Pharmacy Benefit Update
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1 Pharmacy Benefit Update July 1, 2012 PDL and Benefit Plan Updates Fully Insured Customers Webcast 1
2 Table of Contents Prescription Drug Landscape Summary of July 1, 2012 Updates July 1, 2012 PDL and Clinical Updates Therapeutic Class Overviews Generic Lipitor Strategy Update Hormonal Contraceptives Additional Updates Communication Plan Q&A Contact your UnitedHealthcare representative for all materials referenced in this document. 2
3 Today s Presenters Paul Kiser Sr. VP, Client Management Travis Hawton Sr. Director, Marketing Lida Etemad VP, PDL Development Susan Maddux Chief Pharmacy Officer, Pharm.D., BCPS 3
4 Prescription Drug Landscape What Drives PDL Decisions Presented by Paul Kiser, Sr. VP of Client Management 4
5 Prescription Drug Landscape Not all drugs are created equal $20 Billion 1 in member and physician marketing by drug companies. Members and physicians don t realize actual cost. Our goal is to help members and physicians better understand their options and make better decisions Congressional Budget Office brief, Dec issue Thousands of drugs available and new drugs launching each week however, not all add value.
6 Brand & Generic Market Dynamics Impact on Cost 1 Brand Accelerated Price Increases New 3 Our Rebated Brand Price 2 Launch of Brand Extensions High-Price Generics During Exclusivity Period Patent Expires Months From Patent Expiration 6
7 Summary of July 1, 2012 Decisions With the exception of Lipitor, no medications in the top 100 by utilization are affected. Member impact should be minimal, but resulting savings should be significant. Key Decisions # of Affected Drugs Adv. PDL Trad. PDL Effective Date Down-tiers Hormonal Contraceptives Up-tiers Hormonal Contraceptives 8 8 July 1, 2012 or earlier 4 3 Aug. 1, n/a July 1, 2012 New Tier Placements 2 2 July 1, 2012 or earlier Exclusions 3 3 July 1, 2012 Continued Exclusions (confirmed from exclude at launch) July 1, 2012 Select Designated Pharmacy 4 2 July 1, 2012 Notification Bulk Powders Bulk Powders July 1, 2012 New Supply Limits Modified Supply Limits July 1, 2012 These decisions do not apply to PacifiCare business administered by OptumRx. 7
8 PDL Management Strategies July 1, 2012 Pharmacy Benefit Update Presented by Lida Etemad, VP of Pharmacy Mgmt Strategies Susan Maddux, Chief Pharmacy Officer 8
9 Therapeutic Class Overviews July 1, 2012 PDL and Clinical Update Lipitor Update Diabetes Hormonal Contraceptives Pain Skin Conditions Testosterone Replacement
10 Lipitor Strategy Update Generic Lipitor launched in November and is anticipated to decrease in price around June 1, Upon the price drop of the generic, the following tier placements will be effective. PDL Type Medication Name Tier Placement* Advantage PDL generic Lipitor (atorvastatin) Lipitor or Traditional PDL generic Lipitor (atorvastatin) Lipitor Additional Tier 1 generic alternatives available: lovastatin (generic Mevacor) pravastatin (generic Pravachol) simvastatin (generic Zocor) At the Pharmacy Point-of-sale messaging will direct the pharmacist to dispense the lowest cost option for the member. 10 *Final timing for this tier change is dependent on the price decrease of the generic, which is anticipated to be near June 1, 2012.
11 Diabetes Class Overview We re making several updates in the diabetes class. The following outlines the class overview for impacted medications. Class review prompted by: New oral medications to market, all clinically similar and work in the same way. Limited ability to exclude, rely on tier placements and programs such as Select Designated Pharmacy. 11
12 Diabetes Oral Medications and Supplies New combination medications and supplies expand therapy alternatives, providing an opportunity to lower overall class costs and encourage better decisions. All work in the same way Januvia / Janumet Janumet XR Juvisync Jentadueto Kombiglyze XR Onglyza Tradjenta $$$ Janumet XR, Juvisync Januvia / Janumet $$ Jentadueto, Kombiglyze XR Onglyza, Tradjenta Additional Decisions: ActoPlusMet XR is an extended-release version of Tier 2 ActoPlusMet and offers less value. Apidra, Aprida Solostar are a low utilized insulin medications and will be included in the Select Designated Pharmacy Program. One Touch Verio joins other One Touch test strips in Tier 1 since no generic alternatives are available. 12
13 Hormonal Contraceptives Health Care Reform Update for Pharmacy Beginning Aug. 1, 2012, UnitedHealthcare will implement several tier changes as part of Health Care Reform. We are required to provide coverage for medications: at $0 Cost Share from each of these categories: Emergency (e.g. Plan B) Hormonal (e.g. Oral or other route) Barrier (e.g. diaphragms) 13
14 Hormonal Contraceptives PDL Management Strategies Numerous options in Tier 1 and Tier 2 provide members with affordable access. Approximately 50% of prescription claims for hormonal contraceptives will process at $0 cost share when zero cost share is implemented. PDL Type Decisions: Number of Tier 1 Contraceptive Options Number of Tier 2 Contraceptive Options Number of Tier 3 Contraceptive Options Advantage PDL 26* 9* 13* Traditional PDL 38* 2* 8* *Count is based on the chemical or each unique product represented; there may be multiple medication names for each. Azurette/Kariva, Balziva/Briellyn/Zenchent, Junel/Microgestin, Ogestrel (Branded Generics - Advantage PDL Only) Each unique progestin contraceptive medication will be represented in Tier 1, making sure women have access to each type of contraceptive. ella, Plan B One-Step (emergency contraceptives) Natazia Yasmin (Advantage PDL Only) 14
15 Pain New formulations and brand options continue to crowd the class, offering little to no clinical value over generic alternatives. Worth 5x more? = Tier 1 Combination Narcotic (generic Hycet) Zolvit Decisions: Abstral (cancer pain) previously excluded at launch, offers sufficient value to be covered on Tier 3. Fentora (cancer pain) is the most expensive option in the class. Nucynta ER previously excluded at launch, offers sufficient value to be covered in Tier 3. Zolvit previously excluded at launch, Tier 1 generic Hycet is a better value option. 15
16 Skin Conditions Acne, Dermatitis, Rosacea With the same active ingredients available at a lower cost in other over-the-counter or generic alternatives, why pay more for these products? Acne Dermatitis Rosacea 200x 180x Brand Alternatives 160x 140x Cost 120x 100x 80x 60x 40x 20x x Benze Delos Duac Pramosone Rosadan BenzEFoam Ultra OTC Benzoyl Peroxide Delos Cleanser, Lotion OTC Benzoyl Peroxide Duac / CS Benzaclin 25g (Advantage PDL) clindamycin / benzoyl peroxide (Generic Benzaclin Traditional PDL) Pramosone E hydrocortisone/ pramoxine (Generic Pramosone) Rosadan Kit Multiple Product Packaging Exclusion metronidazole cream (Generic Metro Cream) 16
17 Testosterone Replacement Aggressive marketing for testosterone products has significantly increased use of these male hormone replacements and overall class costs. Clinically Similar with Same Active Ingredient Not worth the added cost Tier 2 Options Androderm Testim Axiron Fortesta Previously excluded at launch; limited to no member disruption. 17
18 Hepatitis C Class Management New therapies in the Hepatitis C class have increased the likelihood of finding a cure for the infectious disease. Recently launched Incivek is becoming the market leader over Victrelis and offers better health care value with: simple dosing regimen shorter duration of treatment. Notification program, currently in place, also helps ensure coverage for appropriate use. Decision: Move Incivek from Tier 3 to Tier 2 to improve affordable access. Incivek is used as part of a 3-drug regimen. 18
19 Additional Updates July 1, 2012 PDL and Clinical Update
20 Additional Updates Down-Tiers Nuedexta (neurologic disorder) Offers sufficient health care value to be down-tiered prior to July 1, 2012, allowing members to take immediate advantage of cost savings. Continued Exclusions (previously excluded at launch) Atelvia (osteoporosis) Delayed-release version of Actonel yet is almost nine times more expensive than Tier 1 generic alternative. A generic version of Actonel is also expected in Kapvay (Attention Deficit Hyperactivity Disorder - ADHD) Nexiclon XR (high blood pressure) Zolpimist (sleep) Extended-release version of Tier 1 clonidine yet is over 18 times more expensive. Prior to Kapvay being approved, ADHD guidelines already recommended clonidine as monotherapy or adjunct therapy. Extended-release version of Tier 1 clonidine, which is the same active ingredient for Kapvay (above) and has been available since 1974 to treat high blood pressure, yet Nexiclon XR is over 58 times more expensive. Oral spray formulation of Tier 1 zolpidem (generic Ambien), but priced seven times more. Please note in addition to these updates, other Clinical Programs (Notification and Supply Limits) are being implemented for 7/1/12. Please check the PDL and Benefit Plan Updates Summaries for impacted medications. 20
21 Communication Plan July 1, 2012 Pharmacy Benefit Update Presented by Travis Hawton, Sr. Director of Marketing 21
22 Comprehensive Communication Plan Comprehensive communication plan over four months prior to effective date. Brokers and Consultants (March) UHC Broker Portal Connection Newsletters Training tools and materials Webcasts and recordings Employers (March/April) Communication from your UHC representative Connection Newsletters PDL Report 1:1 Meetings Reference Materials Physicians (April/May) Physician PDL unitedhealthcareonline.com Network Bulletin Newsletter Outreach to Medical Societies 22 Member Engagement (May/June) June 1 Member Letters Prescription Drug Lists Employee Flyers (Lipitor included) Newsletter Text Call Center July 1 - myuhc.com Pharmacists (July) July 1 Point-of-Sale (POS) Messaging Call Center Blast Fax Blast Newsletter
23 Next Steps 1. Familiarize yourself with the July 1, 2012 Pharmacy Benefit Updates. 2. Use the flyer and newsletter text available on Communications Resource Center to further inform your employees. Please Note: These PDL changes and benefit updates do not apply to PacifiCare, Prescription Solutions by OptumRx, or Medicare/Medicaid businesses. For customers not on the 2007 Pharmacy Rider, exclusions based on the 2007 Rider, ProgressionRx, and Refill and Save Programs will not be implemented until customer s renewal of the new pharmacy rider and as allowed by state regulation. 23
24 Thank you for your participation! We re always looking to improve our communications and trainings to better serve you and your employees. You will receive a survey following this training and we would appreciate it if you would take a moment to fill it out. Please contact your UnitedHealthcare representative with questions. 24
25 Decisions Definitions Key July 1, 2012 Pharmacy Benefit Update 25
26 Decisions Definitions Key Key Decision Definition Down-tiers Up-tiers New Tier Placements Select Designated Pharmacy Exclusions Continued Exclusions (confirmed from exclude at launch) ProgressionRx (Step Therapy) Notification Down-tiers refer to medications that move to a lower tier, which can occur at any time throughout the year to provide members with immediate cost savings. Up-tiers refer to medications that move to a higher tier because they offer less health care value (either clinically and/or financially) than similar medications in their therapeutic classes. New tier placements occur for medications that have been previously excluded at launch, but now offer sufficient health care value to have a tier placement. The Select Designated Pharmacy Program is a 2004/2007 Rider capability. Members on the high-cost, maintenance drugs in this program will no longer be able to fill their prescription at retail and obtain network benefits. They will be given three options to save: switch to lower cost retail options, switch to mail, or both. We do not make the decision to exclude medications from benefit coverage lightly. A medication is only excluded when it offers no clinical value over other options in its class and its exclusion can be leveraged to achieve significant savings for our customers while preserving affordable choices for members. Multiple Product Packaging Exclusions are medications that contain two or more already available medications (packaged together), most are available generically or over-the counter. These exclusions will have little to no member impact since the medication has been excluded at launch. ProgressionRx directs members to try a lower-cost medication (known as Step 1) before progressing to a higher-cost alternative (known as Step 2). Notification requires physicians provide additional clinical information to verify member benefit coverage. Supply Limits Supply Limits establish the maximum quantity of drug that is covered per payment or in a specified timeframe. For a complete list of supply limits and notification updates, please visit the Advantage and Traditional PDL Summaries. These decisions do not apply to PacifiCare business administered by OptumRx. All branded medications are trademarks or registered trademarks of their respective owners. 26
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