Wednesday, April 25, 2018

The role of PBMs in the drug supply chain — and why it matters to employers

Most employers don’t understand how PBMs make money and what role they play in the drug supply chain. The fact is these “middlemen” can drive up pharmacy costs. Historically, PBMs have two main goals:

1. Negotiate drug prices in an effort to keep costs low for consumers and employers.

2. Favor the most effective drug where there are similar drugs treating the same condition.

But PBMs also have a third goal: to make money for their owners and shareholders. Arguably this goal overrides the other two. Many industry watchers — and members of the public — are wondering if PBMs provide much value other than skimming as much profit from the drug supply chain as possible.

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Thursday, April 19, 2018

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 215)

This document is updated weekly, but why is it important? Healthcare marketers are aggressively pursuing new revenue streams to augment lower reimbursements provided under PPACA. Prescription drugs, particularly specialty, are key drivers in the growth strategies of PBMs, TPAs and MCOs pursuant to health care reform.

The costs shared here are what the pharmacy actually pays; not AWP, MAC or WAC. The bottom line; payers must have access to actual acquisition costs or AAC. Apply this knowledge to hold PBMs accountable and lower plan expenditures for stakeholders.



How to Determine if Your Company [or Client] is Overpaying

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

Tuesday, April 17, 2018

Amazon About-Face On Drug Sales Not Surprising To Walgreens And CVS

News Amazon is backing away from an effort to sell drugs to hospitals doesn't come as a surprise to retail drugstore chains Walgreens Boots Alliance, CVS Health and distributors in the specialty pharmacy business.

CNBC reported Monday that the online retailer Amazon has “shelved a plan to sell drugs to hospitals” citing “complexities around selling in bulk to large hospitals and building a logistics network to handle pharma delivery.”

Tyrone's Commentary:

Amazon is bailing on selling prescription drugs due to complexities associated with the drug supply chain? I don't know if it's true, but the statement illustrates just how complex the U.S. pharmacy reimbursement and distribution system is for even the smartest companies. Amazon bails and you think you can manage pharmacy benefits efficiently by reading a blog post or watching a webinar or two? Don't kid yourself. 

But it’s not like CVS and Walgreens didn’t warn of the complexities of getting into the business of selling and processing prescription drugs, particularly specialty prescriptions shipped to hospitals and clinics.  “There are many barriers to entry when you’re looking at pharmacy,” CVS CEO Larry Merlo said in August of last year during a call with analysts.

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Monday, April 16, 2018

The Price of Non-Optimized Medication Therapy

Source:  Impact of medication adherence on
hospitalization risk and healthcare cost
Although rising prescription drug prices cause a financial burden, the cost often extends beyond the number that patients see on their bill, according to a recent analysis published in the Annals of Pharmacotherapy. When medication regimens are not appropriately optimized for the patient, the consequences can carry a hefty price tag.

According to the analysis, death and illness resulting from non-optimized medication therapy costs $528.4 billion annually, which is equivalent to 16% of total US health care expenditures in 2016. As the most readily available access point for most patients, pharmacists can play a key role in ensuring that medication therapies are optimized to help produce the best outcomes at the lowest cost.

Tyrone's Commentary:

No plan design is complete without a comprehensive medication adherence program. Key components of an employer plan to improve medication adherence include: 
  • Employee coaching and support teams 
  • Financial incentives to encourage medication adherence
  • Ensuring that the most appropriate medications are prescribed
  • Prescription management to avoid interactions and other dangers
The study was led by Jonathan Watanabe, PharmD, PhD, associate professor of clinical pharmacy in the Skaggs School of Pharmacy, with Jan Hirsch, PhD, professor of clinical pharmacy and chair of the Division of Clinical Pharmacy at Skaggs School of Pharmacy, and Terry McInnis, MD, of Laboratory Corporation of America and the Get the Medications Right Institute.

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