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).