatment of HER2 overexpressing node positive or node negative (ER/ PR negative or with one high risk feature [see Clinical Studies= BREAST CANCER s !S PART OF A TREATMENT REGIMEN consisting of doxorubicin, Cyclophosphamide, and either PACLITAXEL OR DOCETAXEL s 7ITH DOCETAXEL AND CARBOPLATIN s !S A SINGLE AGENT FOLLOWING MULTI MODALITY ANTHRACYCLINE based therapy. Metastatic Breast Cancer Herceptin IS INDICATED s )N COMBINATION WITH PACLITAXEL FOR FIRST LINE TREATMENT OF (%2 OVEREXPRESSING METASTATIC BREAST CANCER s !S A SINGLE AGENT FOR TREATMENT OF (%2 OVEREXPRESSING BREAST CANCER IN PATIENTS WHO have received one or more chemotherapy regimens for metastatic disease. CONTRAINDICATIONS None. WARNINGS AND PRECAUTIONS Cardiomyopathy Herceptin can cause left ventricular cardiac dysfunction, arrhythmias, hypertension, disabling cardiac failure, cardiomyopathy, and cardiac death [see Boxed Warning: Cardiomyopathy]. Herceptin can also cause asymptomatic decline in left ventricular ejection fraction (LVEF). There is a 4â&#x20AC;&#x201C;6 fold increase in the incidence of symptomatic myocardial dysfunction among patients receiving Herceptin as a single agent or in combination therapy compared with those not receiving Herceptin. The highest absolute incidence occurs when Herceptin is ADMINISTERED WITH AN ANTHRACYCLINE 7ITHHOLD (ERCEPTIN for r ABSOLUTE DECREASE IN ,6%& FROM PRE TREATMENT values or an LVEF value below institutional limits of normal and r ABSOLUTE DECREASE IN ,6%& FROM PRE treatment values. [see Dosage and Administration] The safety of continuation or resumption of Herceptin in PATIENTS WITH (ERCEPTIN INDUCED LEFT VENTRICULAR CARDIAC dysfunction has not been studied. Cardiac Monitoring Conduct thorough cardiac assessment, including history, physical examination, and determination of LVEF by ECHOCARDIOGRAM OR -5'! SCAN 4HE FOLLOWING SCHEDULE IS RECOMMENDED s "ASELINE ,6%& MEASUREMENT IMMEDIATELY PRIOR TO INITIATION OF (ERCEPTIN s ,6%& MEASUREMENTS EVERY 3 months during and upon completion of Herceptin s 2EPEAT ,6%& MEASUREMENT AT WEEK INTERVALS IF Herceptin is withheld for significant left ventricular cardiac dysfunction [see Dosage and Administration] s ,6%& MEASUREMENTS EVERY MONTHS FOR AT LEAST YEARS following completion of Herceptin as a component of adjuvant therapy. In Study 1, 16% (136/844) of patients discontinued Herceptin due to clinical evidence of myocardial dysfunction or significant decline in LVEF. In Study 3, the number of patients who discontinued Herceptin due to cardiac toxicity was 2.6% (44/1678). In Study 4, a total of 2.9% (31/1056) patients in the TCH arm (1.5% during the chemotherapy phase and 1.4% during the monotherapy phase) and 5.7% (61/1068) patients in THE !# 4( ARM DURING THE CHEMOTHERAPY PHASE and 4.2% during the monotherapy phase) discontinued (ERCEPTIN DUE TO CARDIAC TOXICITY !MONG PATIENTS

receiving adjuvant chemotherapy (Studies 1 and 2) who developed congestive heart failure, one patient died of cardiomyopathy and all other patients were receiving CARDIAC MEDICATION AT LAST FOLLOW UP !PPROXIMATELY HALF of the surviving patients had recovery to a normal LVEF (defined as r50%) on continuing medical management at THE TIME OF LAST FOLLOW UP )NCIDENCE OF CONGESTIVE HEART failure is presented in Table 1. The safety of continuation OR RESUMPTION OF (ERCEPTIN IN PATIENTS WITH (ERCEPTIN induced left ventricular cardiac dysfunction has not been studied. Table 1 )NCIDENCE OF #ONGESTIVE (EART &AILURE IN !DJUVANT "REAST #ANCER 3TUDIES

Study Regimen 1 & 2a ACbJPaclitaxel+ Herceptin 3 ChemoJHerceptin monotherapy 4 ACbJDocetaxel+ Herceptin 4 Docetaxel+Carbo+ Herceptin a b

Incidence of CHF Herceptin Control 2% (32/1677)

0.4% (7/1600)

2% (30/1678)

0.3% (5/1708)

2% (20/1068)

0.3% (3/1050)

0.4% (4/1056)

0.3% (3/1050))

Includes 1 patient with fatal cardiomyopathy. !NTHRACYCLINE DOXORUBICIN AND CYCLOPHOSPHAMIDE

Table 2 Incidence of Cardiac Dysfunctiona in Metastatic "REAST #ANCER 3TUDIES

Study 5 (AC)b 5 (paclitaxel) 6

Event Cardiac Dysfunction Cardiac Dysfunction Cardiac Dysfunctionc

Incidence NYHA I-IV NYHA III-IV Herceptin Control Herceptin Control 28%

19%

11%

N/A

Congestive heart failure or significant asymptomatic decrease in LVEF. b!NTHRACYCLINE DOXORUBICIN OR EPIRUBICIN and cyclophosphamide. cIncludes 1 patient with fatal cardiomyopathy.

Infusion Reactions Infusion reactions consist of a symptom complex characterized by fever and chills, and on occasion included nausea, vomiting, pain (in some cases at tumor sites), headache, dizziness, dyspnea, hypotension, rash, and asthenia. [see Adverse Reactions]. In postmarketing reports, serious and fatal infusion reactions have been reported. Severe reactions which include bronchospasm, anaphylaxis, angioedema, hypoxia, and severe hypotension, were usually reported during or immediately following the initial infusion. However, the onset and clinical course were variable including progressive worsening, initial improvement followed by clinical deterioration, or delayed POST INFUSION EVENTS WITH RAPID CLINICAL DETERIORATION For fatal events, death occurred within hours to days following a serious infusion reaction. Interrupt Herceptin infusion in all patients experiencing dyspnea, clinically significant hypotension, and intervention of medical therapy administered, which may include: epinephrine, corticosteroids, diphenhydramine, bronchodilators, and oxygen. Patients should be evaluated and carefully monitored until complete resolution of signs and symptoms. Permanent discontinuation should be strongly considered in all patients with severe infusion reactions. There are no data regarding the most appropriate method of identification of patients who may safely be retreated with Herceptin after experiencing a severe infusion reaction. Prior to resumption of Herceptin infusion, the majority of patients who experienced a severe infusion REACTION WERE PRE MEDICATED WITH ANTIHISTAMINES AND OR CORTICOSTEROIDS 7HILE SOME PATIENTS TOLERATED (ERCEPTIN infusions, others had recurrent severe infusion reactions DESPITE PRE MEDICATIONS Exacerbation of ChemotherapyInduced Neutropenia In randomized, controlled clinical TRIALS IN WOMEN WITH METASTATIC BREAST CANCER THE PER PATIENT INCIDENCES OF .#) #4# 'RADE NEUTROPENIA AND of febrile neutropenia were higher in patients receiving Herceptin in combination with myelosuppressive chemotherapy as compared to those who received chemotherapy alone. The incidence of septic death was not significantly increased. [see Adverse Reactions]. Pulmonary Toxicity Herceptin use can result in serious and fatal pulmonary toxicity. Pulmonary toxicity includes dyspnea, interstitial pneumonitis, pulmonary infiltrates, PLEURAL EFFUSIONS NON CARDIOGENIC PULMONARY EDEMA

pulmonary insufficiency and hypoxia, acute respiratory

distress syndrome, and pulmonary fibrosis. Such events can occur as sequelae of infusion reactions [see Warnings and Precautions]. Patients with symptomatic intrinsic lung disease or with extensive tumor involvement of the lungs, resulting in dyspnea at rest, appear to have more severe toxicity. HER2 Testing Detection of HER2 protein overexpression is necessary for selection of patients appropriate for Herceptin therapy because these are the only patients studied and for whom benefit has been SHOWN !SSESSMENT FOR (%2 OVEREXPRESSION AND OF (%2 gene amplification should be performed by laboratories with demonstrated proficiency in the specific technology being utilized. Improper assay performance, including use of suboptimally fixed tissue, failure to utilize specified reagents, deviation from specific assay instructions, and failure to include appropriate controls for assay VALIDATION CAN LEAD TO UNRELIABLE RESULTS 3EVERAL &$! approved commercial assays are available to aid in the selection of patients for Herceptin therapy. These include HercepTestTM and PathwayÂŽ (%2 NEU )(# ASSAYS AND PathVysionÂŽ and HER2 FISH pharmDxTM (FISH assays). Users should refer to the package inserts of specific assay kits for information on the validation and performance of each assay. Limitations in assay precision (particularly for the IHC method) and in the direct linkage between assay result and overexpression of the Herceptin target (for the FISH method) make it inadvisable to rely on a single METHOD TO RULE OUT POTENTIAL (ERCEPTIN BENEFIT ! NEGATIVE FISH result does not rule out HER2 overexpression and potential benefit from Herceptin. Treatment outcomes for metastatic breast cancer (Study 5) as a function of IHC and FISH testing are provided in Table 9. Treatment outcomes for adjuvant breast cancer (Studies 2 and 3) as a function of IHC and FISH testing are provided in Table 7. HER2 Protein Overexpression Detection Methods HER2 protein overexpression can be established by measuring HER2 protein using an IHC method. HercepTestÂŽ, one test approved for this use, was assessed for concordance WITH THE #LINICAL 4RIAL !SSAY #4! USING TUMOR SPECIMENS collected and stored independently from those obtained in Herceptin clinical studies in women with metastatic breast cancer. Data are provided in the package insert for HercepTestÂŽ. HER2 Gene Amplification Detection Method The presence of HER2 protein overexpression and gene amplification are highly correlated, therefore the use of FISH to detect gene amplification may be employed for selection of patients appropriate for Herceptin therapy. PathVysionÂŽ, one test approved for this use, was evaluated in an exploratory, retrospective assessment OF AVAILABLE #4! OR TUMOR SPECIMENS COLLECTED AS part of patient screening for clinical studies in metastatic breast cancer (Studies 5 and 6). Data are provided in the package insert for PathVysionÂŽ. Embryo-Fetal Toxicity (Pregnancy Category D) Herceptin can cause fetal harm WHEN ADMINISTERED TO A PREGNANT WOMAN 0OST MARKETING case reports suggest that Herceptin use during pregnancy increases the risk of oligohydramnios during the second and third trimesters. If Herceptin is used during pregnancy or if a woman becomes pregnant while taking Herceptin, she should be apprised of the potential hazard to a fetus. [see Use in Specific Populations]. ADVERSE REACTIONS The following adverse reactions are discussed in greater DETAIL IN OTHER SECTIONS OF THE LABEL s #ARDIOMYOPATHY [see Warnings and Precautions= s )NFUSION REACTIONS [see Warnings and Precautions= s %XACERBATION OF CHEMOTHERAPY INDUCED NEUTROPENIA ;see Warnings and Precautions= s 0ULMONARY TOXICITY ;see Warnings and Precautions] The most common adverse reactions in patients receiving Herceptin are fever, nausea, vomiting, infusion reactions, diarrhea, infections, increased cough, headache, fatigue, dyspnea, rash, neutropenia, anemia, AND MYALGIA !DVERSE REACTIONS REQUIRING INTERRUPTION or discontinuation of Herceptin treatment include CHF, significant decline in left ventricular cardiac function, severe infusion reactions, and pulmonary toxicity [see Dosage and Administration]. Clinical Trials Experience "ECAUSE CLINICAL TRIALS ARE CONDUCTED UNDER WIDELY varying conditions, adverse reaction rates observed in the clinical trials of a drug cannot be directly compared to rates in the clinical trials of another drug and may not reflect the rates observed in practice. Adjuvant Breast Cancer Studies The data below reflect exposure to (ERCEPTIN ACROSS THREE RANDOMIZED OPEN LABEL STUDIES

Studies 1, 2, and 3, with (n= 3355) or without (n= 3308) trastuzumab in the adjuvant treatment of breast cancer. The data summarized in Table 3 below, from Study 3, reflect exposure to Herceptin in 1678 patients; the median treatment duration was 51 weeks and median number OF INFUSIONS WAS !MONG THE PATIENTS ENROLLED in Study 3, the median age was 49 years (range: 21 to 80 years), 83% of patients were Caucasian, and 13% WERE !SIAN

The first approved non-anthracycline Herceptin-containing regimen

In the adjuvant treatment of HER2+ breast cancer,

TCH provided disease-free survival benefit with reduced cardiac risk 1

Taxotere®* (docetaxel) and carboplatin plus Herceptin TCH provided benefit consistent with AC→TH1

•In BCIRG 006, patients were randomized (1:1:1) to receive one of the following regimens: – TCH – AC→TH: doxorubicin and cyclophosphamide followed by Taxotere plus Herceptin – AC→T (control): doxorubicin and cyclophosphamide followed by Taxotere

•The TCH regimen provided a 33% reduction in the relative risk of disease recurrence, compared

with AC→T (hazard ratio=0.67, 95% confidence interval: 0.54-0.85; P=0.0006) – At 3 years, there was an absolute reduction in the risk of disease recurrence of 4.0% in the TCH arm (95% confidence interval: 0.6%-7.4%) compared with AC→T 2

•The AC→TH regimen provided a 40% reduction in the relative risk of disease recurrence, compared

with AC→T (hazard ratio=0.60, 95% confidence interval: 0.48-0.76; P<0.0001) – At 3 years, there was an absolute reduction in the risk of disease recurrence of 5.7% in the AC→TH arm (95% confidence interval: 2.4%-9.0%) compared with AC→T2

Non-anthracycline regimen reduced cardiac risk1

•In BCIRG 006, a lower rate of congestive heart failure (CHF) was seen with the TCH regimen vs the AC→TH regimen – 0.4% with TCH

– 2% with AC→TH

– 0.3% with AC→T

The TCH regimen enabled a higher completion rate with shorter duration of IV therapy

•The TCH regimen enables immediate initiation of Herceptin with chemotherapy •The TCH regimen reduces the overall duration of infused therapy to 12 months, compared with 1

15 months with the AC→TH regimen1

•On average, for every 100 patients receiving each regimen in BCIRG 006, 13 more were able to complete therapy with TCH than AC→TH2 – 86.3% of patients in the TCH arm were able to complete planned adjuvant therapy vs 73.5% of patients in the AC→TH arm

Adjuvant indications Herceptin is indicated for adjuvant treatment of HER2-overexpressing node-positive or node-negative (ER/PR-negative or with one high-risk feature†) breast cancer: As part of a treatment regimen containing doxorubicin, cyclophosphamide, and either paclitaxel or docetaxel With docetaxel and carboplatin As a single agent following multi-modality anthracycline-based therapy

• • •

*Taxotere is a registered trademark of sanofi-aventis U.S. LLC. †High-risk features for patients with ER/PR+ breast cancer include: tumor size >2 cm, age <35 years, and histologic and/or nuclear grade 2/3.

Boxed WARNINGS and Additional Important Safety Information Herceptin administration can result in sub-clinical and clinical cardiac failure manifesting as congestive heart failure (CHF) and decreased left ventricular ejection fraction (LVEF). The incidence and severity of left ventricular cardiac dysfunction was highest in patients who received Herceptin concurrently with anthracycline-containing chemotherapy regimens. Discontinue Herceptin treatment in patients receiving adjuvant therapy and strongly consider discontinuation of Herceptin in patients with metastatic breast cancer who develop a clinically significant decrease in left ventricular function. Patients should undergo monitoring for decreased left ventricular function before Herceptin treatment, and frequently during and after Herceptin treatment. More frequent monitoring should be employed if Herceptin is withheld in patients who develop significant left ventricular cardiac dysfunction. In one adjuvant clinical trial, cardiac ischemia or infarction occurred in the Herceptin-containing regimens. Serious infusion reactions and pulmonary toxicity have occurred; fatal infusion reactions have been reported. In most cases, symptoms occurred during or within 24 hours of administration of Herceptin. Herceptin infusion should be interrupted for patients experiencing dyspnea or clinically significant hypotension. Patients should be monitored until signs and symptoms completely resolve. Discontinue Herceptin for infusion reactions manifesting as anaphylaxis, angioedema, interstitial pneumonitis, or acute respiratory distress syndrome. Exacerbation of chemotherapy-induced neutropenia has also occurred. Herceptin can cause oligohydramnios and fetal harm when administered to a pregnant woman. The most common adverse reactions associated with Herceptin use were fever, nausea, vomiting, infusion reactions, diarrhea, infections, increased cough, headache, fatigue, dyspnea, rash, neutropenia, anemia, and myalgia. Please see brief summary of full Prescribing Information, including Boxed WARNINGS and additional important safety information on the following pages. References: 1. Herceptin Prescribing Information. Genentech, Inc. May 2008. 2. Data on file. Genentech, Inc.

So. San Francisco, CA

9488100

11/08