Category Archives: Prescription Drugs

Lower Prescription Drug Prices Lure Americans To Mexico To Buy Meds : Shots – Health News : NPR

Good morning all.

Thanks go out to Josef Woodman who tweeted the following today from NPR about prescription drugs and going across the Mexican border to buy them at lower cost.

This is in addition to the article I recently posted, Run for the Border (Not a Taco Bell Commercial).

So wall, or no wall, Americans are going to look for cheaper prescription drugs, either in Mexico or Canada, or elsewhere, until we allow the government to negotiate prices for medications under an improved and expanded Medicare for All.

But thanks to a former Louisiana congressman who left Congress to become the President and CEO of PhRMA, a pharmaceutical company lobbying group, Congress passed a bill that prevents Medicare from negotiating lower drug prices and bans the importation of identical, cheaper, drugs from Canada and elsewhere.

But it does not have to be this way. We can lower drug prices, but by allowing the government to negotiate them, and not giving the pharmaceutical industry huge giveaways.

Here is NPR’s article:

Faced with high U.S. prices for prescription drugs, some Americans cross the border to buy insulin pens and other meds. At least 1 insurer reimburses flights to the border to make such purchases easy.

Source: Lower Prescription Drug Prices Lure Americans To Mexico To Buy Meds : Shots – Health News : NPR

Run For the Border (Not a Taco Bell Commercial)

Yesterday, one of my contacts in the medical travel space commented on an article that was posted on LinkedIn that explained why the author was sent south of the border to purchase prescription drugs (you thought I was going to just say drugs, right?) for his company.

He found out that the same drugs, made by the same manufacturer, but packaged in Spanish were much cheaper than ones packaged in English and sold north of the border.

I decided to ask for his permission to re-post his article, and with his kind permission, I am doing so here in its entirety, as posted to LinkedIn. Here is the link in case you want to read the original.

Why Pharma Sent Me South of the Border…

Published on February 3, 2019

You may have heard of people heading to other places for medical care, but is it really the right thing to do?

We know that the cost of healthcare is ridiculous. And, of course, no one is to blame…right? (Tongue in cheek)

I can’t blame the doctors – they’re great folks just trying to charge enough to cover the bills after all the red tape is required from insurance, Medicare, federal regs, etc. I can’t blame the hospitals – most of them are running in the red from having to support a widespread indigent population with recurring visits for drug overdoses and covering that overhead with Medicare reimbursement rates of 20%. I can’t blame the insurance companies – they’re the good folks just trying to break even as “non-profits”, right? (Just ask them) I can’t blame us the patients…after all, we’re just trying to get the care we need (note sarcasm as a handful overuse and abuse the system). I can’t blame pharma because they’re just trying to make drugs that save the world (snark, snark). I can’t blame government – they’re just trying to do the most for society (OK…ran out of snarks).

With no one to blame, no one is responsible to fix this.

What does this mean for me as an employer? It’s simple…

HEALTH CARE REFORM STARTS WITH ME…

No outside party can do it – I have to find ways to partner with my employees to find the right solutions to help manage costs. Let’s talk about just one of them.

SOUTH OF THE BORDER DRUG RUNS

It sounds ominous, but it’s one of the best thing we’ve found. Here’s the opportunity – I can get the same medication from the same manufacturer at substantially lower costs because I get it from a pharmacy that just happens to be located five minutes over the Mexican border. It comes in the same packaging, but it’s just written in Spanish. We verify the sourcing, we verify the manufacturing, we verify everything… And everything is above board. By working with the hospital where the pharmacy is located, we coordinate care with the physician in the United States to ensure that the patient has the right prescription, is seen by a physician in Mexico, and receives the quality product when they arrive. Legally, they can transport up to a 90 day supply over the border per day. To make it worth our while, we have them fly down to San Diego, have a courier pick them up and take them over the border for the first 90 day supply, transport them back and have them stay overnight in San Diego. The next day, the transport picks them up, takes them down for the second 90 day supply, bring them back and they fly home. That way they can get a 180 day supply per trip.

So what’s the catch?

I can’t think of one yet. Last year, our company ran a beta test with two individuals with a specialty drug each. We pay for their travel down, pay for the courier to transport them over the border to the hospital where they are met with the physicians at the hospital, we pay for the pharmacy representative, the medication, the overnight accommodations in San Diego, and a stipend to cover food and ancillary costs. What’s in it for the employee? We also cover their co-pay so they do not have to cover any costs for the medication – the medication becomes free to them, saving them hundreds of dollars if not thousands of dollars a year. Additionally, they get to keep any money that they save from the per diem money that we provide to them for their daily costs.

What’s in it for us is the employer?

Last year, after paying for the medication, all of the transportation costs including the employee costs of travel, the concierge fees for our broker who assists us with this arrangement, and all additional fees, the savings on these two individuals for one medication a piece was well over $70,000.

Do I have your attention?

Everything is legal. Everything is above board. Everything is safe. And the customer service is beyond everything that we can imagine.

This is not unique to us. The State of Utah just adopted this as their primary option for specialty medications for their employees. As I understand it, they are using a different service than I do. However, the results are similar.

We will be rolling this out to all of our employees this year. As you can imagine, there is great anticipation about how much we can save as we consider solutions and opportunities with program such as this. When it comes to healthcare, it is a game – and the people who understand the rules will win. The ones who do not understand the rules of the game will continue to pay more and lose.

Until we get a handle on controlling costs with things such as pharmaceuticals, we must continue to look for new ways to control these costs. If you would like additional information on the solution, feel free to message me.

In the meantime, feel free to get a hold of my pharma tourism broker – I promise I don’t get anything from this. I just share good news is I get it. @rockstarcurrywillix

Here’s to your success!

Dr. Wade Larson

@DrWadeLarson

wade@wadelarson.com

http://www.wadelarson.com

Midterm Mashup

Well, the 2018 Midterm elections are over, and the analysis is beginning as to what this all means.

For those who wanted to send a message to the Russian puppet in Washington, the election meant that the House of Representatives will be controlled for the next two years starting in January by the Democrats.

For the Republicans, it means a greater control of the Senate, with at least one race, the one in my current state of Florida undecided and headed for a recount, as per state law.

However, there were many defeats for the party of Obama, Bill Clinton, Jimmy Carter, LBJ. JFK, Truman and FDR. Andrew Gillum lost to a nobody for governor of Florida who is connected to the Orangutan by an umbilical cord. Beto O’Rourke made a valiant, if futile effort against the worse person to hold a Senate seat, Lyin’ Ted Cruz. And a few Democratic senators lost seats in Indiana, Missouri and North Dakota.

But as far as health care is concerned, the change in the leadership of the House of Representatives means that the ACA is safe for another two years. and Medicare and Medicaid will not be cut, as the Senate Majority Leader has indicated he wanted to do.

Medicaid, in particular, came out of the Midterms a little better than expected before the election, as the following posts from Healthcare Dive, Joe Paduda, and Health Affairs reported this morning.

First up, Healthcare Dive, who reported that Red states say ‘yes’ to Medicaid . Idaho, Utah, and Nebraska said yes to expansion; Montana said no.

Joe Paduda echoed that in his post, “And the big winner of the 2018 Midterms is…Medicaid“. However, Joe stated that results in Montana were not final; yet, they had decided to expand Medicaid two years ago, but the vote was temporary, and yesterday’s vote was to make it permanent.

And lastly, Health Affairs reported in “What the 2018 Midterm Elections Means for Health Care” that besides blocking repeal of the ACA, Democrats may tackle drug prices, preexisting conditions protections, Opioids, Medicare for All, Surprise bills (unexpected charges from a hospital visit). regulatory oversight, extenders such as MACRA, Medicaid Disproportionate Share Hospital (DSH) payments, and Medicaid expansion, especially since gubernatorial wins in Maine, Kansas, and Wisconsin will make expansion more likely in those states.

Utah insurer will pay for members’ travel to Mexico to fill pricey prescriptions

In an effort to combat rising drug prices, one Utah health insurer will pay its members to travel to Mexico to fill prescriptions for certain expensive drugs, according to The Salt Lake Tribune.

Source: Utah insurer will pay for members’ travel to Mexico to fill pricey prescriptions

Tariffs Threaten U.S. Health Care

The petulant man-child occupying the White House is proposing to impose a 25 percent tariff on Chinese products and ingredients, according to a report in the New York Times on Friday.

Some of the products and ingredients are essential to health care in the U.S. such as pacemakers, artificial joints, defibrillators, dental fillings, birth-control pills and vaccines.

In addition, dozens of drugs and medical devices are also among products targeted for the tariff. Some of them are in short supply, and dangerously so. They are epinephrine, which treats allergic reactions, and others like insulin, whose price rising has led to public outrage.

This proposed tariff has unsettled the medical device and supply industries, since a growing number of products and their components are manufactured in China.

The manufacturing of medical equipment has shifted from throwaway surgical gloves to more complicated products like MRI scanners.

An International Trade Commission in January, the Times reported, said the fastest growth in China’s medical device industry has been in sales of orthopedic devices, plates, and screws, made mostly of titanium and used for surgery and sports medicine.

One analyst, the Times continued, estimated that 12 percent of medical devices imported to the US come from China, which amounts to $3 billion a year.

A report this week by RBC Capital Markets, the article mentioned, estimated that if the tariffs took effect, this could cost the medical device industry up to $1.5 billion each year. Some of these higher costs would result in higher prices for those devices, and would affect baby boomers, who are the biggest recipients of hip and knee replacements.

This no doubt would be a boon to the medical travel industry, from the US to countries not imposing tariffs on Chinese products, or not.

Greg Crist, spokesperson for AdvaMed, the device members trade group, said its members were “disappointed because this action threatens to affect the health and well-being of American patients and those around the world, the Times article added.

While it is unclear if the tariffs would be enacted, companies have until May to lobby the administration for changes. But the man-child ratcheted up the pressure by threatening to levy tariffs on an additional $100 billion in imports.

However, analysts said that it was unclear if the tariffs would have an effect on the drug industry, even though China is a leading exporter of raw pharmaceutical ingredients, according to the article.

“We don’t see much impact,” said Umer Raffat, a pharmaceutical industry analyst for Evercore ISI on Tuesday to investors.

This is so because many generic drugs that contain Chinese ingredients are manufactured in places like India and would not be subject to the tariffs.

Yet, one trade group has sounded the alarm, the article indicated. They said that the tariffs could exacerbate the issue of health care costs as the administration is pledging to lower drug prices.

Lastly, there are two drugs on the list of 1,300 Chines exports: epinephrine and lidocaine, which are in short supply in their injectable form.

“Things are so bad right now with the injectables, we don’t need anything else to pile on, to possibly make things worse,” said Erin R. Fox, a drug-shortage expert at the University of Utah.

She also said that the tariffs could exacerbate the shortfalls of generic injectable drugs, the decades-old products that are the mainstay of hospitals and have long been in short supply due to manufacturing problems and disruptions in supply.

For some widely used products, it is unclear, according to the article, how American consumers would be affected. Insulin is one example; however, all three companies that sell insulin in the US, Lilly, Sanofi, and Novo Nordisk said they did not import insulin from China.

Whatever happens with the tariffs, the effect they would have on health care here and around the world is uncertain. However, it would be prudent for those in the health care industry, the medical travel industry, and the workers’ comp industry to be aware and act accordingly to provide their patients with the drugs and devices they need.

Slight Increase in Average Medical Costs for Lost-Time Claims, Part 1

It’s that time of the year again, the time when I review the NCCI State of the Line Report.

As an added feature this year, I am including a look at the Medical Cost data, a new subject which I heard about back in February, when I attended NCCI’s 2017 Data Education Program.

First up is the distribution of medical costs by category. NCCI supports regulatory and legislative initiatives by providing State Medical Data Reports using data from their Medical Data Call.

For Service Year 2015, the distribution of payments across the various categories is based on data for all jurisdiction where NCCI provides ratemaking services, except Texas.

The key takeaway, as the following table will show, is that in 2015, physician costs were almost 40% (38%) of total medical costs, combined inpatient and outpatient hospital costs were approximately 30% (31%), and prescription drug costs were about 11%.

Table 1.

Table 1.

Source: NCCI’s State Medical Data Reports

Drilling down further, the distribution of physician costs for Service Year 2015, indicates that the bulk of the costs were associated with physical medicine, 30%, and surgery was associated with 24%, 10% associated with radiology, as shown in Table 2.

Table 2.

Table 2.

Source: NCI’s State Medical Data Reports

Getting even further, the next area the report covered was prescription drug payment changes over time.

The key takeaways here are the following:

  • In 2011, generic equivalents represented 47% of payments for all drugs prescribed. This increased to 58% by 2015, and driven largely by brand-name drugs.
  • Repackaged drugs now represent a small portion of overall drug payments because several states have implemented regulation on reimbursement.

Table 3.

Table 3.

Source: NCCI’s Medical Data Reports

NCCI analyzed the impact of prescription drug fee schedules on the cost of drugs by classifying states into one of four categories. States that had fee schedules were classified as Low, Medium, or High, based on the size of the Average Wholesale Price (AWP). The fourth category were states without a schedule.

The key takeaways here are:

  • Transitioning from not having a schedule to a low-fee schedule significantly reduces prices for WC prescriptions
  • Moving from no schedule to a high-fee schedule may increase drug costs, as shown in the following chart.

Chart 1.

Chart 1.

Source: NCCI’s Medical Data Reports

NCCI also looked at physician payments as a percentage of the Medicare reimbursement rate. In most states, they said, WC physician services are subject to fee schedules, just like the ones in group health and Medicare.

One way to measure physician costs across the states is to compare WC payments to the Medicare reimbursement rate.

The key takeaway from this is:

  • Prices paid relative to Medicare vary widely, from about 100% (Florida – 101%) to over 250%
  • Of the five jurisdictions with the largest percentage, all but Alaska (263%) are currently operating without a fee schedule
  • Countrywide the average is 150%

What does this mean for you?

While there are some positives in these numbers, especially with the cost savings from going to a low fee schedule for drugs, and an increase in the use of generic over brand-name drugs, and a decline in the percentage of repackaged drugs, medical costs are still very high for workers’ comp.

In the next post, I will look at the medical lost-time claim severity.

Big Insurer to Put Dispensing Docs on Notice

An article in Healthcare Finance yesterday reported that Aetna has put more than 900 opioid prescribing physicians on notice that they fall with the 1 percent of top opioid prescribers.

Here is the link to the article:

http://www.healthcarefinancenews.com/news/aetna-puts-more-900-physicians-notice-they-fall-within-top-1-percent-opioid-prescribers

What does this mean for workers’ comp?

It means that other insurers need to do the same for the physicians who prescribe opioids for injured workers, but as Joe Paduda recently reported, the drug spend is going down.

But he also said this, earlier this week,  “Medical services for people with opioid dependence diagnoses skyrocketed more than 3,000 percent between 2007 and 2014.”

This was for privately insured people, he continued.

“The dollar cost of the drug itself is the least of the cost issues; dependency is strongly associated with much higher utilization of drug testing, overdose treatment, office visits and (my assumption) higher usage of other drugs intended to address side effects of opioids.”

So just because Aetna is watching does not mean that the problem is going to go away any time soon.