Leaving Canada for Medical Care 2011

Among the consequences of poor access to health care in Canada is the reality that some Canadians will ultimately receive the care they require outside of the country. Some of these patients will have been sent out of country by the public health care system due to a lack of available resources or the fact that some procedures or equipment are not provided in their home jurisdiction, says Nadeem Esmail of the Fraser Institute.

Others, which are of more interest here, will have chosen to leave Canada in response to concerns about quality to avoid some of the adverse medical consequences of waiting for care such as worsening of their condition, poorer outcomes following treatment, or simply to avoid delay. Measuring the size of this population allows for comparative assessment of Canada's health system's quality.

In 2011, a significant number of Canadians -- an estimated 46,159 -- received treatment outside of the country.

This figure constitutes roughly 1 percent of all patients for non-emergency medical care.

Increases between 2010 and 2011 in the estimated number of patients going outside Canada for treatment were seen in British Columbia, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.

Only Ontario saw a decrease in the number of patients seeking treatment outside of Canada.

At the same time, the national median wait time for treatment after consultation with a specialist increased from 9.3 weeks in 2010 to 9.5 weeks in 2011.

Furthermore, the methodology that produced these figures likely underestimates the number of Canadians leaving the country to receive care.

These numbers are based on specialist responses, which means that patients who leave Canada without consulting a specialist are not likely to be included in the count.

The counts are also based on the number of procedures estimated to have been performed in Canada, which is less than the number of patients consulted and less than the number of Canadians who would have required treatment, including those who left Canada to seek it.

Clearly, many of those who left the country to receive care were driven by a desire to return more quickly to their lives, to seek out superior quality care, or perhaps to save their own lives or avoid the risk of disability.

Source: Nadeem Esmail, "Leaving Canada for Medical Care 2011," Fraser Institute, July/August 2012.


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Wellpoint strikes deal to buy Amerigroup for $4.9 Billion

WellPoint entered a definitive agreement to acquire Amerigroup in a cash deal valued at $4.9 billion.

The agreement, expected to close in the first quarter of 2013, calls for WellPoint, Indianapolis, to pay $92 per share for Amerigroup, a Virginia Beach, Va.-based managed-care company with 2.7 million members in 13 states, according to a news release.

The acquisition would greatly expand WellPoint's footprint in Medicaid managed care and with the dual-eligible population. The combined company would have “a presence in the four largest states that have a combined $105 billion in annual dual eligible spending,” according to the release.


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Unapproved Oxycodone Drugs Ordered Off the Market by FDA

Unapproved manufacturers of the painkiller oxycodone are being targeted by the FDA and being asked to halt production and distribution. The Unapproved Drugs initiative, started in 2006, is intended to remove drugs from the market that have not gone through the appropriate measures of approval. “Federal Register” notices have been given to manufacturers of multiple unapproved drugs, some of which date back to the 1800’s. The current notice is aimed at single ingredient, instant-release drugs that contain oxycodone. Oxycodone, known on the streets as “Oxy”, has been labeled a controlled substance by the government because of the high rates of overdose and abuse.

"It's a high public health priority for FDA to remove these unapproved products from the market to minimize consumer exposure to drugs that may be unsafe, ineffective and of poor quality," FDA Center for Drug Evaluation and Research Office of Compliance acting director Lisa Bernstein said. "Since FDA-approved versions of these oral dosage forms are available by prescription, there should be no negative impact on consumers as a result of this action and no disruptions to the drug supply."


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GSK Agrees to $3B Settlement

In the largest fraud settlement in U.S. history, GlaxoSmithKline has agreed to pay $3 billion in settlements and to plead guilty to criminal charges related to its branding, safety disclosures and price reporting of several drugs.

The Justice Department on Monday announced a “global settlement” that resolves three investigations related to the pharmaceutical giant.

The company will pay $1.8 billion to resolve criminal and civil liabilities for off-label marketing, including $757 million in criminal fines for misbranding antidepressants Paxil and Wellbutrin, and more than $1 billion for alleged False Claims Act violations related to payments of kickbacks for those and other drugs.


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Walgreens and Boots Combination, Where are the Synergies?

The American drug store chain Walgreens has agreed to buy a 45 percent stake in Alliance Boots, the European pharmacy retailer, for $6.7 billion, in a deal that could allow it to take full control of Alliance Boots by 2015.

The deal will create one of the world’s largest drug store and pharmacy retailers with more than 11,000 stores in 12 countries. The acquisition also would allow Walgreens to expand into overseas markets, and give Alliance Boots a presence in the Unites States that it has long wanted.

“Today’s announcement represents an exciting opportunity to accelerate our five core strategies and advance that mission in the U.S. and now internationally,” Gregory Wasson, chief executive of Walgreens, said in a statement.

Finding the synergies in this deal will be challenging beyond extending two large brand names on an international scale.  Few in the US know the Boots brand and likewise, Walgreens is not a household name outside of the US.  Both will need to leverage the Americanization of the Brand.  In healthcare and pharmaceuticals, American brands are highly regarded internationally, so expect this to come into play as this new combination extends their reach.

Time will tell if buying leverage will truly play out in the branded world of Rx but certainly in the world of consumer, private label and generics, bigger is better!

Stay tuned



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Research on Savings from Generic Drug Use

The Hatch-Waxman Act, passed in 1984, is largely responsible for the relationship seen today between generic and brand name drugs.  While brand names are allowed to charge high prices for their first several years on the market, their patents eventually expire (as stipulated by the Act) and generic manufacturers move in to sell at a lower price, says the Government Accountability Office.

Prescription drug spending in the United States reached $307 billion in 2010 -- an increase of $135 billion since 2001.

This comprised approximately 12 percent of all health care spending in the country in 2010.

As efforts to control health care spending expand, attention is naturally paid to the role of generic drugs in reducing spending on prescriptions -- generics are, on average, 75 percent cheaper than their brand-name competitors.

The usage of generic drugs has grown from approximately 19 percent in 1984 to 78 percent today, and is expected to increase even further in the next few years as major drugs lose their patent.

The Government Accountability Office has conducted a review of studies on the topic in an effort to understand the future role that generic drugs might play in controlling costs.  Its research yielded several conclusions.

A series of studies estimated the total savings that have accrued to the U.S. health care system from substituting generic drugs for their brand-name counterparts to be more than $1 trillion between 1999 and 2010,

One study assessed the potential for additional savings within Medicare Part D, finding that if generic drugs had always been substituted for the brand-name drugs studied, about $900 million would have been saved in 2007.

Source: "Research on Savings from Generic Drug Use," Government Accountability Office, January 31, 2012.

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New CMS Document on the Medicaid Program on Covered Outpatient Drugs

Last Friday evening, CMS released the proposed rule regarding changes to averagemanufacturer price (AMP), which essentially formalizes the changes to AMP that had been previously discussed in the Affordable Care Act (ACA). Recall that the ACA had discussed changes to the methodology by which Federal Upper Limit, or FULs, which are used for the reimbursement of generic drugs under Medicaid, would be calculated relative to the methodology that had been previously proposed under the Deficit ReductionAct of 2005 (DRA). The significant changes in ACA included a shift to a no-less than-175% markup over the weighted average manufacturer price (AMP), whichis the acquisition cost by wholesale distributors for drugs for the retail class oftrade, which compares to the prior proposal of 250% of the lowest AMP underDRA (recall that FULs had previously been calculated based on a discount off AWP). While the new proposed rule has some minor clarifications,we don’t believe these should drive material changes to the new AMP prices.CMS did indicate that it recognizes that if reimbursements are too low, pharmacies may elect not to participate in Medicaid, which could potentially impact beneficiary access to pharmacy services. CMS is soliciting comments onthe proposed rule, which are due by April 2.

Its interesting reading should you want to review the ruling:  http://www.ofr.gov/OFRUpload/OFRData/2012-02014_PI.pdf


D2 Presenting: Is Specialty Pharmacy Right for Your Hospital at HSCA

Stay at the forefront of pharmacy industry issues and take advantage of opportunities to network with leading decision-makers—join us in Tampa for the 2012 National Pharmacy Forum.

Make Key Business Contacts and Explore Critical Industry Issues.

The National Pharmacy Forum is the place to strengthen partnerships with existing clients and develop new connections. You’ll also gain insight into emerging trends and an outlook for the future with relevant educational content.

Program highlights include:

  • Specialty Pharmacy: Opportunities in the Hospital Setting, which presents an expert market/situation analysis that breaks down the complexity of the biopharmaceutical marketplace and the positions of stakeholders featuring Dean Erhardt, MBA and Dan Steiber, R.Ph
  • Battleground 2012: An Update on the Political Landscape, which explores the latest public opinion research on healthcare reform, the economy, and the country’s political future.
  • Comparative Effectiveness Research, which gives a comprehensive overview of comparative effectiveness research (CER) and patient centered outcomes research (PCOR).
  • Healthcare 2020: The Transformative Trends That Will REALLY Define Our Future, which details dramatic innovations that will impact tomorrow’s healthcare system. .

And you won't want to miss presentations from engaging keynote speakers:

Kevin B. Sneed, PharmD, founding dean of the University of South Florida College of Pharmacy and respected lecturer on a range of healthcare topics. His research interests include the pharmacological treatment of patients with cardio-metabolic disorders and disparities in healthcare.

Jim Carroll
, recognized as one of the world’s leading international futurists with a massive global blue-chip client list. He is also widely acknowledged as an authority on international trends, rapid business model change, business transformation in a period of economic uncertainty, and the necessity for fast-paced innovation.

For complete programming information, view the preliminary program/schedule of events.

For more information and to register, visit www.supplychainassociation.org/forum


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FDA Submits Generic, Brand Drug User Fee Bill Language to Congress

FDA Submits Generic, Brand Drug User Fee Bill Language to Congress

Generic drugmakers won’t have long to wait after Congress passes a user fee bill to learn the various fee levels in the Generic Drug User Fee Act (GDUFA).  Under statutory language delivered to Capitol Hill on Friday, the FDA would
have only until Oct. 31 to establish fee levels for a one-time backlog fee, a drug master file fee and various application and supplement fees.

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New HHS Report Indicates Shocking Gaps between ASP and WAMP

The HHS Office of the Inspector General (OIG) released a report comparing average sales prices (ASP) to widely available market prices (WAMP) for selected drugs. The report compares ASPs to WAMPs for 14 drugs that have been identified in previous OIG reports for repeatedly exceeding the 5 percent ASP to average manufacturer price (AMP) threshold.

As part of the ASP price substitution policy, OIG is required to conduct studies that compare ASP to WAMP and AMP for Medicare Part B drugs to identify if the ASP of a drug exceeds either the WAMP or the AMP by a certain threshold.

The study revealed significant gaps in what is being reported between the manufacturers and the distributors in come cases gaps of over 300%!

D2 readers can find this document at http://oig.hhs.gov/oei/reports/oei-03-10-00280.pdf

Below is a summary statement taken from the above document.

Federal law requires OIG to conduct studies that compare ASPs to W AMPs and average manufacturer prices (AMP).  I f  OIG finds that the ASP of  a drug exceeds either the WAMP or AMP by a certain threshold (currently 5 percent), the Secretary of  Health and Human Services (the Secretary) may disregard the ASP for the drug when setting reimbursement amounts.  Since the implementation of the ASP reimbursement methodology, OIG has issued 27 reports comparing ASPs to W AMPs and AMPs

(2 comparing ASPs to WAMPs, 25 comparing ASPs to AMPs). The purpose of this review was to compare ASPs to W AMPs for 14 drugs that have been identified in previous OIG reports as repeatedly exceeding the 5-percent ASP-AMP threshold.  However, limitations and irregularities in the sales data provided by the distributors and manufacturers of the 14 drugs called into question the data's accuracy and reliability, and prevented us from measuring W AMPs against the threshold.

All of the manufacturers that reported direct sales to providers included data on their discounts and rebates for those sales.  However, two distributors (which sold over half of all the units reported to us) were not able to determine the discounts and rebates they provided, meaning that the W AMPs we calculated most likely did not reflect the actual prices paid in the marketplace.  In the past, OIG has had difficulty obtaining data on discounts and rebates from distributors, but in those instances, the missing data did not have the same impact on our results.

Furthermore, the total number of units sold reported to us by distributors and manufacturers differed substantially from the number reported to the Centers for Medicare & Medicaid Services (CMS) through quarterly ASP submissions, potentially resulting in our data reflecting an inaccurate number of sales.  Most likely because of these issues, the WAMPs we calculated varied widely from other pricing points; several drugs had WAMPs that were substantially higher than the associated ASPs and AMPs.  We plan to continue to fulfill our statutory mandate to conduct WAMP studies, and these issues will need to be addressed before any future efforts can be made to compare ASPs to WAMPs.  We will consider alternative methodologies that will allow us to conduct pricing comparisons, including directly surveying providers to obtain accurate and complete sales data.



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