In: Health21 May 2010
Health Policy Update
Speaker: Rex Cowdry, MD, MPH, Associate Director, National Economic Council.
The market for health care poses a number of challenges for proponents of competitive markets, even though the markets have immensely desirable features in terms of incentives to enhance quality, control costs, and develop innovative approaches to treatment and to the organization and financing of care. The prospects for an effective market have never been brighter. For our current health care system to be transformed, the following crucial elements are needed: appropriate incentives, transparent quality and cost measures, and a robust health information technology system. The vital components of this vision must also include P&T committees, well-designed formulary incentives, and technology assessments.
Consumers will be asked to take a more active role in their health care; however, with imperfect information, it is difficult for consumers to make informed decisions. The markets are focused on consumers, and so they must bring value into the equation. There must be better, evidence-based health information (e.g., on chronic diseases) and practical information (e.g., on insurance) that is usable for patients and physicians. Incentives, such as financial rewards for preventing medication errors, must be developed.
The structure of health information must be improved; for instance, we need better information about how drugs actually work in practice and how they should be used. We also need a better system for documenting and recording adverse effects. Making these kinds of changes will undoubtedly improve the quality of care.
U.S. Department of Health and Human Services/Food and Drug Administration Update
Speaker: Mark Goldberger, MD, MPH, Acting Deputy Director, Center for Drug Evaluation and Research, Food and Drug Administration, Washington, DC.
The FDA is facing many challenges, such as (1) drug shortages, especially of intravenous (IV) steroids, anesthetic agents, and antibiotics; (2) safe and cost-effective drug importation; and (3) the short-term and long-term consequences of the Medicare Modernization Act (MMA) of 2003. Drug importation under the MMA assumes that the drug imported is the same product as the current product. There must be safeguards in place to ensure that customers are getting what they expect.
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There is currently a decline in FDA approvals of new molecular entities. The cost to develop some new chemical entities is $1.7 billion apiece, from discovery to launch; the drug-development process is long and arduous. Drug shortages are a growing problem. Such shortages arise from manufacturing problems and the fact that fewer companies are producing drugs in today’s medical and business environment. A naloxone shortage occurred because of extensive facility renovations and an inadequate inventory.
Shortages of methylprednisolone, a long-acting, injectable corticosteroid suspension administered epidurally to control chronic and severe low back pain, have also been reported. The FDA says that it will find another company to fill the void. These shortages wererectified several months after being reported.
The Current Political and Prescription Drug Benefit Environment
Speaker: Terry S. Latanich, JD, Consultant, Medco Health Solutions.
The MMA affects pharmaceutical manufacturers, pharmacies, PBMs, and health plans—and, by extension, their P&T committees.
People will decide which insurance plan to join depending on whether their prescription medication is listed on the formulary. Discount cards became available in June 2004 and will be continued until the end of 2005, when the new Medicare plan takes over. Under the plan, employers will receive a 28% subsidy from the government.
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P&T committees are expected to come under increased scrutiny during this transition period. There is a growing belief that P&T committees sometimes rubber-stamp what the insurance companies demand and that they do not pay enough attention to the cost of medications. Some drug plans will respond by limiting the number of drugs covered in a therapeutic class in order to drive the costs down. P&T committees will probably attempt to choose the drugs in a plan based on scientific evidence and outcomes studies. However, drug manufacturers will look closely at P&T committees and will challenge those who do not include their drugs on the formulary. As a result, such pressure will make it difficult for some people to serve on P&T committees.
Drug importation and re-importation are under FDA scrutiny, and their impact is currently under federal watch. The next few years will be very important as Medicare prescription benefits begin to unroll.