Wednesday, September 24, 2014

Reference Pricing: Pharmacy Invoice Cost (ACTUAL) for Top Selling Generic and Brand Prescription Drugs

Why is this document 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 healthcare reform. 

The costs shared below are what our pharmacy actually pays; not AWP, MAC or WAC.  The bottom line; payers must have access to "reference pricing." 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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 5% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means that your organization or client is likely overpaying. REPEAT these steps once per month.

-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving. 

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization.  In this case, the market check language is effectually meaningless.


Click here to register: "How To Slash the Cost of Your PBM Service, up to 50%, Without Changing Providers or Employee Benefit Levels." [Free Webinar]

Monday, September 22, 2014

States step in to regulate drug copays

Insurers may need to find new ways to control costs for specialty drugs, as more states add limits to cost-sharing and utilization continues to grow.

At least five states have enacted laws limiting copays and two — New York and Alaska — have expressly prohibited the use of tiered formularies for specialty medications. Another 11 states, including California, Illinois and Virginia, have legislation up for consideration that would limit copays.

That state governments are stepping in to place limits on cost-sharing for specialty drugs suggests that public angst over rising out-of-pocket costs is reaching an inflection point—monthly drug costs that were once affordable for patients with conditions like arthritis or multiple sclerosis are becoming harder to cover as part of a family budget. Consumers are seeking relief and lawmakers are turning to insurers to limit what they can charge their members.

“The trend towards increased reliance on specialty pharmaceuticals would not raise such an important concern if specialty drugs did not represent the most expensive segment of pharmaceuticals not only for insurers, but also for consumers through cost-sharing measures,” as Chad Brooker, a health policy analyst at Connecticut’s insurance exchange, Access Health, wrote in Health Law and Policy Brief last year.

By some estimates, specialty medications account for only one percent of all U.S. prescriptions but 25 percent of national drug spending. Not only is that set to grow to as much as 45 percent by 2017, but the assumption that prices for existing will fall over time may not always be the norm.

Teva Pharmaceuticals’ Copaxone, an injection-based multiple sclerosis drug, debuted in 1996 at a price of about $1,000 per month, by 2008 was priced at $2,000 per month, and nowadays is hovering around $5,000. To continue reading click here.

By:  Anthony Brino

Click here to register for: "How To Slash the Cost of Your PBM Service, up to 50%, Without Changing Providers or Employee Benefit Levels." [Free Webinar]

Thursday, September 18, 2014

Reference Pricing: Pharmacy Invoice Cost (ACTUAL) for Top Selling Generic and Brand Prescription Drugs

Why is this document 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 healthcare reform. 

The costs shared below are what our pharmacy actually pays; not AWP, MAC or WAC.  The bottom line; payers must have access to "reference pricing." 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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 5% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means that your organization or client is likely overpaying. REPEAT these steps once per month.

-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving. 

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization.  In this case, the market check language is effectually meaningless.


Click here to register: "How To Slash the Cost of Your PBM Service, up to 50%, Without Changing Providers or Employee Benefit Levels." [Free Webinar]

Monday, September 15, 2014

Drug prices soar as Big Pharma targets discount program

Until May 1999, the daytime speed limit in Montana was “reasonable and prudent.” Lead foots from around the country called it the home of the Montanabahn. That’s very much how prices are set by the big drug companies today – with similar results. Last year, commonly used generic medicines spiked 600 percent.

Meanwhile, the pharmaceutical industry is trying to derail a vital federal drug discount program called 340B that helps hospitals and community health centers supply lower-cost medicines and enhanced services to underserved patients.

The industry’s profiteering has gotten the attention of Congress, insurance companies and patients. Per-unit costs on specialty drugs rose 12 percent last year, according to Express Scripts. A database compiled by Bloomberg News shows the steady price increases of leading medications during the past seven years. An Epipen for allergic reactions rose 222 percent. A single dose of the drug Benicar for high blood pressure is up 164 percent. The high-cholesterol medicine Crestor jumped 103 percent per pill.

Against this backdrop, the drug industry has marshalled an army of lobbyists to go to war against poor, underserved Americans and the hospitals that treat them. Congress created the 340B drug discount program in 1992 with bipartisan support to allow health providers that serve large numbers of low-income patients to receive discounted medication from drug companies. In turn, these safety-net hospitals and clinics supply low-cost or no-cost medicines to the community. The program also helps fund diabetes, HIV/AIDS, cancer, dental and primary-care clinics.

Affordable medications are the key to improving health outcomes. When drug costs get too high, patients skip doses -- or pass up buying prescriptions altogether. According to a survey from the Commonwealth Fund, the United States leads the world in this respect, with one quarter of adults choosing to go without their medications. Their health often declines and many end up back in the emergency room, largely on the taxpayer’s dime.

Everyone agrees, even John Castellani, CEO of the industry trade association PhRMA. In a recent interview with Kaiser Health News, he said patients’ “out-of-pocket expenses are potentially so high that we have to be concerned about whether or not people will be able to afford to continue to get their medicines.”

In fairness, Castellani was complaining about high prescription deductibles in some plans offered under the Affordable Care Act. But what about the devastating impact of his own industry’s overpriced medications? Here, Big Pharma ducks responsibility and conveniently chooses profits over people.

Click here to register: "How To Slash the Cost of Your PBM Service, up to 50%, Without Changing Providers or Employee Benefit Levels." [Free Webinar]

Friday, September 12, 2014

Reference Pricing: Pharmacy Invoice Cost (ACTUAL) for Top Selling Generic and Brand Prescription Drugs

Why is this document 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 healthcare reform. 

The costs shared below are what our pharmacy actually pays; not AWP, MAC or WAC.  The bottom line; payers must have access to "reference pricing." 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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 5% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means that your organization or client is likely overpaying. REPEAT these steps once per month.

-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving. 

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization.  In this case, the market check language is effectually meaningless.


Click here to register: "How To Slash the Cost of Your PBM Service, up to 50%, Without Changing Providers or Employee Benefit Levels." [Free Webinar]

Monday, September 8, 2014

10 Things To Know About Specialty Drug Spending

Over 25 percent of prescription drug spending in the U.S. was attributable to specialty drug costs in 2013, and specialty drug spending is expected to grow by more than 60 percent by the end of 2015, according to a recent report by HealthPocket.

Here are 10 things to know about specialty drug pricing.

1. Nearly 70 percent of Food and Drug Administration approvals in 2013 were for specialty drugs, according to PwC's Health Institute's annual medical cost trend report for 2015.

2. Specialty drug spending is projected to reach $192.2 billion by 2016, a 121 percent increase from the $87.1 billion in 2012, according to PwC's Health Institute's annual medical cost trend report for 2015.

3. In a survey by the Morning Consult, 60 percent of respondents said they were concerned with the high price of specialty drugs and afraid they would not be able to afford them in the future.

4. The high price tag of some specialty drugs, including Gilead Sciences' hepatitis C drug Sovaldi, have received Congressional scrutiny.

5. In July, Sens. Ron Wyden (D-Ore.) and Chuck Grassley (R-Iowa) sent a letter to Gilead seeking an explanation for Sovaldi's $1,000 a pill price.

6. The vast majority of Americans (82 percent) believe charging $1,000 a pill is "unacceptable," according to the Morning Consult survey.

7. When the four metal categories — bronze, silver, gold, and platinum — were compared, out-of-pocket specialty drug costs for platinum plans were the lowest, according to the HealthPocket report.

8. The out-of-pocket cost for specialty drugs for those with platinum plans was 64 percent lower than those with gold plans, 74 percent lower than those with silver plans, and 78 percent lower than those with bronze plans, according to the HealthPocket report.

9. The average annual out-of-pocket cost for a 30-year-old bronze plan enrollee taking specialty drugs is $9,568.78, while the average cost for a platinum enrollee of the same age is $6,670.70, according to the HealthPocket report.

10. Bronze plans do not always lead to the most out-of-pocket costs for specialty drugs, as there are some bronze plans with lower annual out-of-pocket costs than some silver and gold plans. For example, a 50-year-old bronze plan enrollee taking specialty drugs has average out-of-pocket costs totaling $11,396.44, while the average silver plan enrollee of the same age spends an average of $11,583.55, according to the HealthPocket report.

Thursday, September 4, 2014

Reference Pricing: Pharmacy Invoice Cost (ACTUAL) for Top Selling Generic and Brand Prescription Drugs

Why is this document 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 healthcare reform. 

The costs shared below are what our pharmacy actually pays; not AWP, MAC or WAC.  The bottom line; payers must have access to "reference pricing." 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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 5% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means that your organization or client is likely overpaying. REPEAT these steps once per month.

-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving. 

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization.  In this case, the market check language is effectually meaningless.


[Complimentary Webinar] click here to register: "How To Slash the Cost of Your PBM Service, up to 50%, Without Changing Providers or Employee Benefit Levels."