U.S. Physician and Payer Forum

June 2013

Accountable Care Organizations: How Will Payer and Provider Adoption of This Model Impact Prescribing Trends in Asthma and COPD?

Introduction:

Accountable care organizations (ACOs) will likely have a more immediate impact on prescribing trends in asthma and COPD than they will in other common conditions such as cancer because payers and providers alike see these chronic lung disorders as a treatment arena ripe for improvements in both cost savings and health outcomes. The adoption of the ACO model is spreading from its origins in the Medicare system into the realm of commercial health plans. ACOs are making pulmonologists more conscious of the long-term consequences of each prescribing decision by linking their reimbursement to the achievement of goals such as reducing hospital readmissions and total medical costs as well as saving on prescription drug costs. As physicians balance these often-competing goals, they prescribe more medications earlier in the course of treatment for asthma and COPD to avoid costly hospital stays. Among the products benefiting from the additional sales are two widely used drug classes, ICSs and LABA/ICSs, which are called “controller” or “maintenance” drugs because they prevent acute exacerbations that can prompt hospital visits. ACOs also plan to monitor patient adherence to these and other drugs—another factor likely to increase sales. However, the ACO focus on cost-cutting drives many of these additional sales to generic competitors of brand name drugs. Among the controller drugs, ACOs may even spur a movement away from the brand-dominated LABA/ICS class [GlaxoSmithKline’s Advair (salmeterol/fluticasone propionate), AstraZeneca’s Symbicort (formoterol/budesonide), and Merck’s Dulera (formoterol/mometasone furoate)] to reach the generic alternatives available in the ICS class (generic Budesonide nebulizer). Branded drug marketers can use a variety of means to protect market share in the challenging ACO environment. Within drug classes, some branded drugs may be distinguished by an active agent different from the generic in that class. For example, GlaxoSmithKline’s Flovent is an ICS agent different from the generic drug budesonide. GSK’s Advair has the same ICS agent as Flovent and, as a combination LABA/ICS drug, Advair arguably promotes adherence compared with the use of two drugs administered separately. However, the LABA/ICS class is vulnerable because of FDA warnings about LABA side effects. Drug marketers should be prepared to point out any brand advantages such as low side effects, ease of use, convenient delivery devices for inhaled drugs, and superior improvements on the health screening tests most frequently used for ACO monitoring. In addition, many brands might need to preserve their place in ACO formularies by discounting prices under contracts favorable to ACOs.

Questions Answered in This Report:

  *   Establishment of ACOs: What kinds of insurers are developing ACOs for their commercial populations? How many beneficiaries and providers are participating today and in 12 months’ time? What indications are being targeted as part of ACOs, now and in 12 months’ time? What kind of physicians/physician groups are joining the ACOs? What are MCOs’ enrollment, cost, and quality goals for their ACOs? What is the minimum size an ACO must be to establish its own formulary?

  *   ACOs’ impact on prescribing behavior: What performance and efficacy measurements are payers using to determine bonus payments to physicians and hospitals? How are these measurements likely to impact prescribing behavior in the treatment of asthma and COPD? How will financial incentives influence physician prescribing of brands versus generics? How would MCO PDs like the pharmaceutical industry to partner with them in the context of ACO contracting? What weight do MCOs assign to competing goals, such as reducing prescription drug costs versus reducing hospitalizations?

  *   Presence and role of distinct ACO formularies: Which formularies are ACOs following, now and in 12 months’ time? What is the difference between an ACO formulary and traditional formulary in terms of coverage of specific branded and generic drugs for asthma and COPD? How are ACOs favoring specific drug classes including ICS, LABA/ICS, LABA, SABA, SAMA, and other therapies? What specific brands among the ICS, LABA/ICS, leukotriene inhibitors, and anticholinergics are being favored? Is prescription drug spending included in the ACO cost measurements? How is that measurement influencing prescribing behavior for specific branded and generic drugs for asthma and COPD? What is the magnitude of this influence? How do payers expect ACOs to impact medical costs and prescription drug costs? What are payers measuring as part of ACOs, including FEV1 screenings and adherence rates?

Scope:

This U.S. Physician & Payer Forum reveals physicians’ and payers’ insights into the changes in prescribing practices in the United States for asthma and COPD drugs due to participation in ACOs. The report is based on a survey of 100 pulmonologists, 39 MCO pharmacy directors, and 2 MCO medical directors at MCOs that either currently contract with ACOs or expect to do so within 12 months. We highlight reimbursement arrangements, formulary restrictions, metrics tied to provider compensation, and other factors that influence decisions to use branded drugs or generic alternatives. The report explores opportunities for drug developers to advocate for their brands consistent with ACO goals and to protect or expand their market share. Specific therapies examined within the ACO context include GlaxoSmithKline’s Flovent and Advair; AstraZeneca’s Pulmicort and Symbicort; Teva’s QVAR; Merck’s Dulera and Singulair; and Boehringer Ingelheim’s Spiriva and Atrovent.

- Markets covered: United States.

- Primary research: Online survey of 100 pulmonologists, 39 MCO pharmacy directors, and 2 MCO medical directors.

- Population segments: Our analysis involves patients covered under Medicare, Medicaid, and commercial health plans. The report also reflects on potential changes in prescribing for patients with lung disorders at different stages of severity, such as intermittent asthma and persistent asthma.


Search Reports

Mentioned in this report:

  • Brands:
  • - Advair
  • - Alvesco
  • - Asmanex
  • - Atrovent
  • - Budesonide
  • - Dulera
  • - Flovent
  • - Montelukast
  • - Pulmicort
  • - QVAR
  • - Singulair
  • - Spiriva
  • - Symbicort
  • - Xolair
  • Companies:
  • - AstraZeneca
  • - Boehringer-Ingelheim
  • - Genentech
  • - GlaxoSmithKline
  • - Merck
  • - Novartis
  • - Sunovion
  • - Teva
Decision Resources Group brands include: