What's Past is Not Prologue: Formularies Differ by State

I've recently heard predictions regarding California's forthcoming formulary that are based on the experience of Texas over the last five years.  Both are large states.  Both have well recognized, embedded utilization review processes.  And they have tertiary dispute resolution processes that, while not precise analogs, nonetheless look similar to one another (the Texas IRO process and the California IMR process).

So we might expect California, when it adopts it's drug formulary on or about July 1, to exhibit behaviors and results that are similar to the results Texas has achieved with its formulary (see my colleague Mark Pew's recent blog posts for insight into the CA timeline).  In Texas, prescriptions for "N" drugs fell by 81% and the costs for those same drugs dropped by 80%.  Total opioid scripts dropped by 8% and total drug costs in the state's work comp system fell by 15%.  All of this occurred with no discernible increase in loss adjustment expense (primarily, utilization review). So we might expect the same from California, right?  

I don't think so.  I offer three key data points in defense of that view:

First, the formularies are not the same.  Texas relies on Work Loss Data Institute's Official Disability Guidelines, Appendix A (which lists medications are either "N" or "Y" based on whether they are recommended for first-line therapy).  California has used as its starting point Reed Group's MDGuidelines in order to incorporate a formulary into MTUS.  The list of "non-preferred" drugs in these guidelines is a different, and frankly more restrictive, list than the ODG list of N drugs.  For instance, ODG has some opioid analgesics in the "Y" category.  The MDGuidelines categorized all opioid analgesics as "non-preferred." The two organizations take different approaches and I'm careful to avoid expressing preference for one or the other (PRIUM works closely with both sets of guidelines).  The important take-away here is that the two states are relying on different formulary approaches.

Second, about 38% of CA's lost-time claims have attorney representation.  That number for TX is 6%.  There are lots of reasons for this (attorney fee schedules come immediately to mind) that have nothing to do with formularies.  But adopting a formulary in a state with injured worker representation in the single digits is a fundamentally different proposition than adopting it in a state where 4 out of every 10 injured workers on indemnity have a lawyer.

Finally, loss adjustment expense in CA is already running at about 35% of total losses (which is 83% higher than the median in WCRI's latest study on LAE).  When the TX formulary came into full effect in 2013, the number of IRO decisions from 2013-2015 ranged in the 1200-1400 range per year over that three year period post-formulary implementation.  The number of IMR decisions in CA in 2016?  164,136.  And this is before the adoption of a formulary. Long term, as the prescriber community adjusts to the formulary list and its associated rules, the number of medication-related IMRs may in fact moderate.  But for the latter half of 2017, I wouldn't count on that happening.

Two different states, two different formularies, two different environments.  Beware of drawing conclusions regarding one based on the other.

Michael
On Twitter @PRIUM1

California's Formulary: An Update from the Field

[Mark Pew, Senior Vice President of PRIUM, has been following, working, talking, meeting, eating, sleeping, and breathing California formulary for months - actually, years.  Mark's latest update below.]

The language has been approved (published late on Sep 4) for a bill to establish a Work Comp drug formulary in California - I will let you read it for yourself rather than restating it's contents here. AB 1124 should have its third reading on Sep 8, a vote on either Sep 9 or Sep 10, and with enough AYE votes Governor Brown will sign it into law shortly thereafter. I certainly don’t want to jinx it by unequivocally stating that a drug formulary will be implemented in California by July 1, 2017, but that possibility is as promising as it has ever been.

But … It hasn’t been easy. And I and others at PRIUM have had a front row seat to the entire process:

• In November 2009, we started following the development of the Texas drug formulary, staying engaged through the 9/1/11 and 9/1/13 implementations.
• On November 8, 2012 at the National Work Comp & Disability Conference in Las Vegas, I presented an overview of the Texas drug formulary and opined that California was a logical candidate to consider something similar.
• In December 2013, I had my first meeting with California’s Department of Workers’ Compensation (DWC) to present the concept of a drug formulary.
• In January 2014, I had my first meeting with leaders in the Assembly, Senate and Labor to discuss the concept of a drug formulary.
• In October 2014, the first major milestone in California’s discussion of a drug formulary came after the California Work Comp Institute (CWCI) published a whitepaper “Are Formularies a Viable Solution to Controlling Prescription Drug Utilization and Cost in California WC” with a tentative answer of “yes”.
• On March 5, 2015, the second major milestone occurred when Assemblyman Henry Perea (D-Fresno) introduced AB 1124 to direct the DWC’s Administrative Director to adopt a formulary (read about it in thisWorkCompCentral article that requires subscription.

Since that date, the process of filling in the details has been a consuming priority for me and many others involved in Work Comp in California. There have been many formal and informal meetings involving almost every stakeholder and constituent. There was a public hearing in the Assembly and then in the Senate, both interesting in their content and participants, from praise to guarded optimism to limited opposition. An advisory committee has been working directly with Assemblyman Perea’s office in July and August to develop the content of the bill. It has been an adventure in spirited dialogue and compromise in a decidedly non-antagonistic environment (though one not totally devoid of disagreement). The committee was comprised of representatives from every possible corner of Work Comp in California, and while the final version of the bill does not reflect all of the suggestions, the dialogue has been extremely helpful in establishing what will need to be addressed in the rule-making process. In collaboration with the DWC, the focus has been on crafting a bill to become law that mandates action but provides flexibility.

The third major milestone? July 23, 2015 at the CCWC conference in Anaheim where David Lanier (Secretary of the Labor and Workforce Development Agency) stated “Based on the work to date and the urgent need I have instructed Christine [Baker, Director of the Division of Industrial Relations] to move forward with creating a formulary as expeditiously as possible". This strategic statement sent an unmistakable message that a formulary was going to happen. Period. I still recall seeing people in the audience turning their heads and whispering to each other “did I just hear that right?” while I was writing notes to myself with exclamation marks.

And it got done (well, almost done). Think about it – from March 5, 2015 until now, all constituents in the California Work Comp system have basically agreed that a drug formulary is needed. In California! In less than six months! Amazing!

Of course, there is much work still to be done. And likely the hardest work to be done. Deciding on the concept of a drug formulary and some general parameters is one thing – crafting the actual rules and process to initiate intended consequences and mitigate unintended consequences are yet another. My July 2015 article on Claims Management magazine, "A Formulary for Success", will provide some insights into guiding principles that should be taken into account.

The first step to that is September 8, 2015 from 10:00am till Noon when a public hearing will be held to establish the goals of the DWC and listen to feedback from all interested parties. This meeting will just be the start of a long journey, and I will continue to be a technical adviser as the rules are developed. Unfortunately, I will not be able to attend as I had previously committed to speak at a North Bay Work Comp Association event in Santa Rosa, but if you’re interested go to the Elihu Harris State Office Building (Room 2, Second Floor, 1515 Clay Street, Oakland, CA 94612) on Tuesday.

The stated goals of the DWC are:

• Improve appropriate care through the dispensing of evidenced-based medicine
• Expedite pharmaceutical treatment for ill and injured workers
• Reduce delays, including reducing the need for elevated utilization review and independent medical review
• Improve efficient delivery of medical benefits and reduce administrative costs

Those are the lofty goals that have driven this entire process since the beginning, and one reason why consensus through compromise has been achieved so quickly.

The common theme I’ve heard throughout this process has been to ensure injured workers receive appropriate treatment with a renewed focus to limit the damage prescription drugs with very dangerous and even life-threatening effects can wreak. Part of that is to ensure those who have become reliant / dependent upon / addicted to dangerous polypharmacy regimens are not suddenly thrust into withdrawal but allowed to thoughtfully and carefully be tapered to a more appropriate drug regimen while being equipped with more robust coping skills to deal with the pain that remains.

In other words, whether it’s Labor or applicant attorneys or defense attorneys or physician groups or carriers or self-insured employers or legislators or PBM's or any other interested party, the focus has been squarely on combating the epidemic of over/misuse of prescription drugs and creating a path to less dangerous and more efficacious pain management for those that need it. And who can argue with that? Apparently, nobody.

Because there have been so many people integral to this process, I won’t even try to name them all. So, instead, I will just say “Kudos Cali”!

Mark

On Twitter @RxProfessor

Another New Opioid: Cheeky, This One

Yesterday, I wrote about generics and the distraction of cheap, but still potentially dangerous, medications.  Never fear: there's always an expensive new brand name drug with which to contend.

On December 23, Endo Pharmaceuticals put out a press release announcing that the company has filed a New Drug Application with the FDA for Buprenorphine HCI Buccal Film for the "management of pain severe enough to require daily, round the clock, long-term opioid treatment and for which alternative options were inadequate" (the precise language required on the labeling of any extended release/long acting opioid).  The buccal film will be a strip placed on the inside of the patient's cheek.

According to Endo, this medication is a "partial opioid agonist and a potent analgesic."  Let's break those phrases down so you know what you'll be dealing with if this gets approved.

A partial opioid agonist means that although buprenorphine is an opioid, and thus can produce effects similar to other opioids (more on that next), its effects are less than those of "full agonists" like heroin or methadone.  Many of you will recall buprenorphine as a primary ingredient of Suboxone, a medication indicated for helping patients wean off of other opioids.

But Endo isn't intending this medication to assist in the weaning process.  Rather, Endo is also describing this as a "potent analgesic," with all of the issues associated with other long acting opioids.  The press release does say that the medication demonstrated a "low incidence of typical opioid like side effects."  No mention of the specific side effects or what "low incidence" actually means.

Next, look for the marketing folks to put an inspiring and cool-sounding trade name on this.  For now, we have Exalgo... Nucynta...  Opana... Zohydro... Hysingla... Palladone... This list would be hilarious if it wasn't so tragically true.

Any guesses for this new one?

Michael
On Twitter @PRIUM1

What Are You Doing About Compounds?

I've been on the road visiting with customers and I'm hearing a lot about compounds.  Most of us are aware that compound medications are intended to provide certain medications in forms or dosages not commercially available, therefore necessitating a pharmacist create or mix a compound medication.  More of us are becoming aware that compounding represents a significant and growing clinical and financial risk in workers' compensation.  Only a few of us have clear and well documented processes and procedures for dealing with these prescriptions.

While compounding isn't new, the attention being paid to it is, in fact, overdue.  Recently, Express Scripts was sued by several compounding pharmacies for allegedly issuing blanket denials for over 1,000 different active ingredients in compound medications (this policy was in the group health space, not work comp).  While we know such blanket denials aren't feasible in work comp, the tug of war between the compounding pharmacies and the payer community is playing out in our space all the same.

Compounds can be medically necessary and effective, but use should be limited to situations where the oral medication has proven ineffective and/or has produced serious side effects.  Clearly, we're seeing a frequency of compound prescriptions in work comp that far exceeds what is likely medically reasonable and necessary.

So what's your strategy?  What are you doing?  Many compound pharmacies are making obscene amounts of money exploiting gaps in the claims management processes of work comp payers.  How do you plan to close those gaps?

Michael

Two post scripts:

There are a precious few compounding pharmacies trying to do this right.  You should be looking for them and putting them into your networks.

And for a more comprehensive view on compounds in work comp, I'd direct you to the excellent CompPharma white paper from earlier this year.

On Twitter @PRIUM1