Wednesday, October 28, 2020

[Webinar] The Untold Truth: How Pharmacy Benefit Managers Make Money

The reason so many PBMs are reluctant to offer radical transparency is in doing so their revenues would be cut in half! How many businesses do you know will voluntarily cut their revenues in half? Instead, non-fiduciary PBMs seek out arbitrage opportunities to foster top-line 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 flow streams in the PBM Industry
  • Basic to intermediate level PBM terminologies
  • Examples of drugs that you might be covering that are costing you
  • The #1 metric to measure when evaluating PBM proposals
  • Strategies to significantly reduce costs and improve member health

Sincerely,
TransparentRx
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.

Tuesday, October 27, 2020

Tuesday Tip of the Week: Factor Benefit Design into your PBM Scorecard (Rerun)

Factor in the actual benefit design, not questions about benefit design, into your PBM scorecard. At a minimum, it should be the same form the PBM uses to set your group up in the back-office. Sometimes even the PBM's benefit design form excludes important details, such as DAW codes, so be careful. If important information is missing get it included especially when that information contributes to your cost. 

Click to Learn More

Never once during hundreds of RFPs has any consultant or broker ever asked us for a signature ready benefit design as part of our response. I've not taken a poll so I don't know the reason. Maybe it is because some believe benefit design doesn't have a big role in determining cost. If that is the case, nothing could be further from the truth. I would be asking for a benefit design to be submitted as if we were going live with it.

Don't put 50 questions in a RFP around benefit design where important details get lost in translation. Instead, get a copy of a signature ready benefit design and score it as part of the PBMs proposal. Here are some weights I recommend applying to each scorecard:

Contract - 40%

Benefit Design - 25%

References - 10%

Questionnaire - 5%

Reverse Auction - 15% 

Finalist Presentation - 5%

In pharmacy cost drivers, price is 1A and benefit design is 1B. Aside from copayments and deductibles (cost sharing) most plan sponsors know little else about their benefit design and have left it up to the PBM to decide. When the PBM is non-fiduciary that could lead to significant overpayments.

Monday, October 26, 2020

Bling-Loving Postal Boss Asked to Step Down Over $12,000 Worth of Cartier Watches

It was only a matter of time before bling-loving Australia Post boss Christine Holgate got some unwanted attention. The CEO, who raked in $2.5 million from the government-owned business last year, was ordered to stand down after admitting she gave $12,000 worth of Cartier watches to her staff as thanks for securing a $66 million deal in 2018.

Wasteful Pharmacy Spend
Don't gift non-fiduciary PBMs Cartier watches

Ms. Holgate confirmed four of her highly-paid executives were handed Cartier watches during a cross-examination with the Senate. They were 'awards' for securing a deal with the Commonwealth Bank, Westpac and NAB, which paid a combined $66 million to Australia Post so its customers could access banking services at its stores across the country. 

Tyrone's Commentary:

What does this have to do with pharmacy benefits management? It is so easy to waste money with pharmacy spend that many CFOs and HR executives are gifting the equivalent of a Cartier watch to non-fiduciary PBMs on a weekly basis. Larger businesses, $10 million or more annual pharmacy spend, are gifting PBMs the equivalent of one Cartier watch per day! As fiduciaries, employers have a duty to be good stewards of how company dollars are used to fund care for employees and dependents. A good steward of the pharmacy benefit understands 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. Assessing transparency is more effectively done by a trained eye with personal knowledge of the purchaser’s benefit and disclosure goals. Here is a thought. What happens when executive promotions and compensation are tied to pharmacy benefit performance?

'They got watches,' Ms. Holgate said as she was questioned by the Senate. They were a Cartier watch of about a value of $3,000 each. She was asked, "Do you remember the brand, the type? Was it a Cartier Tank? What was it?' 'The Senate said the gifts were disgraceful and appalling.

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Friday, October 23, 2020

Dean Foods Carves Out Specialty Pharmacy and Saves Big

In 2019, Dean Foods, which this year was acquired by Dairy Farmers of America, spent $52,900 on 4 biosimilars, well short of the $227,500 the company would have spent on 3 originator products. The carve-out was arranged through Vivio and enabled Dean Foods to sequester specialty drug costs and management so that savings could be achieved outside of the structure imposed by a pharmacy benefit manager (PBM) plan.

PBM Carve-Out Diagram
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Switching employees on expensive originators to biosimilars, generic drugs, and lower-cost therapeutic alternatives while also discontinuing experimental drugs generated $1.7 million in clinical savings (avoided therapy costs) for the former dairy company, the report said. But given all anticipated vs actual costs from the carve-out program, Dean Foods saved $4.35 million in 2019, according to the report. This includes supply chain savings.

Tyrone's Commentary:

There are several benefits to a carve-out PBM arrangement including options to carve out specialty pharmacy. The truth is if left to their own devices specialty pharmacies owned by PBMs, or independent, want to get the product out of the door and into the mail. When left unchecked, there is little chance it will pass up on filling a $15,000 prescription knowing full well a less costly therapeutic alternative is as effective. It is up to the plan sponsor to remove any conflict of interest.

Benefits of a carve-in PBM arrangement such as population health management can make life easier. When all the data is under one roof it goes without saying life is easier compared to bringing in a third-party. However, plan sponsors have to be careful though what you give up in exchange for "easier." With carve-in arrangements plan sponsors can lose flexibilty and control of benefit design, formulary management and even forgo rebate dollars. Of course, no carved-in PBM will tell you this is going to happen just read between the lines.

Vivio said in the report it achieves savings by seeking out lowest-cost drug suppliers, passing 100% of rebates to its customers, and taking advantage of manufacturer discounts. It said that “typically, 15% of prescribed specialty drugs have lower-cost therapeutic equivalents alternatives such as biosimilars, generics, and less-costly branded drugs.”

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