Friday, October 26, 2018

PepsiCo and ExxonMobil Team Up with Express Scripts to Create Pharmacy Benefit Design for Radical Transparency and Greater Performance Accountability

Hidden cash flows to non-fiduciary PBMs make up for artificially low administrative fees
It seems the NDPC has fixed this problem have you?

The National Drug Purchasing Coalition (NDPC), an employer-led coalition, is announcing the Total Performance Management solution for its members: a transformative new way for employers to provide pharmacy benefits that guarantees pricing transparency, alignment on outcomes, and accountability for performance.

Express Scripts worked closely with the NDPC to develop the innovative solution. NDPC member companies include PepsiCo, Inc.; ExxonMobil; Chevron Corporation; Sodexo; Yum! Brands, Inc.; Solvay USA Inc., and others.

The Total Performance Management offering is a novel pharmacy benefit model providing employers with more transparency to the true costs of prescription medications, alignment with Express Scripts on clinical, service, and financial performance goals for the plan, and accountability from Express Scripts for delivering on those goals.

The new model has two areas of focus:
  • Pay-for-performance for clinical and administrative plan management that improves patient and plan outcomes. Pay-for-performance means Express Scripts will take on more risk from clients, and be rewarded only when it delivers on agreed-to commitments.
  • Clients pay what Express Scripts pays for prescription drugs plus administrative fees ensuring clients have the transparency they want. By adding clarity to costs, our clients will have a more direct line of sight to the true cost of drugs net of all manufacturer discounts, rebates and incentives.
Tyrone's Commentary:

It's about time! However, the model isn't new so don't be fooled by the marketing spin. Nonetheless, it is the right thing to do and for that I must applaud both NDPC and Express Scripts. NDPC should be credited for demanding radical transparency and Express Scripts for delivering on plan sponsor requirements for more transparency. Three things the coalition must execute on now that radical transparency is seemingly in their grasp:
  1. Continuously monitor PBM performance which goes far beyond standard or ad hoc reports.
  2. Not allow Express Scripts to clawback lost revenues by overcharging for standard or ancillary services.
  3. Prevent Express Scripts from shifting costs to the medical pharmacy spend. I don't know if Express Scripts makes this deal if not for the merger with Cigna.

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