Tuesday, September 29, 2020

Tuesday Tip of the Week: PBMs can be Fiduciaries

It's not important to me who is right or wrong. I'm focused on making sure plan sponsors get the right information. Ohio's Attorney General in 2019 called for PBMs to be fiduciaries. Still there is doubt among commercial and public sector employers, unions, health plans and health systems whether a PBM can act as a fiduciary. Very few purchasers of PBM services are asking for a fiduciary model in their pharmacy benefits management request for proposals, for instance.

Pass-through and transparent PBM business models don't inherently eliminate wasteful and duplicative spending. Because these models thrive on optics and not delivering lowest net cost, they can leave plan sponsors mired in the status quo.
In their middleman role, PBMs have used secrecy and subterfuge to pad their own profits instead of passing savings along to customers. John Paul Jones wrote, "It seems to be a law of nature, inflexible and inexorable, that those who will not risk cannot win." 

Click to Learn More
                          
“When state agencies entered into these nebulous deals with PBMs, they unknowingly hired a fox to guard the henhouse,” Yost said. “But he was a smart fox. He didn’t kill the chickens; he helped himself to the eggs.” The attorney general recommended "a solution based on market principles" identifying four objectives that should be met:

1) State drug purchases should go through a master PBM contract that is administered through a single point of contact.

2) The Ohio Auditor of State should have unrestricted authority to review all PBM drug contracts, purchases and payments.

3) PBMs must be fiduciaries.


4)
Nondisclosure agreements (NDAs) on drug pricing with the s
tate must be prohibited.

What was the broker or consultant's role in that situation? There are situations where you have someone who is trying to prove that they're valuable by trying to play hardball with people and spin it as if they are
 looking out for you. On March 15, 2019 AG Yost filed suit against OptumRx on behalf of the Ohio Bureau of Workers’ Compensation seeking to recover nearly $16 million in overcharges to the fund intended to protect injured workers. 

A fiduciary standard cannot be forced upon PBMs at least not yet but AG Yost acknowledges, albeit implicitly, PBMs can be fiduciaries if we so choose to put our clients' interests above our own.

Continue Reading >>

Monday, September 28, 2020

Drugmakers Push Back on the Use of Contract Pharmacies by 340B Covered Entities

With October deadlines looming, hospitals and health systems that participate in the 340B drug pricing program are scrambling to respond to a flurry of new audit demands from drug manufacturers, as well as manufacturer limitations on the number of contract pharmacies that these covered entities are allowed to use under 340B. Manufacturers and providers participating in the 340B Drug Pricing Program have entered into a new phase of tensions this summer, as manufacturers push back on the use of contract pharmacies by providers. 

Additionally, beginning in June, some manufacturers sent letters to providers, directing them to upload contract pharmacy claims data for 340B-eligible prescriptions to the vendor 340B ESP to minimize duplicate discounts for claims that are submitted to Medicaid, Medicare Part D, and commercial payors. 340B administrator entities responded by sending communications to the same providers, reminding them of the confidentiality and data privacy obligations governing the claims data, and refusing to provide authorization to disclose data for payors other than Medicaid.

One manufacturer’s announced refusal to sell drugs for shipment to contract pharmacies is the strongest stance on this issue so far. This announcement will require a response from HRSA (the agency endorsed the use of contract pharmacies in a 2010 regulatory notice), which may ultimately lead to a court battle on the question whether the use of contract pharmacies is permissible under the 340B Program.

Drug companies have become more emboldened in recent weeks to restrict sales to contract pharmacies as legal experts say the Trump administration lacks authority to crack down on the drug companies. Merck, Sanofi and Novartis have called for contract pharmacies to submit claims in order to avoid duplicative discounts. Back in July, Lilly restricted sales to contract pharmacies of three formulations of the erectile dysfunction drug Cialis.

Tyrone's Commentary:

That pharmaceutical companies would incorporate more compliance initiatives into the 340B program should come as no surprise. Some hospitals were pocketing the savings from 340B discounts instead of offsetting patient out-of-pocket costs, for example. This is only the beginning. First, drug manufacturers clamped down on rebate aggregators and their submission of duplicate or unqualified claims for rebates. Now, the focus has shifted to the use of contract pharmacies by 340B covered entities. Next, I presume drug manufacturers will shift their focus to the abuse of copay maximizer and manufacturer assistance programs. There is no long-term substitute for being an astute caretaker of your employer-sponsored pharmacy benefit plan. 

Pharmaceutical companies are targeting a popular tool used by hospitals in the 340B program, which requires drug companies to provide discounts to safety-net hospitals in exchange for participation in Medicaid. Roughly one-third of the more than 12,000 340B hospitals use a contract pharmacy to dispense the discounted drugs, according to a 2018 report from the Government Accountability Office. 

The GAO report found that the Health Resources and Services Administration, which oversees the 340B program, does not fully assess compliance with the program’s prohibition on duplicate discounts for drugs prescribed to both Medicaid and 340B. Pharmaceutical manufacturers have also charged that the discount program has gotten too large and unwieldy.

Continue Reading >>

Thursday, September 24, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 332)

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.

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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.


Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.


-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

Wednesday, September 23, 2020

Free 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, September 22, 2020

Tuesday Tip of the Week: Focus on Lowest Net Cost Drugs

Easier said than done since many purchasers of PBM services believe they have it all figured out. Organizations, such as the New York Department of Health, often downplay intelligence, believe their competitors to possess access to the identical information. Well, everyone also has access to a large array of fruits and vegetables, yet many don’t eat them or eat only a few. New Yorkers wastefully spent more than $706 million in Medicaid payments over three years. The state Department of Health uncovered the overcharges for pharmacy services, according to audits released by the state comptroller.

State Comptroller, Thomas DiNapoli, released five audits with several recommendations to improve the program. The comptroller criticized state health officials for failing to establish sufficient oversight and control with managed care payments, which led to the unnecessary payments. The department has worked to ensure efficient and cost-effective pharmacy services for New Yorkers dependent on Medicaid with the FFS model. 

Many employers, unions, and government agencies pay large consultancies and brokerage firms to help them avoid overpaying for pharmacy services. So then how does this keep happening? There are a number of reasons including misaligned incentives, inefficient procurement and indifference just to name a few. But, the primary reason is without question a wholesale lack of education around pharmacy benefits management in general. It is education which leads employers to leveraging the four pillars to better PBM performance.

Click to Learn More

Auditors found DOH missed opportunities to lower costs on pharmacy services delivered through Medicaid managed care because officials did not ensure the use of the lowest net cost drugs, according to the comptroller. Auditors estimate $605 million was spent in unnecessary drug costs from Jan. 1, 2016, through Dec. 31, 2019. Folks access doesn't translate into action. Buzzwords and repurposed RFPs with 100 hundred questions are not working. 

A senior leader from one of the world’s largest 
pharmaceutical manufacturers emailed this to me...  

"We have had numerous debates internally about how purchasers are asking for transparency vs. just the lowest price. Contract nomenclature often obscures the real price. We get asked often about direct contracting between manufacturer and employer.  Lots of barriers but conceptually something that needs to be considered and they are not asking for a lower net price vs. the PBM...just better optics!”

Education is key to use of lowest net cost drugs in pharmacy benefit plans. Only the most sophisticated purchasers of PBM services will have the knowledge and confidence to bind lowest net costs for prescription drugs into contract language and benefit design. Hence, your competitive advantage includes executing good analysis of the correct information then deciding what all of this suggests for your organization. Those who seize the chance and develop a good plan that may reasonably be accomplished have a higher probability of getting to lowest net cost. 

Thursday, September 17, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 331)

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.


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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.


Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.


-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

Tuesday, September 15, 2020

Tuesday Tip of the Week: Increase out-of-pocket (OOP) spending for specialty drugs

Medicare beneficiaries pay substantially higher out-of-pocket (OOP) costs for specialty drugs than employer-sponsored insurance enrollees. Based on specialty drug class, average OOP spending for Medicare fee-for-service (FFS) enrollees was $108 to $1437 greater than spending by employer-sponsored insurance enrollees. Medicare Advantage beneficiaries had slightly higher OOP spending than FFS beneficiaries. 

The pharmaceutical pipeline is moving toward more high-cost specialty drugs. From 2008 until 2017, CMS defined specialty drugs as those with a monthly cost greater than $600; beginning in 2017, the threshold became $670. These drugs are primarily biologics and biosimilars used to treat complex chronic conditions such as rheumatoid arthritis (RA), multiple sclerosis (MS), cancer, and hepatitis C. Patients with these conditions have few other clinical options, forcing them to pay high cost-sharing rates or forgo treatment.

How Much US Households with Employer Insurance Spend Premiums OOP |  Commonwealth Fund

Care for these diseases can begin around age 40 years and continue throughout life, making health insurance coverage likely to span across employer-sponsored insurance (ESI) and Medicare prescription drug (Part D) coverage. Few studies have examined whether the financial burden placed on patients who take specialty drugs differs among those with ESI, Medicare fee-for-service (FFS), and Medicare managed care (Medicare Advantage [MA]) drug coverage.

The benefit structure of Part D results in Medicare enrollees paying substantially higher OOP costs for specialty drugs than employer-sponsored insurance enrollees, primarily due to the absence of an OOP cap in Medicare and the donut hole. Given the policy and clinical concerns that high cost sharing may lead to nonadherence and financial burden, it is important to understand the levels of cost sharing across insurance types and the role that benefit design may play.

Thursday, September 10, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 330)

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.


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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.


Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.


-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

Tuesday, September 8, 2020

Tuesday Tip of the Week: When the carrier, PBM and ASO all share the same parent company you are fully insured (Rerun)

Well, I guess it depends on why you moved away from the fully-insured funding option in the first place. There are several pros for self-funding chief among them include:

1) More Control
2) Better Reporting
3) Improved Pricing
3) Formulary
4) Better Health Outcomes
5) Elimination of Rebates to Carriers
6) More Transparency

With that said, I am asking plan sponsors and their independent consultants to consider the following question.

Click to Learn More

A self-insured pharmacy benefit plan should provide better cost control, transparency and technology as well as information and reporting. When your PBM is reluctant to share valuable information to help you manage and evaluate performance are you really self-insured? Health insurers may combine aspects of the two funding options to subsidize pricing (cost-shifting). 

For companies with a carved in program, there may be concerns about changing to a carved-out program due to a perception that additional time and resources will be needed, but I have seen that on a day to day basis, there is little difference in having a separate pharmacy program. The farther removed you are from the downsides of a fully-insured pharmacy benefit plan the better off your group will be.

Friday, September 4, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 329)

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.


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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.


Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.


-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

Thursday, August 27, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 328)

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.


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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.


Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.


-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

Tuesday, August 25, 2020

Tuesday Tip of the Week: Out-of-pocket caps don't lead to increased health plan spending or reduced affordability for all enrollees

A study published in the New England Journal of Medicine of caps placed on out-of-pocket (OOP) costs for specialty drugs demonstrated that the caps did not lead to an increase in health care spending except for patients at the highest tier (95th percentile) of spending, investigators wrote. They concluded that this showed that the caps were doing what they were supposed to do: protect the patients most vulnerable to high OOP costs without leading to across-the-board health care spending increases.




The study included records for 27,161 patients, from 2011 to 2016, covered by 3 national payers. Among patients in the 95th percentile of spending on specialty drugs, OOP costs were $351 lower per user per month, which represented a decrease of 32% in spending, investigators said.

Investigators noted that not enough is known about the effects of caps on patient costs, and they sought to remedy this deficit via their study. They noted that specialty drugs such as antiviral agents for hepatitis C and biologic agents for multiple sclerosis or rheumatoid arthritis are highly effective but spending for these agents is disproportionate to that for other drugs.

By the Numbers

“Over the past decade, health-plan spending for such treatments increased from an estimated 26% of total drug spending to 49%, while the treatments remained below 2.5% of total prescriptions dispensed,” they wrote.

Meanwhile, the use of high cost-sharing drug tiers among employer sponsored health plans has risen from 11% to 51%, with a simultaneous increase in the disparity in OOP spending between specialty drug users and nonspecialtiy drug users, “becoming 3 times as large as that in an earlier 10-year period,” the authors wrote.

In just the past 2 years, at least 21 states and the federal government have introduced legislation to control OOP patient costs for prescription drugs, and 11 states have introduced laws targeting specialty drug spending. Of the latter group, Delaware, Louisiana, and Maryland passed legislation and imposed caps on OOP for commercial health plans at $150 per 30-day supply of specialty medication, the authors wrote.

Investigators said their concern was that they would find that caps would lead to increased health plan spending followed by increases in insurance premiums and reduced insurance affordability for all enrollees. This did not happen.

Monday, August 24, 2020

Free 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.

Thursday, August 20, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 327)

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.


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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.


Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.


-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

Tuesday, August 18, 2020

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

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.

Friday, August 14, 2020

Pharmacy CEO pleads guilty to $50M reimbursement fraud

Central Rexall Drugs was paid more than $50 million in reimbursements from pharmacy benefits managers from 2015 to 2016, according to Mr. Carpenito. He also said Ms. Taff, who will be sentenced Dec. 1, received more than $1.5 million from the scheme.

Recruiters told the patients which medications to get based on how much reimbursement the pharmacy would receive from insurance companies for the drugs, not because the patients needed them, Mr. Carpenito said. The drugs covered within these New Jersey workers' insurance plans included expensive pain, antifungal, scar and libido medications with reimbursements that often ran as high as thousands of dollars per month, WNBC reported.

Comparing your formulary options
Click To Learn More

Tyrone's Commentary:

The PBMs were likely involved with uncovering the fraud still it should not have gone this far but why? Many if not most of those reimbursed drugs should have been excluded from the formulary in the first place. Shame on the PBMs for pushing these claims through by rubberstamping prior authorizations and plan sponsors for signing off on what is more than likely an open or some sort of hybrid formulary which allowed those claims to be adjudicated. You can't "keep employees happy" to the extent you run an inefficient pharmacy benefit program. It doesn't matter how much money you have to throw at a pharmacy expenses. If it isn't managed cost-effectively it is a failure. All PBMs are not created equally. My PBM, TransparentRx, scrutinizes every single claim at the same time maintaining CFO satisfaction scores hovering around 90%. For those who believe PBMs are an unneccessary expensive, you get a birds-eye view of a future without us.

Hayley Taff, CEO of Hammond, La.-based pharmacy Central Rexall Drugs, pleaded guilty Aug. 12 to playing a key role in a scheme that garnered more than $50 million in false reimbursements. Ms. Taff and her co-conspirators recruited public employees in New Jersey to get pricey specialty prescriptions they had not been prescribed, according to U.S. Attorney Craig Carpenito of the District of New Jersey. 

Continue Reading >>

Thursday, August 13, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 326)

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.

        

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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.


Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.


-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

Tuesday, August 11, 2020

Tuesday Tip of the Week: If I were a plan sponsor here are the seven things I would be asking of PBMs during an RFP

RFP season is in full swing and a little later than usual for obvious reasons. It's mind-boggling what PBMs are asked to do in some of these RFPs. The responses we provide are sophisticated. Isn't it reasonable to then expect that the evaluation of those responses be equally sophisticated? If I were a plan sponsor here are the seven things I would be asking of PBMs during an RFP.

1. PBM Contract. Do you know why spreadsheeting PBM pricing offers is held in such high regard? Business math is easy 2 + 2 = 4. PBM contract evaluation isn't so easy so decision-makers hand it off to the corporate attorney who can't tell you the difference between ASP and WAC. I'm not suggesting the corporate attorney isn't smart. Of course they are smart but that doesn't mean diddly squat unless you have a trained-eye for pharmacy benefits. The problem for plan sponsors who wait until the last minute to address contract nomenclature is that it is the most important factor in determining whether your plan overpays or pays a fair price for PBM services. In PBM contracts 2 + 2 ≠ 4. Discount and rebate guarantees mean less when contract nomenclature is ambiguous.

2. Benefit Design. Never once during hundreds of RFPs has any consultant or broker ever asked us for a completed 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. Don't put 50 questions in a RFP around benefit design where important details get lost in translation...geesh. I would be asking for a benefit design to be submitted as if we were going live with it. 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.


Click to Learn More
 

3. References. 2-3 companies who can verify the PBM's claims (i.e. retail network, mail and specialty access and transparency) about performance. This could also include inquiries about account management and member support performance.

4. Questionnaire. 20 - 25 verifiable questions pertinent to my company's needs. Here is where you inquire about security, reporting, disease management, MTM or alternate funding programs.

5. PBM Reverse Auction. Two PBM reverse auctions in the same competitive bidding process in fact. The first round is conducted after the claims repricing is submitted. The second round is completed after all contract concessions have been made and the resulting contracts memorialized. Usually you are down to 3-5 candidates at this point. Keep in mind that in a well run and organized reverse auction prices only go down.

6. Finalist Presentation or Interview. Don't allow PBMs to turn it into a marketing contest. Use the time to win more contract concessions and clear up any lingering concerns.

7. Claims Repricing. Not for the purpose of determing who has the better price but to make sure the PBM is in the ballpark of the market. Claims repricings tell you what happened in the past. Claims repricings can't tell the story of what is going to happen in the future. The PBM contract and benefit design are better suited to help predict future performance. Furthermore, if the incumbent PBM has leveraged bad product mix or poor utilization to generate its management fee you are asking PBMs in the bidding process to reprice those same bad claims.

Now score each of the six areas (excluding repricing). Here are some weights I recommend applying to each score:

Contract - 40%

Benefit Design - 25%

References - 10%

Questionnaire - 5%

Reverse Auction - 15%

Finalist Presentation - 5%

As you can see the repricing has earned no weight. The claims repricing serves to show only if the pricing is competitive nothing more. The reverse auction will establish pricing guarantees and the contract will help determine whose pricing is the most transparent. It takes time to get really good at any of these areas. Don't give up on them the first or even second time around.

The best proponent of radical transparency and lowest net Rx cost is informed and sophisticated purchasers of PBM services. I'm not talking about 1400 SAT or 4.0 GPA sophistication. I'm referring to a high level of sophistication in the PBM arena. If it isn't your bag don't carry it. Find someone else who specializes to do the heavy lifting for you.

Thursday, August 6, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 325)

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.
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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.


Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.


-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

Wednesday, August 5, 2020

Free 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, August 4, 2020

Tuesday Tip of the Week: Put a Stake in Vampiric PBM Management Fees

The #1 metric for evaluating PBM proposals is not PEPM, PMPM, or cost per Rx. None of those metrics answer the most important question around getting to the lowest net Rx cost. That question is "How much money is the PBM making?" Watch to learn more.

Video Length:  6.5 minutes


Thursday, July 30, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 324)

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.


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.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It's impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.


Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.


-- Tip --

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

Tuesday, July 28, 2020

Tuesday Tip of the Week: Deadlines get deals done

It was about a month ago I was sitting behind the wheel of my automobile listening to sports talk radio. I know...there are much better options, such as NPR, but I needed an escape. My timing couldn't have been better, however. The segment I caught was about the Dallas Cowboys and their ongoing negotiations with starting quarterback Dak Prescott.  

Dak after being told he gets a one year deal
If you don't know the story and why would you if you're not a football or sports fan but here is the background. In the NFL, high-performing rookies are essentially locked into less than market value contracts for up to 5 years. A NFL team could extend the contract before expiration if it so chooses. In many cases, they do just that especially when the rookie has outperformed their contract and has stayed out of trouble.

Enter Dak and the Cowboys who opted to franchise tag Dak. A franchise tag is essentially a one-year deal with no long-term guarantees or committment from an NFL team. Does this sound familiar? NFL quarterbacks who are considered franchise type quarterbacks rarely get the franchise tag. Teams try and lock them up for the long-term. But when the team doesn't trust a player enough to lock them up long-term it uses the franchise tag. 

Many self-funded employers are opting to franchise tag their PBM instead of going into 2-3 year contracts. Why, because you don't trust them! Who wants to go through a bidding process every six months unless it's absolutely necessary? No one, thus the reason I wrote this blog post. One year deals give PBMs a lot of leverage. Have you ever wondered why it's like pulling teeth to get access to your own claims data but when the contract is up for renewal it seems to find its way to your inbox?

Jerry Jones, the owner of the Dallas Cowboys, said something I always knew but for some reason this time it really resonated with me. In reference to his negotiations with Dak Prescott and his agent, Jones said, "deadlines get deals done."  In our world, this is the same leverage PBMs use to get employers into deals which lead to contract opacity and significant overpayments. Pharmacy Benefit Managers are well aware employers must get ID cards into the mailboxes of their employees. 

In other words, non-fiduciary PBMs prefer short windows to get service agreements executed. Short windows lead to wasteful and duplicative spending especially on management fees. PBMs will generally provide transparency and disclosure to a level demanded by the competitive market and rely on the demands of clients in negotiating their contracts. Here are some useful tips:

1) Make the contract the centerpiece of any PBM selection process.
2) If the contract is 1A, the benefit design is 1B. Who has control you or the PBM?

The best proponent of radical transparency and lowest net Rx cost is informed and sophisticated purchasers of PBM services. I'm not talking about 1400 SAT or 4.0 GPA sophistication. I'm referring to a high level of sophistication in the PBM arena. If it isn't your lane don't play in it find someone who does.

Thursday, July 23, 2020

Reference Pricing: "Gross" Invoice Cost vs. AWP for Popular Generic and Brand Prescription Drugs (Volume 323)

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.

Tuesday, July 21, 2020

Tuesday Tip of the Week: Dose Optimization Interventions Yield Significant Specialty Drug Cost Savings

Dose optimization strategies offer a potentially valid, clinically based intervention in which payers can realize a direct drug cost savings, and indirect medical cost avoidance. Dose optimization programs have been evaluated with once-daily, oral maintenance medications using various methods that produced varied results.

These studies were conducted in medication classes such as gastroesophageal reflux disease (GERD), anxiety and depression, and hypercholesterolemia. While the current literature describes dose optimization in the nonspecialty space, there is limited literature on dose optimization strategies used for specialty products.

Oral Oncology Therapies: Specialty Pharmacy's Newest Challenge
Source: Pharmacy Times

A specialty pharmacy developing a dose optimization program could evaluate the implications and viability for specialty products, since they work closely with payers and providers. A successful dose optimization program within a specialty pharmacy could contribute a significant cost savings for payers, further mitigating the rising costs of specialty medications. Therefore, the goal of this pilot program was to evaluate the scenarios and opportunities for dose optimization within a selected group of oncolytics.

Diplomat Pharmacy's oncology program delivers comprehensive care management to help patients address complex aspects of their treatment and condition. The crossfunctional oncology team is composed of specialized clinicians, and nonclinicians leveraging evidence-based care for treatment optimization, improved care coordination, and therapeutic cost management. 

Monday, July 20, 2020

Channel Management for Specialty: Challenges with Medical Benefit or Pharmacy Benefit

At the point when the vast majority consider getting their meds filled, they take their script to their nearby network drug store or send their script to a mail order pharmacy. As a rule, by far most of prescribed drugs are usually secured under the pharmacy benefit in the interest of the individual's insurance plan. 

Albeit a retail or customary mail channel bodes well for 97% to 99% of non-specialty medications, the other 1% to 3% of scripts are specialty drugs that may should be filled through another channel including home infusion, physician clinic or a hospital. With specialty medications, there is dilemna in which either the medical or pharmacy benefit may be the primary point for dispensing, administration, and reimbursement.

  
In recent years, as the industry has watched specialty spend grow, I have observed prescription insurance plans’ specialty gross costs represent anywhere from one-third to 50% of their total gross spending while the number of prescriptions being filled for that specialty spend is for fewer than 1% of the health plan’s total pharmacy prescriptions.

According to CVS Health’s 2018 Drug Report and the cohort of insurance plan’s it manages, “Specialty utilization and share of gross cost continues to grow, reaching 45 percent of total pharmacy spend in 2018 as compared to 42% in 2017, despite comprising only 1 percent of prescription claims.”