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WYETH-AYERST's NORPLANT IS LEADING HMOs TO ADOPT "CREATIVE COVERAGE"

Executive Summary

WYETH-AYERST's NORPLANT IS LEADING HMOs TO ADOPT "CREATIVE COVERAGE" strategies, Norrie Wilkins, PhD, president and CEO of the Minneapolis benefits management firm Clinical Pharmacy Advantage, reported at an April 10 session of the National Managed Health Care Congress in Washington, D.C. "Most HMOs are considering covering the product, but with a different kind of co- payment," she said. As with most contraceptives, "there is a co- payment per prescription. For Norplant, there's an initial [high] co-payment, but depending on how long the patient remains a member of the HMO, she can get a partial return on that co-payment." Wilkins noted that health maintenance organization decisions about whether to cover the $ 350 contraceptive implant have been complicated by not only the high initial cost of the product but also the requirement that it be surgically implanted. "Although technically it's a drug," she stated, "it is administered by a physician, and many of the policies regulating its coverage as a drug don't always apply to what's covered on the physician side." As of late March, 13 state Medicaid agencies had announced that they would cover the contraceptive implant (The Pink Sheet" March 25, T&G-3). Also addressing the April 10 meeting, George Carlson, medical policy manager of Arizona's Medicaid program said that state's Medicaid director had also endorsed Norplant coverage. The manager of Arizona's Health Care Cost Containment System (AHCCCS) announced that AHCCCS' medical director has also recommended that Norplant be covered under his state's program. "We do not have a mandatory formulary [in Arizona]," Carlson explained "but our medical director . . . has spoken to [local] medical directors and asked them to consider it as a covered item in their Medicaid Plans." AHCCCS is designed as a managed care system. Carlson and Wilkins spoke during a session that included a broader discussion of the role of pharmacy and therapeutics committees in managed health care. Wilkins noted that in general, employers may be attracted to HMOs with P&T committees because "they [employers] are becoming more knowledgeable about the pharmaceutical industry and healthcare," and are more "anxious to avoid legal risks and to control costs" of pharmaceutical coverage. Michael Pollard, of the D.C. law firm Michaels & Wishner, noted that there is "no case law" on challenges to P&T committee actions. To reduce risks, he advised that P&T committees should "always have a scientific basis for decisions." In addition, they should "have regular reviews of their policies"; "clearly disclose all restrictions of coverage"; "notify providers about changes" in coverage; and "always maintain good records."

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