Beating Them at Their Own Game: Case for PBM Program Aimed at Incentivizing Generics

By: Susan Hayes

I recently read an article of great interest to me and it should be to you if you manage a prescription drug benefit. The article described a study that matched records on payments from pharmaceutical and medical device makers in 2014 with corresponding data on doctors’ medication choices in Medicare’s prescription drug program (https://static.propublica.org/projects/d4d/20160317-matching-industry-payments.pdf?22). ProPublica, an independent, non-profit newsroom that produces investigative journalism in the public interest, published the comparative analysis, states in the article that “Doctors who got money from drug and device makers—even just a meal– prescribed a higher percentage of brand-name drugs overall than doctors who didn’t, our analysis showed. Indeed, doctors who received industry payments were two to three times as likely to prescribe brand-name drugs at exceptionally high rates as others in their specialty.”

Now I personally do not think that a sandwich from Panera would make a physician prescribe brand name drugs. But, the article went on to say that, “Doctors who received more than $5,000 from companies in 2014 typically had the highest brand-name prescribing percentages. Among internists who received no payments, for example, the average brand-name prescribing rate was about 20 percent, compared to about 30 percent for those who received more than $5,000.”

I find this study was well done if you read the scholarly version of the study (i.e. the study referenced above versus the article on ProPublica’s website (https://www.propublica.org/article/doctors-who-take-company-cash-tend-to-prescribe-more-brand-name-drugs). I also understand the criticism that many specialists in medicine only have the option of brand name medication in their field. For example, Ophthalmologist received the highest amount of payment from drug companies at 86% and there are few generic drugs available. However, ProPublica accounted for this discrepancy: ProPublica calculated the average and standard deviation of the p brand variable for each specialty. ProPublica calculated incidence-rate ratios, also called risk ratios, to compare the likelihood of being a high brand-name prescriber for doctors receiving industry payments and those who don’t. We assessed the statistical significance of the risk ratios with 95% confidence intervals. All were significant.

What does this tell us about physician prescribing? One, is that an impression is made on a physician to prescribe brand name drugs based on the company that they keep. If a drug rep buys a physician lunch, of if the physician has attended a seminar or presents a speech about a brand name drug, chances are these physicians will prescribe the brand name drug. Secondly, the type of interaction between the physician and the drug company mattered. Physicians who received speaking payments had higher rates of brand-name prescribing than those who received other types of payments.

How should this study influence the prescription drug benefit management community? Perhaps it is futile to think that calling to get a physician to switch a patient to a generic when the physician is pre-disposed to a brand name medication. And, plan sponsors who enroll in these programs should realize the futility of these programs and stop throwing good money to waste.

Perhaps what would be more effective is to beat drug manufacturers at their own game. Perhaps involving (financially) physicians in the dispensing process would be a more positive message. If drug companies are willing to throw millions of dollars to physician to prescribe brand, maybe a “counter program” aimed at throwing millions to physicians to prescribe generically would be a good idea.

The PBM industry, however, is reluctant to develop these programs. Any given plan sponsor/health plan/employer would be willing to spend $50 to avoid a $500 drug from being prescribed rather than a $50 generic. This, in essence, would be a rebate reversal program. Pay for the $50 generic drug plus a $50 payment to the physician rather than pay for a $500 drug. But then this cuts out the PBM’s rebates which, except for rare incidences, are not passed back to the plan sponsor. So, if you think your PBM is managing physician dispensing, think again. It is clear from this article that a significant way to influence physicians is to pay them. But to pay physicians would mean that the PBM is not getting paid its rebates. And who in their right mind would think that a PBM would turn away hidden revenue and give that over to physicians?

Perhaps plan sponsor/health plans/employers should start a “take a physician to lunch” program. Bring that up in your next meeting with your PBM and see where that goes. In the meantime, realize that only one thing talks and that is money.