ACR Position

American College Of Rheumatology Position Statement On New Agents for Arthritis

PRESENTED BY: Committee on Rheumatologic Care

FOR DISTRIBUTION TO: Members of the American College of Rheumatology, Managed Care Organizations/Third Party Carriers, Business Health Coalitions, Health Care Policy Officials,
Members of Congress

BACKGROUND:

Several new medications used to treat both inflammatory and degenerative arthritis have been recently approved by the U.S. Food and Drug Administration. The need to balance the potential benefit of rational and appropriate use of these newer therapies with their increased cost is of significant importance to people with rheumatic diseases, their physicians, health insurance purchasers and third party payers.

Following double-digit health care inflation in the late 1980s and early 1990s health care premiums have been stable over the past few years.
However, despite the flat to declining health care premiums, the cost of providing medications has risen 15-18 percent a year during this period.
If this trend continues, it is estimated that over the next few years pharmaceutical costs will overtake those associated with hospitalization.

Several new arthritis therapies have been introduced, including cyclo-oxygenase 2 (COX-2) inhibitors and new biologic and immunosuppressive agents. More new therapies, perhaps new classes of drugs, are on the horizon. Early studies suggest that some of these
agents may surpass currently available treatments either due to improved efficacy or a better side effect profile. COX-2 inhibitors may provide comparable relief to other non-steroidal anti-inflammatory drugs (NSAIDs) with potentially less gastrointestinal toxicity.

The new biologic and immunosuppressive agents provide new or improved mechanisms to control inflammatory arthritis. These advances, however, are not without increased costs. The new COX-2 inhibiting NSAIDs, may be several times more expensive than non-selective generic NSAIDs. New biologic agents can cost $10,000 per year or more. Insurers, health delivery systems, and self-funded employers have tried to control pharmacy costs by:

Using formularies and other prescribing rules and restrictions

Increasing medication copayments and creating differential pricing between generic and brand medications

Outsourcing management to pharmacy benefit companies

Providing clinician feedback on prescribing patterns and associated costs

Creating treatment guidelines

Placing the pharmacist or clinician at financial risk for medication costs

Despite these efforts, medication costs continue to rise. In our multifaceted system of private and public insurance coverage, both the cost burden and the potential benefit of access to these new medications is often unevenly distributed. Fully capitated large multispecialty groups may place the provider at risk for pharmacy costs.

In contrast, in delivery systems where providers accept risk only for professional services, the insurer or managed care organization (MCO) is primarily at risk for medication costs. Self-funded employers and
preferred provider organizations (PPOs) may be at risk for medication costs or may shift part or all of that risk by contracting with a pharmacy benefit management company.

Medicare beneficiaries are disproportionately impacted by rising pharmacy costs. Medicare has generally not provided outpatient medication coverage, resulting in many Medicare patients purchasing Medigap insurance to provide that coverage. In areas of significant
managed care penetration and relatively high Medicare reimbursement rates, however, MCOs have offered generous pharmacy benefits as a way of attracting new enrollment into Medicare HMOs. Rising pharmacy costs and declining reimbursement rates have forced many MCOs to drop those plans entirely or cut pharmacy benefits.

Complicating this situation has been legislation in several states mandating the offering of comprehensive pharmacy benefits for Medicare patients and subsequent court reversal of this legislation in some of those states.

Society's challenge is to balance the obligation to provide optimal treatment for individual patients with sensible cost considerations. Unfortunately, this often pits the provider against the insurer. The American College of Rheumatology supports placing treatment decisions in the hands of those providers most knowledgeable about both the diseases and the newer therapies.

The rheumatologist as an expert in both inflammatory and degenerative arthritis is best qualified to triage and promote the rational use of these treatments. Strict external rules and restrictions imposed by
payors may result in the denial of these agents to those most in need of treatment, leading to increased pain and disability.

Differential rules and regulations on access to these medications can be a subtle way of encouraging chronically ill patients to switch to other insurers or health plans.

There has been a great deal of enthusiasm for disease management for chronic diseases such as asthma, congestive heart failure and diabetes,
as these programs have resulted in rapid cost containment from decreased hospital and emergency room use. This same enthusiasm should be extended to chronic diseases such as rheumatoid arthritis, which often requires less hospital care and has a longer and less certain financial payoff. For those still working, gains can be measured in longer and more productive work lives, and for those no longer in the workforce, these gains can be measured in improved quality of life.

POSITION:

The new medications becoming available for arthritis must be examined in terms of both their potential additional benefits and greater costs. Potential benefits include increased effectiveness, a better quality of life, increased work productivity, decreased disability, and possibly a reduction in hospitalization and joint replacement surgery. Increased costs include considerably higher prices than those for currently existing medications and any differential cost of toxicity monitoring and the delivery of treatment.

Rheumatologists, the clinicians with the most experience and expertise in diagnosing, evaluating and treating arthritis, are uniquely qualified to determine the appropriate use of these new therapies, especially the biologic and immunosuppressive agents. This is particularly true in the case of juvenile rheumatic diseases where small populations make it impractical for manufacturers to conduct extensive testing. In these cases, clinician experience rather than scientific data becomes the primary factor in determining clinical pathways.

Restrictions requiring the failure of an arbitrary number of other therapies prior to use of newer agents are inappropriate.

Since these new medications have shown promise of being more effective early in the course of arthritis, the time and expense spent trying serial medications may result in increased joint damage and disability.

Providers and insurers alike need to consider both the effectiveness and cost of medications when making or paying for treatment choices. This has very significant implications for society as the purchasers of
health care (employers, government and individual patients) decide how best to finance health care in the future.

Approved by Committee on Rheumatologic Care: 5/10/99
Approved by Board of Directors: 8/21/99

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