Wednesday, January 11, 2012

Payor Satisfaction and Price Caps on Repackaged Drugs

Bill Herrle, executive director of the National Federation of Independent Business (NFIB), told WorkCompCentral News yesterday that Florida Insurance Commissioner Kevin McCarty has prepared an order to roll back workers' compensation rates by 2.5% if Governor Rick Scott signs a repackaged drug price cap into law this year.

Serendipitously, the Wall Street Journal (WSJ) reported that the pharmaceutical sales agenda has softened, and that sales people don't visit doctor's offices intending to do a hard sales pitch anymore.

Stating that the pharmaceutical industry is responding to "changing economic and regulatory conditions", the WSJ story explains:

"Traditionally, armies of sales reps have fanned out to 'detail' doctors with aggressive, well-rehearsed sales pitches and pressure to boost prescriptions. Multiple sales reps from one company might call on the same physician. That strategy over the past 15 years helped propel the industry to $300 billion in yearly U.S. sales today."

In part a response to government crackdowns on "aggressive, illegal marketing of drugs for unapproved uses" drug makers have been scaling back spending only $14.5 billion in marketing in 2010, down 15% from five years ago according to the WSJ.

Perhaps this is one of the reasons the repackaged drug bill might actually see a signature in a state that has rebuffed what other states found to be reasonable regulation in an attempt to put some sanity in an out of control situation.

Florida has been cited in NCCI studies as having the most expensive pharmaceutical costs in any workers' compensation system due both to narcotics overprescription and physician dispensation of repackaged drugs. The state is known to be a supplier of opioids to the underground market which then distribute the drugs to other state markets.

Schedule II & III drug prescriptions were the topic of a Florida law that was passed last year that created a drug monitoring program to curtail the opioid underground market, but capping the price of drugs has been hotly contested by the Florida Medical Association (FMA) and a company called Automated Healthcare Solutions (AHCS).

Our WorkCompCentral news story calls AHCS a software firm, but that is not an accurate representation - the company manages physician dispensing of drugs with automated systems to control inventory, repackaging, and claims management to help ensure top dollar reimbursement to the physician.

According to news reports, companies controlled by AHCS executives Dr. Paul Zimmerman and Gerald Glass gave $100,000 to a committee that supported Scott during the 2010 elections. Five companies affiliated with AHCS sent $500 checks each to Scott's campaign, according to the publication Health Care News Florida.

The AHCS website home page has the company's mission statement: "AHCS empowers health care providers and organizations by maximizing patient care through point of care medication dispensing and other ancillary services."

Another statement on the AHCS site makes clear why the company is so opposed to bills capping the price of repackaged drugs:

"By dispensing medications onsite to your patients you are saving them the frustrating and often costly trip to the pharmacy. Onsite dispensing provides your patient with additional confidence in you and your practice."

The FMA seems to be tightly integrated with AHCS. FMA spokeswoman Erin VanSickle referred questions by WorkCompCentral on FMA's stance on the bills to Alia Faraj-Johnson, an outside media consultant for AHCS.

Faraj-Johnson told WorkCompCentral that AHCS has gotten no signal from Scott's staff on whether the governor will support the measure. She said Tom Panza, an attorney for the company, testified against it during a meeting of the House Insurance and Banking Subcommittee last month.

Sam Miller, executive vice president of the Florida Insurance Council, said he expects Scott to back the bill, however he also said insurers have not yet received a clear signal from the governor.

The WSJ story includes a vignette of a recent drug sales representative encounter, and how the soft sell approach caused an attitude change in the physician regarding the manufacturer's products, even eliciting an invitation for the sales person to return to the doctor's office.

"Increasing physician satisfaction, it turns out, is a much better way to promote a pharmaceutical agent than simply telling them to write more prescriptions or what the benefits" are, David Ricks, president of Lilly's global business unit, is quoted as saying in the WSJ story.

Perhaps increasing payor satisfaction is a much better way to promote repackaged drugs and physician dispensing - until then there needs to be price caps.workers compensation, work comp, injured worker 


  1. This comment has been removed by the author.

  2. Thank you for sharing this informative article about the potential roll back of workers' compensation rates in Florida if a repackaged drug price cap is signed into law. The piece highlights the pharmaceutical industry's response to changing economic and regulatory conditions, including a softening of sales agendas and a shift towards increasing physician satisfaction. It also addresses the controversial issue of physician dispensing and the potential benefits of price caps in promoting payor satisfaction.