Wednesday, September 18, 2019

Special Report: Reducing Wasteful Spending in Employers’ Pharmacy Benefit Plans

A non-fiduciary PBM would prefer that its clients not know just how much revenue or hidden cash flow it generates as a service fee. There are three primary methods in which a non-fiduciary PBM will look to drive revenue. The three primary methods are: spreads, rebates and benefit design. Spreads and rebates are much talked about benefit design not so much at least not where overpayments are concerned.

Usually, the benefits design conversation is about keeping employees happy or limiting disruption to their benefits experience. It's an appropriate conversation to have but certainly not the only one to be had around benefit design. If an employer closes off spread and rebate overpayments to a non-fiduciary PBM, sure enough the non-fiduciary PBM will look to make up for that lost revenue in the benefit design.

The Pacific Business Group on Health commissioned an excellent report, "Reducing Wasteful Spending in Employers’ Pharmacy Benefit Plans" which you must read. Here are a couple of recommendations from that report.
Source:  Pacific Business Group on Health

Image result for whack a mole
Non-fiduciary PBMs are good at this game!
I had this discussion with a seasoned benefits consultant who couldn't believe that this actually happens. That a PBM would poorly design a pharmacy benefit plan so to protect its revenue. He was surprised to learn that a PBM would take this route to protect its margins. I was taken aback that he was clueless to this ballooning tactic.

One last word on #10 above. If your finance or accounting teams have not been properly trained, preferably by someone with PBM insider experience, then they too will leave money on the table. It's a game of whack-a-mole with big stakes. Without training from a PBM insider, a non-fiduciary PBM will always beat you at that game.

Download Full Report >>

Tuesday, September 17, 2019

Oncologists Getting 6% of Drug Price Is 'Financial Conflict'

"No one is immune from monetary temptation. We have a system that rewards oncologists and their chemotherapy offices with more money for giving more expensive chemo. This has to change," said Vincent Rajkumar, MD, a professor of medicine and a hematologist/oncologist at the Mayo Clinic, Rochester, Minnesota. "Last week a myeloma patient told me his oncologist had switched him from Zoledronic acid (ZA) to a 'new, easier' option: denosumab. A recent @ASCO guideline in @JCO_ASCO said both were options. ZA is ~$70; Denosumab is ~$2000. The oncologist gets 6% of the drug he/she chooses."

Distorted Model

Drugs that are administered by infusion or injection in physician offices and in hospital outpatient departments are covered by Medicare Part B, as are certain products furnished by suppliers. Under the current system, oncology practices must buy the chemotherapy drugs up front. The cost for drugs may vary; in the United States, Medicare reimburses costs on the basis of the average sales price (ASP) plus 6%. The 6% is meant to cover any variation in the acquisition price, as well as overhead.

Image result for asp pricing model
Source:  Academy of Managed Care Pharmacy
Tyrone's Commentary:

A big chunk of overpayments made by self-funded employers to PBMs can be eliminated by uncovering the most important objective of the PBM. Is their primary objective to make money or to help clients? Yes, you can still make money and put clients first. There are PBMs telling clients that therapeutic substitution is a bad thing. In other words, PBMs who engage in therapeutic substitution programs do it only to drive rebates for themselves. The truth is some do and some don't. More important, is the PBM's primary objective this ultimately drives financial and sometimes clinical decisions. Avoid the "Happy Ears" syndrome and trust your PBM training and education not what the PBM tells you. This story highlights why therapeutic substitution programs are a valuable drug utilization management tool when used appropriately. It is applicable to both the pharmacy and medical drug spend categories. By the way, how much time are you allocating to monitoring the medical drug spend outside of reviewing standard reports? If the answer is little to none you might want to take a serious look. You will likely discover gross overpayments.

As Rajkumar noted in his Twitter thread, that means that providers will be paid more money for prescribing a more costly medication, even if a less costly and equally effective alternative is available — such as the case he highlighted with the myeloma patient being prescribed denosumab (Xgeva, Amgen) in place of zoledronic acid.

Continue Reading >>

Thursday, September 12, 2019

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 284)

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.

Monday, September 9, 2019

Site of Care Management: Administering specialty drugs outside hospitals could save $4 billion

Image result for drug costs by site of care
Source: www.slideshare.net
Administering pricey specialty drugs in doctors' offices and patients' homes instead of hospitals could reduce drug costs by $4 billion a year for insurance plans, according to a study from insurance giant UnitedHealth Group.

The study released Monday comes as specialty drugs for chronic conditions such as cancer have eaten up a large portion of drug spending costs. UnitedHealth said that changing the location of administering specialty drugs to outside the hospital could save $16,000 to $37,000 in savings per patient.

“Compared to independent physician offices, hospitals charge more for specialty drugs and their administration, whether treatment takes place in a hospital facility or in a hospital-owned physician practice,” the study said.

Download Full Report >>

Thursday, September 5, 2019

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 283)

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, September 4, 2019

Opinion Editorial: A reckoning is coming for non-fiduciary PBMs

Earlier this month, a Medicare recipient with drug coverage filled a prescription at a Concord branch of a major pharmacy chain. The pharmacist, one of many with heart, soul and concern for customers, ran the numbers and pointed out that it would be $80 cheaper if the patient paid for the drug out-of-pocket instead of using her insurance co-pay.

Until recently, pharmacists were banned from alerting customers to such savings by contracts with pharmacy benefit management companies. Untold millions were secretly siphoned away from unwitting patients by the legal, but deceitful, tactic.

A bill passed by Congress last year freed pharmacies from PBM gag orders.“Multiple reports have exposed how this egregious practice has harmed consumers, such as one customer who used his insurance to pay $129 for a drug when he could have paid $18 out of pocket,” Sen. Susan Collins of Maine, a sponsor of the bill, told colleagues.

“Clawbacks” earned by overcharging patients are just one of the sins of an industry that evolved in the 1990s as middlemen between pharmaceutical manufacturers, insurers, employers and plan beneficiaries. They have become, it seems, akin to lampreys, the parasitic eel-like fish with rasping mouths that attach to their piscine victims and suck their blood, weakening but not killing them.

Tyrone's Commentary:

A non-fiduciary PBM salesperson,
click here to wipe that smile off his face.
There are a lot of bad actors in the PBM industry and I mean a lot. Much can be done by non-fiduciary PBMs to improve the level of transparency provided to purchasers of PBM services. For instance, most PBMs consider themselves transparent when they disclose, in contracts, their cash flows. The problem here is twofold. Without a trained-eye reviewing the contracts, most companies don't recognize the "hidden" cash flow streams embedded in contract language. Second, the exact amounts of cash flow to non-fiduciary PBMs aren't disclosed. Any PBM that doesn't disclose its service fee (admin fee + undisclosed cash flow amounts) falls short of providing any reasonable definition of transparency to its clients. I'm not taking purchasers off the hook either you need to get smarter about how you procure and manage pharmacy benefits. The more sophisticated you are as a purchaser of PBM services the less one overpays.

With all this being said, I'm convinced that PBMs are low hanging fruit. It's easy to put most of the blame on us for high Rx costs. Afterall, purchasers and their agents have a direct line to us whether by phone or email. In most cases, no such direct line exists between self-funded employers, their agents and pharmaceutical manufacturers. The research is clear drugmakers keep 70% of Rx profits, pharmacies 15% and PBMs 5%. Also, if I'm being honest most purchasers of PBM services don't know enough about the industry to negotiate a fair and transparent deal for themselves. Twenty-years experience in HR, finance or as a broker will only get you in more trouble unless you've had extensive and formal PBM training from an insider. Even with formal training the road to radical transparency can still be tough. Brokers and consultants must balance the needs of their clients with those of the organization and themselves personally, for example. Additionally, staying current with pharmacy benefits acumen is a lifelong journey not a one-off. 

In summary, there is enough blame to go around for all stakeholders including PBMs. Without high pharmacy benefits management acumen and negotiating skills, you stand little chance of eliminating overpayments to a non-fiduciary PBM. It requires supreme confidence and moxy to stay true to your convictions. That confidence stems from education. Non-fiduciary PBM salespeople have been trained to push you off your spot. Simply put, control what you can control and let the chips fall where they may.


Now several states, including Ohio, have gone to court to recover money needlessly paid to PBMs, who kept the bulk of the money spent by customers its contracts kept in the dark. A study of 9.5 million prescription drug claims by researchers at the University of Southern California found that “2.2 million – or 23 percent – overpaid for their prescription because their co-pay was more than the cost of the drug.”

Continue Reading >>

Friday, August 30, 2019

Pension Funds Sue Insulin Manufacturer for $1.75 Billion over Alleged Collusion

Danish pharmaceutical company Novo Nordisk is facing a $1.75 billion lawsuit brought by a group of pension fund shareholders who allege the company engaged in insulin price fixing and issued misleading statements about the health of its US insulin business.

According to the complaint, Novo Nordisk allegedly colluded with pharmaceutical firms Sanofi, Eli Lilly, and Merck to increase the prices of their insulin drugs. It said the prices of the companies’ insulin products “skyrocketed over the past decade in a suspiciously close and synchronized manner.”

insulin prices may 2017 v2

The lead plaintiffs include the Central States Pension Fund, Southeast and Southwest Areas Pension Fund, Oklahoma Firefighters Pension and Retirement System, Boston Retirement System, Employees’ Pension Plan of the City of Clearwater, and the Lehigh County Employees’ Retirement System. 

The plaintiffs say that during the class period, which is between April 30, 2015, and Oct. 27, 2016, Novo Nordisk reported “impressive revenue, operating profit growth, and sales growth.” They also said the company told investors that it would earn revenue and operating profit growth of between 5% and 9% in 2016, as well as 10% operating profit growth over the long-term.

Tyrone's Commentary:
Source:  www.aarp.org

For those who believe the supply chain would be better off without PBMs think again. All you need do is read this single paragraph from the complaint. It reads, “In truth, Novo Nordisk was experiencing significant pricing pressure in the US and was only able to report ‘flat pricing’ for its drugs because the company entered into collusive agreements with its purported competitors,” said the complaint. “What’s more, the company’s reported revenue, operating profit, sales growth, and margins were overstated in that they were based on collusive price fixing.” That pricing pressure comes primarily from PBMs and our consolidated purchasing power. If that purchasing power becomes fragmented what do you think will happen? The key then, as a purchaser of PBM services, is to extract as much of that negotiated savings as possible from PBMs. In order to accomplish this, your team must have trained-eyes for the procurement and management of pharmacy benefits. The best PBM training comes from insiders.

According to the complaint, while some of the company’s competitors acknowledged that insulin revenue would decline as a result of increased pricing pressures from pharmacy benefit managers, Novo Nordisk assured investors otherwise.

Continue Reading >>

Thursday, August 29, 2019

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 282)

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, August 28, 2019

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

How many businesses do you know want to cut their revenues in half? That's why traditional pharmacy benefit managers don't offer radical transparency and instead opt for hidden cash flow opportunities such as rebate masking. 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 cost of pharmacy benefit manager services or CPBMS
  • 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

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, August 27, 2019

Targeted Medication Reviews (TMRs) Critical Success Factor for Medication Therapy Management

A Humana study comparing the differences in medication therapy management (MTM) services found that targeted medication reviews (TMR) were highly successful interventions.

“This study highlights how critically important it is for Part D and Medicare Advantage plans to continue to innovate in their efforts to contribute to better therapeutic outcomes for the patients they serve,” Michael Taday, associate vice president of pharmacy clinical strategies and operations for Humana pharmacy solutions, said in a statement.

CMS has designated two medication therapy management interventions, comprehensive medication reviews (CMRs) and TMRs.

CMRs review all of the medications taken by a patient and sends them a cover letter, a full medication list, and a medication action plan to combine with their medications. CMS requires providers to offer CMRs to eligible patients on an annual basis.

TMRs monitor medications constantly to determine that drugs are appropriately prescribed and predict or identify medication-related problems.

The study determined that TMR interventions were more successful at achieving low acute inpatient admissions. Furthermore, patients were far more likely to adhere to their medications when their providers used a TMR. The past year, in particular, proved that TMR patients were less likely to visit the emergency department, the data showed.

In contrast, CMR interventions only reduced acute inpatient admissions when it was clear that the patient had a medication-related condition.

Continue Reading >>

Monday, August 26, 2019

Op-ed: PBMs are Driving Up Costs and Lowering Quality Care in America

While there are certainly other factors that increase drug pricing, such as the lack of competition of generic drugs, fee-for-service care models and an absence of patient consideration at the policymaking level, PBMs have remained a central contributor. The already-complex relationship with PBMs becomes harder to demystify and potentially a cost multiplier because the rebate process is not transparent to physicians or patients.

Click to Learn More
In fact, we don’t know what percentages of rebates are kept by PBMs. That begs the question, was the PBM I worked with suggesting a brand-name drug so they would receive a higher rebate payment without any consideration for the patient’s well-being? My experiences make such a conclusion easy to consider.

If PBMs are consistently causing increases in drug prices, delaying treatment and limiting options for patients, why are they part of our health care system? PBMs were developed with good intentions: to help insurance and pharmaceutical companies provide affordable drugs to patients quickly. Unfortunately, that is not how PBMs operate anymore, which makes me think it’s time we rid our system of these unnecessary middlemen.

Tyrone's Commentary:

There is no question that non-fiduciary PBMs have learned how to leverage the purchasing power of unsophisticated plan sponsors to their financial advantage. That proposition doesn't change the fact that PBMs offer valuable services and deserve a reasonable return on those services. The key issue then are the hidden cash flows generated by non-fiduciary PBMs which drive up costs. I wonder if Dr. Price knows that 95% of all self-funded employers have no clue how much they pay a PBM for its services? Before you go there and say PBMs won't divulge this information that is an excuse. There are PBMs who will offer this level of disclosure you just can't drink the kool-aid of those who say it isn't possible. Hence, the solution is not the elimination of PBMs, who offer valuable services, but to stop overpayments. Education is the best solution. It always baffles me when an entity or person suggests a solution to a problem when they stand to gain from their own recommendation. In short, it is self-serving for Dr. Price to suggest PBMs be removed from the supply chain. There are purchasers of PBM services who are better served going direct and there are others who are better off hiring a fiduciary-model PBM. The solutions to the problems in health care are rarely one-size fits all.

Continue Reading >>

Friday, August 23, 2019

Self-funded employers spend 40% of costs on less than 1% of prescriptions

Willis Towers Watson’s Rx Collaborative, the largest employer-based pharmacy benefit group purchasing coalition in the U.S., disclosed that specialty drugs accounted for less than 1% of all the coalition’s prescriptions last year, yet totaled 40% of its total drug costs. In addition, the top 10 drugs by gross cost accounted for 20% of employers’ pharmacy spend in 2018.

Image result for top five disease states for specialty drugs
Source: Specialty Pharmacy Times
“Pharmacy represents about 20% of employers’ overall health care spend and is expected to reach 25% by 2020. This cost pressure has many employers turning to a drug purchasing collaborative to help control costs and improve pharmacy benefit performance,” said Nadina Rosier, Pharm.D., head of the Pharmacy practice at Willis Towers Watson.

“The successful formula for employers’ prescription drug plans centers on joint purchasing power, tools to manage specialty pharmacy costs, and innovative medical and pharmacy benefit strategies that improve employees’ health.”

Which prescription drugs make this esteemed list? Here's a quick rundown of the five medicines expected to become the industry's biggest earners in the next decade. These 5 Prescription Drugs Will Generate a Jaw-Dropping $62.3 Billion in 2024. 

The Top Five
  1. Merck's cancer-fighting immunotherapy Keytruda tops this list, with a projected revenue haul of $17 billion by the end of 2024. Merck's Keytruda is also the drug with fastest pace of sales growth on this list, thanks to its ability to grab several key new indications over the prior two years. 
  2. AbbVie's flagship anti-inflammatory medicine Humira is predicted to slip to second place on this list, with an estimated 2024 revenue forecast of $12.4 billion. In 2018, this drug blew away the rest of the field with a gobsmacking $19.9 billion in global sales. 
  3. Bristol-Myers Squibb and Pfizer's next-generation blood-thinner, Eliquis, is a close third, with 2024 sales expected to hit a monstrous $12 billion. Bristol and Pfizer raked in a whopping $6.4 billion from Eliquis in 2018.
  4. Bristol's PD-1 inhibitor, Opdivo, a rival to Merck's Keytruda, is slated to generate a healthy $11.3 billion by 2024. Once upon a time, Bristol's Opdivo was widely predicted to top this list, but a major miss in advanced lung cancer opened the door for Merck's Keytruda to become the undisputed champion of the PD-1 inhibitor space. 
  5. AbbVie and Johnson & Johnson's game-changing blood cancer drug Imbruvica is set to occupy fifth place, with an estimated revenue haul of $9.5 billion. Now, AbbVie and J&J's Imbruvica might ultimately slip out of the top five. There are several new drugs gunning for Imbruvica's most lucrative indications, and Pfizer's breast cancer drug Ibrance should also bring home no less than $9 billion in annual sales by 2024.  
Tyrone's Commentary:

Does it make sense to have the same entity manage and approve specialty Rx claims when that entity stands to benefit when these claims are approved? The short answer is heck no! The PA process can be an exercise in complete futility. Additionally, software, like CoverMyMeds, which is supposed to streamline the PA process is far to often a rubber stamp exercise so that the PBMs who own specialty pharmacies can speed time to money. If you're interested take a look at who owns CoverMyMeds. Employers who are serious about bending the specialty Rx cost trend are seeking alternative methods to reduce cost and improve outcomes. One such alternative is individualized care planning.

Thursday, August 22, 2019

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 281)

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, August 21, 2019

How an Stand-alone PBM Uses Patient Engagement to Improve Cost and Patient Outcomes

As the PBM landscape consolidates around a few monolithic players, it’s become increasingly difficult for independent challengers to carve out space for themselves in a dominantly payer-owned field. Even one of the largest independent pharmacy benefit managers (PBMs) in the United States found they could not compete on cost.

Luckily, some independent PBMs are doing things a little differently. We are incorporating better patient care into our business strategies in pursuit of a vision for lower healthcare costs and greater transparency across the medical and pharmacy benefits.

Click to Learn More
At the heart of the vision is a unique program launched with a small network of best-in-class specialty pharmacies, chosen because they offer patient-support services that improve logistics, promote access and adherence, and reduce costly healthcare episodes. And it works. 

These partnerships have upheld the belief that more empowered, knowledgeable, and cared-for patients have better outcomes and use the healthcare system more efficiently. This is how independent PBMs are carving out a true niche as the partner who cares about patients and lowers healthcare costs universally.

Continue Reading >>

Tuesday, August 20, 2019

Medicare and its beneficiaries could have saved an estimated $17.7 billion if older generics were prescribed, study finds

Medicare and its beneficiaries could have saved an estimated $17.7 billion earlier this decade on generic versions of older medicines instead of paying for newer, chemically similar but more expensive brand-name drugs that companies launched to replace those older pills, according to a new analysis in the Annals of Internal Medicine.

Tyrone's Commentary:

Click to Learn More
Medication switches are most often thought of as changing a brand-name product to a generic drug. Switching also can mean the changing of one brand name product for another, or the switching of a generic medication to the same drug produced by another generic manufacturer. These can be initiated by the physician, pharmacy or PBM. Switches are done to reduce the overall cost of prescription medications. Generic or therapeutic switching remains one of the great but underutilized opportunities for lowering prescription drug costs. 
  • Medication switches are done to reduce the high cost of  prescription drugs.
  • Generic substitution means that patients prescribed an expensive  brand-name medication are given a less-expensive generic  equivalent in the pharmacy.
  • Therapeutic substitution means switches within a drug class; a  brand-name medication may be replaced by a less expensive brand-name or generic product.
  • The cost savings are substantial, especially for health plans.
One of the biggest mistakes employers make is not continuously monitoring drug spend to identify generic switch savings opportunities. You can't set it then let it go hoping for the best. In other words, standard PBM reports won't uncover the wasteful spending. You need a trained set of eyes to catch savings opportunities early and often.

For example, Medicare spent $13.4 billion on the Nexium acid reflux pill between 2011 and 2017, but could have saved $12.7 billion if, instead, prescriptions were written for generic copies of the older version of the drug called Prilosec. Similarly, Medicare beneficiaries spent more than $832 million on Nexium between 2011 and 2015, but could have $690 million if prescribed a generic version of Prilosec.

Download Analysis >>

Monday, August 19, 2019

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 280)

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.

Sunday, August 18, 2019

Plan Sponsors Laser Focused on High-Cost Claims

Of the health care initiatives large employers participating in the National Business Group on Health’s (NBGH) latest Health Care Strategy and Plan Design Survey cited, implementing virtual solutions (51%) and developing a more focused strategy to address high-cost claims (39%) were at the top of the list.

The cost of specialty medical treatments is escalating at an unsustainable rate—typically a double digit percent increase year-over-year. Even worse, large employers with self-funded plans are footing the bill for newer high-cost treatments, some in the millions per treatment. Employers have many concerns related to high-cost treatments: the million-dollar price tags and the speed at which the treatments come to market, which can call into question the rigor and timeline of clinical trials.

What’s more, an increasing focus of the research and development pipeline is on treatments for narrow subsets of patient populations with rare diseases—making this an exciting time in health care when patients with certain illnesses, sometimes terminal, are able to receive treatments or even be cured, the report notes.

Large Employers’ Top Health Care Initiatives, 2020
However, as a result of the pipeline of treatments for rare diseases, large employers are increasingly focused on the impact of even one or two cases on their overall annual health care budgets. For example, Zolgensma, a one-time injection to treat spinal muscular atrophy in young pediatric patients, was launched in May at a $2.1M price tag, sending employers into action mode to uncover ways to finance such therapies.

In 2019, about one-quarter of employers are delaying the inclusion of new treatments from their formulary at launch (e.g., for 6 months) to enable the pharmacy benefit manager (PBM) or health plan to better determine the treatment’s efficacy and safety. The other two options—stop-loss insurance and outcomes-based contracting—aren’t as popular an approach, but are being considered heavily for 2021/2022.

In 2018, a majority (56%) of large employers voiced skepticism about the proposed health plan–PBM mergers. Specifically, they were unsure if these newly formed relationships would lower cost, improve quality and curate a better consumer experience. As a followup to that survey question, this year’s survey dove into whether employers are “voting with their feet” by going out to bid in direct result of mergers between health plans and PBMs.

The survey finds 16% of surveyed employers are issuing a request-for-proposal (RFP) due to health plan–PBM mergers. Another 30% are considering doing so in 2021-2022. These numbers are an indication that consolidation is having a profound effect on the health care industry, which could result in a plan change—health plan or PBM—for a number of employers, the report says.

The full report is only available to NBGH members, but an executive summary of the findings is available here.

Friday, August 9, 2019

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 279)

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.

Thursday, August 1, 2019

Reference Pricing: "Gross" Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 278)

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, July 31, 2019

Trump Administration ‘Opens Pathway’ on Drug Imports From Canada

A year after calling proposals allowing Americans to import cheaper drugs from Canada a “gimmick,” Health and Human Services Secretary Alex Azar said the federal government is “open for business” on such a strategy.

Image result for drug importation from canada

Azar announced a preliminary plan Wednesday to allow Americans to import certain lower-cost drugs from Canada. Insulin and other biological drugs, controlled substances and intravenous drugs would not be included. The plan relies on states to come up with proposals for safe importation and submit them for federal approval.

Tyrone's Commentary:

Drug Utilization is more complicated than just the days supply or units being dispensed. Utilization also considers the sites or channels (i.e. retail, specialty etc.) from which prescription drugs are being dispensed and that is just for starters. I would also argue drug utilization is measured, at least in part, by the country from which prescription drugs are procured. If you are self-funded employer and aren't at least considering Canada as an alternative source from which to procure prescription drugs, what are you waiting for?
    
Under a second option, manufacturers could import versions of FDA-approved drugs from foreign countries and sell them at a lower cost than the same U.S. versions. This appears to be a way drugmakers could avoid some of the contracts they have with drug middlemen, known as pharmacy benefit managers.

Continue Reading >>

Tuesday, July 30, 2019

Impact of a Co-pay Accumulator Adjustment Program on Specialty Drug Adherence

In a 2018 survey of large employers, 80% identified SpRx costs as a top 3 driver of healthcare costs, and 26% said it was their greatest healthcare cost driver, up substantially from 6% in 2014. Needless to say, employers are concerned about the rapid growth of specialty pharmaceutical (SpRx) expenditures. 

Employers have acted to constrain SpRx expenditures. Those offering high-deductible health plans (HDHPs) have combined medical and pharmacy plan deductibles into one, thereby shifting initial payment for prescriptions to enrollees until they reach the deductible limit. 

Image result for copay accumulator programs

Some employers have added pharmacy benefit management features, including utilization management, use of a SpRx vendor, and the addition of a SpRx tier in formularies. Others have excluded many SpRx products from medical plan coverage, thereby shifting greater oversight of SpRx use to pharmacy benefits.

Takeaway Points

Pharmacy benefit managers are offering co-pay accumulator adjustment programs (CAAPs) to counter pharmaceutical company co-pay assistance subsidies for enrollees receiving specialty medications, although the impact of these programs on medication adherence is unknown.

  • In this analysis, implementation of a CAAP was associated with significant reductions in autoimmune specialty drug adherence.
  • Risk of treatment discontinuation was significantly higher following CAAP implementation.
  • Use of specialty drugs included on the preventive drug list, which eliminates co-payments, was not affected by the CAAP.
  • Further analysis is needed to evaluate the implications for subsequent healthcare utilization and costs.