Thursday, January 16, 2020

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 301)

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, January 14, 2020

U.S. Supreme Court to hear case on States’ Right to Regulate Pharmacy Benefit Managers (PBM)

The U.S. Supreme Court will hear a case brought by Arkansas Attorney General Leslie Rutledge against the pharmacy benefit management (PBM) industry, according to a statement issued Friday (Jan. 10) from Rutledge’s office.

The legal battle began with Act 900, passed by the Arkansas Legislature in 2015, which sought to require pharmacy benefit managers (PBMs) to reimburse pharmacies at or above their wholesale costs paid for generic drugs and prevents them from paying their own drugstores more than they pay others.

Tyrone's Commentary:

I owned a mail-order pharmacy and cashed out in 2010 but not before some tough lessons. One of those lessons, the large PBMs wanted less competition and had the knowledge and power to make that happen. Needless to say, this case resonates with me. I had two choices; die slowly or create a business model which I could compete with non-fiduciary PBMs on my terms not theirs. I chose the latter.

On the front end, non-fiduciary PBMs woo plan sponsors with pricing guarantees that appear "real." The back-end is a different story. DIR fees allow non-fiduciary PBMs to earn "hidden cash flow" by clawing back a percentage of reimbursements long after the claim has been adjudicated, for example. I hear far too often from HR Business Partners, CFOs, employee benefits brokers and consultants, "what do I care about DIR Fees as long as my guarantees are being met." It's myopic to think this way.

These hidden cash flows (reimbursing below acquisition cost) put pharmacies out of business. Not coincidentally, this leads to less competition for PBMs who own chain stores and large mail-order pharmacy operations. You guessed it less competition means you will pay more; now or later.

In a 2017 ruling that otherwise dismissed a lawsuit by the Pharmaceutical Care Management Association, which represents PBMs, U.S. District Judge Brian Miller said Act 900 was preempted in health plans regulated by the federal Employee Retirement Income Security Act (ERISA). U.S. Solicitor General Noel Francisco recommended Dec. 5 that the Arkansas case – Rutledge v. Pharmaceutical Care Management Association, No.18-540 – be heard by the U.S. Supreme Court.

Rutledge has argued that more than 16% of rural pharmacies closed in recent years due to declining PBM payments on generic prescriptions causing Arkansans to be unable to receive necessary medications. Three PBMs dominate the market – CVS Caremark, which is part of the corporation that operates the CVS drugstore chain, OptumRx and Express Scripts.
Continue Reading >>

Saturday, January 11, 2020

PBM 101 Webinar: How to Slash PBM Service Fees, up to 50%, Without Changing Vendors or Member Benefit Levels

How many businesses do you know will voluntarily cut their revenues in half? This is the reason non-fiduciary pharmacy benefit managers are reluctant to offer radical transparency. Instead, they opt for hidden cash flow opportunities to foster growth. 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 the cost of pharmacy benefit manager services
  • Specialty pharmacy cost-containment strategies
  • The financial impact of actual acquisition cost (AAC) vs. maximum allowable cost (MAC)
  • Why mail-order and preferred pharmacy networks may not be the great deal you were sold

Tyrone D. Squires, MBA  
10845 Griffith Peak Drive, Suite 200  
Las Vegas, NV 89135  
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.

Friday, January 10, 2020

Drawing a Line in the Sand California Looks to Contract Directly with Generic Drug Manufacturers

Figure 1
California would become the first state to contract with generic drug manufacturers to make prescription medicines to sell to residents, under a plan proposed by Gov. Gavin Newsom that aims to control rising health costs.

Mr. Newsom, a Democrat, said it will be part of his new budget proposal. Few details were provided about how the plan would work, what kind of drugs it would produce, how much it would cost to enact or how much it might save the state—things that are likely to be studied in more depth as debate over the state budget begins in the coming months.

Tyrone's Commentary:

I've long been a proponent of sophisticated plan sponsors taking a more active approach in managing their pharmacy benefit. So it goes without saying, "I like this governor." The status quo does not sit well with him so he is constantly looking to make processes more efficient or cost-effective. For plan sponsors, this could mean carving out services usually controlled by the PBM (see figure 1).

But with a population of 40 million—nearly 1 in 3 of whom use the state’s Medicaid program for low-income people—Mr. Newsom is betting that California’s purchasing power can help it offer drugs at a lower price than they are offered commercially.

Continue Reading >>