June 2008, Vol 1, No 5 by Dalia Buffery

THE PEER-REVIEWED FORUM FOR EVIDENCE IN BENEFIT DESIGN ™ JUNE 2008

VOLUME 1, NUMBER 5

EDITORIAL

Results-driven Healthcare: Addressing the Staggering Cost of Poor Performance Kip Piper, MA, CHE BUSINESS

Comparing Pharmacy Benefit Managers: Moving Well Beyond the Simple Spreadsheet Analysis David Calabrese, RPh, MHP ™

CLINICAL

Capnography Monitoring Enhances Safety of Postoperative Patient-Controlled Analgesia Thomas McCarter MD, FACP; Zakir Shaik MD, MHA; Keith Scarfo DO, MS; Laura J. Thompson RT(R), MBA REGULATORY

The NCCN Compendium for Cancer Management Interview with Bill McGivney, PhD DEPARTMENTS

Generic Drug Trends AMCP Highlights

JUNE 2008

VOLUME 1, NUMBER 5

™

EDITORIAL

Results-driven Healthcare: Addressing the Staggering Cost of Poor Performance Kip Piper, MA, CHE

Associate Publisher Maurice Nogueira maurice@engagehc.com 732-992-1895

Peer Review Panel

BUSINESS

Publisher Nicholas Englezos nick@engagehc.com 732-992-1884

Comparing Pharmacy Benefit Managers: Moving Well Beyond the Simple Spreadsheet Analysis David Calabrese, RPh, MHP Stakeholder Perspectives by James T. Kenney, Jr, RPh, MBA, and Thomas McCarter, MD, FACP

Editorial Director Dalia Buffery dalia@AHDBonline.com 732-992-1889 Contributing Editor Sandy Paton Senior Production Manager Alaina Pede

CLINICAL

Director of Human Resources Blanche Marchitto

President Brian F. Tyburski brian@engagehc.com

Capnography Monitoring Enhances Safety of Postoperative Patient-Controlled Analgesia Thomas McCarter, MD, FACP; Zakir Shaik, MD, MHA; Keith Scarfo, DO, MS; Laura J. Thompson, RT(R), MBA Stakeholder Perspective by Michael F. Murphy, MD, PhD

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

REGULATORY

Mission Statement

The NCCN Compendium for Cancer Management

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 drug benefit designs. Benefit designs are greatly affected by numerous clinical, business, and policy conditions.

Interview with Bill McGivney, PhD Stakeholder Perspective by Thomas Kaye, RPh, MBA

DEPARTMENTS

GENERIC DRUG TRENDS Where Generics and Biologics Meet

This publication provides benefit design decision makers the integrated industry information they require to devise formularies and drug benefit designs that stand up to today’s special healthcare delivery and business needs.

Melisa J. Heinrichs, PharmD, BSPS; Gary M. Owens, MD

Information for Authors Continued on page 4

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

AMERICAN HEALTH & DRUG BENEFITS

June 2008

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disease management programs implemented in 2006 programs with NCQA Design Certification

less day of work lost

Healthcare may be a numbers game, but we’re only interested in one number. At Lilly, helping you manage patients requires a shared commitment to delivering initiatives, ideas, and positive outcomes. So we keep our focus on those who count on our medicines. From diabetes and mental health education, to patient adherence efforts, to simply offering the best answers we can,

Lilly is working towards one focus... one patient at a time.

NCQA has reviewed and certified Eli Lilly and Company’s Program Design capability. For complete details on the scope of this review, visit www.lilly.com All numbers current as of December 2006. MG45571 COPYRIGHT © 2007 ELI LILLY AND COMPANY.

JUNE 2008

VOLUME 1, NUMBER 5

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Continued Clinical Editor

Thomas McCarter, MD, FACP Chief Clinical Officer Executive Health Resources tmccarter@AHDBonline.com

AMCP MEETING HIGHLIGHTS Looking Down the Pharmaceutical Pipeline By Maude Campbell

Business/Government Editor

Kip Piper, MA, CHE President, Health Results Group kpiper@AHDBonline.com

Executive Summaries

Editorial Board

UNMANAGED MOMENTS

Pharmacy Reimbursement Policy Michael R. Schaffer, PharmD, MBA Arthur F. Shinn, PharmD, FASCP Employers F. Randy Vogenberg, RPh, PhD Alberto M. Colombi, MD, MPH

Specialty Pharmacy Rebecca M. Shanahan, Esq.

Managed Care Pharmacy Policy Cynthia J. Pigg, BSPharm, MHA

WEB EXCLUSIVE

Managed Markets Marketing Jeffrey A. Bourret, RPh, MS, FASHP Charles E. Collins, Jr, MS, MBA

www.AHDBonline.com

• Alarming Rate of Prescriptions Unfilled by Newly Diagnosed Hypertensive, Diabetic Patients • Cost Sharing Has Negative Effects on Biologics • Indexed Journals Valuable Source for Formulary Decisions • Disease Management and Wellness Programs for Employees Work

Clinical Research Nirav R. Shah, MD, MPH Samuel M. Silver, MD, PhD Michael A. Weber, MD Managed Care & Government Affairs Sharad Mansukani, MD Research & Development Michael F. Murphy, MD, PhD Wayne A. Rosenkrans, Jr, PhD Healthcare Outcomes Gary M. Owens, MD Outcomes Research Gordon M. Cummins, MS Timothy S. Regan, BPharm, RPh

American Health & Drug Benefits, ISSN 1942-2962 (print); ISSN 1942-2970 (online), is published 9 times a year by Engage Healthcare Communications, LLC, 241 Forsgate Drive, Suite 205B, Jamesburg, NJ 08831. Copyright © 2008 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. Address all editorial correspondence to: editorial@AHDBonline.com, Telephone: 732-992-1889. Fax: 732-992-1881. American Health & Drug Benefits, 241 Forsgate Drive, Suite 205B, Jamesburg, NJ 08831. POSTMASTER: CORRESPONDENCE REGARDING SUBSCRIPTIONS OR CHANGE OF ADDRESS should be directed to CIRCULATION DIRECTOR, American Health & Drug Benefits, 241 Forsgate Drive, Suite 205B, Jamesburg, NJ 08831. Fax: 732-992-1881. YEARLY SUBSCRIPTION RATES: One year: $99.00 USD; Two years: $149.00 USD; Three years: $199.00 USD. Permission requests to reprint all or part of any article published in this journal should be addressed to REPRINT PERMISSIONS DEPARTMENT, Engage Healthcare Communications LLC, 241 Forsgate Drive, Suite 205B, Jamesburg, NJ 08831. The ideas and opinions expressed in American Health & Drug Benefits do not necessarily reflect those of the Editorial Board, the Editors, or the Publisher. Publication of an advertisement or other product mentioned in American Health & Drug Benefits should not be construed as an endorsement of the product or the manufacturer’s claims. Readers are encouraged to contact the manufacturers about any features or limitations of products mentioned. Neither the Editors nor the Publisher assume any responsibility for any injury and/or damage to persons or property arising out of or related to any use of the material mentioned in this publication.

AMERICAN HEALTH & DRUG BENEFITS

June 2008

Pharmacy & Specialty Products James T. Kenney, RPh, MBA Pharmacy Benefit Design Joel V. Brill, MD Scott R. Taylor, RPh, MBA Pharmacoeconomics Jeff Jianfei Guo, BPharm, MS, PhD Policy & Public Health Alex Hathaway, MD, MPH, FACPM Joseph R. Antos, PhD Actuary David Williams

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EDITORIAL

Results-driven Healthcare: Addressing the Staggering Cost of Poor Performance Kip Piper, MA, CHE

erious and costly performance problems riddle the $2.4-trillion US healthcare system. Because of overuse, underuse, and misuse of healthcare, researchers estimate that roughly 30% of healthcare costs are generated by poor quality.1,2 Therefore, poor-quality medical care will cost about $720 billion in 2008.1,2 Poor quality also reduces productivity. For every dollar of healthcare spending caused by poor quality, poor care costs an estimated 50 cents in lost productivity. When applied to the $822 billion in care provided through employer-sponsored insurance, this translates to an additional $123 billion in costs.3 A recent study by the Health Research Institute at PricewaterhouseCoopers (PwC) estimates that wasteful healthcare spending costs $1.2 trillion annually.4 Analyzing findings from a wealth of published studies, the PwC researchers looked at the cost of waste from inappropriate clinical care and overt errors, individual behaviors leading to costly health problems, and antiquated operational processes that add costs, without providing any value.4 Making matters worse, research on the care patients receive from physicians, hospitals, and other providers paints a frustrating, even scary, picture. For example, studies conducted by the RAND Corporation show that Americans receive clinically inadequate or inappropriate care at shockingly high rates. Specifically, RAND’s research shows that acute care for insured adults is appropriate only 53.5% of the time, on average. In other words, about 46% of acute care is clinically incorrect. Similarly, about 43.9% of chronic care and 45.1% of preventive care is inappropriate according to accepted medical standards.5 Children receive 68% of recommended care for acute medical problems, 53% of recommended care for chronic medical conditions, and 41% of recommended preventive care.6,7

Kip Piper is president of Health Results Group, LLC, Washington, DC, and Senior Counselor at FleishmanHillard, Inc. He writes the blog piperreport.com.

AMERICAN HEALTH & DRUG BENEFITS

June 2008

The bottom line is that the delivery of health-related care—whether for adults or for children—is inappropriate or unnecessary about half of the time. Basically, it’s a coin flip.

Root Causes of Poor Quality, High Costs Ultimately, three immutable principles of economics and life explain the underlying causes of this poor performance. Price is what you pay, but value is what you get. Taking a page from Warren Buffett’s “play book,” buyers of health benefits must focus on value, not price. Price is an important part of the equation, but it is meaningless if you do not know the value of what you are receiving for that price. Unfortunately, in healthcare we obsess on unit prices. In no other marketplace or domain of life do Americans—corporations, consumers, federal and state policymakers, news media— pay so much attention to price and so little to value. You get what you pay for. Today, we pay for quantity, not quality. Poor performers are sustained and rewarded. The best performers are financially penalized and professionally demoralized. The consequences are all too obvious. You can’t fix what you can’t see. In sharp contrast to virtually every other industry, healthcare is quite opaque. American healthcare is full of decision makers—consumers, physicians, and other providers, health plans, public officials—who lack the information they need to make decisions. Five Steps to Higher Performance The problems are daunting but solvable. To improve the quality and cost-effectiveness of healthcare delivery, purchasers and payors must tightly focus on strategies to expect, measure, disclose, reward, and support results, as outlined below: 1. Expect results • Set actionable performance expectations for healthcare providers, particularly physicians, clinics, hospitals, pharmacies, and long-term care providers.

Results-driven Healthcare

• Ensure that performance expectations are clear, decision relevant, reasonably achievable by highlight competent providers, and consistent with evidencebased medicine.

2. Measure results • Rigorously measure clinical and economic performance compared with expectations. • Use consensus-endorsed measures, such as those adopted by the National Quality Forum. • However, don’t let the perfect be the enemy of the good, or analysis be the enemy of action. 3. Disclose results • Publicly report the clinical and economic performance. • Ensure that reporting of performance is frequent and timely. • Use reader-friendly formats that support the differing decision-making needs of consumers, providers, health plans, purchasers (employers, Medicare, Medicaid), and the media. 4. Reward results • Directly align coverage, reimbursement, cost sharing, market share, contracting, utilization management, and other key policies with performance expectations. • Specifically, reward higher performance through monetary incentives (eg, pay-for-performance), greater market share, public recognition, and regulatory flexibility. • Reward positive consumer behaviors through incentives such as differential copays (eg, low or zero copay to see the best physicians, very high copay to see poor quality physicians).

• Education and training of physicians, patients, and family caregivers. References 1. Midwest Business Group on Health, with Juran Institute. Reducing the Costs of Poor-Quality Healthcare through Responsible Purchasing Leadership. 2003. http://208.67.196.159/LoadDocument.aspx?docID=20&showIcon =false. Accessed May 22, 2008. 2. Becher EC, Chassin MR. Improving the quality of healthcare: who will lead? Health Aff. 2001;20:68-81. 3. For more information on the cost and consequences of poor quality of healthcare, see reports from the Institute of Medicine. Crossing the Quality Chasm: The IOM Health Care Quality Initiative. http:// www.iom.edu/CMS/8089.aspx. Accessed May 22, 2008. 4. PricewaterhouseCoopers’ Health Economics Institute. The Price of Excess: Identifying Waste in Healthcare Spending. April 2008. Health Economics Institute, Washington, DC. http://www.pwc.com/extweb/ pwcpublications.nsf/docid/73272CB152086C6385257425006BA2FC. Accessed May 22, 2008. 5. Asch SM, Kerr EA, Keesey J, et al. Who is at greatest risk for receiving poor-quality health care? N Engl J Med. 2006;354:1147-1156. 6. Mangione-Smith R, DeCristofaro AH, Setodji CM, et al. The quality of ambulatory care delivered to children in the United States. N Engl J Med. 2007;26:644-649. 7. For more information on studies by RAND Health on quality of care, see www.rand.org/health/highlights.html#quality.

Unmanaged Moment

5. Support results • Support the infrastructure and processes essential to results-driven healthcare. These include: • Evidence-based coverage and value-based benefit designs. • Patient-centered care, including stronger physician–patient communication, referrals, and genuine follow-up. • Chronic care management. • Modern health information technology, including electronic medical records, e-prescribing, and e-lab results. • Comparative effectiveness research. • Health services research to build our knowledge base on costs, quality, and access.

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JOIN AHDB PEER REVIEW American Health & Drug Benefits (AHDB) is looking for medical and pharmacy directors, P & T Committee members, and other experts in benefit design who are interested in joining our peer reviewers and assist in maintaining the high quality of articles published in the journal. You will be asked to review at least 1 or 2 articles per year in your area of expertise. Reviewers’ names will be published in AHDB at the end of the year. Reviewers should have at least 1 area of expertise in a health-related field for which they feel qualified to assess the content and quality of manuscripts submitted for publication in AHDB.

Articles fall into 3 main areas related to healthcare: Regulatory, Business, and Clinical. These main categories are represented from the different vantage points of all stakeholders in healthcare and are divided into many subcategories, including (but not limited to): • Administration/Management • Benefit design • Disease management/state (eg, asthma, infectious diseases, pain management, schizophrenia) • Drug therapy (including biologics, generics) • Drug utilization • Employer benefits • Finance/economics • Health information technology • Health policy/reform • Patient education/initiatives/quality-of-life issues • Pharmacoeconomics: cost-benefit analysis, cost-effectiveness • Pharmacy management: pharmacology, specialty pharmacy, pharmacy benefits • Reimbursement: Medicare/Medicaid, health insurance, prior authorization • Research: methods, study design, data collection/analysis

To become a peer reviewer, please complete the form below and fax to: 732-992-1881. Reviewer Information ________________________________________________________________________________________ First Name Last Name Credentials ________________________________________________________________________________________ Title Company ________________________________________________________________________________________ Address ________________________________________________________________________________________ E-mail Phone OR e-mail your information to: editorial@AHDBonline.com

For the treatment of hypertension

Introducing BYSTOLIC. A novel beta blocker with efficacy and favorable tolerability across a broad range of patients.

1-3

n Unique mechanism of action includes cardioselective beta blockade and vasodilation1* n Once-daily antihypertensive, with efficacy maintained over 24 hours1

Please see brief summary of full Prescribing Information on adjacent page. For full Prescribing Information visit 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. Caution should also be used in diabetic patients as beta blockers may mask some of the manifestations of hypoglycemia, particularly tachycardia. 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 >1% and greater than placebo) were headache, fatigue, dizziness, diarrhea, nausea, insomnia, chest pain, bradycardia, dyspnea, rash, and peripheral edema. *In extensive metabolizers (most of the population) and at doses <10 mg, BYSTOLIC is preferentially â?¤1 selective. The mechanism of action of the antihypertensive response of BYSTOLIC has

not been definitively established. Possible factors that may be involved include: (1) decreased heart rate, (2) decreased myocardial contractility, (3) diminution of tonic sympathetic outflow to the periphery from cerebral vasomotor centers, (4) suppression of renin activity, and (5) vasodilation and decreased peripheral vascular resistance.

References: 1. BYSTOLIC [package insert]. St. Louis, Mo: Forest Pharmaceuticals, Inc.; 2007. 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. ÂŠ2008 Forest Laboratories, Inc.

44-1012269R1

02/08

2.5 mg, 5 mg and 10 mg Tablets 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 alpha-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 of 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 Infertility). 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 12-week, 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 placebotreated 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. 12/07 © 2007 Forest Laboratories, Inc.

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Comparing Pharmacy Benefit Managers: Moving Well Beyond the Simple Spreadsheet Analysis David Calabrese, RPh, MHP

Unabated increases in prescription drug demands, advancing technology, and rising drug inflation rates combined with a sagging economy, continue to intensify budget pressures for payors responsible for delivering pharmacy benefits to plan members. At the same time, high levels of complexity and resource requirements in drug benefit administration have led to a state in which plan sponsors remain heavily dependent on pharmacy benefit managers to assist in these efforts. With pharmacy representing such a critical component of healthcare delivery from clinical and economic perspectives, it is essential that sponsors exercise high levels of due diligence in pharmacy benefit manager review and appraisal to ensure proper balance of quality clinical care, sufficient access, and optimal cost-efficiency in the delivery of such benefits. This review is designed to provide a comprehensive understanding of current pharmacy benefit management business practices and help equip plan sponsors with the knowledge, strategies, and safeguards to drive a well-informed pharmacy benefit selection process and, inevitably, a better-aligned pharmacy benefit management–payor relationship. [AHDB.2008;1(5):9-19.]

he annual rate of increase in prescription drug spending has clearly tapered in recent years, and yet the share of prescription drug expenditures paid by public and private health insurers continues to grow.1 Pressures to effectively manage prescription drug costs remain as high as ever, given the many factors (eg, increasing demand, drug inflation rates, specialty drug development, and aggressive drug marketing) working collaboratively to drive even higher drug spending. It is essential that plan sponsors wishing to partner with a pharmacy benefit management (PBM) organization to gain more adequate control of drug benefit programs exercise extreme vigilance in the selection of such a service provider. Plan sponsors must strive to gain a thorough understanding of current PBM business practices and how

Mr Calabrese is Chief Clinical Officer, MedMetrics Health Partners, Worcester, MA, and Assistant Clinical Professor, Northeastern University Bouvé College of Pharmacy & Allied Health Sciences, Boston, MA.

such practices may directly influence the sponsor’s ability to optimize clinical outcomes and cost control in drug benefit programming. Sponsors also need to develop sound processes to compare and contrast PBM options, leading to the selection of a vendor whose interests are most clearly well-aligned with their own, and whose business practices substantiate such levels of alignment. It is therefore essential that any comparative assessment of potential PBM partners goes beyond rudimentary spreadsheet comparisons of one PBM’s proposed pharmacy discount rates, administrative fees, and/or drug rebate projections versus another’s. This article outlines comparative considerations in PBM assessment and insights into traditional PBM business tactics and their potential impact on a plan’s ability to effectively manage quality of patient care and overall drug expenditures. It further describes strategies for plan sponsors to perform a well-informed PBM evaluation process. Careful attention to these issues and implementing these strategies can help in the selection of a well-aligned PBM business partner, better protect

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KEY POINTS Despite a clear tapering in drug expenditures over the past few years, prescription drugs remain a significant component of the total healthcare dollars. A common shortcoming of PBM vendor evaluation processes at the plan sponsor level is an undue level of focus on reimbursement rates for brand-name medications and manufacturer rebate earnings. Many PBMs have been generating substantial revenue for years through business practices that are not appropriately aligned with the best interests of their clients, resulting in unnecessarily higher prescription drug spending at the plan sponsor level. Over the past decade, several plan sponsors have filed high-profile lawsuits against major for-profit PBMs, alleging a variety of inappropriate business tactics that have led to hundreds of millions of dollars in fines and settlements. PBMs are in a unique position to assist plans in driving higher levels of quality and value in the delivery of healthcare to plan members. It is therefore essential that PBMs are held to the most rigorous of standards.

the organization in its PBM contracting, and secure a trusting, satisfactory, and long-term payor–PBM working relationship.

Spreading the Wealth Anyone who has ever purchased a theater ticket through a ticket broker has experienced first-hand the effects of “spread” pricing. Ticket brokers will typically purchase tickets at one price and then resell them at an inflated level, keeping the differential for themselves as their service fee. Similarly, many PBMs have been generating substantial revenue for years by paying their contracted network pharmacies at one rate and then charging their clients a higher rate, pocketing the difference. But unlike ticket brokers, the net differential kept by PBMs has not always been as apparent to its clients, nor have these PBMs been forthcoming in sharing this information. Charging plan sponsors a higher rate for prescription drugs than the PBM had actually paid for the drugs, and retaining the difference, is referred to as “differential pricing” or “spread pricing.”2 As an example, let’s assume a PBM contracts with a plan sponsor at a pharmacy reimbursement level for brand-name drugs based on the average wholesale price (AWP) of the medication minus a 14% discount. This may seem a reasonable and acceptable discount, but unbeknown to the

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client, often the PBM’s actual contracted rate of discount with its network pharmacies is significantly more aggressive (eg, AWP minus 17%), thus allowing the PBM to keep a significant differential on every branded claim as undisclosed revenue. This remains a common PBM practice and applies to brand-name and generic drugs. With generic drugs, revenues generated through retained pharmacy spread can be even more substantial and more worthy of close examination. Strategies for plan sponsors on how to avoid potential conflicts with PBMs are listed in Table 1. Although no one would argue that PBMs are entitled to a fair profit for their efforts on a plan’s behalf in building and maintaining an effective pharmacy distribution network, manipulation of actual pharmacy reimbursement rates raises the following concerns. A spread-pricing model: • Can prevent plan sponsors from achieving the maximal discount possible on their drug spending. Dollar values of such spread among traditional PBMs have been reported to routinely amount to as much as $2 to $4 for a prescription claim.3 Depending on the size and demographic makeup of a plan, such spread-pricing models can result in lost cost savings to the plan of hundreds of thousands of dollars. • Creates an incentive for PBMs to promote highercost branded agents: the higher the AWP of a given agent, the greater the spread (or profitability) on that claim to the PBM. • Offers an incentive for PBMs to unnecessarily drive a greater volume of prescriptions, and/or a disincentive to curb inappropriate drug overutilization, because the more prescriptions are filled, the greater the number of spreads retained by the PBM. • Provides an opportunity for PBMs to deliberately manipulate AWP prices. Plan sponsors need to be aware that PBMs can use various price reference databases to obtain AWP prices, which can vary significantly on any given product from one database to another. A spread-pricing model also allows PBMs to pay network pharmacies off of one reference database (the one with the lowest referenced AWP) and then charge its plan sponsors off of another (the one with the highest AWP listing), thus further enhancing its retained spread on every claim.

Generic Drug Pricing: No Longer an Afterthought In evaluating PBM vendors, a common mistake plan sponsors make is their undue focus and attention on brand-name medications and branded drug pharmacy discount levels. With generic utilization rates exceed-

Comparing Pharmacy Benefit Managers

ing 60% within many plans today,4 and with vast differentials in ingredient cost for prescriptions between a brand and a generic drug, generic products represent an enormous opportunity for cost savings to payors.4 However, sponsors must also recognize that reimbursement rates for generics are subject to a much greater variability than branded drugs among different PBMs, and this can have a much more significant impact on a plan sponsor’s bottom-line drug spending than may be expected.5 Therefore, sponsors should pay close attention to the comparative performance of generic drug pricing programs among competing PBMs and the speculative impact of such pricing variation on that plan’s specific drug expenditures. In processing payment to contracted pharmacies for the dispensing of generic drug products, almost all PBMs today will use a maximum allowable cost (MAC) reimbursement program. MAC was originally established by the Health Care Finance Administration to prevent pharmacies from purchasing a lower-priced product from one generic manufacturer and then billing the government for a higher-priced product from another manufacturer.6 MAC represents the highest price a health plan or other intermediary will pay retail pharmacies for the dispensing of a specific medication when that medication is available from different generic manufacturers. With MAC pricing, wholesale acquisition costs for a given generic product available from various manufacturers are routinely compared, and a standard markup is applied to establish a MAC reimbursement rate. The goal of MAC pricing is to establish a fair and equitable level of reimbursement for all pharmacies, while ensuring that plan sponsors are not paying overly inflated rates for drug products. In marketing their services, many PBMs will use MAC pricing programs to attract new clients, claiming extensive savings relative to such programs. Purchasers of PBM services, however, should be aware of the ways in which a PBM can manipulate MAC pricing programs (Table 2) to make them attractive to clients, while inevitably serving as yet another tool to drive greater revenues for the PBM and potentially depriving clients of maximal dollar savings with generic drugs. The key tactics PBMs use to maximize profitability by MAC pricing are: • Many PBMs will reimburse their national network of pharmacies off a very broad and aggressive MAC pricing list, but then turn around and charge plan sponsors for the same drugs off of a much less broad and much less aggressively priced list, once again netting the difference for themselves.

Table 1 Plan Sponsor Strategies: Contracting a PBM 1. Demand full transparency in your contract negotiations with a PBM about network pharmacy discounts. PBMs should divulge to you their contracted rate and their blended effective rate for branded and for generic agents within your geographic region. If there is one large chain in your area, demand to know the specific contracted rate for that pharmacy; a PBM’s contracted rate may vary from one pharmacy chain to another, and among independent pharmacies • Contracted rate is the reimbursement rate that a specific pharmacy or pharmacy chain contractually agrees to accept for processing prescription drug claims on behalf of a specific PBM • Effective rate is the actual blended performance rate of discount for the AWP, accounting for differences in reimbursement rate among individual pharmacies and the net effect of drugs that process at a customary level (the pharmacy’s retail price of a drug), which may be lower than the negotiated AWP discount 2. Consider a requirement of full pass-through in contracting, ensuring that you will be charged no more than the actual amount paid by the PBM to their network pharmacies, including all net pharmacy discounts and dispensing fees. Ensure that the pass-through pricing applies to both in-state as well as out-ofstate pharmacies 3. Consider using contractual commitments from the PBM of pricing guarantees that hold the PBM financially accountable for projected effective rates put forth during request for proposal response processes 4. Contractually secure full auditing rights to PBM actual acquisition cost data and network pharmacy contracts 5. Ask the PBM what reference it uses in determining AWP pricing for pharmacy reimbursement and contractually obligate the PBM to use a single, mutually agreed on reference for all claims processed, with full audit rights; such reference should be specifically defined in the final contract AWP indicates average wholesale price; PBM, pharmacy benefit management.

Such spread pricing on generic drugs is extremely important for plan sponsors, as it can average as much as 10% to 15% per generic prescription processed and can amount to lost cost savings to a plan sponsor of as much as $2 million annually per 100,000 lives covered.7 • It is not uncommon for PBMs to maintain multiple MAC lists and charge individual clients off of the list that will actuarially prove most profitable to the PBM. • Many PBMs will quote a highly aggressive MAC effective rate (eg, AWP minus 60%+), but fail to

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Table 2 Plan Sponsor Strategies: MAC Pricing 1. Demand full pass-through of MAC pricing from your PBM and full audit rights to network reimbursement rates and data 2. Request the PBM to divulge the total number of different MAC lists it uses nationally and the rationale for having more than 1 list. Ask yourself, “If the PBM were truly acting in the best interests of its clients, why would it need to maintain multiple MAC lists?” 3. Demand full, regular access to the MAC list applied to your specific plan. Many PBMs will be reluctant to share their list, considering it proprietary in nature. In such a case, question the PBM’s commitment to transparency and partnership with your organization 4. Ensure mutual understanding of how your PBM defines a generic drug 5. Ensure full disclosure of the discount level for generic drugs not included on the MAC list applied to your plan 6. Be sure you understand the methodology and frequency with which the MAC list is updated 7. Ask for the PBM’s most recent performance figures for generic reimbursement in your geographic region, including: • Current MAC effective rate—the average percent discount off the AWP for drugs processed by the MAC list to be applied to your organization • Percent of total frequently dispensed generic drugs represented on that MAC list (ideally, at least 95%) • Number of individual line items on that MAC list • Overall generic effective rate (the average percent discount off the AWP for all generic drugs) whether reimbursed at MAC, usual and customary pricing, or AWP discount. This performance metric is probably the most important, because it is the most equitable means of comparing generic reimbursement rates of PBMs • Overall PBM generic utilization rate—percent of total prescriptions filled for generics by plan sponsors. Ask for clear description of what drug benefit products and/or classes (eg, insulin, diabetic test strips, medical devices, over-the-counter medications, compounds) may be excluded 8. Establish clear terms about the PBM’s policy for establishing MAC pricing on new generics from multiple manufacturers. Consider establishing performance guarantees for the timing of MAC price establishment on new generics 9. Strongly consider using performance guarantees for the overall generic effective rate. Avoid guarantees around MAC effective rate, which can easily be manipulated by the PBM to meet performance standards while retaining significant spread AWP indicates average wholesale price; MAC, maximum allowable cost; PBM, pharmacy benefit management.

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reveal that the rate quoted was based on a MAC list that only covers a limited percentage of the total generic drugs most commonly used by a plan’s members. Those drugs that are excluded from the MAC list will be charged to the plan sponsor at a much less attractive level (eg, AWP minus 15%-20%), resulting in even greater spread revenue for the PBM. • If the PBM is failing to provide all plan sponsors with access to its most broad and aggressive MAC pricing list, then there is also a disincentive for the PBM to act quickly in passing along aggressive MAC pricing discounts to clients when new generic agents become available. The longer the PBM delays the pass-through of its MAC pricing on these drugs, the greater the revenues it retains for itself. As an example, in April 2007, the popular sedative/hypnotic agent Ambien (zolpidem) became available generically via several generic manufacturers. While the price of the branded version of this medication was as much as $4.90 per tablet, the acquisition cost of this product to most pharmacies plummeted almost overnight to as low as $0.30 per tablet.8 In situations like this, most major PBMs will move quickly to establish aggressive MAC pricing with their national network of pharmacies. However, this does not mean that the PBM will move quickly to pass along the newly established aggressive MAC rate to its contracted clients. The longer the PBM delays doing so, the greater the spread on this new generic product the PBM retains, and the more substantial the lost cost savings opportunity for the plan sponsor. • If the PBM is owned by or directly affiliated with a retail pharmacy chain, there may be further disincentive to quickly and aggressively establish MAC pricing, as doing so runs the risk of negatively affecting the profitability of its parent retail chain affiliate, who dispenses such drugs.

Manufacturer Rebates: Reservations Required Another major revenue source for traditional PBMs is drug rebates from pharmaceutical manufacturers. Traditionally, rebates are dollars paid back to PBMs by the drug manufacturer in exchange for favorable positioning of its products on the PBM’s drug formulary or within a specific plan design. Rebates can also be paid to the PBM for less restricted access to drugs (eg, no prior authorization) within a drug benefit program or for market share performance of a manufacturer’s products versus current competitors. For a variety of very good reasons, rebates today represent one of the most controversial areas of PBM busi-

Comparing Pharmacy Benefit Managers

ness practice, which is also highly scrutinized. The challenges and controversy stemming from branded drug rebates include: • Similar to the different forms of spread revenue retained by PBMs with network pharmacy discounts, many traditional PBMs will also retain a significant proportion of any rebate dollars generated by a plan’s utilization and collected from pharmaceutical manufacturers on a plan’s behalf.9 • Many PBMs are reluctant to divulge actual rebate agreements between themselves and the pharmaceutical manufacturer and the portion of rebates it retains, deeming such agreements as proprietary in nature. This creates a major dilemma for plan sponsors, because the sponsor then remains largely in the dark in knowing how one drug product in a class compares with another from a net pricing perspective. As will be discussed later, a variety of prominent lawsuits have been waged against the major for-profit PBMs over the past decade by plan sponsors alleging the promotion of more expensive drug products as a way of enhancing the PBM’s own rebate revenues at the plan sponsor’s expense. • As a means of further retaining rebate earnings from its clients, many PBMs may forego the negotiation of aggressive rebates and alternatively negotiate additional administrative fees into their contracts with drug manufacturers. Such fees can take many shapes and forms and are routinely disguised as incentive fees, data management fees, data-sharing fees, performance fees, rebate management/administration fees, access fees, formulary management fees, professional services fees, health management fees, educational grants/fees, and drug promotional/advertising fees. By reclassifying rebates and collecting greater administrative fees from manufacturers, a PBM can then tout the fact that they are passing through a large portion (up to 100%) of the rebate dollars to its clients, but in reality is still retaining major revenues for itself by shifting such dollars out of the rebate bucket and into the administrative fee bucket, of which it retains 100%. Administrative fees also create an incentive for PBMs to be less aggressive in negotiating actual rebate discounts off of the price of a drug, so that more of those discount dollars can be shifted into the PBM’s fully-retained administrative fees. • Academic research has reported that major PBMs can retain, on average, 38% to 40% of rebate dollars collected from drug manufacturers, and such rev-

Table 3 Plan Sponsor Strategies: Manufacturer Rebates • Require that the PBM disclose all contracts with drug manufacturers yielding any payment to the PBM • Consider a requirement of full pass-through for all rebate earnings (including administrative fees) driven by plan’s specific utilization, with full audit rights to manufacturer contracts, rebate payments, and administrative fees • Establish performance guarantees related to the invoice timing and as collection of and dispersing of rebate dollars back to the plan • Demand access to plan-specific net drug cost information (after rebate and network pharmacy discounts) down to the individual national drug code level within all major drug classes • For specific utilization management and educational programs the PBM may wish to implement in your plan (eg, provider/member education, medication adherence, therapeutic interchange), consider requiring full disclosure of any manufacturer revenue generated by such programs; use policies that require plan-specific sign-off before implementation PBM indicates pharmacy benefit management.

enues can represent a significant, however decreasing, proportion of a PBM’s gross annual profits.10 • When rebate income and administrative fees tied to branded drugs outweigh revenue from plan sponsors, one must question whose best interests the PBM is truly representing. Such undisclosed earnings raise a number of important questions: 1. Do such branded revenue streams create a disincentive to fully optimize the formulary positioning and maximize utilization of high-value generic drugs in several key drug classes? 2. Do such earnings create further disincentives for the PBM to streamline the number of products within key formulary classes or to employ more rigorous utilization management techniques (eg, step therapy, prior authorization, over-the-counter coverage) proven to yield substantial savings to plan sponsors? 3. Do such earnings compromise the true evidencebased nature of formulary decision-making at the PBM level? 4. Are educational efforts conducted by PBMs truly educational in nature, or simply the end result of a behind-the-scenes, revenue-generating commitment by the PBM to help promote a pharmaceutical company’s newest brand-name drug product? 5. An additional revenue source for PBMs is the float on rebate dollars. For every day the PBM delays cred-

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Table 4 Plan Sponsor Strategies: Mail-Order Pharmacy • Ask your PBM for detailed information on all their mail-order pricing components and demand full audit rights • Push for MAC pricing on generic drugs dispensed by mail; ensure the safeguards described earlier for a MAC list • Before implementing a mail service program, particularly a mandatory mail-order benefit design, carefully model the actuarial impact of such a program. Such modeling should incorporate differences in comparative reimbursement rates between mail and retail, dispensing fees, lost copay revenue, disenrollment rates, and potential waste • Request that the PBM provide an acquisition cost-based pricing model for its mail service, with direct 100% pass-through of its actual acquisition cost for drug products acquired via mail facilities, but at a higher dispensing fee; note that many PBMs will likely be reluctant to provide such a model, which can significantly limit their profitability potential • Consider shopping mail-order service from many vendors as a separate carve-out benefit • Recognize that to retain prescription volume and foot traffic, many retail pharmacies are willing to accept lower discounts and dispensing fees from PBMs on 90-day supplies of long-term medications dispensed via their retail outlets. Ask your PBM if it provides a 90-day retail network and compare discounts with mail; this may allow the plan sponsor to capitalize on greater discounts, while providing similar conveniences of mail, but with a more personalized option for its members • If implementing a mail benefit, consider requiring that the first fill of a newly prescribed long-term drug be limited to a 30-day supply at retail; this may help mitigate issues of waste from intolerability or dosing changes • Contractually prohibit mail services from engaging in: Unauthorized therapeutic interchange programs Unauthorized promotion of brand drugs to plan members Repackaging of products NDC up-charging • Require full disclosure of all administrative fees and other incentives offered to the PBM by drug manufacturers for product acquisition and mail distribution activities • Ensure that the PBM’s rebate guarantees include prescriptions dispensed by mail MAC indicates maximum allowable cost; NDC, national drug code; PBM, pharmacy benefit management.

it of rebate dollars back to its plan sponsors, the PBM collects additional revenue in the form of interest (or float) on those dollars. In evaluating PBM vendors, comparative rebate projections should serve, at best,

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as a tertiary determinant in the selection process (Table 3). Plan sponsors should recognize that projections of higher rebate earnings from its PBM will often equate to a broader access, promotion, and use of branded drug entities (many of which may offer little to no clinical value over less costly alternatives), and inevitably higher net plan costs.

Mail-Order Pharmacy: Friend or Foe? As the PBM industry has grown and evolved, many larger PBMs have expanded their business model and profitability through the development and/or acquisition of in-house mail-order prescription drug delivery services. PBMs have worked hard to popularize such mail-order programs as a key strategy that plan sponsors should use to enhance control over rising prescription drug expenditures. Mail-order pharmacy has become a core component of the business model for most major PBMs and is currently reported to represent a significant portion of their overall profitability.11 Plan sponsors and their patients can clearly benefit from certain advantages of mail-order prescription service, such as enhanced convenience, dispensing accuracy and efficiency, formulary adherence monitoring, and patient compliance programming. More controversial, however, is the validity of claims by PBMs that mail-order programs offer significant cost savings to plan sponsors. Very limited research has been conducted to definitively establish a significant economic value of mailorder pharmacy service. The limited study data published show mixed results, raising questions about the cost impact to the plan sponsor.12-16 Adding to these questions are more recent trends toward greater rates of discount in the retail setting, higher generic utilization rates, and increased levels of patient cost sharing. With these trends, plan sponsors can run a significant risk of greater cost exposure through mail-order, particularly if the plan elects to waive copayments as an incentive for its members to use mail service. When evaluating the utility of mail-order programs (Table 4), plan sponsors need to keep in mind the following important facts: • Dispensing of generic drugs via mail represents one of the largest opportunities for profitability for PBMs who own such facilities.17 As such, PBMs will often refuse to accept MAC reimbursement for generic drugs dispensed via mail, and will typically push for a fixed discount off of AWP (eg, AWP minus 50%55%) instead.18 Although such discounts may seem significant, those familiar with the nuances of gener-

Comparing Pharmacy Benefit Managers

•

ic drug pricing understand that use of an aggressive MAC pricing program can yield substantially better discounts (eg, AWP minus 65%-70%). Allowing PBMs to use an AWP-based discount on generics by mail opens the door for the PBM to use up-charges to plan sponsors. Up-charging involves the selective purchasing of products at lower acquisition costs and charging plan sponsors for an alternative national drug code (NDC) number of the same product that carries a higher AWP. Another form of up-charging used by many mail facilities is repackaging. Given the volume of prescription drugs being dispensed through most mail facilities, such facilities will typically purchase drug products from manufacturers in larger bulk quantities at a substantially lower acquisition cost per unit. Many of these facilities will also carry repackager licenses, which permit the mail facility to repackage drugs purchased in bulk into much smaller containers for distribution. Many PBMs will then bill the plan sponsor, using the smaller-sized repackaged NDC number that will almost universally carry a significantly inflated AWP unit price. PBM-owned mail facilities can directly influence prescribers to switch prescription drug products to alternative agents representing higher profitability to the PBM (via rebate retention or purchasing margins), but not necessarily representing lower net costs to plan sponsors. Many PBMs may offer to waive dispensing fees and/or administrative fees on mail prescriptions as an enticement to plan sponsors to promote mail programs. However, if the net costs of claims filled through mail distribution are higher than retail, the bottom line may simply be higher costs to plan sponsors and greater revenue to the PBM. Many of the administrative fees described earlier that are paid to PBMs by drug manufacturers can also be tied directly to promotional programs employed in conjunction with mail distribution. Once again, the plan sponsor may not be aware of any of these programs, which are not entitled to any of the revenues they generate for the PBM. Some PBMs may exclude the sharing of rebate earnings via mail-order prescriptions as a means to offset their service charges for the provision of mail distribution. Intuitively, mail dispensing also poses a greater risk of waste to plan sponsors. If a patient receives a 90day supply of medication by mail and then develops an adverse effect, requires a different dose strength

Table 5 Plan Sponsor Strategies: Claims Data Access • Demand access to routine sharing of electronic claims data detailing all the plan’s prescription transactions; try to provide this with every billing cycle for auditing and reconciling billing information from the PBM • Compare and contrast reporting packages from various PBMs to assess level of detail and practicality of the information for assisting the plan in monitoring utilization patterns Understand the number of standard reports to be delivered, at what frequency, and any associated charges Assess potential charges for changes to the standard reporting package or for any ad hoc reporting and typical turnaround time • Determine if the PBM provides a tool that permits plan sponsors to directly access its utilization data by a web-based dashboard or query platform • Ask the PBM to share its policies about data sales and require full disclosure of sales revenues • Assess the relative value of your plan’s claims data and consider contractual language to limit the aggregation and sale of the data or to add provisions requiring some revenue sharing in exchange for permitting the PBM to aggregate and sell such data PBM indicates pharmacy benefit management.

or formulation, or terminates membership early in that 90-day course of therapy, a good portion of the medication is wasted at the plan’s expense. • Wall Street analysts have estimated that the average profitability to a PBM of a prescription dispensed through their own mail facility is approximately 4 times that of a retail prescription, with generic drugs being the most profitable of all transactions.19

Data Access, Data Protection Historically, plan sponsors have required very limited depth of data from their PBMs for plan-specific utilization, reporting, and trending. Savvy plan sponsors, however, are now demanding much greater access to such information to reconcile PBM billing information, validate PBM commitments to transparency, and monitor pricing and trending, particularly if performance guarantees have been established contractually with their PBM (Table 5). Plan sponsors should also be cognizant of their members’ prescription utilization data being very valuable for market research firms and drug manufacturers who stand to gain significant benefit from a plan’s specific utilization patterns, member demographics, and prescribing habits of its network physicians. Consequently,

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Table 6 Plan Sponsor Strategies: Audit Rights, Obstacles • Build contract language allowing full audit rights to all PBM network pharmacy contracts, claims data, manufacturer rebate and administrative fee contracts, mail service purchasing invoices, clinical coverage criteria, and formulary decision-making records • Include contract clauses that identify all documents and data to be made available to your auditors • Include contract terms that prohibit the PBM from limiting who may perform such audits, at what times, and under what circumstances. This is key, because PBMs can create significant road blocks to limit a plan sponsor’s auditing capability • PBMs that outsource relevant functions should commit to full transparency and audit rights to its subcontracted vendor relationships and services PBM indicates pharmacy benefit management.

many PBMs have for years capitalized on this opportunity by routinely aggregating and selling patient deidentified claims data to third parties, including drug manufacturers. Such data sales have translated into yet another lucrative revenue stream for the PBM. For PBMs that engage in this type of data sales activity, plan sponsors must carefully call into question that PBM’s level of integrity and commitment to their clients. Often today, heavily promoted brand-name drugs offer little to no added clinical value, but significantly higher costs, compared with traditional, often generically available, alternatives. Hence, sales of prescription drug data can clearly provide drug manufacturers enhanced leverage in the promotion and sales of their branded drug products in a given region, potentially conflicting with appropriate prescribing and utilization messages a plan wishes to deliver to its providers and members.

Audit Rights, Obstacles In light of the various methods by which PBMs can generate significant profit and the potential for conflicts of interest in doing so, it is of vital importance that plan sponsors protect themselves by taking appropriate measures to ensure full access to all required PBM data and information validating the PBM’s contractual commitments and fiduciary duty on the plan’s behalf (Table 6). Evidence, Innovation in Clinical Support Evidence-based medicine (EBM) is defined as “the conscientious, explicit, and judicious use of current best evidence to make decisions about individual

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June 2008

patient care.”20 The practice of EBM involves combining clinical expertise with the best available clinical research, patient values, and best practice standards. Following EBM is considered central today across all components of our healthcare system as a means to improve quality of care at a more manageable cost. PBMs are in a unique position to assist plans in driving higher levels of quality and value in the delivery of healthcare to plan members. It is therefore essential that PBMs are held to the most rigorous of standards to ensure that the clinical programming they use on behalf of their clients (eg, formulary development, provider and patient education, and all aspects of clinical drug utilization management) is anchored in the most sound, evidence-based clinical processes possible. Hence, plan sponsors must carefully compare and contrast the true depth and evidence-based value of clinical programs offered by one PBM versus another. Sponsors should seek to gain an understanding of the clinical, academic, and practice-based resources embedded within a PBM’s clinical program development and implementation processes. Considering that a PBM’s formulary often takes center stage in the development and deployment of its clinical programming strategies, formulary decision-making processes at the PBM level are important to evaluate. Plan sponsors should request a detailed description of the process flow involved in the development and management of a PBM’s formulary. PBMs should be asked to provide credentials of all voting members serving on its formulary decision-making body—usually the Pharmacy & Therapeutics (P & T) Committee—as well as the policies used to screen for and manage potential conflicts of interest among its committee members. Sponsors should request sample copies of P&T agendas, minutes, and review materials to evaluate the degree to which that PBM is critically assessing the available clinical data, grading the level of integrity of published scientific evidence, and pinpointing for its P&T Committee members (or advising its clients’ P&T Committees of) the potential strengths and weaknesses of a new drug product versus existing standards of care. If all these things are not evident from a PBM’s formulary review, sponsors must question the reason. For example, are there underlying manufacturer relationships that the PBM is unwilling to jeopardize by pointing out a new brand-name drug’s potential clinical shortcomings versus existing brand-name or generic alternatives? In addition, in recognition of the enormous opportunity that generic drugs represent for plan sponsors in driving higher levels of cost-efficiency without compromising

Comparing Pharmacy Benefit Managers

quality of care, plan sponsors are advised to assess the PBM’s ability to assist in maximizing generic utilization. First, a PBM’s formulary should be reviewed to determine the breadth of brand versus generic options within key therapeutic areas where well-tested, clinically sound generic products are available. For example, in high-profile categories, such as proton pump inhibitors, statins, antihypertensives, and antibiotics, a PBM formulary that consists of a high percentage of single-source branded entities, with limited utilization management controls around those entities, is more than likely the result of a PBM’s intent to capture greater branded drug rebates. As discussed earlier, the end result of such a broad-based formulary is often higher revenues for the PBM and increased net bottom-line drug expenditures for the plan. Second, PBMs should be asked to detail the various clinical and administrative programs available to influence physician prescribing of generic agents whenever clinically appropriate and to drive greater patient education and awareness of the value of generic drug options. Each PBM should also provide plan-specific speculative growth in generic utilization rates using benchmark results of such programming across its existing client base. Finally, and probably most important, plan sponsors must assess the level of innovation that a PBM can deliver in its clinical programming. PBMs should be asked to illustrate the types of clinical programs and resources they believe can distinguish their organization in its ability to assist its clients in not only lowering drug costs but more important in enhancing the level of clinical outcomes for its members. As our industry evolves, plan sponsors should be holding PBMs to a higher clinical standard, thus driving a paradigm shift away from revenue-generating administrative activities and toward a more focused level of clinical innovation, improved quality of care, and patientcentered programming.

Administrative Fees: Seeking Stability With every transaction processed on behalf of a client—a paid, rejected, or reversed claim—the PBM incurs a cost that is transferred to its clients in the form of a transaction fee. With most traditional PBM financial models, the PBM will apply a certain margin (often highly variable) onto each transaction fee as a means to cover its overall administrative costs. This practice is often referred to as “fee-per-transaction pricing model.” The challenge posed by this type of model is that it decreases incentive for the PBM to control excess utilization or inappropriate processing of prescription

Table 7 Plan Sponsor Strategies: Choosing Consultants 1. Conduct a thorough assessment of a consulting firm’s previous experience • Require the consultant to provide details of the past several PBM consultation services provided: type of organization served, final recommendations, and rationale for these recommendations and vendors chosen • Be mindful if the consultant appears to be recommending one vendor on a more consistent basis than others 2. Ask potential consulting firms to conduct a complimentary assessment of your plan’s PBM contract, benefit structure, and formulary to assess their level of expertise 3. Require consulting firms to provide full legal disclosure of potential conflicts of interest, with full audit rights 4. Request detailed information from consulting firms about the methodology for soliciting and evaluating PBM bids; carefully assess issues addressed in this article PBM indicates pharmacy benefit management.

medications, because every added transaction translates into more fees paid to the PBM. Sponsors who elect to proceed with this type of pricing model should understand how such fees will be assessed, and whether they will be applied to all claims or just paid transactions. If applied to all claims, the sponsor must carefully examine its own historical claims activity to accurately project administrative fees that will be incurred from reversed and rejected claims. As an alternative, plan sponsors can explore a permember-per-month pricing model, which pays the PBM a flat monthly fee per enrolled member to cover all its administrative costs, regardless of the number of prescriptions dispensed. In this model, the plan sponsor will pay the PBM a per-transaction fee, but that fee is simply a pass-through of the PBM’s entire actual incurred claimprocessing costs, with no added margin per claim. This model provides plan sponsors with more stable upfront total administrative cost projections and less risk of significant cost fluctuation because of growth in per-capita volume of prescription drug claims processed.

Litigation Review Within the past decade, plan sponsors have slowly become more privy to a number of the behind-the-scenes tactics described above that PBMs have used to exploit revenue for themselves, frequently at their clients’ expense. In turn, several government agencies and other third-party payors have filed a number of high-profile

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lawsuits against major PBMs alleging a variety of inappropriate business schemes, including fraud, kickbacks, overcharges, and breach of fiduciary duty to plan sponsors. Several of these lawsuits have since resulted in hundreds of millions of dollars in fines and settlements being paid by some of the largest for-profit PBMs.21 Despite the high-profile nature of these lawsuits and much greater demand from plan sponsors for a more transparent and well-aligned PBM business model, many of these PBM practices may still exist today. On evaluating potential PBM partners, sponsors are advised to carefully research lawsuits and government investigations against such PBMs. Sponsors should also require PBMs, by request for proposal processes, to fully disclose all past and present litigation or investigations involving their organization, including the nature of the allegations, their current status, and any resultant changes in policies and practices by the PBM.

Consultants: Choosing the Right Dance Partner In an effort to simplify the administrative complexity of a PBM assessment process and to ensure the best value in final PBM selection, many plan sponsors will use benefits consultants with specific expertise relative to the PBM industry and PBM contracting. Although such consultants can provide significant value to the plan sponsor, the selection should also be conducted with equal due diligence (Table 7). Plan sponsors are advised to carefully assess a consulting firm’s background and experience in this particular realm. Many consultant firms may also have their own conflicts of interest, including brokerage relationships with select PBMs generating sizable chunks of revenue for the consultant. Conclusions In light of unrelenting cost pressures and increasing complexity of pharmacy benefit programs, payors will undoubtedly continue to rely on the resources and expertise of PBMs. But with pharmacy benefits representing a significant component of overall healthcare delivery and healthcare spending, it becomes of paramount importance that plan sponsors exercise extreme due diligence in critically evaluating choices about PBM vendors. Keys to ensuring optimal selection of a PBM partner include a strong understanding of industry trends, keen awareness of PBM business practices, effective strategies to protect a plan’s best interests, and a commitment to forego simple spreadsheet analyses in assessing PBM options. The end result is the promotion of a rewarding PBM–payor relationship and, ultimate-

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ly, a better-quality, value-driven pharmacy benefit program for the plan and its members. Such concerted efforts among plan sponsors can help to drive further transformation within the industry, whereby PBMs that exemplify the key principles of alignment, transparency, business integrity, and clinical innovation can rise to lead this industry into the future. References 1. Kaiser Family Foundation. Prescription Drug Trends Fact Sheet. May 2007; Document 3057-06. http://www.kff.org/rxdrugs/upload/3057_06. pdf. Accessed May 15, 2008. 2. Garis RI, Clark BE, Siracuse MV, et al. Examining the value of pharmacy benefit management companies. Am J Health Syst Pharm. 2004; 61:81-85. 3. Garis RI, Clark BE, Siracuse MV. Is the pharmacy benefit manager truly transparent? Trust but verify. US Pharm Rev. 2006;August:8-10. 4. 2006 Drug Trend Report. St. Louis, MO: Express Scripts; April 2007. 5. Garis RI, Clark BE. The spread: pilot study of an undocumented source of pharmacy benefit manager revenue. J Am Pharm Assoc. 2004; 44:15-21. 6. Gosselin RA. The maximum allowable cost program. Manag Decis Econ. 1980;1:204-206. 7. Zimmerman A. True transparency: PBM cost-control model of the future. Benefits Compens Dig. 2006;43:1-3. 8. Drug Topics Red Book, Updates. 111th ed. Greenwood Village: Thomson Medical Economics; 2007. 9. Barnes JE. When is a rebate a kickback? Discounts by pharmaceutical companies to middlemen are under fire. US News & World Report. August 4, 2002. 10. Abrams LW. Contrary to what Wall Street and the FTC say, the PBM business model is misaligned. November 2005. http://www.nuretail.com/PBM_Alignment.pdf. Accessed May 15, 2008. 11. PBM earnings reflect mail revenues, generic utilization. Drug Benefit News. November 12, 2004;5:4. 12. Effects of using pharmacy benefit managers on health plans, enrollees, and pharmacies. Washington, DC: US General Accounting Office; January 2003. Publication GAO-03-196. www.gao.gov/cgi-bin/getrpt?gao-03196. Accessed May 15, 2008. 13. Carroll NV, Brusilovsky I, York B, et al. Comparison of costs of community and mail service pharmacy. J Am Pharm Assoc (2003). 2005;45:336-343. 14. Valluri S, Seoane-Vazquez E, Rodriguez-Monguio R, et al. Drug utilization and cost in a Medicaid population: a simulation study of community vs. mail order pharmacy. BMC Health Serv Res. 2007;7:122. 15. Garis RI, Bramble JD, Rea M, et al. Evaluating the costs of brandname and generic prescriptions dispensed by mail versus retail. Drug Benefit Trends. 2007;19:15-19. 16. Johnsrud M, Lawson KA, Shepherd MD. Comparison of mail-order with community pharmacy in plan sponsor cost and member cost in two large pharmacy benefit plans. J Manag Care Pharm. 2007;13:122-134. 17. Martinez B. Selling generic drugs by mail turns into lucrative business. Wall Street Journal. May 9, 2006. 18. Federal Trade Commission. Pharmacy Benefit Managers: Ownership of Mail Order Pharmacies. September 2005. File # P042111. 19. Berg K, Yosha N. PBM Down low, vol. II–quarterly PBM thoughts. Credit Suisse/First Boston. February 9, 2004. 20. Sackett DL, Straus SE, Richardson WS, et al. Evidence-Based Medicine: How to Practice and Teach EBM. London, England: Churchill Livingstone; 2000. 21. Benjamin RG. Point: a case for state regulation of PBMs. Manage Healthcare Executive. May 17, 2007. http://managedhealthcareexecutive. modernmedicine.com/mhe/article/articleDetail.jsp?id=427710& sk=&date=&%0A%09%09%09&pageID=2. Accessed May 15, 2008.

Comparing Pharmacy Benefit Managers

Stakeholder Perspectives Maximizing Savings, Efficiency, and Quality when Contracting with a PBM The management of a pharmacy program for a health plan or an insurance company is a complex task. To be effective, an active staff of skilled pharmacists is required to direct the clinical, qualitative, and financial components of the operation. Management of the pharmacy benefit, drug formulary, and contracts with a retail pharmacy, specialty pharmacy, or a pharmacy benefit management (PBM) company represent the core elements of such a task and require expertise, experience, and administrative acumen to successfully administer an effective program. PHARMACY DIRECTORS: The pharmacy director or the vice president of pharmacy services must take the lead in all aspects of management of the pharmacy benefits of their organization. The decision whether to contract with a PBM or to perform the services in-house lies with the pharmacy and finance departments of the health plan or the health insurance company. An effective method to evaluate potential PBMs involves the development of an extensive and de-

Aligning Incentives in Healthcare Transactions MEDICAL DIRECTORS: Healthcare is a complex marketplace that requires integrated, cooperative interaction of many stakeholders with every transaction. Partners compete for position, and as in any competitive market that matures, competition may occur at different levels. The first level on which the subcontractorâ&#x20AC;&#x2122;s performance is most often judged is price. If differentiating criteria are equal (or unidentified), the provider offering the lowest cost will be chosen. As prices stabilize and purchasers become more sophisticated, competition will occur at the levels of quality, or value-added service. As payors and employers look to contract with pharmacy benefit management (PBM) companies, cost is often a primary driver. These companies have enough purchasing power to deliver lower acquisition costs, competitive retail pharmacy contracting

tailed request for proposal (also known as RFP) that addresses all the core business needs of the company, including a detailed list of all the services that will be covered by the terms of the contract. The degree of control of the pharmacy benefits is established via the contract terms. A savvy pharmacy manager can effectively eliminate all gray areas from a contract by specifically defining all the financial terms and negotiating all necessary restrictions to protect the health plan or the insurance company, the patients, and any contracted pharmacies from inappropriate terms that diminish the quality of the program and increase the budgetary impact. HEALTH PLANS: Relying on the PBM to direct the negotiations leaves the company open to significant lost opportunities for the best possible contract terms. Rather, the health plan/insurance company must determine its critical service needs, define the payment structure for each service, negotiate control over the fee structure for all participants, and maintain ownership of all claims data, with the goal of maximizing savings and efficiency without compromising quality or service. James T. Kenney, Jr, RPh, MBA Pharmacy Operations Manager Harvard Pilgrim Health Care terms, and adequate networks, and infrastructure costs that may be diluted over a larger number of transactions. As costs become less of a differentiator in selecting a PBM partner, companies can now consider other qualities, such as those well illustrated in Mr Calabreseâ&#x20AC;&#x2122;s article. In the complex interaction that is healthcare, each link is trying to succeed on its own terms, and incentives are often not aligned across the continuum. By understanding how each party intends to succeed, and how the interaction can be mutually beneficial for all parties, and for the patients at the center of the transaction, the system as a whole can become more efficient. Mr Calabrese offers a wonderfully transparent view of one subset of these interactions that comprises a core of many healthcare transactions. Thomas McCarter, MD, FACP Chief Clinical Officer Executive Health Resources

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Global Resources. Uncompromising Standards.

Over the past year, Mylan has blossomed into one of the largest generic companies in the world— with operations in more than 90 countries. By acquiring the Generics Business of Merck KGaA, we have dramatically diversified our product portfolio into new therapeutic areas, dosage forms and delivery systems. As we expand beyond our shores, we take with us knowledge and expertise gained for more than 45 years. We recognize the trust that pharmacists place in Mylan Products, that’s why we will continue to do what we do best . . . make proven medicine more affordable for the patients who need them. 800-RX-MYLAN www.mylan.com ©2008 Mylan Inc.

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Where Generics and Biologics Meet Melisa J. Heinrichs, PharmD, BSPS; Gary M. Owens, MD

s was discussed in the first articles in this series (see AHDB, April, May 2008), generic medications are positively affecting trends in pharmacy spending and, ultimately, overall healthcare spending. Generic manufacturing and utilization have been increasing at a rapid pace. Biologic medications have yet to be truly affected by the introduction of generic competition in the United States. Despite various blockbuster biologics going off patent and increasing pressure for cost-containment, no regulatory process or safety control has so far been established that will allow a generic biologic to reach the market.

Follow-on Biologics versus Traditional Generics We are all familiar with the word biopharmaceuticalâ&#x20AC;&#x201D; a medication made by or derived from living organisms by the use of biotechnology. New terms flooding the market lately are follow-on biologic and biosimilar. These terms refer to agents that are similar but not identical to the originator biologic reference product.1 The US Food and Drug Administration (FDA) prefers the term follow-on biologic, but the rest of the world, and particularly European authorities, prefer the term biosimilar.2 Because these molecules are not identical to their reference products the way small-molecule generics are identical to theirs, it is vital that neither term be used interchangeably with generic or biogeneric.

To understand why follow-on biologics cannot be compared with traditional generics, we must examine the differences between these 2 types of pharmaceuticals (Table 1). For small-molecule generics, the development and manufacturing processes are straightforward. Generic manufacturers need only demonstrate that the product contains the identical chemical composition of the innovator product and a bioavailability study demonstrating similar pharmacokinetic properties.1 But as noted, follow-on biologics cannot meet even the most basic of these specificationsâ&#x20AC;&#x201D;being identical to the innovator productâ&#x20AC;&#x201D;because of the very nature of biopharmaceuticals, and how complex the manufacturing process and end product are. Most notably, biopharmaceuticals are large, complex proteins that are very closely tied to their manufacturing process. This process is composed of dozens of steps, including cloning sequences, expression in host-cell systems, fermentation, purification, and formulation. A change in any step can have drastic outcomes on the final product. The case of Eprex (epoetin alpha) is a good example. In the final product formulation, the manufacturing plant switched from human serum albumin stabilizer to polysorbate 80 and glycine, which resulted in an increased incidence of antibody-mediated pure red-cell aplasia.1 This serious side effect was unexpected, resulting from a seemingly innocuous change in the process. To complicate the issue further

Table 1 Characteristics of Biopharmaceuticals versus Traditional, Small-Molecule Generics Biopharmaceuticals

Traditional generics

Complex proteins Large size: up to 100-1000 times larger than traditional generics Genetically modified living cells Multifaceted manufacturing process Tied closely to manufacturing process Complex mechanisms of action Multiple targets, binding sites Efficacy markers not always clear Hard to isolate, purify after production Generally unstable

Basic molecular structures Small size Chemical manufacturing process Minimal steps to synthesize product Manufacturing process easily duplicated Simple, direct mechanism of action Limited, well-characterized binding sites Efficacy markers easily quantified Product components limited, known Stable once produced

Sources: References 1-3.

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Table 2 Biologics Price Competition and Innovation Act of 2007 The main features of the Act indicate it: 1. Requires Secretary of Health and Human Services to: • Determine interchangeability • Establish similarity in clinical outcomes and safety parameters • Establish class-specific guidance for products • Develop goals for reviewing follow-on biologic applications • Collect and evaluate data on the cost of reviewing follow-on biologics 2. Prohibits Secretary of Health and Human Services from: • Approving a follow-on biologic for 12 years after the innovator is introduced • Approving a second follow-on biologic within 1 year of the first approval 3. Sets forth provisions for: • Governing patent infringement actions • Exchange of confidential information • Good faith negotiations • Filing of an infringement action Source: GovTrack.us. S. 1695-110th Congress (2007): Biologics Price Competition and Innovation Act of 2007, GovTrack.us (database of federal legislation). http://www.govtrack.us/congress/bill.xpd?bill=s110-1695&tab=summary. Accessed April 28, 2008.

for follow-on biologics, the manufacturing process of the innovator product is protected by patent, thus making it nearly impossible to replicate any product.

The Global Regulatory Climate Given the notable differences between follow-on biologics and traditional medications, it is only fitting that the regulations to govern follow-on biologics account for such disparities. Currently, Europe has the most developed regulations for approving and bringing follow-on biologics to market. The European Medicines Agency (EMEA) is the lead body that establishes marketing authorization of generic products in Europe. In 2006, the EMEA issued the first class-specific guidelines for approval of 4 categories of follow-on biologics: • Human insulin • Human growth hormone (HGH) • Erythropoietin • Granulocyte colony–stimulating factor. The European Union has also developed a general legal pathway governing the approval of follow-on biologics. To date, 5 medications have been approved in

Europe according to these guidelines. The EMEA guidelines approach follow-on biologics as distinctive entities from their innovator biologics. Most notably, the guidelines highlight the importance of the manufacturing process.3 The EMEA requirements for approval of follow-on biologics include testing and documentation in the following areas1: • Efficacy studies • Extrapolation for other indications • Human pharmacokinetics and pharmacodynamics • Preclinical data • Postapproval immunogenicity commitments • Safety. As demonstrated by the Eprex example, biopharmaceuticals can provoke significant immunogenic responses. To account for this, the EMEA has specifically required 12-month immunogenicity comparisons and full pharmacovigilance plans for all follow-on biologics.3

Regulation in the United States While Europe has taken the lead in developing regulatory guidelines to bring follow-on biologics to market, the FDA has yet to approve and implement a process of its own. As noted in earlier articles in this series, the 1984 Hatch-Waxman Act amended the Federal Food, Drug, and Cosmetics Act to expedite getting generics to market.4 The 2 abbreviated pathways that the Hatch-Waxman Act added were 505(j) for traditional, identical generics and 505(b)(2) for drugs that are significantly different but comparable with an innovator product.5 In 1997, the Public Health Services (PHS) Act was enacted specifically to regulate biologic products. However, biologic products were first established nearly 15 years earlier, with the introduction of recombinant human insulin (by Genentech and Eli Lilly) in 1982.4 This has complicated the issue of launching follow-on biologics, because the early biologics and their follow-on imitators have been grandfathered in by Hatch-Waxman. To date, a handful of follow-on biologics have been approved using the 505(b)(2) pathway—primarily versions of insulin and HGH.6 Although this has worked for older products, more recent biologics, regulated by the PHS Act, have been losing patent, and no process has been established for licensing and regulating any generic, or otherwise similar, product. This apparent hole in the pharmaceutical regulatory system has sparked much debate and legislative proposals in the past few years. In 2007, 3 bills regarding follow-on biologics were introduced: the Access Continued on page 25

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Continued from page 22 to Life Savings Medicine Act, the Patient Protection and Innovative Biologic Medicines Act, and the Biologics Price Competition and Innovation Act. The first 2 were quickly rejected. The latter, and most recently proposed bill, was introduced but has since stalled. It has proved to be the most promising legislation and includes several key features (Table 2). Most notably, it calls for demonstrating comparability, 12-year exclusivity for innovators, and 1-year exclusivity for the first follow-on biologic. This legislation is expected to be reconsidered after the 2008 presidential election.4

Likely US Targets for Follow-on Biologics Biologics represent an exponentially growing share of prescription pharmaceutical spending. Sales in the United States have grown at least 17% annually for the past few years.4 Hundreds of biologics are in the pipeline, and by 2010 nearly half of drug approvals are expected to involve biotechnology.4 Several originator biologics are most likely to be targeted in the United States. In a study conducted by Citigroup Investment Research, 13 biologics were identified as the most likely to face follow-on competition by the year 2015 (Table 3).7 The selection was influenced by 3 key factors: market share, ease of manufacturing, and patent timing. Many of the identified targets are blockbuster medications. Epogen alone posted earnings of more than $2 billion in 2006. The researchers noted that monoclonal antibodies are generally deemed to present more challenges during the manufacturing process, so they are less likely to face competition.7 Patent timing will be a key factor for targeting agents in the United States. Some primary players in certain classes have lost or will shortly be losing patent, including granulocyte colonyâ&#x20AC;&#x201C;stimulating factors, erythropoietins, interferons, and HGHs.1 Challenges of Biologic Manufacturing Another challenge is how to pay for such a complex process. Cost estimates range from $10 million to $40 million for developing a follow-on biologic.8 Compare this with just $1 million to $2 million for a traditional, small-molecule generic. Estimates for the cost of constructing the manufacturing facility alone range from $250 million to $450 millionâ&#x20AC;&#x201D;before a product is even made.8 In addition, biologic proteins can take a considerable amount of time to develop, with projections ranging from 5 to 8 years.8 These challenges have the potential to influence the projected cost savings associated with these products.

Table 3 Biologics Likely to Face Market Competition Most susceptible Epoetin alfa (Epogen; Amgen) Filgrastim (Neupogen; Amgen) Somatropin rDNA (Nutropin; Genentech) Somatrem (Protropin; Genentech) Human insulin and related products (Novo Nordisk) Moderately susceptible Darbepoetin alfa (Aranesp; Amgen) Etanercept (Enbrel; Amgen) Interferon beta-1a (Avonex; Biogen Idec) Alteplase (Activase; Genentech) Dornase alfa (Pulmozyme; Genentech) Imiglucerase for Injection (Cerezyme; Genzyme) Hylan G-F 20 (Synvisc; Genzyme) Algalsidase beta (Fabrazyme; Genzyme) Source: Reference 7.

Cost Savings of Follow-on Biologic Despite these challenges, the financial incentive for many manufacturers is significant. In 2006, biologics accounted for roughly $54 billion, or about 20% of total pharmaceutical spending.5 And by 2010 they are expected to account for nearly double that, at $99 billion. This rate of increase is second only to diagnostic imaging in all healthcare spending.5 The reason for this is the increased cost of the product compared with traditional medications. On average, biologics cost $45/day or $16,425/year compared with $2/day or $730/year for traditional, small-molecule drugs.6 Such high costs could mean significant savings for consumers when follow-on biologics become available. In 2007, Avalere Health calculated the potential federal cost savings from follow-on biologics at $3.6 billion in the first 10 years after the introduction of follow-on biologics.9 Other studies according to Avalere reported a 10-year saving for Medicare of $14 billion, and total savings in US spending of $71 billion.9 Many variables have to be considered in calculating potential cost savings from follow-on biologics. First, is the number of follow-on entrants a biologic can expect to draw. The Avalere study predicted that products with annual revenue of more than $1 billion could expect 3 follow-on biologics to compete for market share,9 a much smaller number than for small-molecule drugs, because of the high cost and time requirements in developing a biologic.

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GENERIC DRUG TRENDS

Second is the penetration rate for follow-on biologics. The Avalere study predicted a penetration rate ranging between 33% and 75%.9 The penetration for biologics will be less than for traditional agents because of the uncertainty surrounding their performance, safety, and immunogenicity. Finally, the Avalere study suggests the savings to consumers with follow-on biologics will likely be much lower than that from traditional generics, ranging from 10% to 30% compared with up to 90%, respectively.9

Conclusions: The Future Although the cost savings are predicted to be substantial for the US economy, many pieces must fall into place before such benefits can be realized. The regulatory process for getting a follow-on biologic to market is unclear and is not likely to be determined before the end of 2008. If approved legislation is in keeping with the EMEA guidelines and proposed regulations, the approval process will not only be substantially longer but also more costly for manufacturers to conduct further clinical trials and surveillance. Also, increased upfront manufacturing costs will substantially reduce the number of manufacturers that could compete in this market. These initial costs will likely lead to smaller cost savings for consumers; however, given the high costs of biologics, savings should still be significant. Obstacles to follow-on biologics include heavy opposition from innovators, absence of a follow-on biologic approval process, heavy costs and complexity in development, and new and uncharted territory, but despite these resistors, the future for follow-on biologics appears inevitable. With a large market share and rapidly growing market segment adding economic incentive for manufacturers, and patents using biologics running out, the future has already begun. Advances in analytic techniques and the unending pressure for cost-containment by third parties and the American economy add to the bright outlook. Followon biologics will likely forge ahead and become a reality in the near future. References 1. Mellstedt H, Niederwieser D, Ludwig H. The challenge of biosimilars. Ann Oncol. 2008;19:411-419. 2. Genazzani AA, Biggio G, Caputi AP, et al. Biosimilar drugs: concerns and opportunities. Biodrugs. 2007;21:351-356. 3. Covic A, Kuhlmann MK. Biosimilars: recent developments. Int Urol Nephrol. 2007;39:261-266. 4. Ehrlich E, Wright EL. Biogenerics: what they are, why they are important, and their economic value to taxpayers and consumers. 2007. http:// www.cagw.org/site/DocServer/Biogenerics_FINAL.pdf?docID+2221. Accessed April 28, 2008.

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5. Johnson JA. FDA regulation of follow-on biologics. CRS Report for Congress. August 6, 2007. http://www.waxman.house.gov/pdfs/crs/ RL34045.pdf. Accessed April 28, 2008. 6. Shapiro RJ, Singh K, Mukim M. The potential American market for generic biological treatments and the associated cost savings. February 2008: 1-18. http://xs4all.nl/~surg3on/INSM/200802_Shapiro_Biogeneric_ Savings.pdf. Accessed April 28, 2008. 7. Carroll J. Where the wall will fall first. Biotechnol Healthc. 2007:26-32. 8. Grabowski HG. Statement to the House Oversight and Government Reform Committee. March 26, 2007. http://oversight.house.gov/ documents/20070416132526.pdf. Accessed April 28, 2008. 9. Ahlstrom A, King R, Brown R, et al. Modeling federal cost savings from follow-on biologics. Avalere Health LLC. April 2007. http:// www.avalerehealth.net/research/docs/modeling_Budgetary_Impact_of_ FOBs.pdf. Accessed April 28, 2008.

Dr Heinrichs is a staff pharmacist at St. Elizabeth Medical Center, Edgewood, Kentucky; Dr Owens is President, Gary Owens Associates, and former chair of Pharmacy & Therapeutic Committee, Independence Blue Cross.

Unmanaged Moment

NOT EVERYONE IS CUT OUT FOR THE SAME TREATMENT. 1 in 4 adults suffer from a diagnosable mental disorder in any given year.1

Open Access. Because different people have different needs.

Open access is especially important in the treatment of mental disorders because the response to therapy can vary greatly from individual to individual and from one medication to the next. Restrictions in the form of prior authorizations and preferred lists may have the unintended consequences of jeopardizing patient health while failing to reduce costs.

Bristol-Myers Squibb supports open and unrestricted access to mental health medications. For people with mental illness, having access to newer and potentially more effective medications can be a crucial component of treatment.

SUPPORT OPEN ACCESS AND GIVE PROVIDERS THE FREEDOM TO FIND THE MOST APPROPRIATE MEDICATION FOR EACH INDIVIDUAL. 1. National Institute of Mental Health. Available at: http://www.nimh.nih.gov/healthinformation/statisticsmenu.cfm. Accessed March 24, 2008.

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CLINICAL

Capnography Monitoring Enhances Safety of Postoperative Patient-Controlled Analgesia Thomas McCarter, MD, FACP; Zakir Shaik, MD, MHA; Keith Scarfo, DO, MS; Laura J. Thompson, RT(R), MBA

Background: Patient-controlled analgesia is associated with potentially fatal opioid-related respiratory depression. Opioids are a well-recognized cause of respiratory depression. However, in the postoperative patient, unrecognized pulmonary disease may lead to retention of carbon dioxide, which is further antagonized by opioids and may lead to lifethreatening respiratory depression. Therefore, using a method that would provide earlier warnings for respiratory problems could improve patient outcomes. Objective: To assess the efficacy of monitoring postoperative patients who were receiving patient-controlled opioid therapy with capnography modules in addition to the rouThomas McCarter, MD, FACP tine use of pulse oximetry to monitor ventilatory status and generate alerts when respiratory parameters exceed hospital-established limits. Method: Postoperative patients receiving patient-controlled analgesia were compared in relation to the use of pulse oximetry and capnography modules and their ability to generate alerts about abnormal respiratory parameters. A total of 634 patients receiving patient-controlled analgesia therapy were studied, of whom 239 (38%) received hydromorphone, 297 (47%) received morphine, and 98 (15%) received fentanyl. All 9 patients experiencing respiratory depression received supplemental oxygen. Results: Of the 634 patients studied, 9 (1.4%) experienced respiratory depression by bradypnea (<6 breaths per minute). Six (67%) events were related to hydromorphone and 3 (33%) were related to morphine. In 7 (78%) events, there was no basal infusion rate and the saturation of peripheral oxygen was >92%. All respiratory depression events occurred within the first 24 hours of patient-controlled analgesia therapy. In all cases, capnography, but not pulse oximetry, alerted the nurse to impending respiratory depression. Conclusions: Capnography was more effective than pulse oximetry in providing early warning of respiratory depression in patients receiving supplemental oxygen. Capnographic monitoring and automatic pausing of patient-controlled analgesia improved postoperative outcomes in situations that could have otherwise been fatal. Use of capnography improved clinician confidence that opioid dosing could be safely continued in postoperative patients for more effective pain management. [AHDB.2008;1(5):28-35.]

pioid-related respiratory depression can have tragic consequences. Failure to detect a patientâ&#x20AC;&#x2122;s declining respiratory status before progression to respiratory depression can lead to unwar-

Dr McCarter is Chief Clinical Officer, Executive Health Resources, Newtown Square, PA; Dr Shaik Medical Resident; Dr Scarfo is Medical Resident; and Ms Thompson is Project Administrator, Department of Clinical Information, Safety, and Quality Affairs, Main Line Health, Bryn Mawr, PA.

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ranted outcomes and possible need for critical care.1 Concerns about respiratory depression can also prevent clinicians from adequately treating postoperative pain.2 Patient-controlled analgesia (PCA) is widely used for postoperative opioid administration, because of its considerable potential to improve pain management by enabling patient control of dosing frequency. PCA, however, is associated with significant hazards,1,3-9 and the Anesthesia Patient Safety Foundation (APSF) has noted a significant, underappreciated risk

Capnography Monitoring in PCA

of serious injury from PCA in the postoperative period.10 The APSF has urged healthcare professionals to consider the potential safety value of continuous monitoring of oxygenation and ventilation in patients receiving PCA or neuraxial opioids during the postoperative period. According to the APSF, “It is not possible to reliably identify those patients at higher risk, and, therefore, all patients receiving parenteral opioids should be monitored.”11 Postoperative patients typically are monitored by pulse oximetry, but a growing body of evidence supports the use of capnography for earlier and more reliable warnings of potential respiratory depression compared with pulse oximetry.12-16 In one study, pulse oximetry identified only 33% of patients with respiratory distress, whereas capnography identified 100% of patients.17 Capnography has also identified a much greater rate of respiratory depression by bradypnea than was previously thought. Compared with the 1% to 2% incidence reported by analysis of published data,18,19 a research study using capnography showed a 41% incidence of respiratory depression by bradypnea (defined as respiratory rate less than 10 breaths per minute [bpm] for 3 minutes or longer).20 Until recently, continuous capnography required the patient to be intubated and was mostly limited to use in critical care.12 Innovative sidestream capnography can reliably be used now in intubated and nonintubated patients, adult and pediatric, as well as patients receiving oxygen.21 In October 2006, Main Line Health upgraded the “smart pump” technology at 3 of our acute care hospitals to include computerized PCA infusion with dosing-error–reduction software and sidestream capnography—end-tidal carbon dioxide (EtCO2)—on a single platform. This article reviews a case series of patients hospitalized at our facilities between October 2006 and March 2007, reporting the results of capnographic monitoring in patients receiving PCA therapy in the postoperative setting.

Implementing Capnographic Monitoring of PCA Main Line Health is an integrated healthcare system in suburban Philadelphia, PA, that includes 4 acute care hospitals licensed for 1047 beds. Recognizing opioids’ potential for harm, our organization has implemented a variety of measures to improve the safety of PCA, including policies and procedures to be used for the selection of candidates for PCA, prescription order sets to minimize prescription-related errors, staff training and supervision to prevent programming-related errors, patient education to avoid

KEY POINTS Patient-controlled analgesia is widely used for postoperative opioid administration but is also associated with potentially fatal respiratory depression. Detecting a patient’s declining respiratory status before progression to respiratory depression is therefore essential. Postoperative patients typically are monitored by pulse oximetry, but increasing evidence supports the use of capnography for earlier and more reliable warnings of respiratory depression. In this study, capnography was more effective than pulse oximetry in providing early warning of respiratory depression. In all 9 cases, the capnography monitoring alarm was the impetus to assess these patients; the pulse oximetry monitor had not alarmed.

“PCA by proxy,” nurse-controlled analgesia in case the patient is not able to administer the drug without assistance, and close monitoring to detect early signs of respiratory depression. A multidisciplinary team was responsible for upgrading the existing smart pump system (Alaris System with Guardrails suite of safety software; Cardinal Health, San Diego, CA; with Oridion Microstream capnography technology) by adding capnographic monitoring modules. The capnography modules were to be included on the same technology platform as PCA pumps. The team included members of the medical staff, nursing, pharmacy, respiratory therapy, biomedical engineering, information systems, and quality. Team members were responsible for reviewing information about the new technology, planning its implementation, and sharing decisions with their peers at all acute care hospitals, except for the hospital that had only recently become part of Main Line Health. The team also developed educational materials to train staff on EtCO2 technology. After implementation, the team met weekly to review any unresolved issues and track progress. Respiratory rate and EtCO2 minimum and maximum levels were determined after speaking with representatives from other healthcare systems that had implemented this technology.

Methods Capnography modules provided real-time data on ventilatory status of postoperative patients receiving PCA therapy by measuring respiratory rate, apneic events, and concentrations of EtCO2. A nasal sampling cannulalike device was used to measure carbon

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Figure Modified Sampling Cannula: CO2 Sampling/O2 Delivery for Nonintubated Patients Small pin holes in the nasal sampling cannula deliver pillows of oxygen around nose and mouth Increased surface area of cannula provides greater sampling accuracy in low tidal volume

Uni-junction of sampling ports prevents dilution from nonbreathing source

CO2 indicates carbon dioxide; O2, oxygen. Illustration courtesy of Oridion Capnography, Inc.

Table 1 Capnography Alarm Limits for Postoperative Patients Using PCA Parameter

Established limits

EtCO2 high EtCO2 low Respiratory rate high Respiratory rate low No breath alarm

50 mm Hg 20 mm Hg 38 bpm 6 bpm 20 seconds

PCA indicates patient-controlled analgesia; EtCO2, end-tidal carbon dioxide; bpm, breaths per minute.

dioxide (CO2) in exhaled breaths (Figure). Since any amount of CO2 in an exhaled breath was indicative of gas exchange, respiratory rate data were assumed to be representative of the patient’s respiratory rate, as long as the sampling cannula was properly positioned.20 An alert was generated and a PCA “pause” protocol could automatically halt the opioid infusion if the respiratory rate was below the pre-established parameters (Table 1). Patients using PCA were also monitored for vital signs, nausea, sedation level, pain scale, PCA dosing, and oxygen saturation as measured by pulse oximetry (SpO2). Every PCA module was physically attached to a capnography module so that nursing could more easily adhere to the policy of using capnography to monitor every patient placed on PCA. This eliminated the need for nursing or central supply to search for a missing

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PCA or capnography module if the two were not together. The only exceptions to this practice were for patients receiving PCA while in active labor and for patients on palliative or end-of-life care. A respiratory event was defined as occurring when the capnography monitor alerted the nurse (pulse oximetry did not alarm in any of the cases) to a change in respiration (apneic period or low respiratory rate) or to EtCO2 levels outside the predetermined limits, paused the PCA infusion because of low respiratory rate, and prompted the nurse or physician to take immediate action. After a respiratory event, the incident was reviewed and the nurses were interviewed by a member of the quality department using a standard set of questions. Patient charts were also reviewed for details about the events, predisposing conditions of the patients, and any incidental findings for each case.

Results In the first 5 months after implementing the capnography modules, a total of 634 patients received postoperative PCA therapy. Of these, 239 (38%) received hydromorphone and 297 (47%) received morphine. The remaining 98 (15%) were given fentanyl. The average age of the patients was 67.5 years, with the exception of 2 patients younger than age 50 years who were otherwise healthy. Of the 634 patients receiving PCA therapy, 9 (1.4%) had respiratory depression that required intervention to avert further complications. Of the 9 patients with respiratory events, 6 (67%) patients were receiving hydromorphone; the other 3 (33%) patients were receiving morphine. All 9 patients were also receiving supplemental oxygen. In 7 (78%) of the 9 patients who had respiratory events, the nursing assessment during the patient’s arrival from the postanesthesia care unit to the medical-surgical unit had caused concern about the patient’s condition. In 2 (22%) of these cases, the patients were otherwise stable on arrival to the unit. In 7 (78%) of the events, the patients were not receiving a PCA basal rate and the patients’ SpO2 was more than 92%. One patient had an SpO2 of 100% and 1 patient had an SpO2 of 76% at the time that the capnographic monitors alarmed, suggesting a critical respiratory depression. All respiratory depression events occurred within the first 24 hrs of initiating PCA therapy, with a mean time of 3.4 hrs, excluding an outlier with 23.5 hrs (Table 2). The median time from initiation of PCA therapy to the onset of respiratory events was 3.5 hrs

Capnography Monitoring in PCA

Table 2 Postoperative Respiratory Events in 9 Patients Using PCA Patient age

Postoperative hrs to event

Rapid response team called?

Basal rate used?

Naloxone administered?

82 78 78 74 73 70 64 49 40

2.5 3.0 2.5 3.5 6.25 3.5 2.5 3.5 23.5

Yes Yes No Yes No No No Yes No

No No No No No No No Yes Yes

Yes Yes Yes No No No No Yes No

PCA indicates patient-controlled analgesia.

and the average time was 5.6 hrs. In addition, 1 patient had an event 23.5 hrs after starting PCA. When excluding this outlier patient, the average time to a respiratory depression event was 3.4 hrs. In all cases, the capnography alarm was the impetus for the nurse to check on and assess these patients; the pulse oximetry monitor had not alarmed. On arrival in the patients’ rooms, the nurses found their patients to be unresponsive and took immediate action. In 4 (44%) of the 9 cases, the rapid response team was called to intervene, because of a dramatic change in the patient’s condition. In another 3 (33%), the attending physician or a resident was called to the bedside to intervene. In the remaining 2 (22%), the nurse stimulated the patient to breathe and continued to closely monitor the patient. In 4 (44%) of these patients, naloxone was administered to reverse the patient’s condition (Table 3). In the remaining cases, PCA was discontinued. These interventions resulted in positive outcomes for all the patients.

Patient Cases The following case examples illustrate the advantages of using additional safety monitoring to allow for early detection of subclinical respiratory depression for all patients receiving PCA. Case 1. PCA therapy was initiated in a 78-year-old man following surgical revision of a left total knee replacement. The patient also had a diagnosis of chronic obstructive pulmonary disease (COPD). He received hydromorphone with no basal rate and a PCA bolus dose of 0.2 mg with a 10-minute lock out. After using the PCA device for approximately 3 hrs, the patient’s

Table 3 PCA-related Respiratory Events: Composite Patient Data Variable

Patient data

Age (average) Rapid response team called PCA included basal rate Naloxone given Postoperative time to event (mean)

67.5 yrs 4 of 9 (44.4%) 2 of 9 (22.2%) 4 of 9 (44.4%) 3.4 hrs

PCA indicates patient-controlled analgesia.

nurse heard the capnography monitor alarming. On entering the room, the nurse found the patient unresponsive. The PCA had automatically paused, which meant that the patient’s respiratory had exceeded the predetermined lower limit of 6 bpm for more than 1 or 2 minutes. A rapid response team was called and 0.4 mg of naloxone was administered to the patient. The patient was awakened, saw many clinicians standing around his bed, and asked “What happened?” Case 2. A 49-year-old woman was placed on PCA after an elective total abdominal hysterectomy and bilateral salpingo oopherectomy for menometrorrhegia. She had no other significant medical history. She received an initial bolus of 1 mg hydromorphone, followed by a basal rate of 0.2 mg/hr and a PCA bolus dose of 0.2 mg with a 10-minute lock out. Approximately 5 hrs after PCA therapy was initiated, a capnography monitor alarm brought the nurse to the bedside. The safety system had automatically paused the PCA infusion. The nurse assessment found the patient was unresponsive with a

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respiratory rate of 6 bpm. A rapid response team was called and 0.2 mg of naloxone was administered. The patient responded, and PCA infusion was discontinued. The patient and her family requested that she remain on capnography monitoring overnight. Case 3. A 64-year-old woman was placed on hydromorphone PCA after a sigmoid colectomy. Her medical history was significant for hypertension and diverticulitis, but without complications. PCA therapy included no basal rate. The PCA bolus dose was 0.3 mg, with a 10-minute lock out. Approximately 2.5 hrs after PCA was started, the capnography monitoring system alarmed because of a low respiratory rate and automatically paused the PCA infusion. The nurse assessed the patient, the attending physician was contacted, and the PCA was discontinued. Shortly after, the patient’s respiratory rate returned to 14 bpm.

In all 9 patients who experienced respiratory events, capnography monitors provided the only alert to declining respiratory function. Pulse oximetry did not alarm in any case.

Case 4. A 78-year-old woman was placed on hydromorphone PCA therapy after inguinal repair. Her medical history was significant for hypertension and hypercholesterolemia. There was no basal rate of PCA, and the bolus rate was 0.5 mg, with a 10-minute lock out. Approximately 2 hrs after PCA therapy was initiated, the patient’s respiratory rate fell to 7 bpm, and the SpO2 was 90% while receiving 5 L supplemental oxygen by nasal cannula. The nurse found the patient to be unresponsive. The PCA was discontinued and naloxone was administered. The patient’s respiratory rate and level of consciousness returned to baseline within 30 minutes, and her SpO2 returned to 97% within an hour.

Discussion The Joint Commission describes pain as the “fifth vital sign” that should be monitored with the same vigilance as blood pressure, pulse, temperature, and respiratory rate. Inadequate pain control is unethical, clinically unsound, and economically wasteful.22 Pain management experts have stated a pain level that is unacceptable to the patient is rated by the patient as a 4 or more on a 0-to-10-point pain scale and requires

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prompt intervention—obtaining an order for and administration of prescribed analgesic and nonpharmacologic modalities, as appropriate. The implementation of capnography modules to monitor ventilatory response of patients receiving PCA therapy was an important part of hospital-wide efforts to enhance patient safety and quality of care in postoperative pain management. The American Society of Anesthesiologists emphasizes that ventilation and oxygenation are separate physiologic processes and that monitoring oxygenation by pulse oximetry is not a substitute for monitoring ventilatory function by capnography.23 A growing body of evidence supports capnography’s sensitivity in the detection of respiratory depression in patients receiving PCA therapy in general nursing care.12,13 Blinded capnography frequently identified respiratory depression undetected by the treating physicians.14 Another study found that a majority of patients with acute respiratory events had EtCO2 abnormalities that occurred before oxygen desaturation or observed hypoventilation.15 During procedural sedation in children, capnography allowed early detection of arterial oxygen desaturation because of alveolar hypoventilation in the presence of supplemental oxygen.16 The results of this case series provides additional evidence that pulse oximetry may fail to detect respiratory depression, particularly if a patient is receiving supplemental oxygen.24 In all 9 patients who experienced respiratory events, capnography monitors provided the only alert to declining respiratory function. Pulse oximetry did not alarm in any case. In 7 of the 9 cases, the SpO2 was greater than 92%. In the detection of respiratory depression, monitoring respiratory rate and EtCO2 concentration was more effective than monitoring oxygenation alone. Results underscore the need for vigilance in postoperative care of patients receiving PCA, especially in the first 24 hrs. Another study found that 77.4% of patients suffered respiratory events in the first 24 hrs postoperatively.25,26 In our series, with excluding one outlier of 23.5 hours, all 9 patients experienced respiratory depression within the first 24 hrs with a mean time of 3.4 hrs. Factors such as COPD, smoking, and obstructive sleep apnea can significantly increase the risk of respiratory events.27-29 In this case series, 89% of patients who had respiratory events had no history of respiratory disease. This supports the use of capnography to monitor all patients receiving PCA therapy, not only those recognized as being at high risk for opioidinduced respiratory depression.

Capnography Monitoring in PCA

Several studies have shown that a basal rate increases the total analgesic dose used and risk of respiratory depression.30-34 It is a common belief among clinicians that removing the basal infusion rate will potentially avoid the risks of respiratory depression. However, in our study, only 33% of the patients who required medical intervention were receiving a basal infusion rate. The occurrence of respiratory events in patients receiving no basal rate and having no evidence of PCA by proxy suggests that PCA by demand-bolus alone can deliver sufficient opioid to result in respiratory depression. Hydromorphone is approximately 8 times more potent than morphine.35 The increased potency allows for better pain control but may increase the risk of respiratory events. In this case series, a much smaller percentage of the 634 patients receiving PCA therapy received hydromorphone than morphine (38% vs 47%), yet a greater percentage of respiratory events was related to hydromorphone than to morphine (67% vs 33%). Other studies have also shown an increased risk of respiratory events with hydromorphone compared with morphine.25 Several studies have shown that a basal rate increases the total analgesic dose used and incidence of side effects such as respiratory depression.30-32 Many clinicians believe that removing the basal infusion rate will potentially avoid the risks of respiratory depression. However, in this case series, 78% of patients experiencing PCArelated respiratory depression had no basal rate.

Outcomes Since October 2006, we had 9 patients whose level of sedation while receiving PCA opioids led to low respiratory rates. In each case, capnographic monitoring of respiratory rate alerted caregivers before pulse oximetry and prevented a serious adverse event. In most of the patients in this series, nursing assessment had already raised concerns about the patient’s condition. Capnographic monitoring provided real-time data that alerted nurses when immediate action was needed. All patients were properly treated without injury. Concerns about potential respiratory depression also can prevent clinicians from treating pain adequately,10 which can adversely affect recovery and outcomes. The use of continuous capnography to monitor EtCO2 and effective respiratory rate improves clinicians’ confidence that opioid doses can be safely increased to provide more effective pain management for all patients. Other benefits of using capnography to monitor patients receiving PCA therapy include: • Increased nursing awareness of changes in respiratory status during PCA therapy

• Increased early nursing interventions to correct PCA-related respiratory distress • Increased nursing confidence that patients were being effectively monitored for respiratory depression • Effective use of the rapid response team to correct PCA-related respiratory distress and avoid increased costs of care that would otherwise follow respiratory arrest • Measurable increases in patient safety during PCA therapy.

The use of continuous capnography to monitor EtCO2 and effective respiratory rate improves clinicians’ confidence that opioid doses can be safely increased.

Conclusions The cases in this series provide additional evidence that continuous capnographic monitoring offers more reliable and earlier indication of changes in patient respiratory status compared with continuous pulse oximetry, particularly in patients receiving supplement oxygen administration. Hospital-defined alerts and data from the capnographic monitoring modules provided clinicians with the earliest warnings of respiratory distress. Automatic pausing of the PCA infusion by the capnography system and expeditious interventions by members of a multidisciplinary healthcare team helped prevent serious complications and the need for more intensive care. Without this PCA safety technology, patients might have needed additional interventions that could have negatively impacted their lives, increased their length of stay, increased the cost of their care, and utilized additional healthcare resources. References 1. Maddox RR, Williams CK, Fields M. Respiratory monitoring in patient-controlled analgesia. Am J Health Syst Pharm. 2004;61:2628,2635. 2. McPhee SJ, Papadakis MA, Tierney LM Jr, eds. Gonzales R, Zeiger R, online eds. Current Medical Diagnosis and Treatment 2007. San Francisco, CA: McGraw-Hill Medical; 2007. 3. ISMP Medication Safety Alert. Safety issues with patient-controlled analgesia Part I—How errors occur. July 10, 2003. http://www.ismp.org/ newsletters/acutecare/articles/20030710.asp. Accessed May 13, 2008. 4. ISMP Medication Safety Alert. Frequent problems with medication systems noted during ISMP hospital evaluations Part 2. June 17, 1998.

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http://www.ismp.org/newsletters/acutecare/articles/19980617.asp. Accessed May 13, 2008. 5. ISMP Medication Safety Alert. More on avoiding opiate toxicity with PCA by proxy. May 29, 2002. http://www.ismp.org/newsletters/ acutecare/articles/20020529.asp. Accessed May 13, 2008. 6. Etches RC. Respiratory depression associated with patient-controlled analgesia: a review of eight cases. Can J Anaesth. 1994;41:125-132. 7. JCAHO Sentinel Event Alert. Patient-controlled analgesia by proxy. December 2, 2004. http://www.jointcommission.org/sentinelevents/ sentineleventalert/sea_33.htm. Accessed May 13, 2008. 8. Overdyk FJ. PCA presents serious risks. APSF Newsl. 2005;20:33. 9. Cohen MR. How to prevent errors—safety issues with patient controlled analgesia (Part 2). ISMP medication error report analysis. Hosp Pharm. 2005;3:210-212,274. 10. Bailey P. Supplemental oxygen is appropriate. APSF Newsl. Spring 2006;21:18. 11. Weinger M. Dangers of Postoperative Opioids; APSF Workshop and White Paper Address Prevention of Postoperative Respiratory Complications. APSF Newsl. Winter 2006;21:61-68. 12. Maddox R, Williams CK, Oglesby H, et al. Clinical experience with patient-controlled analgesia using continuous respiratory monitoring and a smart infusion system. Am J Health Syst Pharm. 2006;63:157-164. 13. Hutchison R, Rodriquez L. Capnography and respiratory depression. Am J Nurs. 2008;108:35-39. 14. Deitch K, Chudnofsky CR, Dominici P. The utility of supplemental oxygen during emergency department procedural sedation and analgesia with midazolam and fentanyl: a randomized, controlled trial. Ann Emerg Med. 2007;49:1-8. 15. Burton JH, Harrah JD, Germann CA, et al. Does end-tidal carbon dioxide monitoring detect respiratory events prior to current sedation monitoring practices? Acad Emerg Med. 2006;13:500-504. 16. Lightdale JR, Goldmann DA, Feldman HA, et al. Microstream capnography improves patient monitoring during moderate sedation: a randomized, controlled trial. Pediatrics. 2006;17:e1170-e1178. 17. Miner JR, Heegaard W, Plummer D. End-tidal carbon dioxide monitoring during procedural sedation. Acad Emerg Med. 2002;9:275-280. 18. Cashman JN, Dolin SJ. Respiratory and haemodynamic effects of acute postoperative pain management: evidence from published data. Br J Anaesth. 2004;93:212-223. 19. Walder B, Schafer M, Henzi I, et al. Efficacy and safety of patientcontrolled opioid analgesia for acute postoperative pain. A quantitative systematic review. Acta Anaesthesiol Scand. 2001;45:795-804. 20. Overdyk FJ, Carter R, Maddox RR, et al. Continuous oximetry/capnometry monitoring reveals frequent desaturation and bradypnea during patient-controlled analgesia. Anesth Analg. 2007;105:412-418. 21. Colman Y, Krauss B. Microstream capnography technology: a new approach to an old problem. J Clin Monitor Comput. 1999;15:403-409. 22. Phillips DM. JCAHO pain management standards are unveiled. Joint Commission of Accreditation of Healthcare Organizations. JAMA. 2000;284:428-429. 23. American Society of Anesthesiologists Task Force on Sedation and Analgesia by Non-Anesthesiologists. Practice guidelines for sedation and analgesia by non-anesthesiologists. Anesthesiology. 2002;96:1004-1017. 24. Poirier MP, Gonzalez Del-Rey JA, McAneney CM, et al. Utility of monitoring capnography, pulse oximetry, and vital signs in the detection of airway mishaps: a hyperoxemic animal model. Am J Emerg Med. 1998;16:350-352. 25. Taylor S, Kirton O, Staff I, et al. Postoperative day one: a high risk period for respiratory events. Am J Surg. 2005;190:752-756. 26. Shapiro A, Zohar E, Zaslansky R, et al. The frequency and timing of respiratory depression in 1524 postoperative patients treated with systemic or neuraxial morphine. J Clin Anesth. 2005;17:537-542. 27. Arozullah AM, Conde MV, Lawrence VA. Preoperative evaluation for postoperative pulmonary complications. Med Clin North Am. 2003;87:153-173. 28. Parikh SN, Stuchin SA, Maca C, et al. Sleep apnea syndrome in patients undergoing total joint arthroplasty. J Arthoplasty. 2002;17:635-642. 29. Gupta RM, Parvizi J, Hanssen A, et al. Postoperative complications

in patients with obstructive sleep apnea syndrome undergoing hip or knee replacement: a case-control study. Mayo Clin Proc. 2001;76:897-905. 30. Hansen LA, Noyes MA, Lehman ME. Evaluation of patient-controlled analgesia (PCA) verses PCA plus continuous infusion in postoperative cancer patients. J Pain Symptom Manage. 1991;6:4-14. 31. Smythe MA, Zak MB, O’Donnell MP, et al. Patient-controlled analgesia versus patient-controlled analgesia plus continuous infusion after hip replacement surgery. Ann Pharmacother. 1996;30:224-227. 32. Looi-Lyons LC, Chung FF, Chan VW, et al. Respiratory depression: an adverse outcome during patient-controlled analgesia therapy. J Clin Anesth. 1996;8:151-156. 33. Parker RK, Holtmann B, White PF. Effects of a nighttime opioid infusion with PCA therapy on patient comfort and analgesic requirements after abdominal hysterectomy. Anesthesiology. 1992;76:362-367. 34. Dal D, Kanbak M, Caglar M. A background infusion of morphine does not enhance postoperative analgesia after cardiac surgery. Can J Anaesth. 2003;50:476-479. 35. Li JM. Pain management in the hospitalized patient. Med Clin North Am. 2002;86:771-795.

Stakeholder Perspective Capnography in Procedural Anesthesia: At the Edge of a “Perfect Storm” MEDICAL DIRECTORS: The case series in this article provides insight into the recognized utility of end-tidal carbon dioxide (EtCO2) monitoring during procedural anesthesia in clinical settings at locations remote from the operating room, where sedation/analgesia is supervised by nonanesthesiologists who may not be continuously available to recognize hypoventilation by conventional clinical observations. Consistent with other studies of EtCO2, respiratory depression was detected during patient-controlled analgesia (PCA) before changes in oxygenation were detected by pulse oximetry, permitting timely medical intervention. These clinical anecdotes thus resonate with mandates from the American Society of Anesthesiologists and the Joint Commission on Accreditation of Healthcare Organizations regarding the respiratory monitoring of patients undergoing anesthesia and lend credence to the position adopted by the Anesthesia Patient Safety Foundation. However, consistent with the history of new technological innovations in medicine, reimbursement for capnography also can be contentious when indications for use and the environment for application extend outside of perioperative medical services. Emergency medical services and the Continued

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June 2008

Capnography Monitoring in PCA

Stakeholder Perspective Continued alternative care market, including physician offices, skilled nursing facilities, sleep centers, endoscopy centers, dental offices, and home healthcare services all provide venues in which EtCO2 monitoring has been considered for a cornucopia of clinical conditions ranging from routine monitoring of ventilatory status—where the risk of respiratory failure can be high (eg, asthma, chronic obstructive pulmonary disease, coronary heart failure)—to biofeedback monitoring in anxiety disorders. Aggressive marketing strategies emphasizing enduser benefits, creation of new markets by extending potential indications, and equipment replacement as a result of enhanced product capabilities accelerate entry of new technology into conditions and environments where enhanced clinical outcomes are not as well established, and where reimbursement is therefore inconsistent. The use of a case series to illustrate the medical importance of EtCO2 in PCA thus occurs within a

hierarchy of evidentiary standards in clinical research. Case reports, case series, database analyses, observational studies, controlled clinical trials, and replicated controlled clinical trials represent paradigms of increasing complexity and persuasiveness that collectively provide compelling arguments to support the utilization of a novel technology. Although medical device clinical trials represent approximately 1% of total research expenditures within the pharmaceutical/medical device industry, prospective studies examining the utility of new technology, such as capnography, in enhancing clinical outcomes become imperative to shape the impact of an otherwise “perfect storm” in the healthcare community— novel, relatively inexpensive technology; apparently self-evident utility; and diverse clinical applications. Michael F. Murphy, MD, PhD Worldwide Clinical Trials Chadds Ford, PA

Information for Authors Manuscripts submitted to American Health & Drug Benefits (AHDB) must be original and must not have been published previously, either in print or in electronic form. Manuscripts cannot be submitted elsewhere while under consideration by AHDB. To be considered for publication, manuscripts must adhere to the format described in this document. All manuscripts are subject to peer review, and acceptance is based on that review. If accepted, authors will be notified of any recommended revisions. The revised manuscript should be resubmitted in its entirety, with all changes made. Routine editorial changes will be made to conform to house style, following the AMA Manual of Style, 10th ed. (New York, NY: Oxford University Press, 2007). The edited manuscript is sent to the author for a final review and approval. Time from submission to publication is generally 3 to 5 months. COPYRIGHT/DISCLOSURE Authors are required to sign a Copyright Transfer Form, assigning all copyrights to Engage Healthcare Communications, LLC, publisher of AHDB, as well as a Financial Disclosure Form, disclosing any financial interests or potential conflict of interest involving the materials discussed in the manuscript. MANUSCRIPT FORMAT • Title page should have a proper title for the article and list the names, titles, and affiliations of all authors. Also list the

• • • • • • •

name, address, telephone number, and e-mail address of the corresponding author A 200-word Abstract Conclusion Double space the entire manuscript and number pages Cite all Tables and Figures in the text, but place the actual graphic elements at the end of the article; type all figure heads and captions in a Word format References: use 25-30 current, post-1990 references, cited in the text but listed at the end of the manuscript. Avoid automatic numbering or footnote/endnote features Length of article: 2500-3000 words, plus tables and figures Save all Figures or images as individual files, at high resolution (300 dpi), as jpg, tif, or eps. Images not saved appropriately or saved within the Word document will delay the peerreview process significantly.

PERMISSIONS Authors must secure a written permission from the original publisher for any previously published (online or in print) Table or Figure. Provide the source with each element. HOW TO SUBMIT Save the manuscripts as a Word file and attach individual files for each image used in the article, saved as an image file (eg, jpeg, tif, eps). Submit the manuscript electronically to: editorial@AHDBonline.com. For assistance with submission, call 732992-1892.

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AMCP HIGHLIGHTS

Looking Down the Pharmaceutical Pipeline By Maude Campbell Based on a presentation titled “Scanning the Pharmaceutical Pipeline: What’s on the Horizon?” by Brian W. Kolling, PharmD, at the Academy of Managed Care Pharmacy Annual Meeting, April 17, 2008, San Francisco, CA.

pproximately 1450 products are currently in the pharmaceutical pipeline, with treatments for cancer and central nervous system disorders dominating the research. Although the number of drugs being developed is at an all time high, the overall quality of the pipeline is unclear, considering the unpredictability of the US Food and Drug Administration (FDA), increased attention to benefit design, and the potential end of the traditional blockbuster drug model. Only 4 of the 20 new drug applications were approved in 2007. Furthermore, patents on 7 major drugs—Lipitor, Plavix, Lexapro, Singular, Diovan, Actos, Zyprexa—will expire in 2011 and 2012, which will create a vertical effect in the market, because there are not 6 or 7 agents that can potentially replace them. Meanwhile, there are some important drugs to watch for during the balance of 2008.

Key 2008 Approvals A total of 6 new agents have either recently been approved or are awaiting approval this year that are expected to have significant impact. Treximet: (sumatriptan/naproxen; GlaxoSmithKline), a combination agent approved in April, has been shown to be more effective than either agent alone for migraine. How health plans in managed care will handle this combination agent remains to be seen, because both components (sumatriptan and naproxen) are available individually. Generic sumatriptan is expected to become available in November. Effient: A June priority review is scheduled for Effient (prasugrel; Daichii Sankyo/Eli Lilly), a platelet inhibitor for the prevention of cardiovascular events in patients with acute coronary syndrome, and if approved, this agent will be the only true competitor to clopidogrel (Plavix). In clinical trials, prasugrel prevented more events than clopidogrel but was associated with more bleeding events. Dexlansoprazole: The proton pump inhibitor (PPI) dexlansoprazole (Takeda) would be a follow-on to lanDr Kolling is Chief Pharmacy Officer, UnitedHealth Pharmaceutical Solutions.

soprazole for gastroesophageal reflux disease and erosive esophagitis. This could be the final PPI and may offer true 24-hour protection. However, the long-term prospects for this medication are unclear, and generic pressures in 2009 will require an aggressive launch and switch marketing campaign. DPP-4: Several companies will be competing in the dipeptidyl peptidase-4 (DPP-4) inhibitor market given the failure of inhaled insulin (Exubera; Pfizer) and vidagliptan (Galvus; Novartis), decreased rosiglitazone (Avandia; GlaxoSmithKline) use, and an upcoming pioglitazone patent expiration. Alogliptin (Takeda) is scheduled to be reviewed in November and could be joined by saxagliptin (Bristol-Myers Squibb/AstraZeneca) next year. Promacta/Nplate: Two new agents seek to expand available thrombocytopenia treatment. Promacta (eltrombopag; GlaxoSmithKline) is an oral platelet growth factor for chemotherapy and chronic liver disease–related thrombocytopenia and idiopathic thrombocytopenic purpura. If approved, it will be the first in its class. Nplate (romiplostin; Amgen) is a thromTable Key Generics Expected Approval in 2008 Drug

Indication

Expected/Approval date

Topamax

Migraine Epilepsy ADHD RLS, Parkinson’s Schizophrenia Genital herpes Bipolar disorder Migraine Bipolar disorder Depression Glaucoma Migraine Epilepsy GERD

March (tentative approval)

Adderall XR Requip Risperdal Valtrex Lamictal Depakote Paxil CR Truspot/Cosopt Imitrex Keppra Prevacid

April (approved) May (approved) June (tentative approval) June (tentative approval) July July October October November (?) November November

RLS indicates restless legs syndrome; ADHD, attention deficit hyperactivity disorder; GERD, gastroesophageal reflux disease.

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AMCP HIGHLIGHTS

bopoesis-stimulating peptibody protein for idiopathic thrombocytopenic purpura treatment. Both Promacta and Nplate are expected to be reviewed this summer. Generic launches in 2008 will not be as extensive as those expected after 2010. Key generics expected to be approved in 2008 are listed in the Table.

Pipeline-related Diseases to Watch Venous thromboembolism. The pipeline has numerous products under development for venous thromboembolism that may replace older, inexpensive drugs. There is potential for combination therapy products and market growth as a result of the ease of administration, lack of monitoring needed, and fewer side effects that may be associated with drugs in the pipeline. In addition, pharmaceutical companies are licensing or sharing key products, including factor Xa inhibitors, which block the clotting factor required to produce thrombin. These agents include rivaroxaban (Johnson & Johnson/Bayer), apixaban (Bristol-Myers Squibb/Pfizer), LY517717 (Eli Lilly), and at least 5 others that are in early stages of development. In addition, the direct thrombin inhibitor dabigatran and the thrombin receptor antagonist SCH530348 are promising treatments. Fibromyalgia. Pharmaceutical companies are increasingly recognizing the need to treat fibromyalgia, which is estimated to affect up to 4% of the US population and is one of the most common causes of chronic, widespread pain. Fibromyalgia is associated with significant comorbid insomnia and depression, and the only currently approved treatment for this is pregabalin (Lyrica). Two antidepressants are being reviewed for fibromyalgia treatment, including duloxetine (Eli Lilly) and a selective norepinephrine reuptake inhibitor, milnacipran (Forest), which is approved as an antidepressant in Europe. Alzheimerâ&#x20AC;&#x2122;s disease. A large amount of drug development activity surrounds Alzheimerâ&#x20AC;&#x2122;s disease (AD) because the patient population is growing rapidly and current treatments have limited efficacy. Potential vaccines and disease-modifying agents are in the pipeline, with beta-amyloid targeted as a key peptide. Prophylactic treatments to prevent AD are also being researched. The AD pipeline includes bapineuzumab (Wyeth/ Elan), a beta-amyloidâ&#x20AC;&#x201C;specific monoclonal antibody that targets the N terminus of beta-amyloid. It is believed to prevent beta-amyloid aggregation and help clear plaques in the brain. A phase 3 trial in mild-tomoderate AD was started in 2007, and a drug launch is

AMERICAN HEALTH & DRUG BENEFITS

June 2008

targeted for 2011. The current version of bapineuzumab is for intravenous (IV) infusion every 3 months, but a subcutaneous formula is under development. Tarenflurbil (Myriad), the R-enantiomer of flurbiprofen, exhibits beta-amyloid effects without effects on cyclooxygenase 1 and 2. Phase 2 trial results in mild AD patients had disappointing results, but longer-term phase 3 trials are scheduled to start in June 2008, with a possible new drug application by the end of 2008 and a launch in 2010. Gammagard is IV immune globulin (Baxter) that contains natural antibodies specific for beta-amyloid. Phase 3 trials are underway but are based on limited phase 2 data. Research with this AD treatment is interesting, but the therapy is likely to be cost-prohibitive. The most interesting natural and long-term AD treatment under development is ELND-005 (Elan/ Transition Therapeutics), which is derived from a naturally occurring form of sugar alcohol, scyllo-inositol. The substance is secreted by the brain, crosses the blood-brain barrier, and is orally active. The product is currently in phase 2 trials for mild-to-moderate AD and is fast-tracked by the FDA. Hepatitis C. With an estimated 170 million people affected worldwide, there is a continued need for new hepatitis C virus (HCV) treatments. Current HCV treatments are associated with high rates of nonresponders and treatment discontinuations. The pipeline has generated renewed interest in HCV, led by protease inhibitors (PIs) representing a new mechanism of action. There are at least 13 PIs in development for HCV. Telaprevir (Vertex) is a PI for HCV that is now beginning phase 3 trials, with an estimated 2010 approval date. According to phase 1 and 2 trial results, the product requires a shorter treatment course than currently available HCV treatments and may have response rates higher than those seen with current standard of care. Sleep disorders. Treatments for sleep disorders are in the pipeline, and new mechanisms are being investigated. Despite the new therapies of recent years, sleep disorders continue to be undertreated. Several 5-HT2A antagonists are being investigated, because they are thought to have a more potent effect on sleep quality than agents that target the gamma-aminobutyric acid receptor. The 5-HT2A antagonists being investigated include eplivanserin and volinanserin (sanofi-aventis), and pruvanserin (Lilly). Silenor (doxepin; Somaxon) and esmirtazapine (Schering-Plough) are also being developed for sleep disorder treatment.

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Reference: 1.

REGULATORY

The NCCN Compendium for Cancer Management Interview with Bill McGivney, PhD

Early in 2008, American Health & Drug Benefits asked Dr Bill McGivney to discuss the National Comprehensive Cancer Network Drugs and Biologics Compendium and guidelines, which represent the evaluation of current evidence on cancer management and the integration of expert judgment in a consensus fashion by oncologists from National Comprehensive Cancer Network institutions. Several advantages that may explain the increasing popularity and acceptance of the Compendium and the guidelines are the authoritative nature of the National Comprehensive Cancer Network experts, the rapid updates, and the free online access. The Centers for Medicare & Medicaid Services reference the guidelines specifically on coverage questions related to oncology and is currently evaluating whether to recognize the Compendium as a basis for Medicare coverage decisions for cancer patients. A decision is expected in June 2008. In January 2008, UnitedHealthcare announced that it would be using the Compendium as a basis for their coverage decisions for patients with cancer, a fact that may influence other private health insurance companies to follow suit. In this interview, Dr McGivney discusses some of the unique features of the guidelines and the Compendium and what differentiates them from available guidelines and compendia of other cancer organizations, including the American Society of Clinical Oncology. [AHDB.2008;1(5):40-44.]

obert Henry: In mid-January, UnitedHealthcare announced that it was adopting the National Comprehensive Cancer Network (NCCN) Compendium for coverage purposes. Do you think it is going to influence physicians in the trenches? Also, many guidelines are issued, but they are often ignored. How has the NCCN reached what appears to be a consensus? Bill McGivney: Indeed, there have been about 3500 guidelines written over the years. The majority of them have found their way to wastepaper baskets or reside in nice leather-bound editions on shelves. There are a variety of reasons why the NCCN guidelines have been widely recognized and applied by clinicians. The guidelines represent the evaluation of evidence and the integration of expert judgment in a consensus fashion by

Dr McGivney is Chief Executive Officer, National Comprehensive Cancer Network, Fort Washington, PA.The opinions expressed in this interview are those of Dr McGivney and do not necessarily represent those of the NCCN.

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experts from leading NCCN institutions in the world. One of the keys clearly is that they are up to date, which is obviously crucial in oncology in particular and in medicine in general, because it is all moving extremely rapidly. In the pharmaceutical industry, the research product lines (the pipeline) are quite full with agents. At the NCCN, we strive to provide recommendations for diagnosis, imaging, drug therapies, radiation, surgery, and so on, along a continuum-of-care basis, and this is done with a sense of urgency to keep them up to date. This is likely one reason that has made the guidelines particularly worthwhile. They are widely recognized as the standard for clinical policy and oncology in the United States. They are available free of charge, which helps, and finally, relevant to the rapid advancements in science and oncology, they came at the right time and the right place. The NCCN guidelines have met the needs of clinicians, especially in the community setting. Community oncologists tend to treat multiple tumor types and, as a result, are in greater need of

The NCCN Compendium for Cancer Management

an up-to-date set of guidelines that keep pace with the scientific and clinical advances. Our surveys show that 96% of oncologists think that the NCCN guidelines are important to use when making decisions about patient care, and of these, 64% say they strongly agree that the guidelines are important. Increasingly, we see that physicians believe that the guidelines are also helpful for interacting with managed care companies. We have seen, particularly in the past 4 or 5 years, that managed care companies increasingly use the guidelines as one of the bases, if not the basis, for coverage policy. Some companies contact us to ask for our position on specific clinical issues and about the appropriateness of the use of a particular technology in the specific indication. In these situations, the NCCN responds rapidly to such information requests about our guideline recommendations. With regards to national coverage determinations, the Centers for Medicare & Medicaid Services (CMS) references the NCCN guidelines specifically on questions related to oncology. We also see that with private payors. As a result, the NCCN has looked to put our information in formats that can be used by payors. About 3 years ago, we looked at all the drugs and biologics recommendations in our guidelines to see what format would be best for payors. Since the late 1980s, when states started to adopt the legislation that became law requiring that private payors at least referred to the 2 compendiaâ&#x20AC;&#x201D;the American Hospital Formulary Service Compendium and the US Pharmacopeia Drug Information Compendium (also known as AHFS and USP-DI)â&#x20AC;&#x201D;and if there were indications for drugs in those compendia then they had to cover such indications in that state, we decided that there was certainly an important role for us to play, particularly in cancer, because of our guideline recommendations, and we had the most up-to-date compendium. Indeed the other 2 compendia tended to be outdated, especially for cancer. So about 3 years ago we decided to develop the format for the Compendium, that is, to translate and transpose the recommendations about drugs and biologics into a compendium format, which is what we have today. On our website, which has free access, we have more than 13,000 registered users for the Compendium, which is the only product that we require registration for, but it is still free. About 5397 are self-identified physicians. Among the 13,000, about 2500 are nurses. Approximately 1000 individuals have identified themselves as managed care professionals, and 500 are involved in the employee world.

KEY POINTS The NCCN Compendium is becoming a standard for clinical policy in oncology in the United States. CMS is currently evaluating whether to adopt the Compendium as a basis for Medicare coverage for cancer patients. Earlier this year, UnitedHealthcare announced it would base its coverage policies for drugs and biologics in cancer care on the NCCN Compendium. More than 1 million people worldwide have accessed the guidelines and the Compendium online at www.nccn.org this year. The guidelines are being updated on an ongoing basis, consistent with the rapid advancements in science and in cancer therapy specifically.

Henry: These are the medical directors at the Fortune 500 company types? McGivney: I am not sure. We have not checked for their degrees, but because they identify themselves as being associated with employers, it is likely they are medical directors or they work with the medical directors at companies that are interested in the expensive drugs and biologics that they may be purchasing. Henry: That brings to mind the issue of cost. If we define value as being a balance of cost, quality, and access, unlimited quality would come at an unlimited price tag and, therefore, will deprive healthcare resources, which are being allocated anywhere else. Does the Compendium relate to cost at all?

Our surveys show that 96% of oncologists think that the NCCN guidelines are important to use when making decisions about patient care, and of these, 64% say they strongly agree that the guidelines are important.

McGivney: Our guidelines do not explicitly address cost. We do not directly attempt to resolve the major health policy concern of increasing expenditures, particularly in drugs and biologics, and in cancer care. Rather we focus on the safety and effectiveness of treat-

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REGULATORY

ments and make recommendations that are based on data and evidence to enhance the efficiency and the utilization of the drugs. Also, my personal opinion is that the decisions about the pricing of drugs need to occur outside of the clinical decision-making setting. It is a public policy issue that relates to employers as purchasers, payors, and manufacturers. Henry: Can the guidelines help in cost-efficiency by targeting the right patients toward the diagnostics? To what degree do the guidelines help in finding the right patient and eliminating waste use through improved diagnostics, genomic testing?

If UnitedHealthcare is using the NCCN Compendium as the basis for coverage determination about drugs and biologics, the Compendium will be used more and more by payors and by physicians.

McGivney: It is certainly very important to be informed about the potential risks and benefits of any therapy. Patients should have authoritative information in user-friendly formats. In my personal opinion, the negative side tends to be when the patient is asked to share a significant burden of the costs of therapy and thus is asked basically to perform a cost-effectiveness analysis on their therapeutic options. I think the guidelines tend to pinpoint with respect to the data regarding certain patient subpopulations, which patients are appropriate for the use of which drugs. The indications of our drug compendium compared with other compendia are more specific, because they are drawn from the guidelines that basically communicate what is appropriate in terms of the context of care. So, for example, if you look at a particular drug in the metastatic setting in our guidelines and in the Compendium, you may see in this specific recommendation that it is only for patients who have a performance status of 0 to 2, which may eliminate 30% to 40% of that patient population, because they have a performance status of 3 and 4. Other compendia are not that specific. The specificity in our guidelines lends itself to enhancing efficiency. If UnitedHealthcare is using the NCCN Compendium as the basis for coverage determination about drugs and biologics, the Compendium

AMERICAN HEALTH & DRUG BENEFITS

June 2008

will be used more and more by payors and by physicians. We are currently developing a set of standard chemotherapy order templates for individual practices for the ordering and use of chemotherapy or biologics. So if you are a community practice and you are using the NCCN standard or templates, and you have UnitedHealthcare patients, you know that for those patients, their therapy will be covered if based on the NCCN order templates. Henry: How does UnitedHealthcare or any of the payors roll this out? How do they implement the Compendium? McGivney: My understanding of the UnitedHealthcare rollout is that they have sent notices to employers, to practices, and to providers in their network, indicating that they are going to do this. They are going to cover all the category 1, 2A, and 2B recommendations in the NCCN Compendium. Category 3 recommendations, which are quite infrequent, will be referred for medical review. Category 3 issues will go down to the next set of compendia that may be required by the plans in a particular state and to the medical literature specifically. In terms of frequency, for example, we looked at the way UnitedHealthcare is going to be managed, at least for an initial period of time, and for the 1564 indications in our compendium, only 6 indications would be category 3 indications that may be referred for medical review based on the way UnitedHealthcare is managing the system initially. Henry: Are the guidelines and the Compendium evaluating health-related quality-of-life issues? McGivney: Yes, that comes into play specifically. Certainly in terms of adverse events there are discussions and different branches in the guidelines, and therefore in the Compendium, about patients who may not be able to tolerate more aggressive treatments. Some of that is dependent on age and some on previous reactions to administration of drugs. We address the issues of pain, fever, neutropenia, and fatigue. The guidelines have all 3 major components: the algorithms are major branches, with specific recommendations, and they are accompanied by long discussion manuscripts that review the evidence that supports the recommendations but also addresses controversial issues. The component is a large reference section. Henry: What are the differences between what you are seeking to do with NCCN guidelines versus what the

The NCCN Compendium for Cancer Management

American Society of Clinical Oncology (ASCO) is doing with their guidelines? McGivney: The NCCN guideline development was initiated in 1995, 2 years before I joined. They are comprehensive, proceeding from identification of a suspicious lesion or symptoms all the way through work-up, diagnosis, treatment, follow-up, general surveillance, long-term surveillance, and if recurrence occurs, obviously, management of that recurrence. The expert panels are also multidisciplinary in nature, because cancer care can involve surgery, radiation, or drugs. ASCO’s guidelines are important as well, but are more focused, like technology assessments that look at a specific technology class. The NCCN success may be explained by the context it provides, such as where the diagnostics should be provided, where the follow-up imaging test should be provided, where the drug therapy should be provided, and if such options fail, what to do next. We have developed quality measures of NCCN guideline recommendations. Some believe we need to measure many points along the continuum of care. Again, NCCN guideline recommendation is a process measure. We first put our guidelines online in 2002, and we had about 100,000 visitors, but this year for the first time we passed the 1 million mark. We are at 1.18 million unique visitors—tremendous utilization of the guidelines by clinicians, consumers, patients, and international visitors. And we are expanding. Right now we have just 5 doctoral level people that take all the different diagnoses and divide them up and track those areas. In addition, we know when the US Food and Drug Administration (FDA) is going to be required to act on something that is in the pipeline, so we track that and we update the guidelines continually. We also have agreement collaboration with the American Cancer Society to develop patient guidelines; about 600,000 booklets of patient guidelines given out every year. These are also available on our website. And we have just signed an agreement with Cerner—one of the largest hospital information system companies in the country—to imbed our information in decision support tools. We are in negotiations with a major company to develop software programs to evaluate the quality of care, and it is based on the 2006 CMS quality demonstration program in oncology for Medicare. We developed a tool with Medicare that could be used to evaluate the quality of care of clini-

cians, and we are working to develop that as a software program that would be made available to all constituencies and the healthcare community based on the NCCN guidelines and the Compendium. Henry: What is the status of the Compendium with CMS? McGivney: I am confident that we will be recognized by CMS. [A decision is expected in June 2008, just around the time this article will appear in print.] We have had a very collaborative relationship with them. They have asked for things that have been beneficial to the users. We have certainly paid particular heed to their “Federal Register” notices. Our Compendium online has an alphabetical listing and index by generic name of all the drugs and biologics in the Compendium. We have made available the total information in all pharmacologic characteristics and actions by directly linking from each drug to the most recent FDA label. It can be searched by disease, histology, brand names, and so on. CMS is interested in compendia that are available to their beneficiaries free of charge. Ours is the only compendium that is available free to all just by visiting our website.

CMS is interested in compendia that are available to their beneficiaries free of charge. Ours is the only compendium that is available free to all just by visiting our website.

The Medicare Coverage Advisory Committee meeting was held on March 30, 2006. CMS convened 14 to 16 experts from around the country who spent a full day evaluating the 6 available compendia, 2 of which are recognized. They identified again about 12 characteristics that should be the basis for a good compendium. They heard an outside contractor report and also had presentations from each compendium. They asked a lot of questions and at the end, they voted on each characteristic: the NCCN received the highest score on each characteristic, particularly in areas of an evidence basis for recommendations, public transparency, and the way we manage potential conflicts of interest. That is why I am confident that we will be recognized by CMS. Stakeholder Perspective on page 44 www.AHDBonline.com

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Stakeholder Perspective Economic/Societal Costs of Adding a Compendium to the Federal Registry PHARMACY DIRECTORS: No one questions the benefits of the National Comprehensive Center Network (NCCN) Drugs and Biologics Compendium as a resource for listing of medically interesting literature, studies, and results. Nevertheless, the NCCN Compendium has not passed the test of need to replace or be added to the Centers for Medicare & Medicaid Services compendia listings. The NCCN website lists 21 sponsoring pharmaceutical companies as financial supporters. Although these are fully disclosed, the aspect of potential bias remains for information being ported to clinicians as to appropriate drug therapy and drug use in manners that may promote greater drug utilization than necessary. The NCCN is suggestive on its website of being a vehicle for funding of clinical studies; this too adds a degree of concern because of unknown elements of the clinical trial agreement and the resulting free flow of all reported data from the clinical study, both good and not so good. Many point to increased survivorship from cancer, and certainly many aspects of modern medicine contribute to this fact; the reality is that these advancements have not been driven by “guidelines” but by experimental outcomes based on evidence and superiority of one therapy compared with another, using active agents and not placebo. Medicine is not lacking for trial outcomes that are rapidly reported by investigators, followed by the oversight committees, and ended quickly when observed advantage or disadvantage is seen in the intermediary results. Clinical trials are tracked by the National Institutes of Health as well as by the US Food and Drug Administration (FDA). As Dr McGivney notes in the interview, many guidelines are indeed published, and most are not used or are ignored, because of perceptions of bias or known bias; the many views of the NCCN online only indicates that a search tool listed a website as a “hit,” and curiosity may have led to further investigations. These investigations, as Dr McGivney notes, are not well documented as to content reviewed and do not necessarily indicate that the site is the destination for guideline development or prescribing purposes. Many hits

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June 2008

on a website do not signify a preponderance of support by oncologists. Healthcare in the United States consumes approximately 16% of the nation’s gross domestic product,1 with an upward trend. So while we can point to having the most costly and advanced technology worldwide, the metrics for measurement of healthcare success are often receiving a failing grade when compared with metrics being reported by lesser advanced and financially able countries.2 Embellishing the NCCN as a compendium would be far-reaching both for therapy and as societal costs. As a society, we must remain steadfast in the approach to disease management and therapy to use proved therapies. Evidence-based medicine in relation to determining the best therapy, based on data from well-designed studies with an adequately powered number of subjects, supports a qualified confidence level in the results. The FDA has similar responsibilities to that of the National Institute for Health and Clinical Excellence in matters of drug regulatory management and approvals, but the US-based clinical studies very often have too few subjects to elicit a high-confidence rating, and the studies often use a placebo for comparison. In contrast, European studies involve therapeutically active comparators with high scrutiny for statistical significance for outcome measures. The official compendium in the federal registrar is currently used to host appropriate off-label use of drug therapy, the issues of Medicare’s national coverage determinations, as well as Part D medications and Medicaid reimbursement. Based on the expected expansion because of dueling listings, the overall expense to society will increase with the addition of any compendium to the federal registry. Adding more references as “official” can only add to the complexity of determination of medical necessity for off-label medications, resulting in the continuation of a broken system. References 1. US Department of Commerce International Trade Commission. Health Care Services Sector, 2007 US Market Overview. http:// www.trade.gov/investamerica/health_care.asp. Accessed June 2, 2008. 2. World Health Organization. Core Health Indicators. http://www. who.int/whosis/database/core/core_select.cfm. Accessed June 2, 2008.

Thomas Kaye, RPh, MBA Sr. Pharmacy Director Passport Health Plan, AmeriHealth Mercy

New Edition Now Available Award-winning Depression Benchmarks!

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Depression Benchmarks

A comprehensive, claims-based analysis of more than 600,000 patient episodes of depression (1 episode = 1 year) highlighting direct costs and utilization of resources across 5 domains of care: Inpatient care Outpatient care Ancillary care (labs, tests, procedures) Emergency department Pharmaceuticals

Do you measure resource utilization and costs associated with depression? Managing quality and cost is the foundation of today’s managed care structure. Wyeth recognizes that balancing quality and cost is a formidable challenge for managed health care professionals. We also recognize that success, in part, hinges on tools and resources that can aid in the evaluation of care management and may lead to reinforcing solutions. As part of our continuing efforts to improve the quality of care for patients with depression, we are proud to sponsor this comprehensive claims-based review to promote ongoing clinical and financial assessments that improve care in this patient population.

To learn more about this exclusive program, please contact your Wyeth Pharmaceuticals Account Manager today! “Depression Benchmarks” and “TRU Benchmarks” are trademarks owned by Managed Care Measures, LLC. Depression Benchmarks publication cover design, photograph, and color scheme (except for Total Resource Utilization blue banner): © 2008, Wyeth Pharmaceuticals Inc., Philadelphia, PA 19101. Total Resource Utilization blue banner: © 1999-2008 Managed Care Measures, LLC. The remainder of this advertisement: © 2008, Wyeth Pharmaceuticals Inc., Philadelphia, PA 19101. 223008-01 TM

Executive Summaries Results-driven Healthcare: Addressing the Staggering Cost of Poor Performance By Kip Piper, MA, CHE

In his editorial, Mr Kip Piper, an expert on government affairs, suggests there is a direct correlation between the escalating costs of healthcare delivery today and poor performance of the providers of care. The share of poor quality of care in the cost—$2.4 trillion—of the US healthcare system is significant. Overuse of healthcare services, as well as undertreatment and inappropriate treatment are respon-

sible for approximately 30% of the cost of this astronomical number of dollars spent on healthcare, amounting to about $720 billion in 2008 alone. Poor quality of care also translates to an estimated 50 cents in lost productivity, amounting to about $123 billion in additional costs for care provided through employer-sponsored insurance. To improve the quality and cost-effectiveness of the US healthcare delivery, Mr Piper says, purchasers and payors must tightly focus on 5 results-driven strategies—expecting, measuring, disclosing, rewarding, and supporting results. Using Mr Piper’s tips on how to achieve these goals can assist health plans improve performance, enhance overall quality of care, and control costs.

Unmanaged Moment

“I feel like everyone takes advantage of me.”

Comparing Pharmacy Benefit Managers: Moving Well Beyond the Simple Spreadsheet Analysis By David Calabrese, RPh, MHP

Over the past decade, several plan sponsors have filed high-profile lawsuits against major pharmacy benefit management (PBM) companies, alleging a variety of inappropriate business tactics that have led to hundreds of millions of dollars in fines and settlements. Capitalizing on his first-hand experience as Chief Clinical Officer at MedMetrics Health Partners in Worcester, MA, Mr Calabrese outlines specific strategies for plan sponsors on how to carefully select a better-aligned PBM business partner and improve the quality of care of plan members at a substantial cost savings to the plan. Keys to ensuring optimal selection of a PBM partner include a strong understanding of industry trends, keen awareness of PBM business practices, effective strategies to protect a plan’s best interests, and a commitment to forego simple spreadsheet analyses in assessing PBM options. This article provides a comprehensive understanding of current PBM business practices and equips plan sponsors with strategies and safeguards to drive a wellinformed pharmacy benefit selection process and enhance the PBM–payor relationship. Highlighting the increasing complexity of pharmacy benefit proContinued on page 48

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June 2008

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EXECUTIVE SUMMARIES

Continued from page 46 grams and the unrelenting cost pressures, Mr Calabrese emphasizes the need to compare the business components offered by a potential PBM before contracting it to serve the plan. He lists specific steps involved in the evaluation process: demanding maximum allowable cost pricing; requiring the PBM discloses their manufacturer rebates; requesting mail-order pricing components; routine access to claims data, including electronic access; audit rights; assessing consulting firms; administrative fees; and litigation history of a potential PBM.

Capnography Monitoring Enhances Safety of Postoperative Patient-Controlled Analgesia By Thomas McCarter, MD, FACP; Zakir Shaik, MD, MHA; Keith Scarfo, DO, MS; Laura J. Thompson, RT(R), MBA

This original research was conducted at Main Line Health (MLH), an integrated healthcare system in suburban Philadelphia that includes 4 acute care hospitals licensed for 1047 beds. Led by Dr Thomas McCarter, this team of MLH healthcare providers studied the efficacy of capnography monitoring in addition to the routine use of pulse oximetry in 9 postoperative patients who were receiving opioid therapy in the form of patient-controlled analgesia (PCA). Opioids are a well-recognized cause of respiratory depression, thus PCA is associated with potentially fatal respiratory depression. The Anesthesia Patient Safety Foundation (APSF) has noted a significant, underappreciated risk of serious injury from PCA in the post-

AMERICAN HEALTH & DRUG BENEFITS

operative period. Failure to detect a patient’s declining respiratory status before progression to respiratory depression can lead to unwarranted outcomes. Using a method that would provide earlier warnings for respiratory problems in postoperative patients using PCA could therefore improve patient outcomes and prevent unwarranted death. Until recently, continuous capnography required the patient to be intubated. Innovative methods now allow the use of capnography in other patients, including those receiving oxygen. In October 2006, MLH upgraded its technology at 3 of their acute care hospitals to include computerized PCA infusion with dosing-error– reduction software and sidestream capnography, known as end-tidal carbon dioxide (EtCO2). Dr McCarter and colleagues describe a case series of 9 patients hospitalized at MLH facilities between October 2006 and March 2007 and discuss the implications of their findings for using capnographic monitoring in postoperative patients receiving PCA. Of the 634 patients receiving PCA during that period at their facilities, 9 (1.4%) experienced respiratory depression by bradypnea. In all 9 cases, capnography, but not pulse oximetry, alerted the nurse to impending respiratory depression. Capnographic monitoring and automatic pausing of PCA improved postoperative patient outcomes as well as clinicians’ confidence in postoperative opioid dosing. These findings are aligned with the APSF restrictions and suggest that capnography may be more effective than pulse oximetry in providing early warning of respiratory depression in patients receiving supplemental oxygen and PCA. In light of the accumulating evidence of the benefits of EtCO2 monitoring, it may be necessary for health plans to review available data and consider their

June 2008

reimbursement practices for capnography versus pulse oximetry.

The NCCN Compendium for Cancer Management Interview with Bill McGivney, PhD

Early in 2008 American Health & Drug Benefits asked Bill McGivney, PhD, Chief Executive Officer, National Comprehensive Cancer Network (NCCN), to discuss the nature of the NCCN guidelines and their Drugs and Biologics Compendium. Dr McGivney explains the unique features of the NCCN guidelines and the Compendium, highlighting the benefits they offer physicians, patients, and payors, including free electronic access to a wealth of clinical information as well as treatment recommendations. The online information is being updated on an ongoing basis to reflect new data and new decisions by the US Food and Drug Administration. Such continuous updating allows all decision makers to use the accumulating new clinical data and new drug approvals, as well as recommendations that reflect these recent changes. In June 2008, the Centers for Medicare & Medicaid Services is expected to rule on whether to adopt the NCCN Compendium for reimbursement and coverage decisions for Medicare patients with cancer. At the beginning of the year, UnitedHealthcare announced that it would be using the NCCN Compendium as a basis for their coverage decisions for cancer patients, which may, in turn, influence coverage decisions by other private health insurance companies. More than 1 million people worldwide have accessed the NCCN guidelines and the Compendium at www.nccn.org.

Brief Summary of Prescribing Information USE IN PREGNANCY When used in pregnancy during the second and third trimesters, drugs that act directly on the renin-angiotensin system can cause injury and even death to the developing fetus. When pregnancy is detected, MICARDISÂŽ tablets should be discontinued as soon as possible. See WARNINGS: Fetal/Neonatal Morbidity and Mortality INDICATIONS MICARDIS is indicated for the treatment of hypertension. It may be used alone or in combination with other antihypertensive agents. CONTRAINDICATIONS MICARDIS (telmisartan) is contraindicated in patients who are hypersensitive to any component of this product. WARNINGS Fetal/Neonatal Morbidity and Mortality Drugs that act directly on the renin-angiotensin system can cause fetal and neonatal morbidity and death when administered to pregnant women. Several dozen cases have been reported in the world literature in patients who were taking angiotensin converting enzyme inhibitors. When pregnancy is detected, MICARDIS (telmisartan) tablets should be discontinued as soon as possible. The use of drugs that act directly on the renin-angiotensin system during the second and third trimesters of pregnancy has been associated with fetal and neonatal injury, including hypotension, neonatal skull hypoplasia, anuria, reversible or irreversible renal failure, and death. Oligohydramnios has also been reported, presumably resulting from decreased fetal renal function; oligohydramnios in this setting has been associated with fetal limb contractures, craniofacial deformation, and hypoplastic lung development. Prematurity, intrauterine growth retardation, and patent ductus arteriosus have also been reported, although it is not clear whether these occurrences were due to exposure to the drug. These adverse effects do not appear to have resulted from intrauterine drug exposure that has been limited to the first trimester. Mothers whose embryos and fetuses are exposed to an angiotensin II receptor antagonist only during the first trimester should be so informed. Nonetheless, when patients become pregnant, physicians should have the patient discontinue the use of MICARDIS tablets as soon as possible. Rarely (probably less often than once in every thousand pregnancies), no alternative to an angiotensin II receptor antagonist will be found. In these rare cases, the mothers should be apprised of the potential hazards to their fetuses, and serial ultrasound examinations should be performed to assess the intra-amniotic environment. If oligohydramnios is observed, MICARDIS tablets should be discontinued unless they are considered life-saving for the mother. Contraction stress testing (CST), a non-stress test (NST), or biophysical profiling (BPP) may be appropriate, depending upon the week of pregnancy. Patients and physicians should be aware, however, that oligohydramnios may not appear until after the fetus has sustained irreversible injury. Infants with histories of in utero exposure to an angiotensin II receptor antagonist should be closely observed for hypotension, oliguria, and hyperkalemia. If oliguria occurs, attention should be directed toward support of blood pressure and renal perfusion. Exchange transfusion or dialysis may be required as a means of reversing hypotension and/or substituting for disordered renal function. There is no clinical experience with the use of MICARDIS tablets in pregnant women. No teratogenic effects were observed when telmisartan was administered to pregnant rats at oral doses of up to 50 mg/kg/day and to pregnant rabbits at oral doses up to 45 mg/kg/day. In rabbits, embryolethality associated with maternal toxicity (reduced body weight gain and food consumption) was observed at 45 mg/kg/day [about 12 times the maximum recommended human dose (MRHD) of 80 mg on a mg/m2 basis]. In rats, maternally toxic (reduction in body weight gain and food consumption) telmisartan doses of 15 mg/kg/day (about 1.9 times the MRHD on a mg/m2 basis), administered during late gestation and lactation, were observed to produce adverse effects in neonates, including reduced viability, low birth weight, delayed maturation, and decreased weight gain. Telmisartan has been shown to be present in rat fetuses during late gestation and in rat milk. The no observed effect doses for developmental toxicity in rats and rabbits, 5 and 15 mg/kg/day, respectively, are about 0.64 and 3.7 times, on a mg/m2 basis, the maximum recommended human dose of telmisartan (80 mg/day). Hypotension in Volume-Depleted Patients In patients with an activated renin-angiotensin system, such as volume- and/or salt-depleted patients (e.g., those being treated with high doses of diuretics), symptomatic hypotension may occur after initiation of therapy with MICARDISÂŽ tablets. This condition should be corrected prior to administration of MICARDIS tablets, or treatment should start under close medical supervision with a reduced dose. If hypotension does occur, the patient should be placed in the supine position and, if necessary, given an intravenous infusion of normal saline. A transient hypotensive response is not a contraindication to further treatment, which usually can be continued without difficulty once the blood pressure has stabilized. PRECAUTIONS General. Impaired Hepatic Function: As the majority of telmisartan is eliminated by biliary excretion, patients with biliary obstructive disorders or hepatic insufficiency can be expected to have reduced clearance. MICARDIS (telmisartan) tablets should be used with caution in these patients. Impaired Renal Function: As a consequence of inhibiting the renin-angiotensin-aldosterone system, changes in renal function may be anticipated in susceptible individuals. In patients whose renal function may depend on the activity of the renin-angiotensinaldosterone system (e.g., patients with severe congestive heart failure), treatment with angiotensinconverting enzyme inhibitors and angiotensin receptor antagonists has been associated with oliguria and/or progressive azotemia and (rarely) with acute renal failure and/or death. Similar results may be anticipated in patients treated with MICARDIS tablets. In studies of ACE inhibitors in patients with unilateral or bilateral renal artery stenosis, increases in serum creatinine or blood urea nitrogen were observed. There has been no long term use of MICARDIS tablets in patients with unilateral or bilateral renal artery stenosis but an effect similar to that seen with ACE inhibitors should be anticipated. Information for Patients. Pregnancy: Female patients of childbearing age should be told about the consequences of second- and third-trimester exposure to drugs that act on the renin-angiotensin system, and they should also be told that these consequences do not appear to have resulted from intrauterine drug exposure that has been limited to the first trimester. These patients should be asked to report pregnancies to their physicians as soon as possible. Drug Interactions. Digoxin: When telmisartan was coadministered with digoxin, median increases in digoxin peak plasma concentration (49%) and in trough concentration (20%) were observed. It is, therefore, recommended that digoxin levels be monitored when initiating, adjusting, and discontinuing telmisartan to avoid possible overor under-digitalization. Warfarin: Telmisartan administered for 10 days slightly decreased the mean warfarin trough plasma concentration; this decrease did not result in a change in International Normalized Ratio (INR). Other Drugs: Coadministration of telmisartan did not result in a clinically significant interaction with acetaminophen, amlodipine, glibenclamide, simvastatin, hydrochlorothiazide or ibuprofen. Telmisartan is not metabolized by the cytochrome P450 system and had no effects in vitro on cytochrome P450 enzymes, except for some inhibition of CYP2C19. Telmisartan is not expected to interact with drugs that inhibit cytochrome P450 enzymes; it is also not expected to interact with drugs metabolized by cytochrome P450 enzymes, except for possible inhibition of the metabolism of drugs metabolized by CYP2C19. Carcinogenesis, Mutagenesis, Impairment of Fertility There was no evidence of carcinogenicity when telmisartan was administered in the diet to mice and rats for up to 2 years. The highest doses administered to mice (1000 mg/kg/day) and rats (100 mg/kg/day) are, on a mg/m2 basis, about 59 and 13 times, respectively, the maximum recommended human dose (MRHD) of telmisartan. These same doses have been shown to provide average systemic exposures to telmisartan >100 times and >25 times, respectively, the systemic exposure in humans receiving the MRHD (80 mg/day). Genotoxicity assays did not reveal any telmisartanrelated effects at either the gene or chromosome level. These assays included bacterial mutagenicity tests with Salmonella and E. coli (Ames), a gene mutation test with Chinese hamster V79 cells, a cytogenetic test with human lymphocytes, and a mouse micronucleus test. No drug-related effects on the reproductive performance of male and female rats were noted at 100 mg/kg/day (the highest dose administered), about 13 times, on a mg/m2 basis, the MRHD of telmisartan. This dose in the rat resulted in an average systemic exposure (telmisartan AUC as determined on day 6 of pregnancy) at least 50 times the average systemic exposure in humans at the MRHD (80 mg/day). Pregnancy Pregnancy Categories C (first trimester) and D (second and third trimesters). See WARNINGS, Fetal/Neonatal Morbidity and Mortality. Nursing Mothers It is not known whether telmisartan is excreted in human milk, but telmisartan was shown to be present in the milk of lactating rats. Because of the potential for adverse effects on the nursing infant, a decision should be made whether to discontinue nursing or discontinue the drug, taking into account the importance of the drug to the mother. Pediatric Use Safety and effectiveness in pediatric patients have not been established. Geriatric Use Of the total number of patients receiving MICARDIS in clinical studies, 551 (18.6%) were 65 to 74 years of age and 130 (4.4%) were 75 years or older. No overall differences in effectiveness and safety were observed in these patients compared to younger patients and other reported clinical experience has not identified differences in responses between the elderly and younger patients, but greater sensitivity of some older individuals cannot be ruled out. ADVERSE REACTIONS MICARDIS (telmisartan) has been evaluated for safety in more than 3700 patients, including 1900 treated for

over six months and more than 1300 for over one year. Adverse experiences have generally been mild and transient in nature and have only infrequently required discontinuation of therapy. In placebo-controlled trials involving 1041 patients treated with various doses of telmisartan (20-160mg) monotherapy for up to 12 weeks, an overall incidence of adverse events similar to that of placebo was observed. Adverse events occurring at an incidence of 1% or more in patients treated with telmisartan and at a greater rate than in patients treated with placebo, irrespective of their causal association, are presented as follows: The most common adverse events occurring with MICARDIS Tablets monotherapy at a rate of e1% and greater than placebo, respectively, were: upper respiratory tract infection (URTI) (7%, 6%), back pain (3%, 1%), sinusitis (3%, 2%), diarrhea (3%, 2%), and pharyngitis (1%, 0%). In addition to the adverse events, the following events occurred at a rate of 1% but were at least as frequent in the placebo group: influenza-like symptoms, dyspepsia, myalgia, urinary tract infection, abdominal pain, headache, dizziness, pain, fatigue, coughing, hypertension, chest pain, nausea and peripheral edema. Discontinuation of therapy due to adverse events was required in 2.8% of 1455 patients treated with MICARDIS tablets and 6.1% of 380 placebo patients in placebo-controlled clinical trials. The incidence of adverse events was not dose-related and did not correlate with gender, age, or race of patients. The incidence of cough occurring with telmisartan in six placebo-controlled trials was identical to that noted for placebo-treated patients (1.6%). In addition to those listed above, adverse events that occurred in more than 0.3% of 3500 patients treated with MICARDIS monotherapy in controlled or open trials are listed below. It cannot be determined whether these events were causally related to MICARDIS tablets: Autonomic Nervous System: impotence, increased sweating, flushing; Body as a Whole: allergy, fever, leg pain, malaise; Cardiovascular: palpitation, dependent edema, angina pectoris, tachycardia, leg edema, abnormal ECG; CNS: insomnia, somnolence, migraine, vertigo, paresthesia, involuntary muscle contractions, hypoaesthesia; Gastrointestinal: flatulence, constipation, gastritis, vomiting, dry mouth, hemorrhoids, gastroenteritis, enteritis, gastroesophageal reflux, toothache, non-specific gastrointestinal disorders; Metabolic: gout, hypercholesterolemia, diabetes mellitus; Musculoskeletal: arthritis, arthralgia, leg cramps; Psychiatric: anxiety, depression, nervousness; Resistance Mechanism: infection, fungal infection, abscess, otitis media; Respiratory: asthma, bronchitis, rhinitis, dyspnea, epistaxis; Skin: dermatitis, rash, eczema, pruritus; Urinary: micturition frequency, cystitis; Vascular: cerebrovascular disorder; and Special Senses: abnormal vision, conjunctivitis, tinnitus, earache. During initial clinical studies, a single case of angioedema was reported (among a total of 3781 patients treated with telmisartan). Clinical Laboratory Findings In placebo-controlled clinical trials, clinically relevant changes in standard laboratory test parameters were rarely associated with administration of MICARDIS tablets. Hemoglobin: A greater than 2 g/dL decrease in hemoglobin was observed in 0.8% telmisartan patients compared with 0.3% placebo patients. No patients discontinued therapy due to anemia. Creatinine: A 0.5 mg/dL rise or greater in creatinine was observed in 0.4% telmisartan patients compared with 0.3% placebo patients. One telmisartan-treated patient discontinued therapy due to increases in creatinine and blood urea nitrogen. Liver Enzymes: Occasional elevations of liver chemistries occurred in patients treated with telmisartan; all marked elevations occurred at a higher frequency with placebo. No telmisartan-treated patients discontinued therapy due to abnormal hepatic function. Post-Marketing Experience The following adverse reactions have been identified during post-approval use of MICARDIS tablets. Because these reactions are reported voluntarily from a population of uncertain size, it is not always possible to reliably estimate their frequency or establish a causal relationship to drug exposure. Decisions to include these reactions in labeling are typically based on one or more of the following factors: (1) seriousness of the reaction, (2) frequency of reporting, or (3) strength of causal connection to MICARDIS tablets. The most frequently spontaneously reported events include: headache, dizziness, asthenia, coughing, nausea, fatigue, weakness, edema, face edema, lower limb edema, angioneurotic edema, urticaria, hypersensitivity, sweating increased, erythema, chest pain, atrial fibrillation, congestive heart failure, myocardial infarction, blood pressure increased, hypertension aggravated, hypotension (including postural hypotension), hyperkalemia, syncope, dyspepsia, diarrhea, pain, urinary tract infection, erectile dysfunction, back pain, abdominal pain, muscle cramps (including leg cramps), myalgia, bradycardia, eosinophilia, thrombocytopenia, uric acid increased, abnormal hepatic function/liver disorder, renal impairment including acute renal failure, anemia, and increased CPK. Rare cases of rhabdomyolysis have been reported in patients receiving angiotensin II receptor blockers, including MICARDIS. OVERDOSAGE Limited data are available with regard to overdosage in humans. The most likely manifestation of overdosage with MICARDIS (telmisartan) tablets would be hypotension, dizziness and tachycardia; bradycardia could occur from parasympathetic (vagal) stimulation. If symptomatic hypotension should occur, supportive treatment should be instituted. Telmisartan is not removed by hemodialysis. DOSAGE AND ADMINISTRATION Dosage must be individualized.The usual starting dose of MICARDIS (telmisartan) tablets is 40 mg once a day. Blood pressure response is dose related over the range of 20-80 mg. Special Populations: Patients with depletion of intravascular volume should have the condition corrected or MICARDIS tablets should be initiated under close medical supervision (see WARNINGS, Hypotension in Volume-Depleted Patients). Patients with biliary obstructive disorders or hepatic insufficiency should have treatment started under close medical supervision (see PRECAUTIONS, General, Impaired Hepatic Function, and Impaired Renal Function). Most of the antihypertensive effect is apparent within two weeks and maximal reduction is generally attained after four weeks. When additional blood pressure reduction beyond that achieved with 80 mg MICARDIS is required, a diuretic may be added. No initial dosing adjustment is necessary for elderly patients or patients with mild-to-moderate renal impairment, including those on hemodialysis. Patients on dialysis may develop orthostatic hypotension; their blood pressure should be closely monitored. MICARDIS tablets may be administered with other antihypertensive agents. MICARDIS tablets may be administered with or without food. Rx only MC-BS (03/07)

Printed in U.S.A.

(10/07)

MC48827

More than in the early morning2

USE IN PREGNANCY When used in pregnancy during the second and third trimesters, drugs that act directly on the renin-angiotensin system can cause injury and even death to the developing fetus. When pregnancy is detected, MICARDIS Tablets should be discontinued as soon as possible (see WARNINGS, Fetal/Neonatal Morbidity and Mortality). MICARDIS is indicated for the treatment of hypertension. It may be used alone or in combination with other antihypertensive agents. MICARDIS is contraindicated in patients who are hypersensitive to any component of this product. The most common adverse events occurring with MICARDIS Tablets monotherapy at a rate of e1% and greater than placebo, respectively, were: upper respiratory tract infection (URTI) (7%, 6%), back pain (3%, 1%), sinusitis (3%, 2%), diarrhea (3%, 2%), and pharyngitis (1%, 0%). Please see Brief Summary of Product Information on adjacent page.

References: 1. Weber MA,White WB,Giles TD,et al.An effectiveness study comparing algorithm-based antihypertensive therapy with previous treatments using conventional and ambulatory blood pressure measurements. J Clin Hypertens. 2006;8:241-250. 2. White WB,Giles T,Bakris GL,et al.Measuring the efficacy of antihypertensive therapy by ambulatory blood pressure monitoring in the primary care setting. Am Heart J. 2006;151:176-184.

Printed in U.S.A.

(10/07)

MC48828