New system gives M.D.s information on drug prices

May 20, 2002

Handheld devices let physicians compare drug prices when they are prescribing

 

HEALTH-SYSTEM EDITION
TECHNOLOGY

New system gives M.D.s information on drug prices

When it comes to writing prescriptions, doctors in the Seattle area who participate in the Premera Blue Cross plan are becoming more educated about the pricing of medications they prescribe. Participating prescribers can download formularies, dosing, and other clinical data, as well as drug prices to their personal digital assistants (PDAs). No more price surprises at the pharmacy and no more calls to physicians to switch nonformulary Rxs to an allowable product.

"Reducing the hassle factor is an important goal to us," said Ed Wong, clinical pharmacist at Premera Blue Cross in Seattle. "This program offers a way for the physician and patient to consider price and formulary before the prescribing decision is made."

Wong also manages a new program that has integrated Premera's open formulary and three-tier co-pay into ePocrates Rx. The new product, called ePocrates Formulary, is being promoted to health plans nationwide. Premera, with about one million lives, is the largest user to date.

Physicians who prescribe for patients enrolled in Premera already use ePocrates Rx, which puts drug dosing, interaction, and other clinical data on a Palm Pilot or any other handheld device using the Palm operating system. ePocrates Formulary adds Premera's formulary, essential information on every Food & Drug Administration-approved drug, and the co-pay tier into which each product falls. When prescribers write a prescription, they now see current co-pay and formulary information along with the familiar dosing and clinical data. One tap brings up a list of alternative products and the co-pay tier for each.

Plan members typically pay $5 to $10 for Tier 1 products, generics; $15 to $20 for Tier 2, preferred brands; and $30 to $40 for Tier 3 products, everything else.

"Physicians tell me, 'I write the prescription and wait for the pharmacist to call,' " Wong said. "Now we don't have to call because the physician and the patient are making a more informed decision at the time the prescription is written."

There is also the direct cost savings from using more generic and preferred brand-name products. After less than two months in operation, Premera isn't ready to release numbers on changes in prescrib- ing habits and drug costs, said communications director Scott Forslund. "With our initial analysis, it will pay its way," he said.

ePocrates Formulary isn't alone on the market. On-line formulary and drug information products such as ePocrates Rx and FormWeb (Formulary Productions) have long had a data field for drug pricing. ePocrates normally uses retail prices from Drugstore.com. FormWeb leaves the price field blank by default, letting each user customize the product.

The problem, said Lee Vermeulen, director of the Center for Drug Policy at University of Wisconsin Hospitals and Clinics, is choosing what number to use in the price field. In an inpatient environment, he explained, acquisition cost might be appropriate. But acquisition cost is less relevant in the outpatient setting where co-pays and store-to-store price variation play major roles in the actual cost to the patient.

Vermeulen uses FormWeb to distribute formulary and clinical information to UWHC prescribers. On the inpatient side, he shows the acquisition cost, especially for high-price drugs such as Xigris (drotrecogin alfa [activated], Eli Lilly). On the outpatient side, he uses a relative scale, one to four dollar signs, to sidestep variations in cost to patients. "Physicians must be more sensitive to pricing," he said. "They don't know what things cost because they never see prices. If we want them to think about cost when prescribing, we must give them the tools."

That's the logic ePocrates' is using to push Formulary. A company spokeswoman said CalOptima, California's Medicaid agency, recently signed on. Richard Fieodotin, M.D., v.p. of clinical product development, said several of the nation's largest health insurers are on the verge of buying. Public or private, clients get the same pitch. Giving prescribers cost information saves money. On the administrative side, Fieodotin explained, the average M.D. spends up to 2.5 hours weekly talking with R.Ph.s on formulary and cost issues. Physicians who use a handheld formulary reported a 64% drop in follow-up calls with R.Ph.s--#151;which saved pharmacists that much time on the phone with physicians.

On the clinical side, a joint project with AdvancePCS, conducted over 14 weeks in 2000, found that prescribing habits do change when cost enters the decision. After physicians were given drug prices, there was a 1.7% increase in the use of generics and a 3.9% increase in the use of preferred brand-name products.

Just what those shifts mean in dollar terms varies, Fieodotin said. He cited an earlier Blue Cross Blue Shield of Michigan study that concluded the plan saved $17 million from a 1% shift from prescribing brand drugs to prescribing generics.

Fred Gebhart