2002 National Health Policy Conference: RESOURCE GUIDE

Managing the Use of Prescription Drugs

Featured Articles

Kizer KW, Ogden JE, Ray JE. Establishing a PBM: Pharmacy Benefits Management in the Veterans Health Care System. Drug Benefit Trends. 1997 August: 24-27, 47.
The U.S. Department of Veterans Affairs (VA) health care system, the Nation's largest integrated health care system, initiated a major restructuring in 1995. One of many changes has been the establishment of a pharmacy benefits management (PBM) program. A core function of the "new VA" is the responsibility of the PBM for maintaining a national formulary, implementing national volume-committed drug contracts, promulgating drug-treatment guidelines, pursuing other disease management activities, and assessing drug utilization and outcomes. The PBM has already been of substantial value to the VA and is expected to be an integral component of the rapidly evolving "new VA."

Thomas CP, Ritter G, Wallack SS. Growth in Prescription Drug Spending among Insured Elders. Health Affairs. 2001 September/October; 20(5): 265-277.
The authors examine growth in prescription drug use and spending in a well-insured elderly population in 1997 and 2000. They describe the high-cost segment of this population, identifying how it differs from the rest of the elderly regarding use and types of medications, and how stable this group is over time. Drug spending by the insured elderly rose more than 18 percent annually between 1997 and 2000. High-cost elders use more brand-name drugs, treat more conditions, and use more medications per condition. Once an insured elder becomes a high-cost user of prescription drugs, that person is likely to remain so. This study suggests that a growing population of elderly is using many medications and may require considerable drug management.

Other Articles

Blumenthal D, Herdman R, Eds. Description and Analysis of the VA National Formulary. Institute of Medicine. 2000 June. Available at www.nap.edu/books/0309069866/html.
This report is the result of a congressional mandate that the VA contract with the Institute of Medicine to conduct an independent analysis of the effects of the National Formulary on the quality of care. In this report, the IOM committee considered pharmaceuticals the primary issue and focused on them, not on devices or supplies. This report and its summary respond to the congressional questions and resulting VA contract. Specific and important recommendations for improvement to the National Formulary are made.

Henry J. Kaiser Family Foundation. Understanding the Effects of Direct-to-Consumer Prescription Drug Advertising. 2001 November. Available at www.kff.org.
This report examines how consumers respond to the extremely popular "direct-to-consumer" (DTC) pharmaceutical ads that were ruled legal in 1997 by the FDA. Many adults say that the ads did a "good" or "excellent" job of telling them about the condition the advertised medicine is designed to treat (84%), the medicine's potential benefits (72%), and who should take it (66%). Fewer, but still half, said the same about potential side effects (52%) and directions for using the medicine (47%).

Henry J. Kaiser Family Foundation. Prescription Drug Trends - A Chartbook Update. 2001 November. Available at www.kff.org.
This resource updates the last year's data on prescription drug trends and includes data on prescription drug coverage, spending, utilization, drug promotion, and the pharmaceutical industry. National spending for prescription drugs, estimated to reach $116.9 billion in 2000, has almost tripled in the last decade. Increased numbers of prescriptions and shifts in use from older to newer, more expensive drugs continues to account for most of the growth in drug spending. But in recent years, manufacturer price increases have contributed a growing proportion of the total rise in prescription drug spending (19% from 1993-1997, and 24% from 1997-2000). Prescription drug use has grown at an average rate of 6 percent since 1992.

For Further Reference

Kreling, DH. Cost Control for Prescription Drug Programs: Pharmacy Benefit Manager PBM Efforts, Effects, and Implications. A background report prepared for the Department of Health and Human Services' Conference on Pharmaceutical Pricing Practices, Utilization, and Costs, Washington, DC. 2000 August 8-9.

United States General Accounting Office. VA Drug Formulary: Better Oversight Is Required, but Veterans Are Getting Needed Drugs. Report to the Ranking Member, Committee on Veterans' Affairs, U.S. Senate. 2000 January.

United States General Accounting Office. VA Health Care: VA's Management of Drugs on Its National Formulary. Report to the Ranking Minority Member, Committee on Veterans' Affairs, U.S. Senate. 1999 December.

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		Managing the Use of Prescription Drugs Featured Articles Kizer KW, Ogden JE, Ray JE. Establishing a PBM: Pharmacy Benefits Management in the Veterans Health Care System. Drug Benefit Trends. 1997 August: 24-27, 47. The U.S. Department of Veterans Affairs (VA) health care system, the Nation's largest integrated health care system, initiated a major restructuring in 1995. One of many changes has been the establishment of a pharmacy benefits management (PBM) program. A core function of the "new VA" is the responsibility of the PBM for maintaining a national formulary, implementing national volume-committed drug contracts, promulgating drug-treatment guidelines, pursuing other disease management activities, and assessing drug utilization and outcomes. The PBM has already been of substantial value to the VA and is expected to be an integral component of the rapidly evolving "new VA." Thomas CP, Ritter G, Wallack SS. Growth in Prescription Drug Spending among Insured Elders. Health Affairs. 2001 September/October; 20(5): 265-277. The authors examine growth in prescription drug use and spending in a well-insured elderly population in 1997 and 2000. They describe the high-cost segment of this population, identifying how it differs from the rest of the elderly regarding use and types of medications, and how stable this group is over time. Drug spending by the insured elderly rose more than 18 percent annually between 1997 and 2000. High-cost elders use more brand-name drugs, treat more conditions, and use more medications per condition. Once an insured elder becomes a high-cost user of prescription drugs, that person is likely to remain so. This study suggests that a growing population of elderly is using many medications and may require considerable drug management. Other Articles Blumenthal D, Herdman R, Eds. Description and Analysis of the VA National Formulary. Institute of Medicine. 2000 June. Available at www.nap.edu/books/0309069866/html. This report is the result of a congressional mandate that the VA contract with the Institute of Medicine to conduct an independent analysis of the effects of the National Formulary on the quality of care. In this report, the IOM committee considered pharmaceuticals the primary issue and focused on them, not on devices or supplies. This report and its summary respond to the congressional questions and resulting VA contract. Specific and important recommendations for improvement to the National Formulary are made. Henry J. Kaiser Family Foundation. Understanding the Effects of Direct-to-Consumer Prescription Drug Advertising. 2001 November. Available at www.kff.org. This report examines how consumers respond to the extremely popular "direct-to-consumer" (DTC) pharmaceutical ads that were ruled legal in 1997 by the FDA. Many adults say that the ads did a "good" or "excellent" job of telling them about the condition the advertised medicine is designed to treat (84%), the medicine's potential benefits (72%), and who should take it (66%). Fewer, but still half, said the same about potential side effects (52%) and directions for using the medicine (47%). Henry J. Kaiser Family Foundation. Prescription Drug Trends - A Chartbook Update. 2001 November. Available at www.kff.org. This resource updates the last year's data on prescription drug trends and includes data on prescription drug coverage, spending, utilization, drug promotion, and the pharmaceutical industry. National spending for prescription drugs, estimated to reach $116.9 billion in 2000, has almost tripled in the last decade. Increased numbers of prescriptions and shifts in use from older to newer, more expensive drugs continues to account for most of the growth in drug spending. But in recent years, manufacturer price increases have contributed a growing proportion of the total rise in prescription drug spending (19% from 1993-1997, and 24% from 1997-2000). Prescription drug use has grown at an average rate of 6 percent since 1992. For Further Reference Kreling, DH. Cost Control for Prescription Drug Programs: Pharmacy Benefit Manager PBM Efforts, Effects, and Implications. A background report prepared for the Department of Health and Human Services' Conference on Pharmaceutical Pricing Practices, Utilization, and Costs, Washington, DC. 2000 August 8-9. United States General Accounting Office. VA Drug Formulary: Better Oversight Is Required, but Veterans Are Getting Needed Drugs. Report to the Ranking Member, Committee on Veterans' Affairs, U.S. Senate. 2000 January. United States General Accounting Office. VA Health Care: VA's Management of Drugs on Its National Formulary. Report to the Ranking Minority Member, Committee on Veterans' Affairs, U.S. Senate. 1999 December. Continue to: The Bush Administration's Health Policy Agenda Critical Health Issues for States A Reforming Governor's Perspective Disaster Preparedness and Response: The New York State Experience How Can We Prepare? Responding to the Threat of Bioterrorism Managing the Use of Prescription Drugs Future Trends in Employer and Individual Insurance Markets Health System Response to Terrorism The Human Genome Project: Implications for Health Care and Society The Public's Perception The Congressional Health Policy Agenda The Economy, Health Costs, and the Future Implications of HIPAA Privacy Regulations Medicare Reform Critical Issues for States Looking Back: Reflections from Seasoned CEOs Return to Resource Guide Table of Contents