Walmart expanded its $4 generic drug program to 14 additional states yesterday, including the states bordering DC — Maryland and Virginia. (There is no Walmart in DC.) The Washington Post compared Walmart’s price to the prices charged by Costco and retail pharmacies and there is clearly a savings. The knock on the Walmart’s program, as explained in the Post article, among others, is that the list of drugs eligible for the $4 program is limited and includes older generic drugs. From a health care policy perspective, I was struck by the following section of the Post article:

The American Pharmacists Association said it supports more affordable medications but cautioned that patients should consult medical experts about which drugs are right for them — and that they may not be the ones on the $4 list.”It starts to send a message that drugs are just another commodity,” said Kristina Lunner, acting vice president of policy and communications. “They’re very different.”

But is that really the case? The pharmaceutical industry’s direct to consumer advertising, which benefits the pharmacies, certainly presents drugs like commodities, notwithstanding the legal disclaimers and what’s more the direct to consumer advertising puts the doctor in the middle between the advertising and the patient. Of course, that’s the doctor’s responsibility and it strikes me that the doctor can fill that role in either situation. What’s good for the goose should be good for the gander. I am not a Walmart fan, but competition does benefit the economy.

The federal district court held a hearing on October 24 in the RICO lawsuit against First Databank and McKesson that has yielded a proposed settlement with First Databank that would require the publisher to reduced its Average Wholesale Price (AWP) listings for over 8,00 drugs by 4 -5% and to stop publishing that AWP listing in 2008. Prescription benefit managers (PBM) often use the First Databank listings as a benchmark for their pricing deals with health plan customers.

The Court did not rule on the motion to approve the proposed settlement at the October 24 hearing. Rather, it granted in part a McKesson motion to unseal a declaration submitted by the plaintiffs’ lead attorney, according to my review of the court docket on PACER.

AP reports that publicly traded PBM stock prices fell on Wednesday October 25 based on investor concern over the impact that the proposed settlement would have on those companies. According to an AP report, “Wachovia Capital Markets analyst Matt Perry [in a note to clients] said shares of Express Scripts and other pharmacy benefit managers are down due to the potential impact on drug prices. But he said the issue should not “obscure what was truly a very strong quarter” for the company.

According to a U.S. Justice Department press release, Intermune, a California-based biopharmaceutical manufacturer, agreed to pay the U.S. Government $39.2 million in settlement of Government charges that Intermune caused false claims to be submitted to Medicare, Medicaid, TRICARE, and the FEHB Program based on its illegal promotion of its Actimmune drug for a use — the treatment of lung scarring — that the Food and Drug Administration had not approved.

The Employee Benefits Research Institute’s annual Health Confidence Survey , released today, discloses that Americans generally are satisfied with the quality of our health care system but aren’t happy with paying the freight.

Merck announced today that the Centers for Disease Control’s Advisory Committee on Immunization Practices is now strongly recommending that adults aged sixty and older receive Merck’s Zostavax vaccine against shingles (herpes zoster). This recommendation follows the FDA’s approval of the vaccine which was given last May. FEHB plans generally adopt the Advisory Committee’s recommendations. Merck charges $150 per dose for the one shot vaccine.

The Citizens Health Care Working Group, which Congress established to make health care reform proposals, has transmitted its final report to the President. The Group made six recommendations:

Recommendation 1: Establish Public Policy that All Americans Have Affordable Health Care
Recommendation 2: Guarantee Financial Protection Against Very High Health Care Costs
Recommendation 3: Foster Innovative Integrated Community Health Networks
Recommendation 4: Define Core Benefits and Services for All Americans
Recommendation 5: Promote Efforts to Improve Quality of Care and Efficiency
Recommendation 6: Fundamentally Restructure the Way End-of-Life Services are Financed and Provided

The Galen Institute was not too pleased with the report.

Today’s Washington Post health section published a Steve Barr article about the upcoming FEHBP, FEDVIP, and FSAFEDS Open Season which runs from November 13 through December 11, 2006. The current issue of the Federal Times similarly includes extensive Open Season coverage.

The U.S. Department of Justice announced yesterday that it has finalized an agreement with Medco Health Solutions, among others, to settle the False Claims Act lawsuits pending against Medco in the federal district court in Philadelphia, PA. Under the settlement agreement, which was first announced in May 2006, Medco will pay the Government and the qui tam relators who initially brought the lawsuits over $155 million. Medco also is entering in a corporate compliance agreement, and it has agreed to treat the settlement and related payments as “unallowable costs” for purposes of its government contract business with Medicare, Medicaid, TRICARE, and the FEHB Program. The settlement documents are available here. This settlement brings to a close litigation that raged for several years.

On Friday, October 20, the Healthcare Information Technology Standards Panel met again to consider amendments to its first three sets of interoperability standards. Modern Healthcare.com published a full report on the meeting today. HHS’s American Health Information Community (AHIC) will consider the standards at its October 31 meeting.

Modern Healthcare explains that

In its personal health-records [PHR] use case, AHIC proposes that PHR systems would be more useful and attractive to patients if they could be linked electronically to data sources so that a patient’s medication history and basic health and demographic information could be loaded into the PHR with little patient effort.

The PHR related interoperability standards therefore concern an electronic patient registration (or medical summary) and an electronic medication history. Modern Healthcare reports that

Considerable controversy arose last month over a report of the technical committee working on the PHR specification to create a patient’s medical summary. The committee recommended adopting the Exchange of Personal Health Record Content (XPHR) as an interim specification even though the specification is still under development by Health Level 7, the Ann Arbor, Mich.-based standards development organization. The recommendation drew cries of foul from supporters of the competing Continuity of Care Record, which has been developed, balloted and is in use by providers and IT vendors. The CCR was developed by ANSI-accredited standards development organization, ASTM International.

HITSP settled the controversy by postponing for six months a decision on which standard to endorse for the PHR use case while expressing a preference for using the Continuity of Care Document, itself a compromise between HL7 and ASTM. The CCD, which incorporates the CCR, is expected to be balloted sometime early next year. Thus, the specification for the PHR that was sent to the AHIC Friday was not deemed to be a standard ready for testing, as were the other specifications, but rather a “work in progress.”

Another area drawing critical comment was a decision by HITSP to use the HL7 version 2.5 communication standard for transmitting lab data and results to an EHR rather than the EHR-Lab Interoperability and Connectivity Standards, or ELINCS, a project of the California Healthcare Foundation.

FEHB Plan carriers will be obligated to adopt these interoperability standards in their new and upgraded health information technology under a 2008 contract amendment that OPM will adopt pursuant to the President’s August 22, 2006, Executive Order.

On a related note, the Certification Commission for Healthcare Information Technology (CCHIT), which like HITSP operates under an HHS contract, certified several additional ambulatory HIT products today, including several electronic health record products.

The Surgical Care Improvement Project released a Surgical Safety Tip Sheet for patients and family members today that received kudos from HHS Secretary Mike Leavitt, among others.