Download - Breaking Down Silos in Search of Value
Promoting high quality, cost effective drug therapy throughout the Military Health System
Breaking Down Silos in Search of Value
CAPT Mark A. Richerson, MSC, USN
Director, Department of Defense Pharmacoeconomic Center
2DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
Objectives
• Define “Value” and impact of Military Treatment Facilities
• Discuss silos affecting delivery of DoD Prescription Benefit
• Discuss the role of conference attendees
"Breaking Down Silos to Enhance the Value of the
Pharmacy Benefit Across the MHS"
3DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
Evidence Based Medicine
Approach to health care practice in which the clinician isaware of the evidence in support of his/her clinical practice,and the strengths of that evidence
- McMaster University
The conscientious, explicit, and judicious use of current bestevidence in making decisions about the care of individualpatients
- BMJ 312:71-2
4DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
The Search for Value
Less Costly, More Effective
More Costly, More Effective
More Costly, Less Effective
Less Costly, Less Effective
The Cost Effectiveness Plane
Effectiveness
Co
stVytorin & Pravachol
The Cost Effectiveness Judgment
Nirvana!
Non Formulary!
Simvastatin
(Zocor)
Effectiveness
Co
st
5DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
TRICARE Eligible BeneficiariesMonthly Average, FY06
Retirees & Family Members < 65
Other >1%
Retirees & Family Members ≥ 65
Active Duty Family Members
Active Duty
1.8M 1.8M
2.3M3.2M 25%36%
19% 19%
9.2 Million
9.2 Million
FY05
FY06
9.1 MillionFY04
8.9 MillionFY03
8.6 MillionFY02
Source: M2
6DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
Unique Users - Point of ServiceAll Ages, FY05 to FY06
Source: PDTS
Unique Users FY05 = 6.6M
FY06 = 6.7M
Retail46% 19% 28%
Mail Order
4%1%MTF
2%
1%
42% FY06 30% FY06
5%
7DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
30-day Equivalent Rxs By POS, Oct 00 – Sep 06
Source: USPD, PDTS
30d
EQ
Rxs
(M
illio
ns)
MTF
Mail Order
FY01 FY02 FY03 FY04
Retail
FY05 FY060
2
4
6
8
10
12
14
16
18
20
22
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
TSRxApr 01
Apr 2001MTF 76%Retail 14% Mail Order 10%
Sep 2006MTF 49%Retail 37%Mail Order 14%
8DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
$ in millions
Sources: PDTS and Prime Vendor
MHS Outpatient Drug Spend
FY02 FY03 FY04 FY05 FY06
MTF $1,388 $1,565 ( 12.7%)
$1,704 ( 8.9%)
$1,615(↓5.2%)
$1,536(↓4.9%)
Retail $1,278 $1,847 ( 44.6%)
$2,430 ( 31.6%)
$3,162(30.1%)
$3,912(23.8%)
Mail Order $347 $429
( 23.4%)$546 ( 27.3%)
$629(15.2)
$718(14.2)
Total $3,013 $3,841 ( 27.5%)
$4,680 ( 21.8%)
$5,406(15.5%)
$6,166(14.1%)
Cost per Beneficiary $347 $430
( 23.9%)
$511 ( 18.9%)
$587(14.8%)
$672(14.5%)
9DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
Class Review & Implementation TrackingO
ct-
04
No
v-0
4
De
c-0
4
Ja
n-0
5
Fe
b-0
5
Ma
r-0
5
Ap
r-0
5
Ma
y-0
5
Ju
n-0
5
Ju
l-0
5
Au
g-0
5
Se
p-0
5
Oc
t-0
5
No
v-0
5
De
c-0
5
Ja
n-0
6
Fe
b-0
6
Ma
r-0
6
Ap
r-0
6
Ma
y-0
6
Ju
n-0
6
Ju
l-0
6
Au
g-0
6
Se
p-0
6
Oc
t-0
6
PPIs
ARBs
PDE-5s
AF-DERMs
MS-DMDs
CCBs
ACEs
BPH-ABs
M/Ks
NCSs
ALZs
AD1s
GABAs
OABs
MiscHTNs
EMETs
BCs
LIP1s
TZDs
No
v-0
6
De
c-0
6
Ja
n-0
7
Fe
b-0
7
H2s
ADHDs
SED2s
10DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
NF/3rd Tier 30dRxsMTFs, All Implemented UF Classes
ACEs
AD1s
BPH-ABs
CCBs
PDE-5s
0
20,000
40,000
60,000
80,000
100,000
120,0003
1-O
ct-
04
30
-No
v-0
4
31
-De
c-0
4
31
-Ja
n-0
5
28
-Fe
b-0
5
31
-Ma
r-0
5
30
-Ap
r-0
5
31
-Ma
y-0
5
30
-Ju
n-0
5
31
-Ju
l-0
5
31
-Au
g-0
5
30
-Se
p-0
5
31
-Oc
t-0
5
30
-No
v-0
5
31
-De
c-0
5
31
-Ja
n-0
6
28
-Fe
b-0
6
31
-Ma
r-0
6
30
-Ap
r-0
6
31
-Ma
y-0
6
30
-Ju
n-0
6
31
-Ju
l-0
6
31
-Au
g-0
6
30
-Se
p-0
6
31
-Oc
t-0
6
11DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
"Breaking Down Silos to Enhance the Value of the Pharmacy Benefit Across the MHS"
What Silos?
12DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
13DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
Stakeholders in the MHS Pharmacy Benefit
• Patients/Beneficiaries
• Clinicians
• Policy makers
• Congress
• Resource Managers
• Industry
14DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
Patient
Policy Maker
Congress
Clinician
Industry
ResourceManager
Aerial View of Rx Benefit Silos
15DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
Pharmacy Cost Trend Components
FY02-FY03
FY03-FY04
FY04-FY05
FY05-FY06
Change in Prevalence% Beneficiaries Using the Pharmacy Benefit
5.2% 0.7% 2.9% 1.5%
Change in Intensity 30 day Equivalent Rxs per User
6.3% 6.3% 6.8% 5.6%
Price inflationWeighted % Change in price of Drugs
5.5% 6.7% 5.9% 4.2%
Mix/New DrugsChange in drug mix and new drug usage
5.1% 4.0% -1.4% 2.6%
% Change in Average Cost per Beneficiary per Year
23.8% 18.9% 14.8% 14.5%
Sources: M2, PDTS, and Prime Vendor data
16DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
17DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
18DoD Pharmacoeconomic Centerwww.pec.ha.osd.mil
Take advantage of this opportunity to better understand various stakeholder perspectives.
Ask questions and share what you learn with others.
Know the significant role you play in sustaining this premier, clinically sound, and cost effective benefit.
Take Away Message:
Promoting high quality, cost effective drug therapy throughout the Military Health System
www.pec.ha.osd.mil