Johnson and Johnson sues SaveOnSP for allegedly overusing drug cost assistance program and notes from around the interweb:

• Johnson & Johnson sues SaveOnSP for allegedly overusing drug cost assistance program. Drug manufacturer Johnson & Johnson has filed a lawsuit against drug benefit company SaveOnSP for allegedly taking advantage of a J&J program that covers out-of-pocket costs for patients who use some of the more expensive prescription drugs. Buffalo, New York-based SaveOnSP, which is run by PWGA Pension & Health Plans, describes itself on its website as “a service that negotiates prices for specialty drugs and, in exchange for the exclusive right to do so, guarantees that the recipients of those covered prescriptions will pay $0.” In the civil lawsuit filed in federal court in New Jersey, J&J said it overpaid in copay assistance by at least $100 million due to the services provided by SaveOnSP. This, said J&J, is due to contract interference and deceptive trade practices by the company.

• Centene Announces Sale of Pharmacy Benefit Manager, Magellan Rx, to Prime Therapeutics. Centene Corporation (Centene) has announced that the payer organization will sell both the pharmacy benefit manager Magellan Rx and pharmacy PANTHERx Rare. Centene expects to make $2.8 billion in proceeds from the two sales combined. “These transactions demonstrate significant progress in our ongoing portfolio review and represent key milestones in our value creation plan,” said Sarah London, chief executive officer of Centene.

• AHIP study claims hospitals charge double for specialty drugs compared to pharmacies. Hospitals on average charge double the price for the same drugs compared to those offered by specialty pharmacies, according to a new insurer-funded study released as federal regulators ponder a probe into the pharmacy benefit management industry. The study (PDF), released Wednesday by insurance lobbying group AHIP, comes as specialty pharmacies have grown in use among PBMs and payers to dispense specialty products. The study was released a day before a scheduled meeting Thursday of the Federal Trade Commission on whether to probe the competitive impact of PBM contracts and how they could disadvantage independent and specialty pharmacies.

• Key Differences Between Fiduciary and Traditional Pharmacy Benefit Managers. Pharmacy Benefit Managers (PBM) are authorized to manage the benefit on their own behalf, with a wide range of restrictions and constraints that serve the PBMs interest, often at the client’s expense. On the other hand, a Fiduciary PBM manages the benefit without that conflict of interest, and with better transparency – looking out for the best interest of the client and plan participants only. What are the Key Differences Between Fiduciary and Traditional PBM Business Models?

• Louisiana AG sues UnitedHealth, alleging drug overcharges in Medicaid. Louisiana Attorney General Jeff Landry has sued UnitedHealth Group, claiming that the healthcare and insurance giant has inflated drug charges in the state’s Medicaid program by billions. The suit was filed April 13 in state court, Bloomberg reported, and alleges that the company’s pharmacy benefit manager Optum Rx took advantage of the secrecy of the pharmacy supply chain to “needlessly” charge Medicaid billions for prescription drug benefits.

Prescription drug spending exceeds 400 billion dollars annually and PBMs have a hand in almost every dollar. How PBMs make money is an important consideration for plan sponsors. PBMs offer a valuable service, one which provides pharmacy benefits to nearly 225 million Americans. Unfortunately, very few people outside of the industry understand what they [we] do or how they make money. I aim to put an end to this now.

Clients of a PBM include but are not limited to self-funded employers, insurers, managed care organizations, state, and federal government agencies. The client works with the PBM to decide the pharmacy benefit that it will offer, including the drugs that will be covered, the beneficiary’s cost sharing requirements, and the pharmacy network. The client then retains the PBM to administer the pharmacy benefit for its members or employees.

One of the primary reasons clients retain PBMs is that PBMs reduce the cost of offering a pharmacy benefit. PBMs do this in a variety of ways: automating administrative services, negotiating discounts on ingredient cost (drugs), and managing drug utilization. May I speak frankly? Industry catch phrases such as “transparency” and “pass-through pricing” or related words are in my experience half-truths. Demand an airtight fiduciary contract and reference pricing, which includes acquisitions costs and NDCs, from an independent third party to maximize value in every single penny of your pharmacy spend.

Often overlooked, in far too many PBM contracts, is how much cash the PBM generates for itself, on a per client basis. I have a simple equation that every consultant, broker and benefits expert should employ to calculate PBM service costs, but few do. Here it is absence of charge. Is it unreasonable to know exactly how much money your PBM is pocketing for the services it provides to your organization? A non-fiduciary PBM will bark at this notion. In other words, no matter how tight you believe your contract to be a non-fiduciary PBM will find a means to reap excessive revenue from clueless payers unless of course you continue reading. To learn more, watch How PBMs Make Money.

Because plan sponsors don’t know how pharmacy benefit managers make money or how much they pay them, it gives PBMs all the incentive they need to overcharge. How many businesses do you know want to cut their revenues in half? That’s why traditional pharmacy benefit managers, and their stakeholders, don’t offer a fiduciary standard of care and instead opt for hidden cash flow opportunities to generate their service fees. 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 at 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
• Basic to intermediate level PBM terminologies
• Specialty pharmacy cost-containment strategies
• Examples of drugs that you might be covering that are costing you
• The #1 metric to measure when evaluating PBM proposals

Understanding how pharmacy benefit managers make money and how much you pay them for their services is a key element in running an efficient pharmacy benefits program. Join us to learn more.

See you Tuesday, 05/10/22 at 2 PM ET!

Sincerely,
TransparentRx
Tyrone D. Squires, CPBS  
10845 Griffith Peak Drive, Suite 200  
Las Vegas, NV 89135 
Office: (866) 499-1940
Mobile: (702) 803-4154

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.