Monday, July 24, 2017

Large group employers are currently struggling to afford specialty drugs

Click to Learn More
Specialty drugs have significantly changed the healthcare world and provide value to patients with previously incurable diseases. While these drugs improve treatment, they come with a large price tag, with specialty spending expected to reach $400 billion within the next 3 years.

Results from a large survey conducted by Anthem, Inc and C + R Research suggest that large group employers are currently struggling to afford specialty drugs and they are using unconnected tools and techniques to manage the trend.

Included were 303 large group employers surveyed between December 2015 and January 2016.

The authors discovered that the costs of new specialty drugs were the most concerning to employers, with 90% reporting that the costs were “somewhat challenging” or “very challenging,” according to the survey.

Thursday, July 20, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 176)

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.

Monday, July 17, 2017

This story should terrify the employee benefits and PBM industries

Table 1: Click to Enlarge
Over-the-top or OTT is a term used in broadcasting which refers to video and other media transmitted via the Internet, as a standalone product, without a cable or satellite operator controlling the distribution of content. Over-the-top content has lead to a new phenomenon often referred to as cord cutting.

Cord cutting is the practice of canceling or forgoing a cable television subscription or landline telephone connection in favor of an alternative Internet-based or wireless service. Cord cutting started picking up steam in 2016 when 1.9 million pay-TV customers abandoned the service, according to an estimate from SNL Kagan. 

But that's just the tip of the iceberg. The research group expects 10.8 million more customers to cut the cord over the next five years, with total subscribers falling to 82.3 million.

I know what you're thinking, "Tyrone what does OTT, cord cutting and all the other mumbo jumbo have to do with pharmacy benefits management? Stay with me it will all make sense shortly.

Thursday, July 13, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 175)

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, July 11, 2017

"Don't Miss" Webinar: How to Slash PBM Service Costs, up to 50%, Without Changing Vendors or Benefit Levels

How many businesses do you know want to cut their revenues in half? That's why traditional pharmacy benefit managers don't offer a fiduciary standard and instead opt for hidden cash flow opportunities such as rebate masking. Want to learn more?

Here is what some participants have said about the webinar.

"Thank you Tyrone. Nice job, good information." David Stoots, AVP

"Thank you! Awesome presentation." Mallory Nelson, PharmD

"Thank you Tyrone for this informative meeting." David Wachtel, VP

"...Great presentation! I had our two partners on the presentation as well. Very informative." Nolan Waterfall, Agent/Benefits Specialist

A snapshot of what you will learn during this 30 minute webinar:
  • Hidden cash flows in the PBM Industry such as formulary steering, rebate masking and differential pricing 
  • How to calculate cost of pharmacy benefit manager services or CPBMS
  • Specialty pharmacy cost-containment strategies
  • The financial impact of actual acquisition cost (AAC) vs. effective acquisition cost (EAC)
  • Recertification Credit Hours: 2
  • Why mail-order and preferred pharmacy networks may not be the great deal you were sold


Sincerely,
TransparentRx
Tyrone D. Squires, MBA  
3960 Howard Hughes Pkwy., Suite 500  
Las Vegas, NV 89169  
866-499-1940 Ext. 201


P.S.  Yes, it's recorded. I know you're busy ... so register now and we'll send you the link to the session recording as soon as it's ready.

Monday, July 10, 2017

Kaleo fires back at Express Scripts, claiming it’s owed at least $5.3M

Depending on which company you ask, one owes the other millions of dollars in a dispute between small drugmaker Kaleo Pharma and top pharmacy benefit manager Express Scripts.

After Express Scripts last month filed a suit alleging Kaleo owes $14.5 million in unpaid rebates, Kaleo has filed a countersuit saying it overpaid the PBM giant by $5.3 million.

Kaleo’s suit claims it overpaid due to “opaque and convoluted invoices” from Express Scripts.
Click to Learn More

Further, Kaleo says, it paid administrative fees to the PBM giant only to see patient access to its overdose med Evzio restricted. Both actions amount to violations of contractual obligations, the drugmaker argues.

In its filing, Kaleo takes a page out of the industry playbook to accuse PBMs of causing high prices by demanding rebates that pad their bottom lines. In the suit, Kaleo argues Express Scripts “extracts excessive fees and ‘rebates’ from pharmaceutical manufacturers like Kaleo to drive up its own profits while providing little, if anything, of value to the pharmaceutical supply chain.”

Thursday, July 6, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 174)

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.

Wednesday, July 5, 2017

Learned Helplessness: The Biggest Reason Non-Fiduciary PBMs Getaway with Overbilling

Learned helplessness is a state of mind created when a person or group of people rely on something so heavily that they stop thinking critically for themselves. TransparentRx recently participated in a PBM finalist presentation for a self-funded employer and during the open discussion, I posed a question to their staff pharmacist who was part of the decision-making team.

Table 1: Scores from a Very Basic
Pharmacy Benefits Quiz
Keep in mind this is a fairly large corporation with more than 5000 employees. I asked the pharmacist was there a reason why they didn't have a customized formulary? A representative from their third-party administrator (TPA) quickly chimed in and responded with, "we use the incumbent PBMs formulary but with edits."

I pushed back with, "does it make sense that you allow a non-fiduciary PBM to control your formulary when it stands to benefit from how it is ultimately managed?" It is at this point when the pharmacist made a startling comment. The response to my question was, "we don't have a customized formulary because we don't have a P&T committee."

Here is the problem with that statement. No third-party payer requires an in-house P&T committee in order to take advantage of a customized formulary. There are reputable companies who specialize in formulary build-out and subsequent management of the formulary who may also maintain a P&T committee. Because these companies don't stand to benefit from any rebate dollars, their primary focus is drug efficacy, safety and cost-effectiveness not what's in it for them.

The decision to include a drug on a drug formulary is a process that considers such factors as efficacy, safety and cost-effectiveness. In managed health care plans, formularies are generally developed and maintained by a pharmacy and therapeutics (P&T) committee. The job of a P&T committee is to identify those products that are most medically appropriate and cost-effective. Overall, the P&T committee is tasked with determining what drug treatments best serve interests of a given patient population.

Monday, July 3, 2017

Maryland Is First to Ban “Price Gouging” on Generic Drugs, but Other State and Federal Initiatives May Soon Follow

Click to Learn More
On May 26, 2017, Maryland became the first state to ban pharmaceutical “price gouging” on certain prescription drugs made available for sale in the state. Amidst overwhelming bipartisan support from both the House of Delegates (137-2-2) and the State Senate (38-7-2), Maryland Governor Larry Hogan allowed House Bill 631, also known as the “Prohibition Against Price Gouging for Essential Off-Patent or Generic Drugs” (“Act”), to become law without his signature.

The Act, which takes effect on October 1, 2017, has two key provisions: (1) a prohibition on price gouging on certain drugs and (2) the authorization of administrative and legal action by the Maryland Attorney General (“MD AG”) to enforce this new law.

The first key provision of the Act (to be codified in Maryland Code Health-General as  Section 2-802) prohibits manufacturers and wholesale distributors from engaging in “price gouging” when selling “essential off-patent or generic drug[s].” An “essential off-patent or generic drug” is any drug or drug-device combination that:
  • is not subject to exclusive marketing rights, 
  • is listed on the most recent World Health Organization Model List of Essential Medicines or indicated by the Maryland Secretary of Health and Mental Hygiene, 
  • is actively manufactured and marketed in the United States by fewer than three manufacturers, and 
  • is made available for sale in Maryland
According to the Act, “price gouging” is an “unconscionable increase in the price of a prescription drug.” An “unconscionable increase” is defined as an increase that is “excessive and not justified” by costs associated with production or access to the drug for public health promotion and results in prescribed consumers lacking “meaningful choice” due to personal necessity and inadequate competition in the market.

Thursday, June 29, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 173)

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.

Wednesday, June 28, 2017

What Effect Will Anthem-Express Scripts Fallout Have on Industry?

As the simmering feud between Anthem, Inc. and Express Scripts Holding Co. looks to finally have an end date, it’s anyone’s guess as to how the PBM industry will look when the dust settles. Evercore ISI, however, offered some potential outcomes during a May 24 webinar.

Click to Learn More
During the webinar, titled “The Anthem/Express Saga + The End Game,” analyst Ross Muken observed that “the PBM industry, as well as other parts of health care services, is going through some pretty massive change.” Over the next 24 to 36 months, “we think…you’re going to see a real reshaping of that health care service landscape.”

The dispute between Anthem and Express Scripts “really re-elevated this idea of…the future of the PBM and what does the function look like, what is the economic model?” Muken pointed to the 2007 CVS Corp. purchase of Caremark Rx, Inc. as the beginning of the shift on the PBM side, followed by Express Scripts, Inc.’s deal for Medco Health Solutions, Inc. in 2012 and then UnitedHealthcare’s acquisition of Catamaran Corp. three years later.

“The industry’s been changing for some time, but I do think we’re kind of building up to another series of events where we see other models formed that look quite different than how the industry focused in the past,” he asserted.

Thursday, June 22, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 172)

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.

Friday, June 16, 2017

How 'price-cutting' middlemen are making crucial drugs vastly more expensive

The expansions of the PBMs’ role and income illustrate the opportunities for profiteering in America’s fragmented healthcare system. PBMs originated as intermediaries to help health plans process claims, steer doctors and hospitals to the cheapest drug alternatives, and allow insurers to combine their customer bases for greater leverage in negotiations with drug manufacturers.

Table 1: Revenue Going from Drugmaker, kaleo,
to Express Scripts for a Single Drug
But over time they became just another special interest. In the 1990s, some of the biggest PBMs were acquired by drug companies, creating conflicts of interest that led to federal orders for divestment. The next phase was a wave of mergers and acquisitions within the field, followed by acquisitions by insurers and pharmacy companies — CVS acquired Caremark, then the biggest PBM, in 2007 and UnitedHealth merged CatamaranRx, then the fourth-largest PBM, into OptumRx in 2015.

The position of the three major PBMs at the center of the drug distribution system appears to be unassailable for now. Last year CalPERS, California’s public employee benefits system, awarded OptumRx a five-year, $4.9-billion contract to manage prescriptions for nearly 500,000 members and their families enrolled in non-HMO health plans. The only other finalists in the bidding were CVS Caremark and Express Scripts.

Thursday, June 15, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 171)

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.

Monday, June 12, 2017

In Washington, everyone is for lower drug prices, but only in theory

One issue where most Americans – 76 percent of them – find common ground is the high price of prescription drugs. President Donald Trump campaigned on the issue and since his inauguration repeatedly has promised to bring drug prices down. Most Democrats and many Republicans in Congress agree. So why has nothing happened?

In a word, money. Hundreds of millions of the dollars that Americans spend on drugs find their way into campaign funds and lobbying efforts on Capitol Hill. In the past decade, the pharmaceutical industry has spent more than $2.5 billion lobbying Congress. Opensecrets.org reports that in 2016, the industry spent $245 million on lobbyists; the next biggest industry sector, insurance, spent nearly $100 million less.

Despite this investment, the industry is getting nervous. Drug prices are expected to climb more than 12 percent this year. Americans already spend an average of $858 a year on prescription medication, more than twice the $400 average in the 19 other leading industrial nations.

The political pressure is such that a kind of four-corner civil war has broken out. Employers, hit hard by rising insurance costs for their employees, are in one corner. Manufacturers are in another. Insurance companies are in the third, and pharmaceutical benefits managers – the biggest of which is Express Scripts – are in the fourth. The latter three are all pointing figures at each other.

Click to Learn More
Express Scripts finds itself getting a lot of blame. Anthem, the nation’s second largest insurer, announced in April that it expects to drop Express Scripts as its pharmaceuticals benefits manager after 2019. Anthem claimed that it had been overcharged billions of dollars a year, a claim that Express Scripts strenuously denied – though it did offer Anthem a $3 billion concession if it would stick around.

Express Scripts is the only large pharmaceuticals benefits manager unaffiliated with an insurer or pharmacy. It makes its money as a middleman, negotiating prices with drug companies for insurance companies. Insurers now question how much of the savings are being passed on to them, their corporate clients and eventually to consumers.

Some members of Congress are wondering the same thing. These middlemen keep their deals secret, and bills have been introduced to force greater transparency.

Congress has also made efforts to allow state and federal health care programs to negotiate bulk price deals with manufacturers and to allow Americans to import drugs from other countries. Trump has said he supports both ideas.

But when Congress actually tried to move this legislation, it went nowhere. And Trump appointed industry-friendly regulators to key positions, even as he continued to tweet his outrage at high prices.

[Source]

Friday, June 9, 2017

"Don't Miss" Webinar: How to Slash PBM Service Costs, up to 50%, Without Changing Vendors or Benefit Levels

How many businesses do you know want to cut their revenues in half? That's why traditional pharmacy benefit managers don't offer a fiduciary standard and instead opt for hidden cash flow opportunities such as rebate masking. Want to learn more?

Here is what some participants have said about the webinar.

"Thank you Tyrone. Nice job, good information." David Stoots, AVP

"Thank you! Awesome presentation." Mallory Nelson, PharmD

"Thank you Tyrone for this informative meeting." David Wachtel, VP

"...Great presentation! I had our two partners on the presentation as well. Very informative." Nolan Waterfall, Agent/Benefits Specialist

A snapshot of what you will learn during this 30 minute webinar:
Recertification Credit Hours: 2
  • Hidden cash flows in the PBM Industry such as formulary steering, rebate masking and differential pricing 
  • How to calculate cost of pharmacy benefit manager services or CPBMS
  • Specialty pharmacy cost-containment strategies
  • The financial impact of actual acquisition cost (AAC) vs. effective acquisition cost (EAC)
  • Why mail-order and preferred pharmacy networks may not be the great deal you were sold


Sincerely,
TransparentRx
Tyrone D. Squires, MBA  
3960 Howard Hughes Pkwy., Suite 500  
Las Vegas, NV 89169  
866-499-1940 Ext. 201


P.S.  Yes, it's recorded. I know you're busy ... so register now and we'll send you the link to the session recording as soon as it's ready.

Thursday, June 8, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 170)

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.

Wednesday, June 7, 2017

Loaded Dice: How Non-Fiduciary PBMs are Winning the Cash and Rebate Game

Since 2011, I've been writing about non-fiduciary PBMs and how they're misleading clients with regard to the gargantuan amounts of money they earn from rebates or manufacturer revenue. And at almost every turn my advice has been ignored by health insurance brokers, benefits consultants and HR executives alike. Taken from a scene in the holiday classic, A Christmas Story, I double dog dare you now to ignore the new information I'm about to share with you.  

On May 16, 2017 Express Scripts filed a Complaint against drugmaker kaleo. The Complaint revolves around the opioid overdose treatment, Evzio, which kaleo manufactures. Express Scripts’ attorneys redacted the Complaint, but did not redact some information that Express Scripts has long regarded as proprietary thus not typically made available to the public.

According to Express Scripts, it entered into rebate agreements with kaleo for Evzio that required kaleo to pay Express Scripts not just for rebates but also administrative fees. The Complaint reveals that in four of its invoices to kaleo, Express Scripts billed kaleo $26,812 in total for “formulary rebates” and $363,160 in total for “administrative fees." That's right, administrative fees amounted to almost 15 times more than the formulary rebates! 

While plan sponsors believe they retain as much as 95% of rebate dollars (non-fiduciary PBM theoretically retains only the 5% difference), the truth is plan sponsors are retaining far less than 50% of rebates or earned manufacturer revenue! Remember, the primary point of rebates is to reduce net plan costs (table 1). 

Wednesday, May 31, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 169)

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, May 30, 2017

Behind the War Between Health Insurers and Pharmacy Benefit Managers

Pharmacy benefit managers and health insurance companies, in theory, should be close partners. But Anthem's protracted litigation with its PBM, Express Scripts, and its decision in April not to renew their contract when the current one expires at the end of 2019 shows how fraught the relationship can be.

Click to learn more
The job of PBMs is to negotiate lower prices from drug manufacturers and pass the savings on to insurers and patients, keeping a cut for themselves. Whether PBMs are passing on enough of the savings or keeping the biggest shares for themselves is a long-running bone of contention that has created suspicion between them and their insurance company partners and among patients and elected officials worried about high drug prices.

Insurers have struggled to respond to questions surrounding PBM practices. Anthem is trying litigation against Cigna. UnitedHealth runs its own PBM, OptumRX. Cigna once ran its own, Catamaran Corp., which it sold to UnitedHealth in 2015 for just over $12 billion. While Cigna no longer offers a standalone PBM business, it still does much of its own drug price negotiation in house.

Because of the uncertainty over where PBMs best fit into the drug distribution chain, the three managers that dominate the PBM business each have a different business model. Express Scripts is the only independent among the Big Three. Optum is part of an insurance company and CVS Health, the country's largest pharmacy chain, runs CVS Caremark.

The uncertainty has also led to continual consolidation of PBM ownership and speculation that insurers and retailers are trying to expand their presence in the business of negotiating drug prices. Express Scripts has been eyed as a possible takeover candidate after with the eventual loss of Anthem, its top customer. By some estimates, Express Scripts could fetch $60 billion from a buyer like Walgreens.

Thursday, May 25, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 168)

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.

Monday, May 22, 2017

Explained: Why your PBM isn't pass-through

Most plan sponsors believe they have a pass-through pricing arrangement with their PBM. So that there is no confusion in what I'm about to show you let's first define pass-through. 



Definition
Pass-through pricing - the cost of a drug after adjustments are made for any and all financial benefits the PBM might receive in the form of discounts, dispensing fees, rebates, credits, grants, etc. 

In other words, even when the PBM receives any discount or benefit after the claim has been adjudicated it should be reflected in the plan sponsor's plan cost. Sophisticated purchasers are taking into account transactions both before and after claim adjudication in order to determine actual ingredient costs. 

After watching this video I hope you begin to question the actual pricing arrangement set up with your PBM. Most likely, it is not pass-through or transparent but a traditional pricing agreement disguised as pass-through.

Thursday, May 18, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 167)

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, May 16, 2017

A Whistle-Blower Tells of Health Insurers Bilking Medicare

In the first interview since his allegations were made public, the whistle-blower, Benjamin Poehling of Bloomington, Minn., described in detail how his company and others like it — in his view — gamed the system: Finance directors like him monitored projects that UnitedHealth had designed to make patients look sicker than they were, by scouring patients’ health records electronically and finding ways to goose the diagnosis codes.
Click to learn more

The sicker the patient, the more UnitedHealth was paid by Medicare Advantage — and the bigger the bonuses people earned, including Mr. Poehling. In February, a federal judge unsealed the lawsuit that Mr. Poehling filed against UnitedHealth and 14 other companies involved in Medicare Advantage. “They’ve set up a perfect scheme here,” Mr. Poehling said in an interview. “It was rigged so there was no way they could lose.”

Mr. Poehling’s suit, filed under the False Claims Act, seeks to recover excess payments, and big penalties, for the Centers for Medicare and Medicaid Services. (Mr. Poehling would earn a percentage of any money recovered.) The amounts in question industrywide are mind-boggling: Some analysts estimate improper Medicare Advantage payments at $10 billion a year or more.

At the heart of the dispute: The government pays insurers extra to enroll people with more serious medical problems, to discourage them from cherry-picking healthy people for their Medicare Advantage plans. The higher payments are determined by a complicated risk scoring system, which has nothing to do with the treatments people get from their doctors; rather, it is all about diagnoses.

Diabetes, for example, can raise risk scores by varying amounts, depending on a patient’s complications. So UnitedHealth gave people with diabetes intensive scrutiny, to see if they had any other conditions that the diabetes might have caused.

As Mr. Poehling’s lawyer, Mary Inman, described it, the government would pay UnitedHealth $9,580 a year for enrolling a 76-year-old woman with diabetes and kidney failure, for instance, but if the company claimed that her diabetes had actually caused her kidney failure, the payment rose to $12,902 — an additional $3,322. Ms. Inman is with the law firm of Constantine Cannon in San Francisco.

Mr. Poehling said the data-mining projects that he had monitored could raise the government’s payments to UnitedHealth by nearly $3,000 per new diagnosis found. The company, he said, did not bother looking for conditions like high blood pressure, which, though dangerous, do not raise risk scores.

Read more >>

Thursday, May 11, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 166)

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.

Monday, May 8, 2017

Inside the ‘Scorpion Room’ Where Drug Price Secrets Are Guarded

The most carefully guarded secrets of the PBM industry involve tens of billions of dollars in rebates they collect from drug companies. Those payments help drugmakers secure favorable spots on medication menus that PBMs offer to millions of patients.
Click to learn more

On average, these and other discounts mean manufacturers lop 44 percent off list prices of brand-named drugs, according to Quintiles IMS Holdings Inc. Express Scripts and CVS say they pass along to clients about 90 cents out of every dollar in rebates.

Auditing and accounting experts interviewed by Bloomberg say that while that may be the case, it is often hard to confirm. Any restriction on audits “gives an advantage to the PBM,” said Craig Garthwaite, a health economist at Northwestern University’s Kellogg School of Management. “PBMs have no reason to want to shine a light on it.”

Mark Merritt, chief executive officer of the Pharmaceutical Care Management Association, a PBM trade group, said members are faithful servants of clients, which include employers, unions, and insurers. “The plan sponsor is in the driver’s seat,” he said. Clients “set the terms of every bit of the contract, including how it is audited.”

T's comment:  I interpret Mark's statement above as a shot across the bow of plan sponsors and their agents. He is suggesting that they [plan sponsors] are unsophisticated purchasers of PBM services and don't do a good job at driving disclosure of contract details important to them.. Plan sponsors need to understand not only what they want to achieve in their relationship with their PBM but also the competitive market and their ability to drive disclosure of details on services important to them.

Still, the terms often require a rigor associated with intelligence agencies. MedImpact Healthcare Systems Inc., for instance, doesn’t permit auditors “to copy, notate or otherwise capture the terms of any pharmaceutical manufacturer rebate contract” or to reveal them to anyone else, including clients, according to a nondisclosure agreement seen by Bloomberg News.

Read More >>

Friday, May 5, 2017

"Don't Miss" Webinar: How to Slash PBM Service Costs, up to 50%, Without Changing Vendors or Benefit Levels

How many businesses do you know want to cut their revenues in half? That's why traditional pharmacy benefit managers don't offer a fiduciary standard and instead opt for hidden cash flow opportunities such as rebate masking. Want to learn more?

Here is what some participants have said about the webinar.

"Thank you Tyrone. Nice job, good information." David Stoots, AVP

"Thank you! Awesome presentation." Mallory Nelson, PharmD

"Thank you Tyrone for this informative meeting." David Wachtel, VP

"...Great presentation! I had our two partners on the presentation as well. Very informative." Nolan Waterfall, Agent/Benefits Specialist

A snapshot of what you will learn during this 30 minute webinar:

Recertification Credit Hours: 2
  • Hidden cash flows in the PBM Industry such as formulary steering, rebate masking and differential pricing 
  • How to calculate cost of pharmacy benefit manager services or CPBMS
  • Specialty pharmacy cost-containment strategies
  • The financial impact of actual acquisition cost (AAC) vs. effective acquisition cost (EAC)
  • Why mail-order and preferred pharmacy networks may not be the great deal you were sold


Sincerely,
Tyrone D. Squires, MBA  
TransparentRx  
2850 W Horizon Ridge Pkwy., Suite 200  
Henderson, NV 89052  
866-499-1940 Ext. 201


P.S.  Yes, it's recorded.  I know you're busy ... so register now and we'll send you the link to the session recording as soon as it's ready.

Thursday, May 4, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 165)

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, May 2, 2017

California Advances PBM “Transparency” Law

Click to learn more
Last week, the California Assembly Committee on Business and Professions voted in favor of Assembly Bill 315.  AB 315 seeks to amend the California Business and Professions Code: (a) to require PBMs to obtain licensure from the Board of Pharmacy, (b) to state that PBMs have fiduciary duties to their “purchaser” clients (i.e., health plans), and (c) to require PBMs to disclose to their purchaser clients data regarding drug costs, rebates, and fees earned. The favorable vote moves the bill to the Committee on Appropriations.

California is not the only state that is considering adopting a PBM “transparency” law.  New York’s Governor Cuomo released a proposal that seeks to require PBMs to both register with the State and obtain a license (from the Department of Financial Services) as well as disclose financial incentives or benefits for promoting the use of certain drugs and financial arrangements that affect customers.

The Governor would also like to impose price controls on pharmaceutical manufacturers. New York has a long history of regulating PBMs through a handful  of systems because the services that PBMs offer often result in a PBM needing to hold a specific non-PBM license and to adopt a specific corporate structure.

In addition, Senator Wyden (D-Ore.) introduced the C-THRU Act to the Senate Finance Committee in March. The C-THRU Act seeks to make PBM rebate data publicly available, require the Secretary of HHS to adopt a minimum percentage of drug rebates that a PBM would need to pass through to certain of its health plan clients, and amend the definition of “negotiated prices” under the Medicare Part D Program.

Fiduciary Duties and Disclosures

The provisions of the bill that seek to make PBMs fiduciaries of their health plan clients and to impose reporting requirements are more burdensome and contentious than the proposed licensing requirement.

Friday, April 28, 2017

How do manufacturer rebates impact drug prices?

A new report conducted by Visante questions the rebates prescription drug manufacturers give to pharmacy benefit managers (PBMs), who negotiate rebates on behalf of employers, unions, health plans, and the federal government to reduce costs for their customers.

The authors analyzed SSR Health data on list price and gross sales to determine if manufacturer rebates impact prescription drug prices. Included in the study were gross and net sales for 176 self-administered, patented, branded drugs sold in the United States between 2011 and 2015.

Click to learn more
A statistical analysis revealed there was no correlation between price increases and rebates, according to the study. The authors found that drug prices have been both increasing and decreasing for prescription drugs, independent of rebates.  

Pharmaceutical manufacturers claimed the rebates have had a negative impact on drug costs. They also allege that PBM involvement is the reason prices have increased, while PBMs have blamed manufacturers for price increases. PBMs report they pass along 90% to 100% of manufacturer rebates to plans, which cut out-of-pocket costs for patients, according to a press release from the Pharmaceutical Care Management Association (PCMA), who commissioned the study.

If rebates were responsible for increasing drug costs, the correlation would be associated with an upward sloping line; however, the authors discovered that the correlation is relatively unchanging, according to the study.

The authors also found no link between rebates for branded drugs and drug cost increases in major categories from 2011 to 2016. Interestingly, during this period, there was substantial growth in several drug categories that have low rebates, including rheumatoid arthritis, multiple sclerosis, and anticonvulsants, according to the study.

Costs for multiple sclerosis drugs increased by nearly 20% from 2011 to 2015, while manufacturer rebates were less than 5%, according to the report. Additionally, the authors discovered that there were very low increases in categories with high rebates, including treatments for diabetes and asthma. During this time, costs for drugs that treat both asthma and COPD increased approximately 7%, but the rebates for the treatments increased to nearly 40%.

These findings suggest that drug cost increases are independent of rebates, which disproves claims made by manufacturers, according to the press release.

See more at: https://www.specialtypharmacytimes.com/news/how-do-manufacturer-rebates-impact-drug-prices#sthash.fsit1XQL.dpuf

Thursday, April 27, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 164)

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 25, 2017

Anthem, Express Scripts largest customer, will not renew its contract with the pharmacy benefit manager

Express Scripts, one of the largest pharmacy benefit managers in the drug industry, said on Monday that its largest customer will not renew its contract with the company. Shares of Express Scripts were down 15.45% as of 5:40 p.m. ET.

The customer, Anthem — owner of a variety of Blue Cross Blue Shield health insurance firms — is responsible for roughly 18% of Express Scripts' first quarter revenue, Express Scripts said in a release.

Click to learn more
As a health insurer, Anthem contracts with pharmacy benefit managers like Express Scripts to help negotiate lower prices for prescription drugs. Anthem accused Express Scripts of not passing along those savings, claiming Express Scripts overcharged the insurer by billions of dollars. The ending of the contract comes after Anthem last year sued Express Scripts over the issue.

"Although conversations have been ongoing, the Company was recently told by Anthem management that Anthem intends to move its business when the Company's current contract with Anthem expires on December 31, 2019, and that Anthem is not interested in continuing discussions regarding pricing concessions for 2017-2019 or in receiving the Company's proposed pricing for the period beyond 2019," said the release from Express Scripts.

Pharmacy benefit managers, or PBMs, including Express Scripts have come into the spotlight as the drug industry faces increased scrutiny over the price of prescription medicines. Drug companies, which bear the brunt of the heat over this, have been trying to convince people that they're not the problem. Instead, they've pointed the finger at the PBM's which they say are responsible for negotiating lower prices in the form of rebates.

Those rebates are meant to be passed on to patients, but a recent report from the drug companies' lobby found that that's not the case for 20% of prescriptions filled. Instead, the implication here is that the companies meant to pass along the rebates are keeping all of the money for themselves, in those cases. It's led to finger-pointing from both PBMs and drugmakers over where those rebates are going.