Drug Costs Are Target of Long Beach Hospital Pharmacist

When Sepracor Inc. wanted Long Beach Memorial Medical Center to use more of its asthma medicine, the company went to see Melinda Klein.

Three published studies touted the benefits of Xopenex for asthma patients requiring emergency care. But Klein, a Memorial pharmacist, thought the medicine looked no better than an inexpensive generic drug.

Klein recommended keeping Xopenex off the hospital’s list of preferred medicines, or formulary. A hospital committee of doctors, nurses and pharmacists voted to follow her advice, despite objections from some local allergists.

With drug costs threatening to consume more of their budgets, hospitals are turning to experts like Klein. At Memorial, she oversees a team of pharmacists who pore over clinical studies to penetrate drug-company hype. Although Klein does not have the final say on which medicines make it onto the hospital’s list of preferred drugs, her opinion carries weight.

“The pharmacy has a lot of power,” said Sara Owen, a Sepracor sales representative who had sought Klein’s endorsement of Xopenex.

When Klein, a graduate of USC’s School of Pharmacy, started at Memorial in 1982, her focus was getting prescriptions filled quickly and accurately. After she became director of inpatient pharmacy five years ago, Klein’s attention was increasingly drawn to the bottom line.

What prompted the change was a tough healthcare environment that has seen hospitals slash services or shut down altogether. An increase in uninsured patients and uncertainty about reimbursement are forcing hospitals to look for efficiencies. Add to that a wave of costly new medicines that threaten to consume a greater portion of hospital budgets.

Memorial says Klein’s efforts have saved the hospital money while giving patients access to appropriate drugs. But some doctors say the drive to control costs may prevent some patients from receiving drugs that may be better for them.

“My feeling is that a patient comes first,” said Steven Meltzer, an asthma specialist in Long Beach and member of the hospital’s education committee who wanted to see Xopenex added to Memorial’s formulary. “At the hospital they may have some other criteria for making a judgment.”

From a tiny office in the hospital’s basement, Klein monitors an annual budget of more than $13 million. Charts tracking drug expenditures cover a bulletin board. Each day she receives spending reports on the 25 costliest drugs used at the hospital. Five expensive medicines can’t be administered without her OK.

Seated at her desk, Klein produced Exhibit A in her war on waste: a cardboard box containing 110 asthma inhalers that had been abandoned by patients leaving the hospital. When new, the inhalers contained a two-week supply, or 28 doses, of Advair, more than needed by patients during a typical hospital stay. Klein grabbed three of the used inhalers. “Look at this one, 20 doses left! And this one, 18 doses. Here’s another, 28 doses. It was never touched.”

Two years ago, Long Beach Memorial spent $28,000 on Advair, but in fiscal 2004 the amount exploded to $138,000 -- reflecting nearly a fivefold increase in prescriptions. Klein blamed a barrage of TV ads and sales pitches to doctors.

In March, Klein persuaded the hospital to substitute drugs that use a different kind of inhaler, one that could be loaded with the exact number of doses each patient needed. She contended that Advair wasn’t suited to hospital use and had some risky side effects. Her decision looked smart in November when the Food and Drug Administration warned that Advair could increase patients’ risk of severe asthma attacks and death.

“I like to think we’re ahead of the curve,” Klein said.

Advair marketer GlaxoSmithKline said the FDA action was unwarranted and could put patients who might have used the drug at risk of uncontrolled asthma. Regarding Memorial’s policy, spokeswoman Lisa Behrens said that hospital stays vary and it would be “concerning” if patients who needed Advair weren’t able to get it.

Klein is careful to keep herself from coming under the influence of drug companies. She won’t accept pens, notepads or other gifts. Klein strives to limit the industry’s sway with the medical staff. Not long ago, she annoyed nurses when she confiscated bottles of hand lotion that had drug company logos on them.

In May, Memorial barred sales reps from providing free meals to doctors and nurses on hospital grounds. Klein pressed for the ban, modeled on prohibitions at Veterans Administration hospitals. The policy also prevents sales reps from promoting products to physicians that aren’t on Memorial’s formulary. The prohibition doesn’t apply off campus.

Before calling on doctors and nurses -- a practice called detailing -- sales reps must fill out a form in Klein’s office stating the purpose of the meeting. Klein regularly patrols the hospital to make sure sales reps haven’t strayed off limits into staff lounges or patient wards. Three years ago, she removed a sales rep whom she’d found in surgical garb on a restricted patient floor.

“It’s a constant battle,” she said.

Although experts debate whether detailing drives sales, there is little question that it adds billions to total drug expenditures. “It gets incorporated into the price of drugs,” said Natalie Mizik of Columbia Business School, who has studied drug detailing. “Someone has to pay for it.”

Klein’s campaign to control spending started in 2002 when she spotted a double-digit jump in prescriptions for EPO, or erythropoietin -- an anemia drug that costs $7,000 an ounce. The medicine was meant for patients with specific conditions, but Klein discovered that physicians were using it for heart failure and gastrointestinal bleeding -- uses not approved by the FDA.

“My sense was that it was being used for any kind of thing where red blood cells were thought to be more beneficial,” Klein said. “I think physicians thought, ‘Well, it won’t hurt.’ ”

After reviewing published studies, Klein concluded that EPO was a valuable drug but that it also posed health risks, such as an increased chance of blood clots. She recommended that the drug be used only for approved conditions, such as anemia related to kidney disease or chemotherapy treatments, and a hospital committee agreed. The change shaved more than $300,000 off annual drug expenses.

James Leo, an intensive-care specialist and assistant chief of Memorial’s medical staff, said doctors recognized that “we don’t have infinite resources.” Saving on drugs such as EPO means the hospital isn’t forced to skimp on such drugs as Diprivan, a sedative that Klein and the medical staff deemed superior to a generic, Leo said.

When Klein considered Xopenex, she asked: Was Xopenex better than a generic? If so, were the benefits worth the added cost?

Xopenex is a derivative of albuterol, a medicine that relaxes the smooth muscles of the airway, which tighten during asthma attacks. By early last year, the drug had half the hospital market for acute asthma care and an even higher market share among asthma specialists. But Xopenex was four to eight times more costly than albuterol, the preferred drug for acute asthma at Memorial.

In February, Sepracor sales rep Owen, armed with clinical studies, arrived at Memorial for a meeting with Klein. A medical consultant, Jeffrey Sterling, formerly an emergency room physician in Wisconsin, accompanied Owen. As they gathered in Memorial’s medical library, they hoped to persuade Klein that Xopenex belonged on the hospital’s formulary.

Sterling said the research showed that Xopenex could save the hospital money by speeding patients’ recoveries so that they went home faster. “A one-day reduction in the length of [hospital] stay can save $800,” Sterling told Klein.

But Klein was skeptical. The study was a retrospective analysis of 231 patients at a small Virginia hospital, not the sort of large, head-to-head clinical trial Klein liked to see. The study noted that patients on either drug “demonstrated comparable improvement” and the differences in total hospital costs were “not significant” on a statistical basis.

Klein found the other studies equally unimpressive. The studies were small and used higher and more frequent doses of Xopenex than approved by the FDA. What’s more, the authors of each study said more research was needed to validate their conclusions, red flags in Klein’s view. “This drug is the same as albuterol but costs 10 times more,” she declared.

Sterling urged Klein to try Xopenex for six months, and Owen offered an incentive: a 10% discount if Memorial agreed to add Xopenex to its formulary. Not good enough, Klein said. Several weeks later, the hospital adopted a policy that called for automatic substitution of albuterol for Xopenex, unless a physician wrote “Do not substitute” on the prescription.