Graduate Ohio Northern University 1989 BS Pharmacy Pharmacy Director for Riesbeck Food Markets since 1994 President of the Ohio

e-mail Interview with Joe Jeffries

The following is a compilation of e-mails exchanged between therubins and Joe Jeffries dealing with the issue of prescription drug coverage and Medicare. Mr. Jeffries is not affiliated in any manner with therubins, or this site and the views that he expresses do not necessarily represent the views of therubins. He did not receive any compensation whatsoever for this interview, and we at therubins want to thank him very much for giving his time and information to us and our viewers.

(Editor's Note: Joe Jeffries is a Graduate Ohio Northern University 1989 BS Pharmacy
Pharmacy Director for Riesbeck Food Markets since 1994
President of the Ohio Pharmacists Association 2000-2001
Chair Gov. Taft's Ohio Small Business Advisory Council 1999-
Present Owner of Jeffries Mortar & Pestle Pharmacy - a compounding pharmacy (est. Oct. 2000)

Since we originally published this interview the U.S. Supreme Court struck down FDA rules affecting the compounding of drugs. Compounding involves altering or specially mixing a prescription medication to fit a patient's special needs. The FDA sought to ban the marketing of compounded drugs, but the Supreme Court struck down this ban as a violation of free speech.

The FDA recently issued the following rules that it will consider in determining if compounding is really illegal drug manufacturing:

Was the compounding done in anticipation of receiving prescription drug business instead of after getting a prescription, or for resale?
Was the compounding done because the drug had prior thereto been banned for safety reasons, or use experimental ingredients without the FDA approval?
Were commercial scale manufacturing or testing equipment used during the compounding, or was ingredients used that were not made in an FDA registered facility?
Was there any failure to follow state pharmacy rules?
Was the compounding merely a copy of an FDA approved commercially available drug?

Dear Allen:

Congratulations on your most informative website. I must say I’ve had a tough enough time digesting the research you have made available to the public, let alone try to gather information to present to you. I truly enjoyed reading the pharmacist interview. Tom Kelly presented what I thought was a very objective opinion about how to help the escalating costs associated with prescription drug therapy. His debit card idea has merit and I believe would work when associated with a medical savings account plan.

My suggestions relate to controlling costs of drug therapy. Many editorials have proposed that medications are still relatively cheap in this country. The argument can be made that drugs are less expensive when compared to a hospital stay, emergency room visit or by-pass surgery. But this is like State Farm providing each car owner with a supply of oil each year to prevent major engine trouble. And to continue with the analogy, the oil makers develop "premium" or specialized oils that cost more money, might do a better job for your engine and become the product of choice for State Farm. Imagine having 4000 choices of oil for your car! That’s what we have in pharmacy.

Market forces do not exist for pharmaceuticals for the majority of medication takers in this country. If you have insurance that helps pay for medications, you will fall into one of five traps when you visit the doctor. 1) you assume you will get a medication 2) you assume you will get a medication that was advertised on TV 3) your doctor will assume you want a medication to treat your problem 4) your doctor will prescribe the medication that exists in greatest quantity on his sample shelf, regardless of its cost or 5) your doctor will prescribe what she was just paid to learn about at the latest "dine and dash" meeting. You will not be overly concerned about the cost of the medication because you only have a co-payment for your prescription. You will pay $5 for a medication whether that medication costs only $10 or $140.

Three billion prescriptions were dispensed in 2000. That number is expected to climb to 4 billion in a few years. It’s something like 12 prescriptions for every man, woman and child in the U.S! To say that our drug industry plays a dominant role in our healthcare is an understatement.

Your web site has the statistics for how much our major drug firms spend on marketing vs. research and development. They are marketing machines. Why shouldn’t they? The FDA has relaxed the restriction placed on drug advertising and we love to take pills. They have a captive audience. Without the market forces normally associated with simple economics, the drug companies are having a continuous field day.

What are the answers to these escalating costs? I propose two:

Co-insurance not co-payments

The average price for a branded prescription is over $70. Copayments of 0, $1, $5 or even $20 are out-of-date. The co-insurance must be based on a percentage of at least 25% of the total. As prices go up so does the co-insurance. Knowing you are paying a quarter or a third of the price makes it easy to understand how much these drugs cost. It is imperative that any Medicare Rx plan be based on a co-insurance.

Co-insurance helps patients influence their doctor for more cost-effective medications. Why pay $50 for an ACE inhibitor when another exists for $15? The exorbitant drug advertising and lavish doctor programs could soon become obsolete.

Co-insurance will not sit well with most union contracts. These programs usually negotiate low copayments for their members. Unfortunately these programs are making everyone else’s costs higher.

Start generic drug sampling programs for doctors or eliminate samples altogether

Visit a doctor’s office and look at their sample room. Yes, ROOM. What used to be a closet is now a full service free pharmacy. Each of us may know of someone who has benefited from these samples but many times it’s the doctor’s family or the nurse’s aunt or the receptionist’s father. The costs of these free medications are a paperwork burden for the drug rep and the doctor’s office alike. Many times these samples go out of date. These expenses drive up the costs for the people who actually pay for their medicines. And when was the last time you received a sample of a generic drug to try? All samples are brand products, consequently 60% of prescription sales are for brand drugs.

Some pharmacy benefit managers are beginning generic sampling programs. Generic drug firms will not because their product does not have exclusivity at the pharmacy. Merck-Medco has started Generic-First. Their program provides generic drug samples in 6 therapeutic classes to doctors. Doctors seem to like the program. Merck drug representatives hate it.

Some drug companies have switched to coupons instead of drug samples. These coupons allow the patient to obtain a free sample at their regular pharmacy. The drug company reimburses the pharmacy through a PBM called HDS. While companies are reluctant to lose space on the doctors sample shelf, these programs are catching on. And the pharmacist likes this too. It allows us to more closely monitor potential drug interactions and patient compliance. It also gives the pharmacist a chance to provide needed drug information on new therapies.

So those are my ideas. Thanks for the opportunity to sound off. Whatever happens someone or some industry is bound to get hurt. I do not hope it is the drug industry but I will not sit by and watch them hoodwink the public into buying a drug discount card. Ten to fifteen per cent off of $140 dollars a month is not an answer. We have good inexpensive treatments available to treat the major causes of morbidity and mortality in this country. Cardiovascular disease, the number one cause of death in the U.S., now has generic beta-blockers, generic ACE inhibitors and inexpensive diuretics. We will soon have a generic HMG coA reductase inhibitor in lovastatin to treat cholesterol. Diabetes treatment will be within our financial reach with existing generic medications and soon with metformin. When the legal fight over the patent for omeprazole ends, we will be able to effectively treat severe reflux disease. If your cheaper brand of 10W-30 lubricates your engine correctly, and you take care of your car, and you drive defensively you probably won’t see your car insurance premiums go up. We should treat our bodies in the same manner. If we continue to demand only the "best" without checks and balances at the cash register – this system we have for drugs (the oil for our bodies) will never work.

Joseph A. Jeffries, R.Ph.
President Jeffries Mortar & Pestle - A Compounding Pharmacy
107 Plaza Dr. Suite K
St. Clairsville, OH 43950
740-695-8400 fax:740/695-8947
www.jeffriesrx.com

Hi Joe,

Here are the questions that we have in connection with your interview:

(1). therubins: You wrote about the debit card and the medical savings plan account. Neither of those items deal with those who are suffering from "catastrophic illnesses". How would you cover the drug costs for these individuals?

Joe Jeffries: When I see catastrophic illness, I think of patients who just received a transplant and will require life-long treatment with anti-rejection medications. Invariably these patients must obtain state Medicaid assistance to pay for these expensive medications. It reminds me of nursing home care: reduce or eliminate your assets to be eligible for Medicaid so you can enter the nursing home. Even though this pulls on our emotional heart strings, we must step back and understand what costs we are trying to control. We need to reduce the numbers on state assistance, reduce the inappropriate-utilization of medications and medical care, and keep people healthier before they need to use medications.

(2) therubins: The drug companies spend a lot of money on advertising. The industry claims that this makes for a more informed consumer. What limits, if any, do you suggest that we put on drug company advertising?

Joe Jeffries:This reminds me of a recent Newsweek "special edition". Obviously paid for by the drug manufacturers, this entire magazine was dedicated to the wonderful treatments available to the American public. See website www.nclnet.org/newsweekletter.htm. A more informed consumer is not one who thinks that Nexium is the only possible treatment for heartburn. A more informed consumer is not one who thinks Celebrex is the only answer for their shoulder pain. The FDA thought it would be enough to make sure the consumer knew about the potential side effects of these medications. The FDA needs to enforce advertising regulation that lists all possible treatments for certain conditions. Think about Nexium’s commercial: "I’m every man – with heartburn pain." That’s powerful marketing and borders on misleading. There are plenty of other effective treatments for heartburn and an informed consumer (and prescriber) needs to know that.

(3).therubins: Most prescription drug plans provide for lower co-payments for generic drug usage. What other methods would you suggest that we could utilize to encourage the use of generic drugs rather than brand name drugs? Also could you give us your thoughts about the issue that generic drugs do not have the "bioequivalance" to the brand name drugs?

Joe Jeffries:The key word in your question is "lower". There needs to be a larger differential between the brand and generic drug to encourage their use. Most PBMs have done this. I would further state that generic co-payments should be changed to co-insurance. This means basing the price on a percentage of the total rather than a simple 5 or 10 dollar copayment. A minimum co-insurance price should be set and then anything above that should be a percentage of the total. The consumer would easily see how much the drug was, the PBM would have a better idea of their share of the cost and market forces would allow for more patient/prescriber intervention. As far as bio-equivalence goes, I must point out a recent article that appeared in the Journal of the American Pharmaceutical Association (JAPhA). A survey of consumer, pharmacist and prescriber attitudes of generic drugs showed that after a bad period in the late 80s, most of us have accepted the accurate notion that generic drugs are equivalent to their brand counterparts. Patients who feel that they do not work can pay the difference.

(4).therubins:If generic drug companies start to use samples and some of the other sales practices of the brand name drug companies, won't the cost for generic drugs rise also?

Joe Jeffries: Generic drug companies will not start to issue samples. These programs will have to be funded by the PBM, Medicaid dept. or other consumer group. The generic firms have no incentive to place their product on the doctor’s shelf because all pharmacies don’t necessarily carry their brand. A possible alternative would be the generic drug association trade group – who has incentive to increase the use of all generics.

(5).therubins:Do you think that PBMs have any positive effect in containing the rising prices for prescription drugs?

Joe Jeffries:Yes they have. Unfortunately they are trying to find new revenue streams that have nothing to do with controlling the consumer’s cost of the drug. They are padding their own pockets by making rebate deals with drug manufacturers, by selling patient data back to drug firms and penalizing pharmacies through audits and fines. A good example of a PBM not playing fair is the increase in the use of Nexium. Merck-Medco is slowly having doctors switch patients from Prilosec to Nexium. Nexium is indicated for acute and chronic Gastro-Esophogeal reflux disease and esophageal errosion. Its benefit is it is more long acting. There may be a justification when someone is taking two Prilosec’s per day. But doctors aren’t paying attention and switching everyone. Soon the patent will run out on Prilosec (omeprazole) and the cost will come down – and everyone will already be switched to Nexium. Good for Merck – bad for drug costs. Generic drugs have continually stayed at below 47% of total Rxs for the last 6 years (and below 20% of total Rx dollars). PBMs have a lot more work to do.

(6).therubins:Health care costs are expected to grow to 16% of the Gross Domestic Product by 2008. Prescription drugs make up about 17% of the health care dollar costs. Is there evidence that increased drug therapies are actually a cost saver in reducing hospital stays and acute care at home when dealing with the elderly?

Joe Jeffries: Nationally prescription drugs only make up 8% of total health care costs. This certainly changes the older you are. The Rx slice of the pie for the elderly sometimes approaches 33%. I’ll let the drug manufacturers prove their worth in the whole scheme of things. Cholesterol reducing drugs, blood pressure medications and diabetes drugs all can reduce the incidence and treatment costs associated with cardiovascular disease, the #1 killer in the United States.

However, Johnson and Bootman showed in a 1997 study that we spent 76.6 billion dollars treating ADEs (adverse drug events) from the drugs we take. Why do we spend as much on treating side effects and problems associated with inappropriate treatment as we do on the drugs themselves? Interesting stuff and worth checking out - see http://www.real-timerx.com/morbidity.html.

(7).therubins: The state of Michigan is utilizing the "formulary approach" in trying to hold down the cost to the state for prescription drugs. Doesn't this deprieve the individual of having their own physician make his/her own choice as to what medication should be prescribed for the patient?

Joe Jeffries: you are right about formularies depriving individual and their physicians the right to choose their own treatment. Unfortunately, physicians and patients alike have not taken steps to attempt to reduce the overall costs of these treatments. And they wrongly assume that "the more expensive the better". Formularies are a way to address the issue if they are for the goal of reducing overall costs to the consumer. Right now they seem to be geared toward rebate money for the PBM. Michigan has introduced a novel approach by developing a formulary committee of objective individuals and purposely not allowing any input from the manufacturers.

FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "How to Select a Nursing Home"

To e-mail: rehabstrat1@aol.com or rubin@brainlink.com

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