West Virginia officials last month asked Express Scripts, Inc. to stop distributing to pharmaceutical manufacturers the prescribing data it collects on state employees and retirees. The PBM said it would honor West Virginia's request, which echoes recent initiatives by other states to prohibit so-called "data mining" — a practice that allows drug reps to tailor their sales pitches to individual prescribers.

Critics contend that data mining drives up utilization of expensive brand drugs. Express Scripts declined DBN's request to elaborate on the issue, but other PBMs say that providing the data to manufacturers — scrubbed of any information identifying patients — does not necessarily increase Rx costs and, in fact, can actually lower them in some circumstances.

At its September meeting, the finance board of the West Virginia Public Employees Insurance Agency (PEIA) decided to "no longer distribute information about members' drug usage to pharmaceutical companies," says David Bailey, a PEIA spokesman. Express Scripts is the PBM for PEIA, which covers roughly 200,000 people. PEIA had about $177 million in drug claims last year, according to the state.

"Providing this information to pharmaceutical companies benefits pharmaceutical companies, and does not necessarily benefit our members," Bailey tells DBN. "Our members are our first priority."

Express Scripts said it would comply with the state's request. "We look forward to continuing to work with the state of West Virginia to make the use of prescription drugs safer and more affordable," the company said in a prepared statement.

In securing Express Scripts' commitment, Bailey says West Virginia was able to accomplish administratively what other states have attempted to do through legislation. "The contract that Express Scripts has is with PEIA, so we were able to ask them as a vendor just to stop doing it," he says. "Their contract is not with the legislature."

Data Mining Targets Prescribers

Indeed, West Virginia's move follows recent initiatives by other states to ban the sale of doctors' prescribing records. Three states — Maine, Vermont and New Hampshire -have enacted laws against the practice. Similar legislation has been introduced in at least 11 other states, the National Conference of State Legislatures (NCSL) said in a September posting on its Web site. Sponsors of such legislation contend that data mining leads to high-pressure sales pitches, which can drive up utilization of expensive brand drugs, and influences prescribing habits.

But health information companies that collect and analyze the Rx data disagree. IMS Health, Inc., Verispan, LLC, and Wolters Kluwer Health filed joint lawsuits Aug. 29 in federal courts in Maine and Vermont challenging the laws in those states that restrict collection and disclosure of physician prescribing information. The lawsuits seek to stop enforcement of the states' laws, which take effect Jan. 1, 2008. In April, Judge Paul Barbadoro of the U.S. District Court in New Hampshire struck down the New Hampshire law on grounds that it restricts commercial speech that is protected under the First Amendment. The state appealed that decision on Aug. 14.

Meanwhile, PBMs say providing prescribing data to manufacturers does not necessarily boost drug costs. And in some cases it is necessary for receiving manufacturer rebates, which actually drive down costs, according to Medco Health Solutions, Inc.

"Medco provides prescription information to pharmaceutical manufacturers in order to get rebates that significantly reduce our clients' drug spend," spokeswoman Soraya Balzac tells DBN. "Prescription information — stripped of any client or patient identifiers — is necessary to verify the drug utilization that is the basis of those rebates."

She also says Medco's specialty pharmacy subsidiary, Accredo Health Group, in some cases may provide prescription information to specialty drug manufacturers. "Due to the complex risk profile of some specialty drugs, prescribing information is needed for clinical and patient safety purposes," Balzac says.

Lois Mastin, vice president of clinical operations and pharmacy services at PBM HealthTrans, L.L.C., also notes that PBMs are not the only source of the prescribing information. The data are sold by pharmacies and so-called "switch" firms, which route claims from pharmacies to various PBMs for adjudication, she says. The data are purchased by "aggregators," such as IMS Health, which then sell the data to drug companies.

"So if the PBM is not reporting this data for one specific client, it's very possible [aggregators] can get the same data from a switch or from a chain," Mastin tells DBN. "It may not be 100%, but they have all kinds of models and formulas and things to use to fill in the holes."

Manufacturers generally are interested in brand drug data only for therapeutic classes in which they're competing against other brands, she says, noting that once a generic arrives, brand marketing efforts often stop. "The manufacturers are battling it out among the brands," Mastin says. "That's what they buy the data for."

For PBMs, selling data does not represent a major revenue source, she adds. The issue of allowing a PBM to sell a sponsor's Rx data is regularly addressed in PBM contracts, Mastin says. "A lot of the PBMs don't even do it, especially the smaller ones, because it is more work than it is worth," she adds. Still, it's not "chump change" either, Mastin notes. "Even if they sell it at a penny a claim, they have millions and millions of claims."

Reprinted from DRUG BENEFIT NEWS, biweekly news, data and business strategies for health plans, PBMs and pharmaceutical companies.