Saturday, June 6, 2009

So what about Delaware's generic drug fill, anyway? Is Walgreens right?

Here's what Walgreens said about Delaware's prescription policies in its press release on refusing to participate in the State Medicaid program:

The state could easily eliminate its Medicaid pharmacy budget gap simply by focusing on its generic dispensing rate at all pharmacies in the state. Each percentage point improvement in the generic dispensing rate would save the state approximately $1.2 million annually. As a low-cost, quality alternative to brand name medications, generics are good for patients, the state and pharmacies.

Is this accurate or not?

The Department of Health and Human Services studied generic drug utilization rates in State Medicaid programs in 2006, and found that Delaware had one of the lowest generic usage rates in the nation:

Delaware, Connecticut, Idaho--49%

The highest rates were:

Illinois, Indiana, Kentucky--59%

ExpressScripts estimated in 2004 that Delaware could save--overall, not just in Medicaid programs--over $67 million by adopting stronger regulations regarding the use of generics.

Specifically, the AARP notes, Delaware does not mandate--even in State Medicaid programs--that pharmacists dispense generics rather than brand-name drugs if the physician does not specifically write "Dispense as written" or "Brand medically necessary."

Nor, the same study found, does Delaware have a requirement for its State Medicaid program either to provide an incentive fee for generic substitution or require the dispensing of the lowest cost multiple source drug.

In other words, folks, regardless of what a heartless corporation Walgreens may be, the point about Delaware being among the laggards in mandating usage of generics and in percentage of generic fills for the State's Medicaid program is absolutely correct.

A 5% improvement in our generic fill rate for Medicaid, bringing Delaware up to 54%--or roughly the national average--would save the First State $6 million, and render the issue of cutting the reimbursement rate for brand names moot by simply not allowing their use as often.

This, of course, is one of the things that nobody in the Markell administration apparently had the time to research.

I'm also left with this intriguing question about Walgreens. I will grant jason, for the sake of intellectual integrity, that Walgreens has a shitty track record even for a giant corporation.

The problem, as Dana Garrett pointed out in August 2007, is that Al Levin knew all this when he took the money and ran. So then, deciding not to run for Governor after he cashed in, Al accepts a position in the Markell administration and then blasts the corporation that handed him bazillions of dollars not only to take over his pharmacies but to keep his brand name....

So Levin has credibility in this issue exactly why?

Notice a pattern here?

The Markell administration is right about across-the-board employee pay cuts and the State employee unions are wrong.

The Markell administration is right about sports betting and the NFL is wrong.

The Markell administration is right about Medicaid reimbursements and Walgreens is wrong.

Nor are these entities simply wrong--they're now evil and selfish for refusing to sacrifice for the good of the cause.


Nancy Willing said...

Oh giggle. This is a 'post of the year' candidate, Steve.

It pays to carefully assess the entire story, no?

Question: Who benefits from the laggard approach to generic drug dispensary? Our own big pharma sitting on 202, AZ?

Anonymous said...

I agree with your analysis , I think. Markell seems to be only publicly picking fights where (regardless of the merits) he thinks the spin can be spun to demonize the various opponents. Even though I think he may be correct with the NFL (I think they're being a bit hypocritical) and Walgreens, a case could be made the Walgreens, although guilty of a lot of other crappy stuff, is maybe the reasonable party in this mess. Although in the case of any pharmacy , I'd point out that there is no one making money dispensing medications anymore, their profit is on the milk, eggs, etc in the store. In Dover, there used to be a few pharmacies that just did prescriptions and they've long ago gone out of business.
I'm surprised that the State hasn't mandated the generic option for prescriptions for Medicaid.
I'm even shocked that I might agree (just a bit) with Nancy. I'd suggest though, that many physicians (mine would be one) has fought certain prescription restrictions in the past.

Mark H

Nancy Willing said...

I sent a portion of this post around the members of the house and senate health care committees which is having a joint meeting tomorrow to discuss the Walgreens decision. I hope they look into it.

Susan Regis Collins sends this message to Steve ~

fine w/me......just so everyone the state 'covers' (including electeds & employees) are going to get the generics too.
this should be researched thoroughly before changes are made.....there are meds made off shore (china, israel, mexico) that have been proven not to pass muster re: dosage, content, etc. some off shore produced meds have been revealed as completely bogus. let's check this out before knee jerk changes are made.
nancy: please forward my comments to steve newton....who is covering his meds?

Anonymous said...

No witch hunt here. SOP is to provide generic unless your doctor specifically checks (not writes), brand name essential.

Steven H. Newton said...

Re: Susan's concerns

1) I get my meds through the same Medco system as State Employees and usually end up with generics.

2) The foreign drug issue is highly misleading, as the States which have been fighting for years to import meds from Canada will tell you. There are plenty of ways to vet the suppliers of these medications, and plenty of industry/government standards for doing so. GAO published a report on internet pharmacies a couple of years ago, which was the subject of one of the very first blog posts I ever wrote (which probably means that nobody read it). In it, I examined the evidence very carefully and discovered that most investigations have shown that lowest cost multiple source producers in the US and Canada actually have excellent records of delivering what they promised. If interested, read

3) Here's the thing about Delaware, and where we lose the money. If a doctor in the Medicaid systems does not write "no generics" (or whatever equivalent), the filling pharmacist may--but is not required by law--substitute a generic. In several states (Massachusetts comes to mind; believe it or not, I also think this is true in Alabama), however, the pharmacist MUST use a generic without specific instructions from the physician, and MUST fill the scrip with the lowest cost multiple source drug available.

That saves shitloads of money because it prevents a Walgreens from having a sweetheart deal with Generic Provider X to use only his generic ambien rather than requiring a fill from the lowest priced generic ambien. This is not rocket science: other, much larger states are already doing it.

Delaware could also save several million dollars by quitting its bizarre fight against internet pharmacies, which again the GAO has repeatedly found to be just about as safe as your neighborhood Happy Harry's.

Here's the crime: instead of actually researching the issue, our legislators and budget cutters prefer to simply axe the reimbursement rate rather than legislate the policy changes that would save the State serious coin without endangering the people entering those pharmacies.

Unknown said...

Your analysis is very misleading. The 2004 study you refer offers 3 generic usage categories.
Generic substitution rate: the percentage of all prescriptions for drugs with generic equivalents that were dispensed as generics. 89%
o Single source prescribing rate: the percentage of all prescriptions that were for single source drugs, which have no generic equivalent. 46%
o Generic utilization rate: the percentage of all prescriptions filled that were generics. 49%

You cite the 49% which mislead. The state does and has since 2002 mandate generic equivalents. Brand name exceptions must receive approval. So Walgreens isn't and can't fill any more generic than the State already mandates. Nor should they be allowed to override a Doctors request for a medically necessary brand name.

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