Are you ready for the change in pharma pricing?

On September 26, 2009, First DataBank and MediSpan, the firms that publishe Average Wholesale Pricing tables is changing its methodology. This change will reduce the AWP amount by almost four percent.

So what you say?

Here's what.

Pharmacies will now be reimbursed at a lower amount for each script filled. With margins on most drugs thin already, this change will push many near to breakeven. Recall that AWP affects retail pricing, not the price paid by pharmacies to manufacturers and their intermediaries.

Understandably, the pharmacies, both independents and chains, are asking the big PBMs to change their contracts to account for the change by reimbursing the pharmacies a few points higher then their current rate.

Word is the big PBMs - Medco, Express - have politely declined. CORRECTION - this statement is incorrect. The big PBMs are in fact negotiating with the retail pharmacies to reach an agreement.

No word on how Caremark is addressing this; as they are owned by the second largest pharmacy chain (CVS) they may well be thinking a little differently about the issue.

In the much smaller work comp world (about $4 billion in annual Rx spend), things aren't quite as clear. Many payers apparently still think the change isn't going to happen for another two years (which is when the legal settlement required it), but the publishers were required to make the change within 180 days of the settlement - which means the changes are effective in precisely one month. Regardless, expect there to be quite a bit of discussion amongst PBMs, their customers, and pharmacies over the next thirty days as all try to figure out how to deal with the change while maintaining decent relationships with each other.

I would note that regulators in several of the larger states don't appear to be interested in making any changes to their fee schedules or reimbursement rules to address the change.

AstraZeneca Heart Drug Wins Face-Off With Plavix

An experimental heart drug being developed by AstraZeneca PLC significantly outperformed the blockbuster pill Plavix in a big clinical trial, setting the stage for a potential three-way battle in a $9 billion market for anticlotting medicines.

The drug, Brilinta, reduced the combination of heart attacks, strokes and death from cardiovascular causes by 16% compared with Plavix, researchers said. In an unusual achievement, the benefit came without an increase in major bleeding complications. The study also found that Brilinta reduced deaths from any cause compared with Plavix, a first in a major study of agents that prevent blood platelets from clotting, researchers said.

Plavix, marketed by Sanofi-Aventis SA and Bristol-Myers Squibb Co., was the world's No. 2 drug by sales last year -- after Pfizer Inc.'s cholesterol drug Lipitor -- with $8.6 billion in global sales. A new anticlotting contender, from Eli Lilly & Co. and Daiichi Sankyo Inc., was recently approved by the U.S. Food and Drug Administration. That drug, Effient, also known as prasugrel, proved more effective in reducing heart attacks than Plavix as well, but at a price of increased risk of bleeding.

Brilinta, known by the generic name ticagrelor, isn't on the market. AstraZeneca expects to file applications in the U.S. and Europe in the fourth quarter, which could lead to Brilinta's approval before the end of next year. The study didn't involve Effient, but some doctors said the Brilinta findings could put pressure on that drug as well.

"Bottom line, it's faster, it seems to be more effective and it may even be safer than prasugrel," said Douglas Weaver, head of cardiovascular medicine at Henry Ford Hospital in Detroit. Dr. Weaver had a role in the Brilinta study but wasn't an author.

Despite the broad findings, Brilinta faces hurdles. With three drug options, "practitioners will have both the benefit and responsibility of having to think through the risk-reward circumstance for each patient," said Clyde Yancy, a cardiologist at Baylor College of Medicine and president of the American Heart Association.

Lower-cost generic copies of Plavix have hit the market in Europe and are expected in the U.S. in 2011. That could make it harder for the presumably more costly Brilinta and Effient to compete.

David Snow, global marketing vice president for cardiovascular drugs at AstraZeneca, said the superior effectiveness Brilinta demonstrated in the latest trial should convince insurers to pay for the drug even though generic Plavix costs less.

Catherine Arnold, a pharmaceutical analyst at Credit Suisse, said close analysis of the data indicates that many patients -- those with diabetes, respiratory problems or heart beat irregularities, for instance -- may fare better with Effient. "There's no question the [broader] efficacy was better," she said. But Brilinta "won't steamroll over prasugrel or generic Plavix."

A spokeswoman for Bristol-Myers defended Plavix, saying its benefits have been well established in clinical trials and in treating 90 million patients since it was introduced 11 years ago.

The 18,624-patient Brilinta trial, sponsored by AstraZeneca, is among the largest ever carried out in heart-attack patients. After a year, 9.8% of patients taking Brilinta had died from cardiovascular causes or suffered a heart attack or stroke, compared with 11.7% taking Plavix. The rate of death after a year from any cause was 4.5% with Brilinta and 5.9% with Plavix.

Plavix has become dominant during the past decade thanks largely to its role in preventing blood clots from forming in stents, which cardiologists implant to keep diseased arteries open. But Plavix is slow to take effect and certain genetic mutations reduce its benefit in many patients. Moreover, its persistence in preventing clots can pose bleeding risk, which can delay bypass surgery or other procedures.

Lilly's Effient acts more quickly and its effect isn't influenced by a person's genetic makeup.

Brilinta acts more quickly than Plavix and, unlike Plavix and Effient, is reversible -- a potential advantage for patients who might be candidates for bypass surgery shortly after a heart attack.

But Brilinta is a twice-a-day medicine, a potential drawback against the easier-to-take once-a-day medicines.

Generic versions of biologic medications are coming

BOSTON (MarketWatch) -- The days of market exclusivity could soon come to an end for the biotech industry if Congress moves forward with plans to finally allow generic biologics on the U.S. market.

Because of their eye-popping price tags, pressure to rein in the cost of biologics has been mounting on Capitol Hill for some time. A process for approving generic versions of traditional chemical medications has been in place for more than a decade, but Congress has yet to establish a similar legal pathway for biologics.

But all that could change in the next few months. Currently, almost all of the leading healthcare reform bills circulating on the Hill call for allowing the Food and Drug Administration to establish an approval process for generic biologics, also known as biogenerics or biosimilars.