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.

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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.

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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.

Monday, April 24, 2017

Second biosimilar to Remicade approved by the FDA

April 21, the FDA approved intravenous Renflexis (infliximab-abda), a biosimilar to Remicade (infliximab). Biosimilars are to biologics as generics are to name brand chemical drugs. This is the second FDA-approved biosimilar for Remicade. Renflexis is indicated to treat adult and pediatric Crohn’s disease, ulcerative colitis, rheumatoid arthritis, psoriatic arthritis, and plaque psoriasis, according to the prescribing label.  

The similarity between Renflexis and the reference product has been demonstrated for indications, dosing, and administration. While the inactive ingredients vary between the 2 drugs, there are no clinically meaningful differences in safety and efficacy.  

Common side effects include upper respiratory infections, sinusitis, and pharyngitis, infusion-related reactions, headache, and abdominal pain, according to the FDA.   In April 2016, the FDA approved the first biosimilar of Remicade, Inflectra (infliximab-dyyb), for multiple indications across a range of autoimmune diseases. Inflectra was the second biosimilar to be approved in the United States and is also administered by intravenous infusion.  

Remicade was the first anti-tumor necrosis factor-alpha treatment approved in the United States to be approved in gastroenterology, rheumatology, and dermatology, according to Janssen. The safety and efficacy of the drug has been well established in clinical trials over the past few years, with more than 1.5 million patients treated worldwide.

- See more at: https://www.specialtypharmacytimes.com/news/fda-approves-second-remicade-biosimilar#sthash.EKplAYoq.dpuf

Thursday, April 20, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 163)

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, April 19, 2017

What's your PBM IQ? Take our quiz to find out.

While benefits managers and their advisors struggle with reducing high drug prices few truly understand (beyond a functional role) the complex system used to manage pharmacy benefits.


What's your PBM IQ? Take our quiz to find out.


Education is the most logical and effective foundation for achieving maximum value in pharmacy benefit management (PBM) services. Expand your PBM knowledge beyond a functional role and understand exactly how each domain works together within the pharmacy distribution and reimbursement system by earning the Certified Pharmacy Benefits Specialist (CPBS™) designation.

Friday, April 14, 2017

What to do About Rising Health Care Costs?

Speakers at the 2017 annual meeting of the Academy of Managed Care Pharmacy took on  rising health-care costs. In a presentation, Steven G. Avey, RPh, MS, FAMCP, Vice President of Specialty Clinical Programs and Michael Ciarametaro, MBA, Vice President of Research at the National Pharmaceutical Council, spoke on the issue and its effects on pharmacy.

A major problem for patients and the health-care system—how higher-than-anticipated drug prices and patients who are stuck with more of the cost burden means more nonadherence and waste. For nonspecialty drugs, patient copays represent 20% to 25% of the drug’s cost, but for specialty drugs, copays represent less than 2% of the medication’s total cost. Avey was surprised, however, to see that financial concerns only represented 2% of patient responses in a patient survey.

The number one thing payers can do, Avey said, is to avoid waste, by addressing poor adherence, paying for the wrong dosage, gaps in care or inappropriate dosing, and prescribing drugs that are not indicated for the patient’s genetic mutation status. To prevent waste, he stressed that it is important for the specialty pharmacy to contact the provider and ask why a patient is not receiving or taking the appropriate regimen.

Ciarametaro discussed affordability, which is different for each stakeholder in the health-care system (patients, payers, society, or purchaser). He also made the distinction between affordability, value, and budget impact. “I would argue that increasing drug spending is not necessarily a negative indicator. We still need to figure out how much we should spend on drugs,” he said.

PBMs only have limited tools to deal with costs and interact with the various stakeholders, and they must deal with and balance covered therapies, utilization management, patient out-of-pocket costs, and rebate contracting with regard to premiums. A single determination of value is not adequate and needs to be tailored to the population, the condition, and the region of care, he said.

Read more >>

Thursday, April 13, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 162)

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, April 10, 2017

New Solutions for Curbing Runaway Drug Costs

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The challenges associated with specialty pharmacy, biologics, and biosimilars require a whole new playbook, one with collaboration as the organizing principle. Payers and providers can work together in several areas to rein in the galloping drug spend:
  1. Clinical management. Given the rapid evolution of the pharmaceutical market, the question is no longer whether a treatment exists for a condition, but how effective it is. The pace of innovation and approvals puts a premium on keeping up with the incoming waves of new research, driving adherence to evidence-based protocols, and engaging with patients so they follow treatment as prescribed.
  2. Cost containment. When it comes to pharmaceutical cost and trend, misaligned incentives can get in the way of optimal solutions. Payers and providers must streamline their processes, especially as they pertain to medications, and wring out unnecessary expenditures whenever possible. Reducing costs can involve many levers, including standardizing therapies and negotiating prices accordingly, expanding the use of generics, exploring biosimilar alternatives, and optimizing use of the 340b program.
  3. Appropriate sites of care. When it comes to specialty drugs, the driver of total cost is not just in the unit pricing but also in how and where those drugs are administered. Costs can vary widely depending on whether a drug is administered in the physician office, at a specialty pharmacy, or at home. Working jointly to steer patients to the most effective sites will boost total effectiveness and help control costs.
None of this will be easy. Even if drug-cost legislation is enacted, there is no guarantee such controls will be effective absent providers and payers working together. But, if we can get it right, we can hold specialty pharmaceuticals to the same standards of value that are reshaping the rest of health care.

by Zachary Hafner

Thursday, April 6, 2017

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 161)

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, April 5, 2017

Prescription Drugs Account for 22% of Payer Premium Spending

Prescription drug costs consume the largest proportion of dollars spent on healthcare premiums, with 22 cents out of every dollar going to medication costs, says AHIP in a new data brief.

Eighty percent of every dollar is spent on medical expenses, and the remaining 20 percent was split between operating costs and net margins, showing that payers are adhering to the 80/20 rule instituted by the ACA.

“This is the latest evidence that shows prescription drug costs are out of control,” said Marilyn Tavenner, President and CEO of AHIP in an accompanying statement.

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“The vast majority of every dollar spent by consumers on insurance premiums is returned in direct medical services, including prescription drugs. That’s why we need real solutions that answer the President’s call to ‘bring down the artificially high price of drugs’ so that consumers can affordably get the care they need.”

The AHIP report used data from premiums contributed by patients under 65 who were continuously insured.

Outpatient services consumed 19.8 cents of every dollar while 15.8 cents were spent on covering inpatient services. Operating costs for payers were 17.8 cents per premium dollar.

In 2014, healthcare expenses totaled $104 billion. Prescription drug spending accounted for $28.9 billion and physician services  accounted for $28.8 billion. Outpatient and inpatient services, respectively, cost $26.1 and $20.7 billion.

Read more >>

Monday, April 3, 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)
  • 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.