Sunday, July 6, 2014

Express Scripts cuts payments for customized drugs

Washington • The nation’s largest pharmacy benefit manager, Express Scripts, is dramatically scaling back its coverage of compounded medications, saying most of the custom-mixed medicines are ineffective or overpriced.
The company, which manages prescriptions for 90 million Americans, plans to drop coverage for 1,000 drug ingredients commonly found in compounded medications. Express Scripts executives say the move is a cost-saver for employers that will reduce their spending on compounded prescriptions by 95 percent.
"What we are eliminating is, pure and simple, wasteful spending," said Senior Vice President Glen Stettin, in an interview with The Associated Press. "These drugs are being used when there are other things available that are already approved by the FDA and are less expensive."
But the coverage change has prompted a swift pushback from compounding pharmacists, who argue that such cuts deprive patients of crucial medications that are not available as manufactured drugs. A compounding pharmacy industry spokesman said similar efforts to curb coverage are in the works from several insurers and pharmacy benefit providers, including UnitedHealthcare and some Blue Cross Blue Shield plans.
"This is the first time we’ve seen a systematic approach to substantially, effectively cut compounding coverage, which ultimately is very detrimental to patients," said Jay McEniry, executive director of Patients and Physicians for Rx Access, a group recently launched by compounding pharmacies.
The cuts by Express Scripts will take effect Sept. 15, unless customers specifically ask to continue paying for the compounded drugs. Companies who want to opt out of the cuts must notify Express Scripts by Thursday.
Express Scripts, CVS Caremark and other pharmacy benefit managers are paid by employers to manage pharmacy costs. They do this by negotiating discounts and rebates from drugmakers and wholesalers, and by setting up tiered drug lists that steer patients toward lower-cost drugs, which are often generics.
In recent years pharmacy benefit companies have focused their cost-saving efforts on new specialty drugs like Sovaldi, a hepatitis C treatment from Gilead Sciences that costs about $1,000 per pill. Express Scripts reported earlier this year that specialty drugs accounted for more than a quarter of all U.S. drug spending, even though they total less than 1 percent of prescriptions. Compounded drugs occupy a different niche in the pharmaceutical landscape.
Compounded medicines are custom-mixed by pharmacists to meet the prescribing instructions provided by a doctor. For instance, if a patient is unable to swallow a pill their doctor may order a liquid formulation of the same drug from a compounding pharmacy.
Express Scripts says patients will still be able to get necessary compounded medicines under its plan. Instead, the company’s cuts focus on untested topical creams and ointments used to treat pain and other conditions. For example, Express Scripts says some compounding pharmacies will mix five or more drugs into a pain cream even though there’s no evidence that the combination is better than a single-ingredient drug. And in many cases that single ingredient is already available as an over-the-counter drug or a conventional prescription.

Bausch & Lomb Recalls About 850,000 Tubes of Eye Ointment

Valent Pharmaceuticals, Bausch & Lomb unit has recalled about 850,000 tubes of an eye-care ointment because some tubes contained tiny crystal particles that could injure the cornea.
Bausch & Lomb said Friday it believed the crystal particles formed when the tubes of Muro 128 ointment were exposed to freezing temperatures during shipments last winter.
The problem could cause injury to the cornea, leading to eye irritation and abrasions, Bausch & Lomb said in a recall notice it sent to retailers and distributors May 30, which instructed them to return the product. The recall wasn't widely publicized; the U.S. Food and Drug Administration posted some details of the recall on its website this week.
The over-the-counter ointment is typically used as a nighttime treatment for corneal edema, or swelling of the outermost layer of the eye. Users are supposed to apply a small amount to the inside of the eyelid every three to four hours or as directed by a doctor.
Bausch & Lomb said it initiated the voluntary recall in the interest of patient safety after an increase in the number of complaints it received from users about a "gritty, sandlike feeling" in the eye after use of the product.
The recall affects tubes of Muro 128 distributed in the U.S., Canada and Hong Kong but not in other regions, said a Bausch & Lomb spokeswoman.
The company investigated and didn't find any problems with its manufacturing process, the spokeswoman said. Instead, Bausch & Lomb blamed the "extreme weather conditions" of winter, saying the affected products may have been exposed to freezing temperatures after leaving company-owned facilities. Freezing temperatures can cause the crystal formations in the salt-based product, the spokeswoman said; boxes containing the tubes carry a "do not freeze" label.

One woman said it felt like "shards of glass" were in her eyes after using the product. Another complained that Bausch & Lomb didn't sufficiently alert consumers to the recall.
Bausch & Lomb said the recall notice was only sent to wholesalers, retailers and eye-care providers, not to consumers, after discussions with the FDA.
The FDA assigned a "Class II" status to the recall, which the agency reserves for products that could cause temporary or reversible problems, or where the risk of serious health problems is remote.
The recalled lots contained expiration dates ranging from June 2014 to October 2016.

Express Scripts pharmacy benefits manager to drop coverage of compound medications

WASHINGTON – The nation’s largest pharmacy benefit manager, Express Scripts, is dramatically scaling back its coverage of compounded medications, saying most of the custom-mixed medicines are ineffective or overpriced.
The company, which manages prescriptions for 90 million Americans, plans to drop coverage for 1,000 drug ingredients commonly found in compounded medications. Express Scripts executives say the move is a cost-saver for employers that will reduce their spending on compounded prescriptions by 95 percent.
“What we are eliminating is, pure and simple, wasteful spending,” said Senior Vice President Glen Stettin, in an interview with the Associated Press. “These drugs are being used when there are other things available that are already approved by the FDA and are less expensive.”
But the coverage change has prompted a swift pushback from compounding pharmacists, who argue that such cuts deprive patients of crucial medications that are not available as manufactured drugs. A compounding pharmacy industry spokesman said similar efforts to curb coverage are in the works from several insurers and pharmacy benefit providers, including UnitedHealthcare and some Blue Cross Blue Shield plans.
“This is the first time we’ve seen a systematic approach to substantially, effectively cut compounding coverage, which ultimately is very detrimental to patients,” said Jay McEniry, executive director of Patients and Physicians for Rx Access, a group recently launched by compounding pharmacies.
The cuts by Express Scripts will take effect Sept. 15, unless customers specifically ask to continue paying for the compounded drugs. Companies who want to opt out of the cuts must notify Express Scripts by Thursday.
Express Scripts, CVS Caremark and other pharmacy benefit managers are paid by employers to manage pharmacy costs. They do this by negotiating discounts and rebates from drugmakers and wholesalers, and by setting up tiered drug lists that steer patients toward lower-cost drugs, which are often generics.
In recent years pharmacy benefit companies have focused their cost-saving efforts on new specialty drugs like Sovaldi, a hepatitis C treatment from Gilead Sciences that costs about $1,000 per pill. Express Scripts reported earlier this year that specialty drugs accounted for more than a quarter of all U.S. drug spending, even though they total less than 1 percent of prescriptions. Compounded drugs occupy a different niche in the pharmaceutical landscape.
Compounded medicines are custom-mixed by pharmacists to meet the prescribing instructions provided by a doctor. For instance, if a patient is unable to swallow a pill their doctor may order a liquid formulation of the same drug from a compounding pharmacy.
Express Scripts says patients will still be able to get necessary compounded medicines under its plan. Instead, the company’s cuts focus on untested topical creams and ointments used to treat pain and other conditions. For example, Express Scripts says some compounding pharmacies will mix five or more drugs into a pain cream even though there’s no evidence that the combination is better than a single-ingredient drug. And in many cases that single ingredient is already available as an over-the-counter drug or a conventional prescription.
“Your health benefit is intended to pay for things that have demonstrated efficacy. These are things that wouldn’t pass muster,” said Express Scripts’ Stettin, who heads the company’s clinical research division. He estimates less than a half-percent of patients who get prescriptions through the St. Louis-based company will be affected by the coverage changes.
Along with questionable effectiveness, Stettin says prices for many compounding drugs have risen to unjustifiably high levels. From the first quarter of 2012 through the first quarter of 2014, Express Scripts says its spending on compounded medications increased nearly 370 percent to $131 million. The average cost of a compounded medicine rose more than tenfold in that period: from $90 to $1,100 per prescription. While some of that increase is due to doctors writing more prescriptions, Express Scripts says the bulk is due to inflation of drug ingredient prices by manufacturers.
Over the last two years, Express Scripts has recorded increases of 100 percent or more in the average price of 117 compounding ingredients. Among that group, 13 ingredients have seen price increases of over 1,000 percent.
In a written statement Wednesday, the compounding coalition said that pharmacies do not control drug ingredient prices. The group also noted that pharmacy benefit managers like Express Scripts can set caps on what they are willing to pay for various medications.
“Express Scripts should explain why it has chosen not to set ‘maximum allowable pricing’ across the board, rather than attempting to shift responsibility to pharmacists and shift costs to its customers,” the group said.

JCB exec says company will stay put even with European acquisition

At the beginning of the year, a European concern was quietly closing on its acquisition of Wichita’s JCB Laboratories, a high-tech sterile pharmaceutical compounding company that its top executive said has seen significant revenue growth over the past two years.
The acquisition came to light publicly this week following the publication of a Treasury Department report that highlighted the northwest Wichita company.
“We are not moving locations,” JCB president Brian Williamson said in an interview this week. “That was part of the deal, that JCB is staying here in Wichita. We are possibly looking at an expansion project here.”
Williamson and three other partners sold the company to Fagron, a 24-year-old pharmaceutical compounding company based in Rotterdam, the Netherlands, that operates in 30 countries.
Williamson declined to disclose financial terms of the transaction, which includes an arrangement that he remain JCB’s president for three years, he said.
Williamson, Kent Richardson and two unnamed partners owned the company that was launched in 2002. From its 8,100-square-foot building at 7335 W. 33rd St. North, the company compounds sterile drugs and solutions to health care providers across the country.
He said JCB’s gross revenue increased 50 percent between 2012 and 2013, and it’s on track to grow another 60 percent this year.
Williamson attributes much of the revenue growth to federal regulations signed into law last fall governing compounding pharmacies. The regulations followed a meningitis outbreak in 2012 that killed 64 people and made more than 750 people sick. The outbreak was traced to contaminated steroid pain injections produced at a now-closed Massachusetts compounding pharmacy.
Williamson said JCB’s decision to voluntarily register with the Food and Drug Administration as an outsourcing facility – and subject itself to federal inspections – helped it gain new business from health care providers.
“There are not many pharmacies that have done that or (they) have gotten out of it (compounding),” he said. “We’re going to see more and more market share as more people continue to get out of the business.”
Under the new regulations, larger compounding pharmacies can voluntarily register with the FDA and have federal inspections, while smaller pharmacies remain under the supervision of state boards of pharmacy.
Employment at JCB has grown concurrently with revenue. Williamson said JCB now has 35 employees, up from 25 last December. It also is in the process of hiring four more people: a financial controller, senior quality assurance manager and two pharmacy technicians. The bulk of its workforce comprises pharmacists and pharmacy technicians, who generally have four-year college degrees in chemistry. We provide “significant salaries, and that’s what the state wants to see.”
JCB’s business, growth and receipt of State Small Business Credit Initiative funds led to a briefing and tour of its facilities by Treasury officials a month ago. JCB received a $63,000 loan from NetWork Kansas through the SSBCI for its relocation to its larger and present building in 2011. Treasury oversees the distribution of SSBCI funds to the states.
Corey Mohn, NetWork Kansas’ director of statewide programs, said Treasury “had seen a lot of anecdotal and statistical evidence we were doing a good job as part of that (SSBCI)” and wanted to send some staff to visit Kansas to see companies that had used SSBCI funds. Mohn said he included JCB as part of Treasury’s tour of six Kansas firms using SSBCI funds.
The end result of the visit was that Treasury spotlighted three SSBCI recipients in its quarterly report released this week, and JCB was one. The other two were firms in Washington and California.
“They (JCB) are just an unbelievably innovative company in our backyard, an example of the type of company that we need more of not only in Wichita, but in Kansas,” said NetWork Kansas CEO Steve Radley, who attended Treasury’s visit to JCB.





Read more here: http://www.kansas.com/2014/07/05/3540251/jcb-exec-says-company-will-stay.html#storylink=cpy

Monday, June 30, 2014

Is there no solution: Saline shortage creates issue for US hospitals

Is there no solution? Hospitals experiencing saline shortage
The lack of saline could spell the most expensive drug shortage in history (Picture: Alamy)
Hospitals across the US are desperately searching for a solution after manufacturers started rationing saline - the salt and water mix used to clean wounds, mix medications and hydrate patients.
Bizarrely, making bags of salt and water is a deceptively complex process, with manufacturing taking up to three weeks due to a 30-step procedure to ensure the saline is sterile.
Drug companies say they won’t be able to catch up with demand until next year.
‘To make one of these drugs is very complex, even though the drug itself is simple,’ said Valerie Jensen, the director of the drug shortage program at the Food and Drug Administration.
The Food and Drug Administration has tried to deal with the shortage by importing saline from abroad but economists have warned it’s not a sustainable solution as all countries have to supply their own hospitals.
‘There is no spot market,’ said FDA economist Marta Wosinska.
‘You can’t buy it like pork bellies or grains or oil.’
Hospitals have developed protocols to conserve supplies, but with the shortage set to continue through to the end of the year, experts have warned the increased demand for saline and labour costs will make it the most expensive drug shortage in history.

State unveils plan to regulate pharmacies

State inspectors who monitor compounding pharmacies that custom mix drugs will be required to have special training, under compromise legislation unveiled Sunday by Massachusetts lawmakers. Adding one pharmacist with expertise in the most risky type of compounding to the board that regulates the industry, would also be mandated under the legislation.
In addition, the bill would require hospital pharmacies, which currently are not subject to routine monitoring by the state’s pharmacy board, to be inspected by state regulators and follow Massachusetts rules by June 2015.
The legislation comes after tainted drugs produced in 2012 at a Massachusetts commercial compounding pharmacy, New England Compounding Center, sickened 751 people, killing 64.
The Massachusetts House and Senate last fall each issued different proposals aimed at closing loopholes that investigators said led to the deadly fungal meningitis outbreak from the tainted drugs, and the compromise package issued Sunday includes many key proposals from both.
“With this legislation, we’ll go from a state with essentially unregulated pharmacy compounding substances to a state which will provide patients with some of the best patient care in the country,” said state Senator John F. Keenan.
“It’s a very good bill . . . that broadens scope and really serves to protect the patients in the commonwealth of Massachusetts,” Keenan said.
“This closes a lot of the loopholes that currently exist,” said Todd Brown, executive director of the Massachusetts Independent Pharmacists Association, a group that represents most compounders. “This potentially can be a model for the rest of the country.”
After the meningitis outbreak, some state inspectors testified at a public hearing that they didn’t have the expertise they needed to effectively monitor pharmacies, such as New England Compounding, that do the most risky type of compounding — mixing drugs that are injected into the body.
The fungal meningitis outbreak was traced to an injectable steroid manufactured at New England Compounding.
“If they are not trained properly, they don’t know what they are looking at,” Brown said.
The compromise legislation also expands the pharmacy board from 11 to 13 members, and would require that eight of its members be pharmacists, including one with expertise in so-called sterile compounding, which is the type of drug mixing done at the now-defunct New England Compounding.
The company closed following the meningitis outbreak.
Governor Deval Patrick last year proposed legislation to decrease the number of pharmacists on the board to four members, saying he believed that fewer pharmacists on the board would mean stronger oversight. He said he believed it would bring a greater range of professional perspective to the board.
The pharmacists association fought that move, saying the field had become so complex, the board needed pharmacists who understood the issues.
The compromise legislation also will require out-of-state pharmacies that ship products to Massachusetts to be licensed by the state and subject to its rules.

Other portions of the package would require inspectors to conduct both planned and unplanned inspections of all licensed compounding pharmacies, and to assess penalties up to $25,000 for each violation by a pharmacy, and up to $1,000 a day for each violation that continues beyond the date prescribed for correction.

Friday, June 27, 2014

Shortage of Saline Has Hospitals on Edge

Hospitals across the country are struggling to deal with a shortage of one of their essential medical supplies. Manufacturers are rationing saline -- a product used all over the hospital to clean wounds, mix medications, and treat dehydration. Now drug companies say they won't be able to catch up with demand until next year.
That leaves San Francisco General Hospital's materials manager, Reid Kennedy, in a fix. Kennedy is in charge of managing all the gloves, bandages, bedpans, and IV solutions for all the medical floors, emergency room, and operating room.
He first got a call last year from his vendor telling him they might not be able to deliver his full order.
"We were put on notice that it was going to be tight," he said.
Then things got worse in January. The flu season hit much harder than expected, and sick people flooded into hospitals. Saline bags flew off the shelves to treat dehydration, and demand far outstripped supply.
"The flu season knocked us out as an industry," Kennedy said. Though hospital administrators say the shortage hasn't affected the quality of patient care, Kennedy uses the word "crisis" to describe the shortage.
It's Harder to Make Than You Think
But can salty water really be that hard to come by? Kennedy pays $1.57 per bag. Why can't drug companies just whip up some more?
"To make one of these drugs is very complex, even though the drug itself is simple," said Valerie Jensen, the director of the drug shortage program at the Food and Drug Administration. "It takes about 3 weeks to make one batch of normal saline from start to finish."
She says the key challenge is making sure saline products are sterile. More than 30 steps and a range of supplies are involved in producing sterile saline. Jensen says FDA inspectors have reason to keep a close eye on any drug injected intravenously. She says they've found some nasty things in IV drugs: bacteria, mold, glass particles.
"These are issues that absolutely would be a safety risk for patients," she said.
That's why the FDA sets strict quality standards for the facilities that manufacture saline and other IV drugs. But the agency has to find a delicate balance between safety and supply.
Some suppliers suggest keeping up with the FDA's standards is too onerous and may be playing a part in the shortage.
"A lot of variables came together to create this," said Scott Crandall, director of medical supply contracts at Novation, a group buying organization in Texas that manages contracts for San Francisco General and 2,000 other hospitals across the country. He's been hearing from manufacturers that increased FDA scrutiny is interfering with drug production.
"During the last year, all suppliers had issues in their facilities where they had to correct certain things the FDA found," Crandall said.
Some of those corrections were serious. Hospira, one manufacturer of saline, issued a recall earlier this year because of leaks in its saline bags. Before that, Baxter, another manufacturer, found particles in its saline vials and had to recall four lots. Both companies say the recalls had no bearing on the current shortage.
Flu Season Causes Headaches
But Crandall says inspections and maintenance require shutting down machines. And when machines aren't operating, less saline is getting shipped. Last winter, he says maintenance closures "slowed production down, 10 to 20 percent."
So the industry was already behind when the flu season hit.
The procurement director for a group of dialysis centers says his supplier, Baxter, told him the main problem was winter weather. Snow and ice storms in the Midwest were delaying trucks headed for California.
"As the weather got worse, we began to see more and more backorder issues," said Colin Carthen of Satellite Healthcare, which runs 70 dialysis centers across the U.S. Each patient comes in three or four times a week, and each time goes through 1 to 2 liters of saline to clean the blood and prevent clotting. At the worst of the shortage, Carthen realized the health of 6,000 patients depended on the administrative magic tricks he could perform behind the scenes.
"I called up a clinical person that I knew, and said, 'Well, what happens if we run out of saline?' Because I was really afraid," he remembers. "And they were just like, 'Yeah, it gets ugly, fast.'"
Carthen says he's lucky that didn't happen. Every day, he spent hours on the phone with suppliers and clinical staff, juggling and rerouting supplies so everyone had enough.
Keeping the Supply From Drying Up
Hospitals have developed new clinical protocols to conserve supplies during the shortage. Nurses at San Francisco General are using smaller saline bags when possible, and transitioning patients who still need hydration to drink water from cups a little sooner than they did in the past. Kennedy has spent hours talking with pharmaceutical and clinical staff about when to use these conservation measures, to make sure there is enough saline to go around.
"Pie is a good analogy. Now I'm going to use 16 slices of pie instead of eight slices of pie, and I'll be able to feed 16 people instead of eight," he said.
The FDA is trying to mitigate the shortage by importing saline from Spain and Norway. But FDA economist Marta Wosinska says that's not a sustainable solution, since those countries have to supply their own hospitals.
"There is no spot market. You can't buy it like pork bellies or grains or oil. You cannot go on a marketplace and order a certain amount," she said.
U.S. companies also don't have the capacity to ramp up production. They only have so many machines, and a lot of them are tied up producing other essential drugs. Building new facilities is hardly an option.
"We're talking about hundreds of millions of dollars and it would take 3 to 5 years," Wosinska said.
The drug companies don't face any real penalties if they don't come through with saline supplies. Contract loopholes release them from paying any fees to their customers if a drug shortage is industry-wide, as this one is.
Both Baxter and Hospira, the top two saline producers in the country, say they are doing all they can to maximize production. Each points a finger at the other for contributing to the shortage.
"We saw increased demand amid decreased product availability from competitors as the main driver," a Baxter spokesman wrote in an email.
A Hospira spokesman countered: "Hospira began seeing stronger demand for its saline products in late 2013 when another manufacturer began to experience manufacturing issues."
Hospira reported a 20 percent increase in U.S. net sales of its injectable drugs between January and March, citing "increased volume due to competitor supply issues," in its latest quarterly financial report.
"The Most Expensive Drug Shortage in History"
The burden ultimately falls on hospitals, clinics, and dialysis centers to come up with their own workarounds. And all that staff time adds up. Hospitals spend $216 million a year on the labor costs of managing drug shortages, according to Erin Fox, a professor at the University of Utah College of Pharmacy.
Now that the industry has indicated the saline shortage will extend through the end of the year, Fox estimates this will be the most expensive drug shortage in history.
"IV fluids impact almost every single patient and every single floor. That means you have to educate and get a message out to multiple groups of people rather than a selected group, like for an anesthesia drug or a cancer drug," Fox said.
For now, the actual cost of saline is steady. Hospitals are protected under contracts that keep prices locked through next year. But Novation's Scott Crandall says that is very likely to change when those contracts expire.
"The suppliers have already signaled to the market that they plan on increasing price significantly," he said. "And when I say that, it could double and triple in some aspects."
Fox says that would be far better than the current situation.
"It is far cheaper for hospitals to pay $3 a bag for saline and have a consistent and quality product -- not recalled due to contaminants or leakage," she said, "than it is to potentially delay elective surgeries or make workarounds that change weekly or daily due to inconsistent supply."