Respiratory meds: Playing the shifting numbers game
The topsy-turvy respiratory medication market has sent providers from one drug to the next, as they search for the most profitable products each quarter. That’s a losing model, says Wayne Vega, senior vice president of sales for Harvard Drug Group. HME News recently asked his advice on how to stay in the game without losing your shirt-or your sanity.
HME News: How can providers plan when the numbers shift every quarter?
Wayne Vega: The business plan should have been and continues to be based on patient needs, the average sales price plus 6% and a $33 dispensing fee. That is the strategy they should be employing. There is no margin in drugs anymore. There have been scenarios that have given small quarterly windfall advantages, but the overall strategy needs to be getting back to the clinical benefit for the beneficiary.
HME: What is a good clinical model?
Vega: They need to be treating the disease the optimum way and that is with a long-acting bronchodilator (LABA) and an anti-inflammatory drug. For example, Perforomist and the steroid Pulmicort should be the drugs being applied with their program. The alternative to using the LABA drugs is a generic Duoneb or separate vials of albuterol and ipratroproum or Xopnex and an ipratropium.
HME: But the second option isn’t as good?
Vega: That’s the least favored clinical approach to the patient because it’s not as long acting; it’s not twice-a-day convenience and it’s not less volume when you start using Xopenex and ipratropium or albuterol and ipratropium. Volume is time, time is convenience and convenience is compliance.
HME: But many providers still chase that reimbursement.
Vega: They are continually looking for that windfall. Those quarterly changes, as dynamic and fluid as they are, make it difficult on the patients, and difficult for the prescribers to believe in their providers. They are prescribing a specialty treatment for a specialty disease state and when you are bouncing patients around prescribers, you are sending prescribers different messages. When you send that message that you can’t provide a drug because you lose money, you lose credibility.
HME: Is there a reason to stay in this market?
Vega: If you are doing other DME, this makes a ripe field for growing other (product lines). Second if you are in the pharmacy business, look at other dispensing fees: 50 cents, 75 cents, $1.50. This is still a good business model for anyone. The folks chasing reimbursement have to let that go and live off our $33 dispensing fee. They have to evaluate and streamline and get better at business.