Changing Landscape Calow Benefit Partners Inc
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AGENDA
Paramedical Landscape - Fraud/abuse Drugs, “The Changing Landscape” Past/Future trends Industry – EP3 Plan Design, Action or Apathy?
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Paramedicals
Canadian Healthcare Anti Fraud Association CHCAA
30 plus members including Insurance companies Third Party Administrators Ontario Provincial Police
Meet Monthly Review/share/update tips, hot spots Paramedical Practitioners, Doctors, Dentists
Pharmacists and “Hospitals” - Watch list
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Paramedicals One of the Top Canadian Carriers in 2012
Medical consultants reviewed in excess of $1 Million of claims
Recovered well above targeted goals in savings and recoveries
Representing a 20% increase in fraud activity year over year
Eg. 18 employee firm had $26,000 in para claims Practitioners accessing web forms and policy info
via internet CHCAA also deals with Identity Theft for
Practitioners
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Paramedicals
Most activity recent years Medical braces-multiple physical locations per
patient (Knee/elbow/wrist etc…) Use of non three dimensional orthotics castings
and multi family claims Uncertified Canadian Orthotic clinics Surgical stockings Multi tier practitioner clinics (Physio, Chiro,
Massage…etc) Spa clinics using practitioner’s registration
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Paramedicals
CHCAA process Monitor claims for activity separate from the
norm and random audits Forensic test on claims submitted Request practitioner’s medical notes after
interviewing patient in person Due diligence prepare report and inform
authorities and plan sponsors Employees can be charged if collusion exists
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Paramedicals
What to do?...Educate Employees If it is “FREE” something is not right with service Protect health card at all times Keep benefits card for yourself/family Confirm receipt matches treatment Be vigil, request info from broker/insurance carrier
quarterly
Keep copies of all forms submitted Employees should “NEVER” sign blank claim
forms!
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Paramedicals
Plan Design Considerations On-going meetings / education Reduce overall coverage $500 to $300 Cap at $500 for all practitioners Work closely with carrier on abuse/fraud Eliminate Paramedical coverage and replace with
Healthcare Spending Account (HCSP) Problem- treated like a credit card not for intention of
employee’s health
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Drugs “Changing Landscape”
Rx & D: Canada’s Research-Based Pharmaceutical Companies
50 member firms Priority Issues:
Driving new Medicines Demonstrating Value Ensuring Product Safety
Regulated industry Patented Medicines Price Review Board established 1987 Only 40% of drugs internationally hit Canadian market
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New Drug Discovery & Development
8 – 10 years
Drug discovery Preclinical Clinical trials Regulatory review
Scale-up tomanufacturing
Market exclusivity
One approved
drug
0.5–2 years6–7 years3–6 years
Number of volunteers
Phase 1
Phase 2
Phase 3
5250~ 5,000 – 10,000
compounds
Pre
-dis
co
very
20–100 100–500 1,000–5,000
Clin
ica
l inv
est
iga
tion
Reg
ula
tory
sub
mis
sio
n
High-risk research: more than $1 billion over 10–15 yearsMarket exclusivity following approval: 8-10 years
Adapted from: Drug Discovery and Development: Understanding the R&D Process, www.innovation.org; DiMasi et al. Managerial and Decision Economics 2007; 28:469-79.
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Chemical Compound is like…
A Biologic Compound is like…
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Two Main types of MedicationsChemical Compounds “Simple or small molecules Often taken orally as pills
(although not always) Manufacturing process is simple
to replicate Post-patent entities called
”generics” Health Canada assessment &
approval of generics is abbreviated – compares to original brand product
Approved generics are formally approved as “bioequivalent” and interchangeable
Biologic Compounds Complex or large molecules Living tissue – human, animal,
plant Must be injected or infused Insulin and vaccines are familiar
forms of biologics Post-patent entities called
“Subsequent Entry Biologics” SEB’s or ‘Biosimilars’
Manufacturing process is highly precise, difficult to replicate
Health Canada assessment & approval of SEBs is a stand-alone product
SEBs are NOT “ bioequivalent’– not interchangeable
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Value of Incremental Innovation
12
1990 2013
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Incremental Innovation: better quality of life
1970: the first insulin pump
modern-day insulin pump
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Incremental Innovation: Better Outcomes
1996: complex regimens with high pill counts 2006: one pill once daily
Drug Information Association
HIV
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Specialty Drugs1.0%
Traditional Drugs99.0%
% of Claims
15
Stakeholder challenges Specialty drug spend continues
to increase and anticipated to grow to 35% by 2015
Source: Express Scripts Canada
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Top 10 Therapy Classes by Spend(Inflammatory Conditions Overtakes High Blood Pressure)
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To Ten MedicinesRank 2009 2010 2011 2012
1 REMICADE REMICADE REMICADE REMICADE
2 NEXIUM 40MG SR NEXIUM 40MG SR CRESTOR 10MG HUMIRA
3 LIPITOR 20MG CRESTOR 10mgNEXIUM 40MG SR
TAB
ENBREL
4 LIPITOR 10MG ENBREL HUMIRA
ESOMEPRAZOLE 40MG ER
5 CRESTOR 10MG HUMIRA ENBREL NEXIUM 40MG SR
6 ENBREL LIPITOR 20MG CRESTOR 20MG CRESTOR 10MG
7 HUMIRA LIPITOR 10MG CYMBALTA 60MG
DR
CIPRALEX 10MG
8 LIPITOR 40MG CRESTOR 20MG TAB
SYMBICORT 200 TURBUHALER
CYMBALTA 60MG
9 PREVACID 30MG PLAVIX 75MG CIPRALEX 10MG
SYMBICORT 200 TURBUHALER
10 PLAVIX 75MG SYMBICORT 200 TURBUHALER
PLAVIX 75MG EZETROL 10MGSource: Manulife Financial national claims data
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Specialty drugs Specialty drug cost pressures
will continue Research and development is
focused on1: Orphan drugs - 43% of specialty
pipeline Cancer Inflammatory disease
Represents lifelong spendSource: 1) Express Scripts research, AMCP Conference April 2013
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Specialty Medication Eg. Solaris Medication
Rare blood disorder Manufacturer is in United States Authorized via Health Canada and PMPRB
Annual Treatment Spend
Approx. $600,000 per year Roughly 70 Canadians require Solaris currently One major carrier has four certificates
Industry responds……EP3
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Industry EP3 Statement
Reinsurance for carriers over the long term On going claims in excess of $25,000 annually Reimbursed back to carrier each year Insured plans only, ASO and Refund Accounting
programs excluded
Plan Sponsor protected for market study EP3 statement included in annual renewal Forms part of specs for RFP from carriers Carriers compete on first $25,000 of claims for
pricing
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Opportunity Traditional/Specialty
Don’t lose sight of the almost 80% of current spend
Drug reforms have given employers the time to plan
It’s time to take advantage of savings opportunities
Chronic disease spend will continue to play an important role
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Action or Apathy
Action Recent Patent Cliff Lipitor, Crestor, Plavix etc…
Bill C102 for Ontario Drug Benefit Program ODB Generic Pricing is 25% of Brand for Ontario Opportunity exists for savings on traditional meds
Apathy Do nothing……..$$$$$$
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Traditional Spend “Action”
Our approach….proactive!
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Action Top fifty drug report
Identify “Illness category” – Wellness Identify Brand where Generic is available Identify Brand coming off patent in next few years
Plan Design Considerations Offer Two Tier drug plan Eg. 80% coinsurance for Brand and 100% Generic Company spend is decreased 75% Employee driven- win win
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Action
Opportunity for savings Patent Cliff
Coming to an end for traditional drugs
Future is much different Specialty Drugs SEB’s
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Creste
r
Oxycontin
EprexNeulasta
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Thank You : Q&A