# Presentation: 694564

##            Creative Options in Pharmaceutical Cost Management

**CAPT Robert E. Pittman**
**Principal Pharmacy Consultant**
**Indian Health Service**
**LCDR Michael Contos**
**Acting Vice Chair**
**IHS National Pharmacy and Therapeutics Committee**
**IHS Annual Meeting of the Nation Combined Councils**
**Phoenix, AZ**
**February 1, 2006**

## Overview

**I/T/U Pharmaceutical Costs**
**Reasons for Cost Increase**
**Fundamental Issues**
**Expenditure Management **
**Resources**

## I/T/U Pharmaceutical Costs

**237 I/T/U Pharmacies in 29 states**
**FY 2005 - $257 million for medications**
**On average, costs are increasing 15% to 17% per year**

**  **

| Number | Description | Total Units | Total Dollars |
| --- | --- | --- | --- |
|  |  |  |  |
| 1 | PIOLITAZONE (ACTOS) | 16,439 | $8,866,887.30 |
| 2 | SIMVASTATIN (ZOCOR) | 94,200 | $6,467,615.56 |
| 3 | ATORVASTATIN (LIPITOR) | 34,293 | $6,264,717.75 |
| 4 | ROSIGLITAZONE (AVANDIA) | 31,593 | $5,756,519.71 |
| 5 | RABEPRAZOLE (ACIPHEX) | 75,155 | $5,347,109.36 |
| 6 | AMLODIPINE (NORVASC) | 40,382 | $5,289,181.56 |
| 7 | GABAPENTIN (NEURONTIN) | 50,569 | $4,277,647.72 |
| 8 | SERTRALINE (ZOLOFT) | 6,138 | $4,262,199.74 |
| 9 | MONTELUKAST (SINGULAIR) | 36,377 | $4,157,741.29 |
| 10 | LANSOPRAZOLE (PREVACID) | 11,396 | $4,118,529.87 |

**  ****I/T/U Pharmaceutical Costs****                           as of June 2005**

## Reasons for Cost Increase

**Population – Increasing, Aging, Shifting **
**New drugs**
**New Treatments**
**Better Treatments**
**Treatments for chronic conditions**
**Formulary Issues**
**Increasing numbers of prescriptions**

## Fundamental Issues

**Cannot decrease drug costs!**
**Can**
**Manage the rate of increase**
**Shift how funds are used**

## Fundamental Issues

**Prescribers determine pharmaceutical expenditures by what and how they prescribe.**
**Administration determines pharmaceutical expenditures by policies**

## Fundamental Issues

**Pharmacy and Therapeutic Committees and Pharmacists can help to assure therapeutically effective and cost effective choices.**

## Expenditure Management

**Drug Procurement**
**Prescribing Decisions**
**Administrative Decisions**
**Reimbursement **

## Drug Procurement

**VA Pharmaceutical Prime Vendor**
**HRSA 340B Discount Program**
**IHS Blanket Purchase Agreements**

## Drug Procurement

**VA Pharmaceutical Prime Vendor**
**Federal Supply Schedule**
**National Standardization Contracts**
**Blanket Purchase Agreements**
**Prime Vendor Discount**
**Savings – approximately 50%**
**Greatest savings on Brand drugs**
**National Supply Service Center Managed**
**I/T Participation Agreements**
**Authorize orders/Ombudsman Role**

## Drug Procurement

**Health Resources and Services Administration 340B Drug Discount Program**
**Open to Tribes and Urban Programs**
**Required Federal discounts**
**Prime Vendor negotiated discounts**
**Savings – approximately 50%**
**Greatest savings on generic drugs**

## Drug Procurement

**IHS Blanket Purchase Agreements**
**Most based on usage**
**Who negotiates**
**National Supply Service Center**
**Actos, Depokate ER**
**Areas **
**Sites**

## Prescribing Decision

**I/T/U sites have their own local formularies.**
**Aberdeen and Oklahoma City Areas have area wide formularies.**
**The IHS National Core Formulary is a listing of core medication that all IHS sites are expected and Tribes recommended to have available for use.**

## Prescribing Decision 

**Formulary**
**Pharmacy and Therapeutic Committee **
**Pharmacoeconomic decisions**
**Use of nationally recognized guidelines**
**Peer Reviewed Publications**
**National Core Formulary**
**Adherence to formulary**
**Peer review of prescribing and non-formulary requests**

## Administrative Decisions

**Outside prescriptions**
**Lost revenue for provider visit**
**Patients access high cost medications**
**Elimination of drug classes**
**NSAIDs**
**OTCs - Prenatal Vitamins, Aspirin in MI**
**Adherence to Formulary**

## Administrative Decisions

**Use of Contract Health Service Funds**
**Staffing**
**Contractors – Adherence to formulary**
**Pharmacy – clinics, review of Rxns, 30 vs 90 day fills**
**Patient Registration – third party billing**
**Business/Billing Office - rejections**
**Patient Assistance Programs – free drugs**

## Reimbursement

**Patient Registration**
**Checking insurance status**
**Signing up eligible beneficiaries**
**Medicare, Medicaid, private insurance**
**Billing Office **
**Timeliness of claims – 10 to 30 days**
**Rejected claims**

## Reimbursement

**Point of Sale billing for medications**
**National and local agreements**
**Checking rejections**

## Resources

**National Pharmacy and Therapeutics Committee**
**Pharmacy Professional Specialty Group**
**National Pharmacy Council**
**www.pharmacyissues.ihs.gov**
**Home.pharmacy.ihs.gov**

## Contact Information

**CAPT Robert E. Pittman****Phone: 301-443-1190****E-mail:  robert.pittman@ihs.gov**
**LCDR Michael Contos**
**	****Phone: 602-364-5170/758-0218**
**	****E-mail: michael.contos@ihs.gov**