Friday, June 30, 2006

Wisconsin's Pharmacy Benefit Program



In July 2003, the Group Insurance Board authorized the Department of Employee Trust Funds (ETF) to contract with a Pharmacy Benefit Manager (PBM) to provide pharmacy benefit services to all State of Wisconsin group health insurance participants. All participants now receive their pharmacy benefit from the PBM, Navitus Health Solutions (Navitus). The pharmacy benefit remains subject to the terms and conditions of Uniform Benefits.

As part of the prescription drug benefit, a three-level co-payment structure for pharmacy benefits will be implemented as of
January 1, 2004, and is as follows:

Level 1* Co-payment per formulary prescription drugs $5.00
Level 2** Co-payment per formulary prescription drugs $15.00
Level 3 Co-payment per non-formulary prescription drugs: $35.00

*Level 1 consists of formulary generic and certain low cost brand name drugs.
**Level 2 consists of formulary brand name and certain higher cost generic drugs.


(applies to Level 1 and Level 2 prescription drugs and Insulin)

There is an annual out-of-pocket maximum of $300 per individual or $600 per family for all participants EXCEPT State participants enrolled in the Standard Plan. These participants will have a $1,000 per individual or $2,000 per family out-of-pocket maximum. There is no out-of-pocket maximum for Wisconsin Public Employer (WPE) participants enrolled in the Standard Plan or State Maintenance Plan (SMP).

Once the out-of-pocket is reached the PBM will pay 100% of the formulary (Level 1 or Level 2) prescription drug costs. Please note that Level 3 co-payments DO NOT apply to the annual out-of-pocket maximum.

Subscribers will have two identification (ID) cards, one from their heath plan and one from Navitus. When filling prescriptions, members need to present their Navitus ID card to the pharmacist. To obtain additional ID cards from Navitus, contact Navitus Customer Service. Members will automatically receive a new ID card from Navitus when they add or delete dependents, have a name change, switch health plans, or their group number changes.

Navitus can answer questions regarding your pharmacy benefits, the formulary, and ID cards. Contact Navitus customer service at:

Navitus Health Solutions
Innovation Court
Appleton, WI 54912

PHONE: (866) 333-2757 (toll free)
Hours of Operation:
7:00 a.m. to 9:00 p.m. Monday - Friday


Question: What is a Pharmacy Benefit Manager (PBM)?

Answer: A PBM is a third party administrator of a prescription drug program that is primarily responsible for processing and paying prescription drug claims. In addition, they typically negotiate discounts and rebates with drug manufacturers, contract with pharmacies, and develop and maintain the formulary. Navitus will negotiate rebates and discounts on behalf of the State of Wisconsin and pass the savings back to the State. Many health plans provide their drug benefit through a PBM.

Question: What is a formulary and how is it developed?

Answer: A formulary is a list of preferred prescription drugs established by a committee of physicians and pharmacists that are determined to be medically-effective and cost-effective. The formulary is developed by a Pharmacy and Therapeutics Committee, which includes a statewide group of physicians and pharmacists. Drugs are evaluated on the basis of effectiveness, side-effects, drug interactions, and then cost. On a continuous basis new drugs are reviewed to make sure the formulary is kept up-to-date and that patient needs are being met. The formulary is available on the Navitus Web site.

Question: How does switching to one PBM benefit participants in the health insurance program?

Answer: An advantage in having one PBM administer the pharmacy benefit for all participants is that all participants will receive the same pharmacy benefit and have a uniform formulary. Previously, participants may have been receiving a medication covered under their health plan. However, if they switched to a different plan, they may have had problems getting that same medication covered because their new plan had a different formulary. Participants should no longer experience those issues when switching health plans. Other advantages in switching to one PBM include having the ability to offer initiatives that give value and flexibility to participants, such as tablet splitting, generic sampling and a mail order service. In addition, having a larger purchasing pool for prescription drugs allows our PBM to negotiate rebates and discounts on behalf of the State of Wisconsin and pass the savings back to the State. This may help hold down future cost increases.

Question: Are there prescription drugs that require a prior authorization from the PBM?

Answer: Yes. Navitus has identified some prescription drugs that require prior authorizations, which are typically initiated by the prescribing physician on behalf of the member. More information about prior authorizations is available on their Web site.

Question: Can participants continue to purchase prescriptions from their current pharmacy?

Answer: In most cases, they will be able to continue using their current pharmacy. Navitus contracts with most national pharmacy chains and due to affiliations with other pharmacies in the state, members may have more choices than in the past. A list of network pharmacies is available on their Web site, or you can contact them for a printed version of the list.

Question: Why won’t the Level 3 co-payment be applied towards the annual prescription out-of-pocket maximum?

Answer: The three-level prescription drug benefit is designed to encourage participants to use prescriptions listed on the formulary when possible. This allows Navitus to negotiate greater cost savings because these drugs will likely be prescribed more often than equivalent non-formulary prescription drugs.

Additional questions and answers can be found on the ETF and Navitus Web sites

Department of Employee Trust Funds P.O. Box 7931 Madison, WI 53707-7931


Sandy Knoesel responds to Nancy Hamant re: Wisconsin's pharmacy benefit program

[See June 28 postings for Nancy Hamant's original letter to Sandy Knoesel]
June 30, 2006
Ms. Knoesel,
Thank you for providing the STRS update. We retirees in Warren County have long thought that the "middle-contractors or PBMs" have not been forthcoming in their services to STRS. Hopefully, something can be done before 2007, as WCRTA does not want "one more dime" of STRS health care money going to line the pockets of PBM CEO's.
Nancy B. Hamant
From Sandy Knoesel:

Thank you for sending us this information. I want to assure you that staff stays up to date on innovative approaches to the delivery of health care. In fact, Eric Stanchfield, secretary of the Wisconsin Department of Employee Trust Funds and Nancy Nankivill Bennett, director, gave a presentation on the developments in Wisconsin to the Ohio Retiree Health Care Coalition meeting at STRS Ohio in May 2004. Staff has continued to follow the developments in Wisconsin. By the way, we are currently having discussions with the Ohio State University, the Department of Administrative Services, OPERS, SERS and OP&F to look at alternative and improved ways to purchase prescription drugs on behalf our members. I appreciate your continued interest.

Molly Janczyk: Keep the pressure on

From Molly Janczyk, June 30, 2006
Subject: Pressure
To Everyone:
I have been reminded how very important it is to keep up the pressure at this time and to remember that we have much work ahead. It is very appreciated that we have written letters to Puckett and Dr. Zelman. PLEASE keep writing and tuned to concerns. IT DOES MAKE A DIFFERENCE and EVERY LETTER/CALL/EMAIL helps.
Our Board Members are 2 to 9 on most issues and it is felt that our insistence, appeals pressuring the 9 is of great benefit. PLEASE DO CONTINUE TO WRITE ON THE NO VOTE TO LIMITED SPENDING BY ASBURY AND Board Members should do no VOTING WITHOUT CONTRACTS or proper documentation in front of them as has been done. Reasoning behind no votes seems to be that they think they will have to be involved in contract issues, etc. THAT IS NOT the case, the vote was just about Board Approval for expenditures by Damon of $100,000 or more. Dr. Zelman and Puckett need to be reminded these are public dollars and they have a fiduciary duty to oversee the spending of OUR money.
Dr. Zelman:
25 S. Front St. Cols. Oh

Thursday, June 29, 2006

Ryan Holderman: Important information about recent STRS board action...or lack thereof!

From Ryan Holderman, June 29, 2006
Subject: Important information about recent STRS board action...or lack thereof!

Dear fellow educators:
As many of you know, I have, since 2003, been active in Concerned Ohio Retired Educators and have attended the STRS Board meetings on a regular basis. Thanks to the reform movement lead by Dennis Leone and John Lazares there have been many positive changes in the way STRS functions.
Dr. Leone, in April of this year, made the following motion:
"Board votes will not occur in the future on items like settlement agreements and/or vendor contracts without the board having said documents at the meeting when the vote is under consideration."
Here is Dennis' account of the events that followed:
"I first presented my proposal for discussion on April 21, 2006. The precise wording was:
"Board votes will not occur in the future on items like settlement agreements and/or vendor contracts without the board having said documents at the meeting when the vote is under consideration."
On May 19, I formally made a motion for the above to be approved. The motion was seconded by John Lazares. After John seconded the motion, I said it even would be fine with me if someone wanted to amend the motion by adding the words "or a summary of said documents" after the words "said documents." I also made it very, very clear that my motion was NOT suggesting that ALL vendor contracts come to the Board for a vote. The words "Board votes will not occur" specified that I was only talking about items that Damon puts on the agenda for a formal board vote. I repeatedly said: "How can I possibly vote on a contract without knowing, even generally, what's in the contract and how much it will cost?" The motion failed 8-2 (Meyers was absent).
In the month following this vote, Steve Puckett said to me that board members likely voted no because they felt I was suggesting that all contracts come to the board for a vote. This is very distressing for me to hear given the fact that I could not have made it more clear (for three months) that I am only talking about proposed actions that Damon places on the agenda.
After the June STRS Board meeting, Conni Ramser asked me this question: Since the Board voted 5-4 on June 16 to limit Damon's spending authority (another proposal that was initially defeated 8-2 on May 19), does this eliminate the need for my other motion? I believe that while the 5-4 vote certainly will now require formal Board votes on things like the bonus check settlement agreement, the big Vitech contract, and the Russell Company contract, I still feel the second motion needs to be put back on the table. My reason is that as a matter of principle, the STRS executive director needs to understand that NO contract vote (regardless of how small) should be put on the agenda unless the Board members have the related documentation in advance. It could be possible, for example, that he wishes for the board -- through a formal vote -- to amend an existing contract. Shouldn't I know the details, even if the amount is less than $100,000. I think so.
To Conni Ramser's credit, she did tell me that she would support additional discussion on this proposal. Even Mary Ann Flannagan, who was adamantly against it, said she feels it should be revisited. Maybe it will pass........I don't know." [End of quote]
I was simply stunned that our STRS Board members failed to see the importance of this motion. Most folks carefully examine any contracts or agreements before they sign them. Certainly a board member charged with the responsibility for a fund as large as our pension system's should do the same! I personally asked Jeff Chapman, Conni Ramseur, and Mary Ann Flannagan to revisit that motion. I told them that the retirees and actives with whom I have contact are incredulous that they would approve such business without seeing what was involved. I intended to button-hole the other board members with the same message but they zipped around the corner before I could shanghai them!
I believe that STRS Board members are more sensitive to input from their constituents, both active and retired, and need to hear from us on this matter. Please take the time to let your feelings be known.
Ryan Holderman
* * * * *
Here are some E-mail addresses to use:

Board Chairperson

Constance Ramser -

Vice Chairperson

Jeff Chapman -

Michael Billirakis -

Mary Flannagan -

John Lazares -

Dennis Leone -

An investment expert appointed by the governor:

Judith D. Fisher -

An investment expert appointed jointly by the speaker of the House and the Senate president:

Geoffrey G. Meyers -

An investment expert designated by the treasurer of state:

Stephen A. Buser -

An investment expert designated by the Superintendent of Public Instruction for Ohio, Susan Tave Zelman :

Steven Puckett - steven.puckett@ODE.state.OH.US

Pharmaceuticals give HUGE bucks in political contributions -- and we wonder why our Rx's are out of $$$ight???

Use this link to get a real eyeful:

Frank Kaiser: How to Fix Plan D Overnight

By Frank Kaiser
Suddenly Senior
I called my Congressman's office today. I wanted to learn how he's coping with his Congressional drug plan.
You see, if I sign with the new Medicare drug plan, my donut hole - the amount from $2,250 to $5,100 where there's absolutely zero drug coverage - is $2,850 out of my pocket.
I wanted to know how big my Congressman's donut hole is.
My Representative, Mike Bilirakis, as Vice-Chair of the Energy and Commerce Committee, was key to getting Plan D passed. His committee is the funnel through which all such bills must travel. [Note: this is not "our" Mike B.]
Perhaps that's why, according to, the health and pharmaceutical industries have given Mike over a million bucks in legal bribes, all part of Big Pharma's $108.6-million in Congressional payola four years back to assure that Medicare couldn't bargain drug prices. A small price to pay, , don't you think, for the $140-billion in windfall profits Plan D is expected to dole out to drug companies in the next 10 years.
But I digress.
I also wanted to find out from Mike how many drug plans he has to choose from. I figured he might have expert advice for constituents like me, baffled by the promiscuous offerings of over 40 providers here in Florida.
Plus I wanted to ask how often Congressional insurance changes its drug formulary. Under Plan D, they change more often than gas pump prices in a Mideast crisis. I wondered, too, if Mike had to pay out of pocket, like we do, for drugs he needs that aren't supported by his plan.
But when I called, instead of any answers, Shirley in his office asked sternly, "Why do you want to know?"
I explained that just maybe Mike had a simpler, cheaper plan than that available to me, and I wondered how it worked.
Well, I've never been told so nicely that it is none of my damned business.
Retire on $85,000 a Year?
Turns out that Congressfolk get health coverage through the Federal Employees Health Benefits Program, considered a model by even fiscal conservatives. In 2000, a Congressman and his family paid about 160 bucks a month for complete coverage, the low price thanks to a huge subsidy ironically dubbed "Fair Share."
Congress also has three state-of-the-art Attending Physician's facilities in the US Capital. And superb outpatient/inpatient care at the unofficial Congressional wings of the famed Walter Reed Army Hospital and Bethesda Naval Hospital.
Nice plan, indeed, and no donut hole.
But Congress is different from you and me, with its House and Senate gymnasiums, barbershops and beauty salons, subsidized life insurance, and a pension benefit 2-3 times more generous than what a similarly salaried executive could expect to receive upon retiring from the private sector. (Congressman Mike will get about $85,000 a year, plus COLAs, when he retires after this term.)
All this, plus $165,000 a year with generous automatic annual raises.
What's wrong with this picture?
Founding Father James Madison wrote, "[I]t is essential to liberty that the government in general should have a common interest with the people, so it is particularly essential that [Congress] should have an immediate dependence on, and an intimate sympathy with, the people."
With the average American earning about $35,000, Madison must be spinning at the idea of Congressional salaries in the very top 5 percent. And these guys and girls don't even fill out their own tax returns. The IRS does it for them.
How can we expect Medicare's new Plan D to reflect reality when our representatives in Washington have no stake in it themselves?
So here's my modest proposal: That all present and former government officials receive their health care under the exact same program the rest of us have.
Doesn't matter what you call it. The CRAP (Comparable Rights for All People) Act of 2006, for all I care. Main thing: Do it!
If we get donut holes, they get donut holes. It's that simple, that fair.
I'd call my Congressman for his opinion on all this, but frankly I get the feeling that his office doesn't want to know how I feel. It may just take an act of Congress to change their minds.

Medicare D explained (??)

John Curry to Dave Speas: An opinion on endorsement

June 29, 2006
Dave --
Just my "opinionated" 2 cents worth -- and it is just that -- my opinion. I say let those 5 walk if they want to. There are a lot of "R's" who have discovered that the folks they voted for (Taft,Montgomery, and Petro) have "kicked them in the teeth and the wallet." They don't see much salvation in Blackwell either with his failed TEL amendment and now the 65% solution to our miserable state of education in Ohio. They don't know Strickland, but they are willing to take a chance. If one wants change, one will have to take a stand. I have tons of respect for you, Dave, but -- on this one -- I feel it is time to take a stand and endorse. This is one of the reasons why I have never joined ORTA -- I think it is also one of the reasons why other people haven't.

Dave Speas: Some insights for Jim Kimmel (and the rest of us)

I have five emails in my possession that came from ORTA members saying that if we back Strickland they will leave ORTA as they are Republicans and we are to work for retirees issues and not for political parties. I have more emails asking that we stay the course on healthcare as if we do not, the political parties will use our supporting another party to oppose it. We are in a catch can situation.
I will work to elect Strickland but at this point of five years of labor to get legislators to even allow us in the door to raise the 14% to 16 1/2% and 10% to 12%. The greatest cry I have gotten in the last 13 visits I have made to ORTA chapters is please do something about healthcare and prescription drugs.
I would like to do as you wish but we are on a road started long ago and I can tell you some legislators have long memories and will try to punish us by working against the healthcare initiative.
I have talked to many older and younger retirees in the last five years as I have traveled over 6000 miles around the state. It is healthcare relief those of us who are the poorest and most vulnerable need. As a public school board member, I am backing those who publicly want changes in our education climate.
I hope you will understand that there are many voices out there crying for many things. I was one of them and I have decided to act to change as many as I can by being active and not just complaining. It is not an easy or enjoyable place to be at times but neither was losing so much by what happened to us with our healthcare.
I hope you will understand that it is important to me to continue to hear from you and I do take your opinions seriously. I will continue to work as hard as I can for all retirees in the state of Ohio.

Conversation re: ORTA/Politics: Leadership imperative for a critical election

From Molly Janczyk, June 29, 2006
Re: ORTA/Politics
Esp. since Blackwell is attempting his '65% of every dollar' plan which is rebuked by conservative Republicans and Democrats as well and will cause further decline for education in Ohio. Membership needs info on candidates and WHY this election IS CRITICAL TO RETIREES and actives. Keeping out of it so as to not elicit some waves vs. fighting for what will help ALL educators, retired or active is the same as guilt by lack of action in my opinion. This may be one of the most critical election ever or certainly one of the most. It SHOULD be about who will bring the greatest good to educators and retirees not about NOT stirring anyone up.
Membership has long wished for ORTA to step up and take direction out front and strong. Backroom is necessary many times. THIS ELECTION IS NOT ONE OF THOSE TIMES! WE NEED CHANGE IN OHIO! ORTA IS IN THE POSITION TO LEAD! There comes a time for all grps to stand up and say what they stand for and fight for it. Think of the consequences is we say nothing and please don't complain when we get the same ol' because we hadn't the courage to speak up just bec some would get offended. Many are offended because of lack of speaking up. Legislators may be influenced if they know hundreds of thousands of votes are at stake. The other organizations are NOT keeping quite and are interviewing for the best candidates. ORTA should be doing the same for its retirees.
Lack of public action is what has hurt ORTA and it will certainly not help in this issue.

From Jim Kimmel to Dave Speas, June 29, 2006
Subject: ORTA/Politics

These times DEMAND a stand be taken by ORTA for Strickland and other education friendly/retiree friendly candidates. Things in Ohio are so bad, with so many crooks in the government, ORTA must be part of the solution or it will be part of the problem. And yes, many have and will disassociate themselves from ORTA as I have. ORTA has a history of weakness which will be exploited by those who have and will hurt retirees. You do not represent those whom you claim to represent if you do not take proper action. If ORTA remains passive and dishes out the same pablum to retirees it has in the past it is less than useless to anyone!
James Kimmel
STRS Retiree

Big Dollars, Little Sense: Rising Medicare Prescription Drug Prices

Note from John Curry: I really don't wonder why -- the "why" is so the pharmaceutical manufacturers get "blessed" with exorbitant profits in return for their extremely generous campaign contributions to the the majority in Congress who passed Medicare Part D. Thank God the Vets are getting a break because the rest of the American public isn't! Please see the comparisons in blue text below:

Key Findings

From November 2005 to April 2006, virtually all Part D plans raised their prices for most of the top 20 drugs prescribed to seniors.

  • For Zocor (40 mg), all Part D plans raised their prices. Almost all (98.5 percent) Part D plans also raised their prices for the lower-strength version of Zocor (20 mg).
  • For Fosamax (70 mg), almost 99 percent of Part D plans raised their prices.
  • For Lipitor (10 mg), over 97 percent of Part D plans raised their prices. A smaller—but still sizable—share of Part D plans (88.9 percent) raised their prices for the higher-strength version of Lipitor (20 mg).
  • For Actonel (35 mg), Toprol XL (50 mg and 100 mg), and Xalatan (0.005%), more than 96 percent of Part D plans raised their prices.
  • For Celebrex (200 mg), Nexium (40 mg), and Norvasc (5 mg), more than 94 percent of Part D plans raised their prices.
  • Only the prices for two generic drugs, furosemide (40 mg) and metoprolol tartrate (50 mg), and the brand-name drug Zoloft (50 mg) were not raised by a majority of Part D plans.
  • However, even for furosemide and Zoloft, a plurality of Part D plans raised their prices. Taking furosemide as an example, 42.5 percent of plans raised their prices, 31.5 percent of plans lowered their prices, and 26.0 percent left prices unchanged.

From November 2005 to April 2006, the median price increases among Part D plans for half of the top 20 drugs prescribed to seniors were at least 4 percent.

  • The median price increases for Aricept (10 mg), Celebrex (200 mg), and Lipitor (10 mg) were at least 6 percent.
  • The median price increase for both dosages of Zocor (20 mg and 40 mg) was 5.7 percent.
  • The median drug prices did not rise for only five of the top 20 drugs: furosemide (40 mg), metroprolol tartrate (50 mg), Prevacid (30 mg), Protonix (40 mg), and Zoloft (50 mg).

From November 2005 to April 2006, for 19 of the top 20 drugs prescribed to seniors, the median Part D plan price changes were virtually identical to changes in manufacturer prices as measured by Average Wholesale Price—AWP.

  • The median AWP for the top 20 drugs prescribed to seniors rose by 3.8 percent, while the median Part D plan price change for those drugs was 3.7 percent. This means that Part D plans are not effectively reducing drug price inflation (as measured by AWP) for the seniors they are serving.

As of April 2006, there were large differences in the prices charged by Part D plans compared to the prices secured by the VA.

  • For each of the top 20 drugs prescribed to seniors, the lowest price charged by any Part D plan was higher than the lowest price secured by the VA.
  • Among those top 20 drugs, the median difference between the lowest Part D plan price and the lowest VA price was 46 percent. In other words, for half of the 20 drugs, the lowest price charged by any Part D plan was at least 46 percent higher than the lowest price secured by the VA.
  • For Zocor (20 mg), the lowest VA price for a year’s treatment was $127.44, while the lowest Part D plan price was $1,275.36, a difference of $1,147.92 or 901 percent. For Zocor (40 mg), the lowest VA price for a year’s treatment was $190.76, while the lowest Part D plan price was $1,275.36, a difference of $1,084.60 or 569 percent.
  • For Protonix (40 mg), the lowest VA price for a year’s treatment was $214.45, while the lowest Part D plan price was $1,110.96, a difference of $896.51 or 418 percent.
  • For Fosamax (70 mg), the lowest VA price for a year’s treatment was $265.32, while the lowest Part D plan price was $727.92, a difference of $462.60 or 174 percent.
  • For Xalatan (0.005%), the lowest VA price for a year’s treatment was $279.84, while the lowest Part D plan price was $555.96, a difference of $276.12 or 99 percent.

As of April 2006, the gap between the lowest and highest prices that different Part D plans charged for the same drug was sizable'

  • Among the top 20 drugs prescribed to seniors, the median difference between the lowest and highest prices that Part D plans charged for the same drug was 36 percent, a difference of $202.02 for a year’s treatment. In other words, for half of the 20 drugs, the highest price charged by any Part D plan was at least 36 percent higher than the lowest price charged by a Part D plan.
  • For 18 of the drugs, the difference between the lowest and highest price charged by a Part D plan for a year’s treatment was more than $100.
  • For three of the top 20 drugs, Nexium (40 mg), Prevacid (30 mg), and Zocor (20 mg), the difference between the lowest and highest Part D plan price for a year’s treatment was more than $500.
    • For Nexium (40 mg), the difference between the lowest and highest Part D plan prices was $801.60 for a year’s treatment.
    • For Prevacid (30 mg), the difference between the lowest and highest Part D plan prices was $787.80 for a year’s treatment.
    • For Zocor (20 mg), the difference between the lowest and highest Part D plan prices was $500.64 for a year’s treatment.


NY Times: New drug for macular degeneration -- but expensive

June 29, 2006
Questions Over New Eyesight Drug That May Be as Good as Older, Cheaper One

A drug that can restore eyesight to some elderly people, even allowing them to read or drive again, is expected to win federal approval this week.

But for patients, doctors, Medicare and other insurers, the drug's arrival will pose a conundrum. That is because the medicine, Lucentis, is expected to be 10 to 100 times as expensive as a similar drug that many ophthalmologists say is every bit as good.

Lucentis, made by Genentech, is the first drug demonstrated in clinical trials to improve vision in people with so-called wet macular degeneration, a form of bleeding behind the retina that is the leading cause of blindness in people over 65. The condition afflicts an estimated 1.2 million people in this country, with an 200,000 new cases each year.

While the drug is not a cure and does not help everyone, specialists say it represents a breakthrough against a disease that once almost inexorably led to an incapacitating loss of eyesight.

"I have people who are reading the paper every morning who would have been totally legally blind two years ago," said Dr. Julia A. Haller, a professor of ophthalmology at Johns Hopkins University, who has had patients testing Lucentis.

But the big question is whether insurers and patients will consider Lucentis worth prices that may be $10,000 a year or higher, compared with around $1,000 or less for the drug already on the market that many ophthalmologists say is just as good.

That drug, Avastin, is approved only to treat cancer. But used for the eye condition, which is legal and known as an off-label use, it works the same way as Lucentis. In fact, Lucentis is a derivative of Avastin tailored to be used in the eye. Like Lucentis, Avastin was developed by Genentech.

With Lucentis not yet available, off-label use of Avastin has become the treatment of choice for macular degeneration. Since last fall, thousands of eye patients have been treated with Avastin, with good results and minimal side effects, experts say.

But Genentech has no interest in getting Avastin approved for macular degeneration, because that would undermine the sales of Lucentis, which some analysts predict will have annual sales of several hundred million dollars.

Avastin is not a cheap drug. It costs about $50,000 a year when used intravenously to treat colon cancer.

But for an injection into the eye to treat macular degeneration, only about $20 to $100 worth of the drug is needed.

Genentech has not announced the price for Lucentis, which the F.D.A. is widely expected to approve by tomorrow. But retina specialists expect an injection of Lucentis to cost from $1,500 to well over $2,000.

For both drugs, an injection is needed as often as every four weeks.

The number of patients with wet macular degeneration is expected to mushroom as the baby boomers age. About 85 percent of people with wet macular degeneration are covered by Medicare, Genentech says.

Use of Avastin instead of Lucentis could save patients and insurers hundreds of millions of dollars a year. Yet, despite the potential cost savings, several specialists said they expected most doctors to switch to Lucentis after its approval because there are solid data from clinical trials on the safety and efficacy of that drug. Using an approved drug, instead of using another drug off-label, also means less paperwork and less risk of malpractice lawsuits. What is more, apportioning Avastin into small sterile doses for ophthalmic use requires its repackaging by special druggists known as compounding pharmacists.

"The whole experience really opens your eyes to how our whole health care system is operating," said Dr. Philip J. Rosenfeld, an associate professor of ophthalmology at the University of Miami who pioneered the use of Avastin for macular degeneration. "We could be incentivized to use the most effective therapy at the most reasonable cost. But that's not how our system is set up."

Genentech's disinclination to test Avastin as an eye treatment has angered some doctors. "The part that really bothers me most is that Genentech has steadfastly refused to do a head-to-head study between Avastin and Lucentis," said Dr. Raj K. Maturi, a retina specialist in Indianapolis.

But Dr. Susan Desmond-Hellmann, the president of product development for Genentech, said the company's priority was "to innovate and do better things for patients" — not to show one drug was equivalent to another.

Dr. Desmond-Hellmann said Lucentis would save the health care system money by preventing blindness, which can lead to other injuries and to nursing home admissions. She also said the company would support programs to help patients with their insurance copayments for Lucentis and would provide the drug free to patients who could not otherwise pay for it.

Wet-form macular degeneration is characterized by abnormal, leaky blood vessels that form under the retina, the light-sensing part of the eye. The vessels leak fluid into the eye, causing warped vision, and damage the macula, the part of the retina responsible for the straight-ahead vision used for tasks like recognizing faces, reading, driving and watching television. People with the condition usually retain some peripheral vision.

"I could look at my husband but not see his face unless I looked to the right to bring him into view," said Helen Nicolosi, 77, of Marathon, Fla., whose eyesight was affected by the disease.

She said monthly injections of Lucentis in a clinical trial improved vision in her affected eye to 20/50 from 20/150, letting her drive again and do the crossword puzzles she loves. Both Avastin and Lucentis work by stopping the growth of new blood vessels. That retards the leaking in eye vessels, and in cancer it halts the supply of nourishment to tumors. Lucentis is a smaller-protein version of Avastin, designed to penetrate the retina better.

In clinical trials, one-quarter to one-third of patients who received Lucentis gained three or more lines of vision on an eye chart, benefits that have lasted two years so far with continued injections. About 40 percent of the patients ended up with at least 20/40 vision, the usual minimum for a driver's license. Only about 10 percent had a degradation of vision of at least three lines on the eye chart after two years.

By contrast, the two drugs already specifically approved for macular degeneration — Visudyne from QLT and Novartis, and Macugen from OSI Pharmaceuticals and Pfizer — slow the deterioration of eyesight but do not usually improve vision.

. .


Wednesday, June 28, 2006

Jane Bryant Quinn: A Requiem for Pensions

I want to speak up for the value of corporate pension plans, which are slowly slipping away. The country hardly seems to care.
"Thanks to better management and lower expenses, pension plans often earn more than a 401(k), so workers lose when they switch."

July 3-10, 2006 issue

Younger workers would rather invest in 401(k)s (pensions carry a musty smell). At retirement, older workers often reject their plan's offer of a monthly income for life in favor of taking a lump sum to invest themselves. Hundreds of companies have closed or limited their plans in recent years, switching to 401(k)s instead. Most tech firms, among others, never offered them in the first place.

That's too bad, because guaranteed lifetime incomes shouldn't be thrown away lightly. They can offer better returns than you'll ever get from your investments, and more personal security, too.

But more on that later. Pensions currently face an obstacle even more serious than waning worker interest, and that's underfunding. Current pension rules allow companies to contribute less than they should, even though they have the money. In a few cases, they can't afford to pay the benefits they promised. The federal Pension Benefit Guaranty Corporation, which picks up part or all of the payments owed by bankrupt plans, warns that its deficits are alarmingly large.

To fix the system, the U.S. Senate and House of Representatives are hammering out a pension-reform bill. It could be ready as early as next month. But it's a strange "reform." All parties agree that it will push many more companies into freezing or dropping their plans. (A frozen plan won't cover new employees and may also end benefit increases for current workers.)

You don't want to know the bill's technical details (trust me on this!). In brief, the reforms require firms to put more money into their plans. Underfunded plans will have to make up their shortfalls faster. There will also be changes in the way all companies calculate how much they owe. In 2005, the industry Committee on Investment of Employee Benefit Assets asked pension executives what they'd do if at least two of the provisions passed. Sixty percent said they'd freeze their plans. "Private pensions are going the way of the dodo," says David Wyss, chief economist for Standard & Poor's. "The more that's required of plans, the sooner they'll go extinct," along with the future benefits of 17 million workers.

Ironically, part of the pension-funding problem no longer exists. Plans are coming back to a sounder footing, thanks to rising interest rates, massive corporate catch-up contributions to their plans, limitations on benefits and the recovery in the markets. The premiums that companies pay for PBGC insurance were raised earlier this year, so its deficit should shrink, too. "PBGC has enough assets to pay benefits for a couple of decades easily," says John Ehrhardt, a principal at Milliman, a consulting firm. A recent report by the Government Accountability Office put the odds at 90 percent that the PBGC could cover all failed plans at least until 2020. In short, the funding crisis may have been oversold.

But fears that government would be on the hook for failed plans has "scared the heck out of everybody," says Congressman Earl Pomeroy, one of the few pension experts in the House. He favors reform at a slower pace to encourage willing companies to keep their plans going. But even if Congress lightens up on the funding burden, accounting changes expected next year will make the plans less attractive to their corporate sponsors.

"Traditional plans have reached a tipping point," Ehrhardt says. Most of them will freeze and eventually terminate. A few firms, however, will still find it useful to keep their plans to attract and retain talented workers in mid career.

When companies freeze plans, they usually sweeten workers' 401(k)s. But that probably won't make up for what you lost. The Employee Benefit Research Institute studied what would happen if pension plans were frozen or ended and workers depended on their 401(k) investments. In a typical plan, it might take an annual company contribution of 15 percent to make at least three quarters of the long-career workers whole, says EBRI's Jack VanDerhei. When the company pays less, as it usually does, you'd wind up with a lower retirement income or else would have to save substantially more yourself.

In another study, the consulting firm Watson Wyatt found that the value of pensions grew substantially in the past five years. In a typical plan, the retirement benefit for someone 65 today might have grown 97 percent since 2000, and 244 percent for a 40-year-old (that counts both market changes and additions due to aging). And that's a frozen plan. A "live" one would have gained much more.

Pension plans also earn more on their investments than a typical 401(k) due to better management and lower expenses. "We're moving from an efficient retirement system to a less efficient one," says Watson Wyatt's Kevin Wagner. It's a loss.

But that's only if you're a working stiff. Top executives are not only keeping their pensions, their payoffs are leaping even as yours are being pared. Tough luck. Today, the money flows to the "deserving rich."

Reporter Associate: Temma Ehrenfeld


© 2006

A conversation re: STRS proposal on HC funding

From Molly Janczyk
Subject: Meuser on McGregor: FW: STRS Proposal
Date: Wed, 28 Jun 2006
Thank you, Mark. I appreciate your thoughts very much. Jim has been responsive since the beginning and has asked to be included. I have appreciated that from him.
Molly J.

From: Mark Meuser, June 28, 2006

I received a copy of your recent e-mail to Rep. McGregor. It was very good.
I know Jim. He lives around the corner from us. He is a great guy, but as he is not on the legislative committee that deals with STRS, he is probably not up to date on all the information.
I thought your analysis of the funding situation was clear and concise. Thanks for clarifying that for him.
From Molly Janczyk
Subject: RE: FW: STRS Proposal
Date: Wed, 28 Jun 2006
Dear Jim, Please remember STRS is self insured and pays out over $1.2 - 1.5 MILLION PER DAY for our health care costs. Reductions in salaries, positions, day care, etc. would not dent the outlay for health care. Of course, we continue to be vigilant on those matters and have seen many reductions simply because every dollar should be prudently spent according to ORC:3307.15 and to clear money for any other needed areas. But, this would not pay for HC.
We need a dedicated stream of revenue and this is the only solution to secure HC for educators and attract quality educators to Ohio. I find it alarming when the Boards cite bulk holdings for STRS and simply write off the importance of this issue trying to make the public think there is all this money and all that is needed is to manage better.
They can add as well as any and know this is not the problem. Ohio is long underfunded for education and to continue to ignore this is going to go on seeing education flounder in Ohio. Please examine this area and proposal comprehensively and objectively. Ask those who understand it to speak with you. 5% is the figure which supports the health care fund to be ongoing for current and future retirees. Much research and examination went into finding the figure along with ways not overly cumbersome to educators at .5% per year for school boards and $40 per ck for an average educator. School boards can also trim many the same areas mentioned in your letter for their districts. If we spoke to their bulk dollar amounts it would paint the same picture of them as some of them tried to paint of STRS. To merely quote funds available does not in any way break down costs for the public. IF EDUCATION WAS PROPERLY FUNDED, Ohio educators may not be in this position of having to beg for their promised retirements with HC. There is no retirement without HC.
Thank you.
Molly J.
From: Jim McGregor
Subject: RE: FW: STRS Proposal
Date: Tue, 13 Jun 2006 11:34:56 -0400
Dear Molly,
Yours is the first briefing I have had on this subject, since I am not on the committee. Perhaps some spending restraint could be added to the bill? Freezing STRS executive salaries, identifying and freezing or reducing executive benefits, eliminating all subsidies for employee day care, requiring protection of STRS resources by reducing the STRS benefits for double dippers, etc. could be explored. We are so thankful for Dennis Leone's and Mr. Lazarus's efforts but the Board still seems not to listen to them thoroughly. Until individuals like them are in a majority on the Board, I lack confidence in the actuarial projections and the Board decision making. I look forward to studying the bill.
From Molly Janczyk, Tuesday, June 06, 2006
Subject: RE: FW: STRS Proposal
Dear Jim How do you stand on the STRS increased contributions legislation? I wonder if Mr. Paessun understands that this is the way to perserve health care for active educators in retirement. He cannot possibly save enough for health care at $240,000 approx. just for premiums and out of pockets at today's costs. This 5% is the number it takes to keep the system up and running now and for future retirees. Careful research was behind this number to convince OEA, STRS and us this would continue health care for all.
2.5% over 5 yrs at .5 a yr is far less than what this educator would have to save for his health care in retirement. Then , of course, I assume he is trying to save for retirement with annuities as well. This would not be attempted if it was not a permanent fix. If STRS becomes healthy again with enough money to fund liability at 30 yrs. so they can devote more
money to health care, STRS can then reduce contributions. This legislation only gives STRS permission to act on contributions. They can also change back if conditions permit.
Please consider all sides before opposing something less costly for all educators. Retirees have borne up to 800% increases in a few years to keep the system going. This just makes it work for actives facing retirement as well. I went from $31 for myself and spouse when I retired in '99 to over $800 in 2007 (predicted) just for premiums. Then 20% of all costs after $500 deductibles for each of us.
.5% is $40 a check based on an average $40,000 salary. Calculate what you will have to save to pay for your health care in retirement. There are no guarantees in life, but this is the closest you will come. Research this legislation, consult your fellow educators who know the facts, go onliine : to see the proposal.
Thank you,
Molly Janczyk

The list you provide below will take much time and by then many educators will live in desperation. Perhaps he is young.
Molly J.

From: McGregor, Jim, June 06, 2006
To: 'Mark Paessun' Subject: RE: STRS Proposal
Dear Mr. Paessun,
Thank you for your concern. It is a difficult problem but I think that there is a solution, though it is incremental and difficult. I agree that the system cannot keep leapfrogging the costs onto teachers and retirees. At the same time, teachers and retirees are tax payers and do not want their taxes increased. There are alternatives.
1) Ohio needs to expand the scope of practice of all medical professionals to take advantage of their full education and capability. Today, laws artificially limit Naturopathic Medical Doctors, Advanced Practice Nurses, Physician Assistants, Nurses, Dental Hygienists, and a host of other professionals. These restrictive laws drive up the cost of care. The Legislature has made some changes but needs to go much further.
2) Ohio needs to limit the salary and benefits of non-profit Hospital executives. Hospitals, receiving public funds, are paying a host of executives million dollar annual salaries and luxurious benefit packages while calling themselves non-profits. Greed has become endemic and the Legislature needs to act. Salary restrictions need to be applied by law to the public retirement systems also.
3) Ohio needs a basic health care plan; one that meets our needs but will not afford our desires. Cosmetic surgery, defensive medical practices, and recreational drugs all need to be eliminated from the plans we have. We need to study capitation and come to mutual conclusions of what we need and can afford.
4) Ohio needs to study end-of-life issues and reach conclusions. Many today have their lives extended against their wills and to their great pain and anguish. I do not support euthanasia but neither do I support extending life through elaborate machinery and/or drugs when the patient does not desire such extension.
These, and other tough issues, need to be faced head on. May God grant us the courage to do so.
Jim McGregor
From: Mark Paessun, June 06, 2006
Subject: STRS Proposal
Dear Mr. McGregor,

I want you to know that I am adamantly opposed to the proposal by the State Teachers' Retirement System to increase employee contributions by
5% (2 ½% for the teacher and 2 ½% for the district). Simply put, STRS must look elsewhere to solve this problem.
In my district, we took reduce health care benefits by shifting more of the cost to those who use it most. Why can't STRS do this? Why should I subsidize health care for retirees and their spouses when that money is being spent today? At the same time, STRS tells me to save for my own retirement health care because I'm going to need a lot of money to pay my part then.
STRS will tell you that they have held state-wide meetings and solicited input from all stakeholders. Their data are skewed. The only people who can afford the time to go to all those meetings are the retirees. The voice of the current retirees is being given too much weight.
This proposal will take money out of my check that I need to be saving for my health care when I retire. STRS is a retirement system. They are not required to subsidize health care for retirees or their spouses. If the money is tight, let them do what they are supposed to do - be a retirement system. I realize that there is no simple answer to the rising cost of health care, but the throw-money-at-it technique is short-sighted and unfair. What is STRS going to do when as costs keep escalating? Keep coming back to me for more? I only have so much to give. Who will be there to subsidize my health care?
Mark Paessun
Teacher (22 years)
Whitehall City Schools

Mary Ellen Angeletti to Susan Zelman: Please explain Puckett's vote

From Mary Ellen Angeletti, June 27, 2006
Subject: Steve Puckett's vote
Dr. Zelman,
I was dismayed at the STRS Board meeting on June 15th to witness Steve Puckett's vote against restraining the STRS Executive Director's spending of retiree funds without the okay of the STRS Board. The Board must be KNOWLEDGEABLE about the money the Executive Director spends and also the contracts he makes and must VOTE on the spending and the contracts. This is the fiduciary responsibility of each and every Board member. Puckett's vote against is irresponsible and I am furious that he represents the Ohio Department of Education. I would appreciate an explanation.
Mary Ellen Angeletti,
STRS retiree

Nancy Hamant: We need a PBM system like Wisconsin's

June 28, 2006
Dr. Asbury, Ms. Knoesel, and STRS Board Members:
Warren County Retired Teachers Association (WCRTA) would greatly appreciate STRS contacting Wisconsin to gather information about the system that they have set up to eliminate the unacceptable costs charged by the current large PBMs. Wisconsin's system appears to be saving considerable money while only charging $5 for generics, $15 for level 2 drugs, and $35 for level 3.
STRS needs to lead the state of Ohio in changing to an equitable and cost efficient system.
WCRTA would appreciate all of STRS's efforts be expended to bring about these changes and look forward to responses as to the feasibility of a system similar to Wisconsin's.
Nancy B. Hamant,
WCRTA Legislative Chair

WISCONSIN: state-supported transparent PBM keeps drug costs in check

“State insurance system touted as 'best in country'”

By Anita Weier,, June 26, 2006, excerpt:

“The co-chairwoman of a state Senate panel on health care reform says the insurance system that serves 230,000 state and local government employees, retirees and their beneficiaries is blazing a path toward more efficient and less costly health care. "Wisconsin has a shining example" to offer, said Sen. Alberta Darling, R-River Hills. "The state changed to a three-tier insurance system and developed a prescription initiative that is very strong. This is the best in the country, and other states are looking at it." The state program has reduced cost increases to about half the level of most public and private sector employer plan increases during the past two years, officials said. Wisconsin's State Employee Group Health Program covers all state and university employees and retirees, and a related Wisconsin Public Employer Program is an option for local governments that participate in the Wisconsin Retirement System. ... Drug costs: The second major change was the consolidation of prescription drug benefits under one pharmacy benefits manager, Navitus Health Solutions, a Wisconsin company that was created to meet the state's needs. The Group Insurance Board demanded complete transparency in all financial transactions with drug manufacturers and that all rebates and savings from discounts be passed through to the plan, which also has greater purchasing power due to consolidation. Navitus created a committee of pharmacists and physicians from across the state who developed a list of preferred drugs and chose the best in each class. The board changed the drug benefit under the program from a two-level co-pay structure to a three-level co-pay structure. The first level, mostly generics, cost $5 per prescription, the second level $15 per prescription, and the third level $35 per prescription. "In the first two years, tens of millions of dollars have been saved," Korpady said, adding that premiums for retired state employees actually went down by more than 6 percent last year. "At the same time, benefit levels have been maintained and high quality and safety have been encouraged and rewarded," Korpady said. "In almost every category of wellness and disease management, our health plans exceed the national averages." Other common features include nurse hotlines, smoking cessation programs, fitness benefits and targeted disease management programs, he said.”

RH Jones: Legislation on 5% contribution increase not likely till after November

From RH Jones, June 28, 2006
Subject: Probably No Legislation on Employee/employer 5% Increase Until After Nov

To all:
The leaders at ORTA are more optimistic than the SummitCRTA Legislative Chair & VP, K. Fluke, PhD. and I. Dr. Fluke and I believe that the 5% employee/employer contribution increase for HC will not take place until after November. We base our prediction on the past performance, or lack of it, by the present ruling political party of Ohio: The GOP. Why would anyone expect them to suddenly change now? We both wish that we could be wrong and they would do the right thing and get it passed immediately. There is such a need. HOWEVER, THEY KNOW THAT NINE YEARS OF THEIR CHARTER SCHOOLS EXPERIMENT IS HURTING THE CHILDREN, THEIR ACTIVE AND THEIR RETIRED TEACHERS. Believe this! Our ORTA needs to be sending out letters to the various media in Ohio. Putting out letters by ORTA execs has a better chance of media support than individual member letters. In the past, ORTA has insisted on us writing. It is time the leadership leads the way and writes.
A while back, according to the Beacon, the newly elected OSBA President, Linda Omobien, said that the names of those politicians opposed to public education need to be published. Nothing has been done to support her on this. She should be strongly backed by us on this. My question to ORTA is: What has taken so long? Why be mum. The politicians, I suspect, are mostly GOP: but in all fairness, if any democrats are in the list, publish theirs too. Those consistently voting against, or for us, need identification. All teachers vote; youngsters under 18 do not. We need to remember them and our selves next Nov.. The time is nearing.
RHJones, SummitCRTA Legislative CMTE Mem. and CORE

Al Rhonemus: A letter to Dr. Zelman re: Spending caps and Dr. Puckett's vote

June 28, 2006

Dr. Susan Zelman, 25 S. Front St.,

Columbus, Ohio 43215-4183

Dear Dr. Zelman:

Being responsible for actions is one choice we have in dealing with problems, or not being responsible is the other, the choice is yours. (A Free Society)

However, when the decision is to make those with whom you are responsible, under your authority to have a control over spending without board or membership approval is of the most importance.

I am very concerned that your representative to STRS voted to give the Executive Director just about any authority he wanted in spending OUR funds that affects every one of our lives. Dr. Puckett seems to follow the path of many of our past directors and board members. Live big time and spend anything anyway not considering those with whom they are truly to represent, the Retirees. I am disappointed in his vote to not put a reasonable cap on the spending without board approval.

Please speak to him about this matter.

Sincerely yours,

Alfred C. Rhonemus,

Retired Teacher

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