Friday, December 6, 2019

Generic Drug Pipeline Update

Courtesy of our friends over at Ventegra.

References for Pipeline

 Manufacturer websites/press releases 
• AMCP 2019 annual meeting presentation 
• AMCP website 
• Asembia Specialty Pharmacy Summit 2019 
• FiercePharma/ 
   - Subscription required 
   - Pharmacist’s Letter

Wednesday, December 4, 2019

In 2020, Optum To Provide More Than 50% Of UnitedHealth’s Total Company Earnings

The rapid growth of UnitedHealth Group’s Optum health care services unit will contribute more than 50% of the company’s earnings in 2020, executives disclosed Tuesday.

Tyrone's Commentary:

I've noticed a growing trend whereby non-fiduciary PBMs are offering $0 admin and/or $0 dispensing fees in their proposals. Additionally, these non-fiduciary PBMs are proposing a pass-through or transparent pricing model as requested by the broker or plan sponsor. How can a PBM be transparent or pass-through if there is no admin fee? How are they making money otherwise? Any reasonable definition of transparency requires that a plan sponsor know how much revenue a PBM is generating and the source of those revenues on a client specific basis.

UnitedHealth chief executive David Wichmann vowed at the start of the company’s annual investor day to continue the momentum and growth of the nation’s largest health insurer at a cumulative annual earnings growth rate of 13% to 16%. This means that the Optum unit will contribute more than 50% of total company earnings.

Optum will generate $112 billion in revenues in 2020, Wichmann said. UnitedHealth Group’s revenues will surpass $260 billion next year, the company has said. “With more than 50% of our earnings coming from Optum in 2020, it’s a good time to reflect on the accelerating impact diversification has had on the capacities of UnitedHealth Group, now a broad-based, health care company still in its formative stages of development,” Wichmann told the investor day attendees.

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Friday, November 29, 2019

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 295)

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, November 27, 2019

OptumRx overcharged Ohio BWC by millions, Attorney General says

OptumRx caused millions of dollars worth of excessive costs for prescription drugs used through the Ohio Bureau of Workers’ Compensation, claims a new court filing by Ohio Attorney General Dave Yost's. After months of mediation with the PBM failed to resolve the legal dispute, Yost's office filed an updated complaint Friday saying OptumRx "overcharged millions" by levying excessive costs for drugs prescribed through the Ohio Bureau of Workers’ Compensation. 

OptumRx breached its contract by not living up to its obligation to give the state the best available rate, Yost's office says. The lawsuit contends that OptumRx charged Ohio more so it could offer other clients lower costs. 

Tyrone's Commentary:

Dumb money is what I call it when a plan sponsor enters into an agreement with a less than radically transparent pharmacy benefit manager. Average purchasers of PBM services are often shoved under the “dumb money” umbrella. If you fall into this category, try not to take offense. The terms “dumb money” and “smart money” were coined by the financial media, not to insult anyone’s intelligence, but to describe different groups of plan sponsors.

Dumb money allows for overpayments to PBMs which smart money does not permit. Smart money covers the overhead. Dumb money pays for bloated payrolls, corporate jets and most important inefficient PBM business operations. How can dumb money become smart money? You start with education as the state of Ohio has done.  

During an RFP or other competitive bidding process, a sophisticated purchaser of PBM services considers contract nomenclature as the most important factor in evaluating PBM proposals. Dumb money is looking for the best optics (i.e. proposed savings, highest AWP discounts, or biggest rebate etc..). If you don't have a contract scorecard now is the time to start. Be careful though with whom you allow to score PBM contract language. You could make this PBM sales executive a very happy camper.

Andrew Krejci, spokesman for OptumRx, said in a statement: "We are honored to have delivered access to more affordable prescription medications for the Ohio Bureau of Workers’ Compensation and Ohio taxpayers. We believe these allegations are without merit, and will vigorously defend ourselves." Optum's contract with the bureau was not renewed when it expired on October 31, 2018.

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