The effect of managed care on prescription drug costs and benefits.

This review discusses the approaches to prescription drug payment practices taken by managed care to influence drug use and costs, and presents the research evidence supporting these interventions. In the US, drugs were infrequently covered as an ambulatory benefit under fee-for-service indemnity insurance; however, health maintenance organisations almost always provide outpatient drugs and consequently have developed approaches to influence drug use and manage its costs. Managed care as a set of tools and as an organisational form is moving toward more restrictions on direct access to pharmaceuticals as a covered benefit. Options for influencing drug use and cost may address access, ingredient costs, dispensing fees and cost sharing. The formulary process is the foundation for a managed pharmacy benefit and integrates these options. The limited empirical evidence for an effect of managed care on drug costs and use is reviewed. A proposed research agenda includes evaluation of the effects of restrictive formularies, capitation, disease management and other programmes to influence the cost and use of pharmaceuticals.

Battered bottom lines: the impact of eroding pharmaceutical discounts on health-care institutions.

For several years, the American Society of Hospital Pharmacists (ASHP) has voiced concern about the impact of federally mandated changes on the pharmaceutical products marketplace. Since this marketplace is relatively inelastic, manipulating one segment in the interest of cost efficiencies is likely to result in price increases in other segments. That manipulation could come through such decisions as a "one-price" policy for pharmaceuticals, mandatory rebates for certain segments of the marketplace, or the elimination of discounts. The issue of cost-effective purchasing of prescription drugs and related supplies has recently come under increased scrutiny from the U.S. Congress, the Department of Health and Human Services, the General Accounting Office, and the Federal Trade Commission. In light of these and future activities, ASHP determined that there was a need to collect credible data on the potential impact of the termination of the Robinson-Patman Act's nonprofit institutional exemption, other discounts, or both on pharmaceutical expenditures in institutional health-care settings. The authors of this paper report the results and analysis of a 1990 mail survey conducted by ASHP and Concepts in Healthcare, Inc., to collect information on pharmaceutical purchasing and discounting procedures in community hospitals and selected nonhospital settings in the United States. Survey respondents reported that they would expect substantial increases in pharmaceutical expenditures if volume and nonprofit discounts were eliminated. Nonprofit hospitals expected a 24.4% increase in pharmaceutical expenditures in the wake of discount elimination, while for-profit institutions projected an 11.9% increase. Pharmaceutical expenditures of the study hospitals averaged $1.69 million per year; respondents estimated that this sum would increase by $390,000 (23.1%) if volume and nonprofit discounts were eliminated.

Incidence and characteristics of antibiotic use in aged nursing home patients.

OBJECTIVE: To measure the prevalence, incidence, types, and certain characteristics of antibiotics prescribed in nursing homes. DESIGN AND SETTING: Periodic survey over 1 year of patient charts in 53 stratified, randomly selected nursing homes in the state of Maryland. PATIENTS: All patients 65 years of age or more residing in these nursing homes on the first day of study. RESULTS: Of 4,165 patients in 53 nursing homes, records over the year were satisfactory in 3,899 patients in 52 nursing homes. The prevalence of antibiotic use on the first day of the study was 8%. Over the next 12 months, observations of more than one million patient-days revealed an incidence of 0.46 antibiotic courses/100 patient-days; 54% of the 3,899 patients received at least one antibiotic course. For presumed active infections, beta lactam antibiotics were the most commonly used, 54% of antibiotic orders. For all antibiotics, urinary tract infection was the most common indication, eliciting 36% of orders including 9% for asymptomatic bacteriuria. Skin, lower respiratory, and upper respiratory infections comprised 14%-17% each. Physicians prescribed 94% of courses but documented examinations of only 44% of patients at the outset of these courses. Consensus criteria for minimal diagnostic evaluation of four selected infections were met in only 11% of episodes of infection. Although the most serious infections tended to be better evaluated than others, 31% of the former were not noted to have been examined by a physician. Three percent of orders were for prophylaxis and two-thirds of these antibiotics were administered for more than 2 days. CONCLUSIONS: Antibiotics are frequently prescribed for aged nursing home patients, often in the absence of a physician's examination and other features commonly performed in evaluation of specific infectious diseases. More than one-fifth of antibiotics prescribed by presumed active infections were for two infections usually thought not to require antibiotic therapy, "viral" upper respiratory infection (13%) and asymptomatic bacteriuria (9%). To optimize antibiotic use in nursing homes, greater attention should be directed to appropriate durations of prophylaxis for urologic, dental, and minor surgical procedures; to standards for diagnostic evaluations of common infections; and to the roles of antibiotics in upper respiratory infections and in asymptomatic bacteriuria.

The "treatment IND (investigational new drugs)": public policy considerations.

A major activity occupying the U.S. Food and Drug Administration for several years has been a rewrite of the FDA's IND and NDA regulations which govern the clinical testing of investigational new drugs and the process for subsequent market approval for those drug entities. In March of 1987, the FDA "reproposed" that portion of the 1983 IND rewrite dealing with the "treatment use" of investigational new drugs during the clinical testing phases of new drug development or during the period between the completion of clinical testing and NDA approval. The Treatment IND reproposal resulted in substantial controversy immediately following its publication in the Federal Register. This article compares the key features of the Treatment IND regulations as reproposed with those of the Final Rule and summarizes the major points of contention among the various interest groups affected. With its new Treatment IND regulations, the FDA appears to have placed itself squarely between competing interests and public policy considerations. The essential purpose and role of the FDA is to determine the inherent safety and effectiveness of new therapeutic medications. Debate on the Treatment IND regulations has raised a number of questions as to the regulations' own safety and efficacy in achieving that objective. It is likely the Treatment IND implementation will engender as much controversy as the regulations as originally reproposed.

Recruitment of long-term care facilities for research.

We report the successful recruitment of a stratified random sample of nursing homes in the state of Maryland into three research studies funded by the National Institute on Aging. These studies examine the prevalence of infections and urinary tract instrumentation and the incidence of antimicrobial use in nursing home residents. Following selection of a facility, the administrator was telephoned and a meeting at the home was requested. At this meeting, the project was explained in detail using a packet of promotional information which included a project summary, a listing of project staff and their qualifications, and letters of support from influential organizations. A total of 61 eligible facilities were contacted in order to achieve a group of 53 participating homes with approximately 5000 beds. One hundred percent cooperation was achieved from all strata except small (less than or equal to 50 beds) proprietary comprehensive care facilities, and homes with both comprehensive and domiciliary beds. A direct, personal approach, backed by a carefully prepared study information and the support of medical and nursing home organizations resulted in successful recruitment of 53 (87%) of 61 homes sampled.

Detecting prescribing problems through drug usage review: a case study.

A retrospective drug usage review was performed on 1,033 randomly sampled prescription orders from the outpatient pharmacy of a hospital and clinic system. Prescription orders were screened in accordance with criteria based on daily dosage, length of therapy or quantity dispenced, diagnosis, and labeling. The results of the study point to a number of potential prescribing problems. In addition, the study demonstrates the feasibility of collecting and analyzing drug usage data on a retrospective basis.