Monday, May 22, 2017

Explained: Why your PBM isn't pass-through

Most plan sponsors believe they have a pass-through pricing arrangement with their PBM. So that there is no confusion in what I'm about to show you let's first define pass-through. 

Pass-through pricing - the cost of a drug after adjustments are made for any and all financial benefits the PBM might receive in the form of discounts, dispensing fees, rebates, credits, grants, etc. 

In other words, even when the PBM receives any discount or benefit after the claim has been adjudicated it should be reflected in the plan sponsor's plan cost. Sophisticated purchasers are taking into account transactions both before and after claim adjudication in order to determine actual ingredient costs. 

After watching this video I hope you begin to question the actual pricing arrangement set up with your PBM. Most likely, it is not pass-through or transparent but a traditional pricing agreement disguised as pass-through.

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