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VA Blazes Trail on Drug Prices
By Cory Reiss,
The Ledger
October 10, 2005
Richard Scott decided about three years ago to fill his stack of prescriptions at the Department of Veterans Affairs.
The VA's generous prescription program is a good deal for the 67-year-old Army veteran in Sarasota. He didn't even mind when the VA asked him to accept larger pills than necessary to control his cholesterol and then cut the pills in half.
He uses a big pair of scissors.
"I can pretty well tell what's half," he said. "I don't have a problem with it."
Scott is one of thousands of veterans that the VA asks to do something the pharmaceutical industry opposes -- pill splitting. It saves the VA tens of millions of dollars a year. In the quirky world of prescription drugs, it can be considerably cheaper to cut an 80 mg tablet of Zocor in half than to buy two 40 mg tablets.
The practice, which the VA considers safe for only a handful of drugs and should not be done without a doctor's advice, is one of several ways the VA combats the twin problems of rising drug costs and an influx of patients seeking cheaper medicine.
As older Americans prepare to sign up for a new drug program under Medicare that begins Jan. 1, critics of the expensive new benefit say Medicare could learn a few money-saving tips from the VA.
But Medicare won't be talking about the savings patients and the program could achieve from splitting certain pills, such as the popular cholesterol drugs in the family known as "statins." Nor will Medicare directly negotiate with drug companies to win lower prices, as the VA does.
And while the VA for years has conducted studies to compare the effectiveness of drugs and their prices, affecting what is prescribed and to whom, the Department of Health and Human Services is only beginning to start that kind of research. It's a small program, and how the results will be used in Medicare is unclear.
The VA is blazing a trail that the rest of government seems slow to follow, said Gail Shearer, director of health policy analysis for Consumers Union, publisher of Consumers Reports.
"So many people in power now want to hide the government's success stories when it comes to health care," she said.
Congress barred Medicare from using its vast numbers -- 42 million beneficiaries -- to negotiate directly with drug makers for lower prices.
Opponents of applying the VA negotiating model to Medicare, mostly Republicans and the drug industry, say such power may work in a smaller, self-contained system like the VA but not in the free-market Medicare system.
The debate has clouded the Medicare drug plan since before it became law and has not dissipated as consumer groups press for change in a program that could cost $720 billion over 10 years.
Regardless, the VA says it has proven savings by other means, which drug companies also have fought to keep from spreading.
In June, the VA published research in a medical journal showing that vets splitting larger-than-necessary pills of simvastatin, known by the brand name Zocor, received similar cholesterol effects as veterans taking smaller pills of the correct dosage.
The department saved more than $46.5 million in 2003 by asking 86 percent of the 1.3 million patients taking this one medicine to split larger pills. Simvastastin is the VA's most prescribed drug, according to VA data, growing from 3.6 million 30-day prescriptions in 1999 to 14.6 million in 2004 largely because veterans like Scott flocked to the VA in that period.
While the number of prescriptions quadrupled, the price to the VA only doubled. A top VA official said that is because the department was able to drastically cut cost through pill-splitting and aggressive negotiations with the manufacturer.
Roy Coakley, pharmacy manager for the VA region that includes Florida, South Georgia and Puerto Rico, said he thinks Medicare patients would go for pill-splitting if it was explained to them.
"I don't think they would look at it like it wasn't as good of a deal," he said.
Regional VA administrators make their own decisions about pill-splitting, and some ask patients to split a dozen or more medications. Medicines with special coatings, time-release capsules or precise dosage requirements are not eligible.
Drug makers and some doctors say splitting is unsafe, especially for the very old.
"That's putting a lot of responsibility on the patient," said Jeff Trewhitt, spokesman for the Pharmaceutical Research and Manufacturers of America, or PhRMA. "And if the break is not exactly along the line a patient could end up receiving too much or too little of the prescribed medicine."
Lacking consensus among doctors or a broader government endorsement, even AARP, the largest seniors group, doesn't have a position.
Mark McClellan, administrator for the Centers for Medicare and Medicaid Services, said the agency has no plans to raise pill-splitting with older Americans. "We want to bring up-to-date benefits to seniors so seniors don't have to split pills," he said.
Although pill-splitting is widely practiced and condoned at the VA, the nation's largest health system doesn't have a national policy either. Though he denies this is the reason, Mike Valentino, the chief consultant for pharmacy benefits management at VA, acknowledged that a formal splitting policy could hurt price negotiations.
"We might see some changes in the way the bids are structured," he said. "Manufacturers are not always big fans of us doing this sort of thing."
Experts say that compared to pill-splitting, far more could be saved if the federal government made better use of "comparative effectiveness" research.
Congress approved $15 million last year for research under the Department of Health and Human Services to compare the effectiveness of individual drugs. The VA says its own comparative studies and the guidelines that result has helped it dull the effects of drug advertising.
The drug industry has come under fire for heavy investments in direct-to-consumer advertising that some blame for rising drug spending. Some doctors and analysts say many people want the drugs they see on television.
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