Mail-Order Pharmacies Take Some Heat

July 21, 2010 -- The controversy brewing over the most cost-effective way to provide medications to HIV patients has portrayed mail-order pharmacies in a negative light, according to Mike Wright, CEO of Wellpartner.

 

“Mail order has a bad reputation with retail pharmacists because of shenanigans pulled by large mail-order companies,” said Wright, whose Portland-based firm provides medications to more than 40,000 patients nationwide through the mail.

 

Yet lawmakers and consumer advocates remain cautious, contending mail order could make it more difficult for people to receive their life-saving medications.

 

“The idea that medication is wasted through mail order just isn’t true,” Wright said. “That allegation makes me furious. People who want to run around providing information should make sure they have correct information; we’re just trying to do our best to serve our partner clients.”

 

The issue reached a critical juncture because the CAREAssist program, which offers assistance to HIV patients, faces a $2.1 million shortfall this biennium. A bid proposal, which hit the streets July 1, is seeking a vendor to coordinate the mail-order option.

 

Oregon isn’t breaking new ground, said Tom Burns, director of pharmacy programs for the Oregon Health Authority. Half the states in the country offer such a mail-order option, giving them the ability to purchase drugs at deep discounts through the federal 340B program.

 

“Mail order will be an option but not the primary way to deliver drugs,” Burns said. “We realize that a lot of people don’t have a secure address or mail delivery to their house. No one will be mandated to use it.”

 

The 340B program offers the best savings and can cover many more people, Wright said. ”It comes down to what’s affordable. The only other choice is to cut off part of the population.”

 

In 2006, Wellpartner was paid $50,000 by Oregon officials to conduct a nationwide study on the 340B program, which offers discounted medications to vulnerable populations by pharmaceutical companies if they want to participate in state Medicaid programs. 

 

That study, which analyzed how the program worked in other states, compared the 340B and rebate models, but didn’t suggest that mail order was the best option. “They came to us because we’re experts in the nation on this program,” said Wright.

 

The savings can be substantial, Wright said. For example, a hemophilic patient in California needed medication to control his bleeding disorder. Typically those drugs cost $1 million a year. By working with a clinic and a health plan, those costs were cut in half with the 340B program.

 

“Even name-brand drugs are available at huge discounts,” Wright said. Typically those medications cost 51 percent less than what’s known as the Average Wholesale Price and 39 percent less than the average insurance reimbursement.

 

Wellpartner has developed software that allows drugs to be tracked and replenished at 340B pricing, and contracts with local pharmacies to provide the medications. In return, it receives a transaction fee.

 

Since 2003, Wellpartner has run such a program for Oregon Health Plan patients with chronic medical conditions who don’t have access to transportation. Approximately 1,800 participate.

 

A study by Oregon State University determined the state had saved $1.8 million over a 20-month period, and the waste associated with mail order amounted to slightly over a half-million dollars or roughly 2 percent of the total cost of the program ($22 million). Not only did the state benefit, but the clients aren’t required to make a copayment for their drugs.

 

Adherence rates are also higher for people who receive their drugs through mail order, according to researchers from UCLA and Kaiser Permanente’s Division of Research in Oakland, Calif.

 

Among patients with diabetes, high blood pressure and high cholesterol, 84.7 percent were two-thirds more likely to take their drugs if they received them by mail, compared to 76.9 percent who got their drugs from a pharmacy. Those findings appear in the online edition of the American Journal of Managed Care.

 

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