Playbook for Employers – Addressing PBM Misalignment and other notes from around the interweb:

• Playbook for Employers – Addressing PBM Misalignment. The guide, released by the National Alliance of Healthcare Purchaser Coalitions, identifies several key strategic recommendations that employers can adopt when looking to better navigate their relationship with PBMs. For one, the playbook recommends that employers find advisers that are genuinely putting in the work for them. Advisers should be independent and transparent, according to the guidebook, and contracts should be designed to ensure that PBMs act in the employer’s best interest. “As we uncover these increasingly apparent anomalies, I think we’ve got to challenge ourselves to do better and most importantly require that our advisers, our middlemen and our intermediaries do better on our behalf,” Mike Thompson, CEO of the alliance, told Fierce Healthcare.

• STAT News investigation takes deep dive into PBM broker conflicts of interest. Employers across the country — from big names like Boeing and UPS to local school systems — pay consulting firms to handle a straightforward task with their prescription drug coverage: Get the best deals possible, and make sure the industry’s middlemen, known as pharmacy benefit managers, aren’t ripping them off with unfair contracts. But a largely hidden flow of money between major consulting conglomerates and PBMs compromises that relationship, a STAT investigation shows. Some consulting firms often are getting paid more — a lot more — by the PBMs and health insurance carriers that they are supposed to scrutinize than by companies they are supposed to be looking out for.

• FTC adds a third GPO to its investigation into pharmacy benefit managers. The Federal Trade Commission is building out its deep dive into the pharmacy benefit management industry yet again. The agency said Thursday that it has sent an order to the group purchasing organization Emisar Pharma Services, requiring it to provide information and records pertaining to its business practices. The order follows similar missives sent to two other GPOs, Zinc Health Services and Ascent Health Services, last month. Emisar negotiates rebates with drugmakers on behalf of Optum Rx, a UnitedHealth Group subsidiary and one of the three largest PBMs. The FTC said its order to Emisar is “substantially similar” to those issued to Zinc and Ascent.

• Report: “Specialty” Drugs are by Far the Most Expensive, but Classification Seems Arbitrary. The prescriptions with the most astonishing price tags — like cancer meds that can cost more than $20,000 a month — are usually classified as “specialty” drugs. You’d think that since they’re so costly, there would be clear criteria for putting drugs in the specialty category. But, according to a new report, you’d be wrong. The issue might seem arcane, but it’s hugely important. Specialty drugs account for only about 2% of the volume of drugs dispensed in the United States, according to industry estimates, but they also account for more than 50% of overall drug spending. The report, by data analysis firm 46Brooklyn Research, found that the three largest drug middlemen in the United States often don’t classify the same medicines as specialty. It also said that a substantial portion of the ones they do put into that category are generics — drugs that are usually no longer under patent and thus are supposed to be cheaper because multiple drugmakers can supply them.

A professional certification in employee benefits offers a range of advantages that can positively impact an individual’s career and professional growth. Here are some key advantages of obtaining a professional certification in employee benefits:

1. Enhanced Credibility and Recognition: A certification demonstrates your expertise and validates your skills in a specific field or industry. It serves as an official recognition of your knowledge and competence, boosting your credibility among employers, colleagues, and clients.
2. Career Advancement: Certifications often serve as a differentiating factor in a competitive job market. They can provide you with a distinct advantage over candidates who lack the same credentials, increasing your chances of landing a job or earning a promotion.
3. Skill Development and Knowledge Expansion: Pursuing a certification requires dedicated study and preparation. Through this process, you acquire new knowledge and develop specialized skills that are highly relevant to your profession. This ongoing learning can help you stay updated with the latest industry trends and advancements.
4. Expanded Professional Network: Certification programs often involve interacting with professionals from diverse backgrounds who share a common interest. This enables you to build valuable connections and expand your professional network, opening doors to new opportunities, collaborations, and mentorship.
5. Increased Earning Potential: Certified professionals generally command higher salaries compared to their non-certified counterparts. Employers recognize the value of certifications and are willing to compensate individuals who possess specialized skills and knowledge.
6. Industry Recognition and Standards Compliance: Certain industries have established standards and regulations that require professionals to hold specific certifications. Acquiring these certifications ensures that you are in compliance with industry norms and can provide services or perform tasks that meet recognized standards.
7. Continuous Professional Development: Many certifications require ongoing education or recertification, ensuring that certified professionals stay up to date with the latest developments in their field. This commitment to continuous learning helps professionals maintain their expertise and adapt to evolving industry requirements.
8. Personal and Professional Growth: Pursuing a certification demonstrates your commitment to personal and professional growth. It showcases your dedication, perseverance, and willingness to invest in yourself, which can boost your self-confidence and provide a sense of accomplishment.

While professional certifications in employee benefits offer numerous advantages, it’s important to choose certifications that align with your career goals and the demands of your industry. Conduct thorough research, consider your professional aspirations, and assess the value that a specific certification can bring to your career path.

The Market Demands Transparency and Perhaps a Whole Lot More and other notes from around the interweb:

• Site-of-Care Shock Looms for Infusion Services. Infusion therapy site-of-care (SOC) management policies imposed by third-party payors are driving an increasing number of infusion patients out of hospital outpatient departments (HOPDs). That’s not surprising, given the $6 billion size of this market. So, where will these patients go instead? Two SOC experts sought to answer that question during a session at the 2023 MHA Business Summit. “HOPD infusions cost on average 70% more than a physician’s office for the same infusion,” said Jacob Wiesenthal, a consultant to healthcare consultancy Recon Strategy, citing data from the Magellan Pharmacy Trend Report. But because many patients on long-term infusion therapy are often extremely sick and the treatments hard to tolerate, requiring clinical support nearby, he noted that employers and payors have not historically pushed to shift SOC for these cases, instead pursuing less risky cost-cutting opportunities. “As a pharmaceutical therapy typically covered under the medical benefit, infusion has also tended to fall through the cracks of expertise between the health plan and the pharmacy benefit manager [PBM].

• The Market Demands Transparency and Perhaps a Whole Lot More. Even though the original purpose of PBMs was to reduce the cost of prescription drugs and to keep drugs affordable, the current nationwide debate is whether PBMs do in fact lower drug prices and make them more affordable and accessible. Because PBMs have historically not been regulated, there was a lack of transparency in how PBMs operated. Multiple state and federal lawsuits have been commenced against PBMs for overcharging public programs for drugs, unjust enrichment, misrepresentation, fraud, and failure to meet ethical and safety standards. Many of these actions have already resulted in hundreds of millions of dollars in damages to providers, plans, patients, and States, while others are still ongoing. The opaque nature of PBM corporate ownership and control, as well as the confidential arrangements with key players in the health care delivery system are speculated to be causing increases in drug and medication prices without a clear and justifiable reason. What’s more, the historical lack of transparency hampers the ability of policymakers to effectively respond to the high and escalating pharmaceutical costs.

• FTC adds a third GPO to its investigation into pharmacy benefit managers. The Federal Trade Commission is building out its deep dive into the pharmacy benefit management industry yet again. The agency said Thursday that it has sent an order to the group purchasing organization Emisar Pharma Services, requiring it to provide information and records pertaining to its business practices. The order follows similar missives sent to two other GPOs, Zinc Health Services and Ascent Health Services, last month. Emisar negotiates rebates with drugmakers on behalf of Optum Rx, a UnitedHealth Group subsidiary and one of the three largest PBMs. The FTC said its order to Emisar is “substantially similar” to those issued to Zinc and Ascent.

• Report: “Specialty” Drugs are by Far the Most Expensive, but Classification Seems Arbitrary. The prescriptions with the most astonishing price tags — like cancer meds that can cost more than $20,000 a month — are usually classified as “specialty” drugs. You’d think that since they’re so costly, there would be clear criteria for putting drugs in the specialty category. But, according to a new report, you’d be wrong. The issue might seem arcane, but it’s hugely important. Specialty drugs account for only about 2% of the volume of drugs dispensed in the United States, according to industry estimates, but they also account for more than 50% of overall drug spending. The report, by data analysis firm 46Brooklyn Research, found that the three largest drug middlemen in the United States often don’t classify the same medicines as specialty. It also said that a substantial portion of the ones they do put into that category are generics — drugs that are usually no longer under patent and thus are supposed to be cheaper because multiple drugmakers can supply them.

The PBM industry is saturated with different business models, each claiming to save plan sponsors money and improve pharmacy benefit plans. However, there is one crucial aspect that none of them openly share with employers: the amount of money they are making from their groups. Only fiduciary or radically transparent PBM models are willing to disclose this information. It’s time to face the reality that traditional, pass-through, and transparent PBM models are essentially the same, failing to reveal the true extent of the PBMs’ profits from servicing your group. A guide to identifying a pass-through pharmacy benefit manager (PBM) is provided below.

Consider this for a moment: the contracts between pharmacy benefit managers, pharmaceutical manufacturers and/or pharmacies are usually fixed. Unless a PBM significantly exceeds the terms of the contract, it remains unchanged until its expiration. For a PBM to outperform such a contract, it would require a substantial increase in the number of covered lives, for instance. This leads us to a crucial realization. When plan sponsors negotiate during renewal, they are essentially deciding how much of the secured discounts they will allow the PBM to retain.

The amount of revenue retained by the PBM is known as the service or management fee, which essentially represents the cost of the services provided by the PBM. These service fees heavily influence the per member per month (PMPM) or per employee per year (PEPY) costs. While rebates, and discount guarantees are important, they often serve as distractions, diverting purchasers’ attention from a key driver of their final plan costs—the PBM service fees. A trained eye is crucial as it possesses the expertise and discernment to recognize and interpret intricate contract details or nuances that may elude the untrained observer, leading to more accurate and insightful observations or judgments. Take our knowledge assessment to uncover where you stand.

It’s important not to confuse the service fee with the administrative fee. The service fee is the amount the PBM keeps as profit after settling its bills, while the administrative fee is usually a quantifiable fee per claim, per employee per month (PEPM), or per member per month (PMPM). However, the latter administrative fee I refer to is distinct from the manufacturer admin fee or rebate, which is a separate topic altogether. In many cases, non-fiduciary PBMs offer artificially low administrative fees, knowing well that accepting them essentially grants them a blank check for service fees.

Pass-through and transparent PBM models fail to disclose the actual amount of their service fees, which is a significant problem. Unlike administrative fees, service fees are not easily quantifiable, primarily because non-fiduciary PBMs intentionally keep this information hidden to conceal their impact on costs. On the other hand, PBMs that operate under a full-disclosure or fiduciary model willingly share the service fee or the portion of negotiated discounts they will retain with employers. The lower this fee, the less employers will pay—plain and simple. A fair PBM service fee can effectively curb cost trends. Non-fiduciary PBM companies have become adept at exploiting the purchasing power of unsophisticated plan sponsors to their financial advantage.

Many plan sponsors mistakenly focus on “AWP minus discount” and the “minimum rebate guarantee” as the key factors when evaluating PBM proposals. However, it is crucial for plan sponsors to examine the cash flows to the PBM. PBM cash flow, often overlooked, can have the most significant impact on final costs. Shifting the primary metric for evaluating PBM proposals to what employers pay the PBM, or the service fee, is a groundbreaking idea. A fiduciary PBM is willing to provide this level of transparency. If a PBM claims to be pass-through but fails to offer such transparency, it is, at the very least, presenting only half-truths. A guide to identifying a pass-through pharmacy benefit manager (PBM) must address the PBM earnings after cash disbursements or EACD.

There are two aspects that should be non-negotiable for purchasers of PBM services. First, full access to their own claims data, free of charge, via Secure File Transfer Protocol (SFTP). Additionally, it is imperative for employers to have full transparency regarding the fees they are paying to PBMs for the services they were hired to provide. In the words of Alvin Toffler, a renowned futurist, “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” The Toffler quote emphasizes the significance of education as the logical and effective foundation for achieving exceptional outcomes in pharmacy benefit management services.

Site-of-Care Shock Looms for Infusion Services and other notes from around the interweb:

• Site-of-Care Shock Looms for Infusion Services. Infusion therapy site-of-care (SOC) management policies imposed by third-party payors are driving an increasing number of infusion patients out of hospital outpatient departments (HOPDs). That’s not surprising, given the $6 billion size of this market. So, where will these patients go instead? Two SOC experts sought to answer that question during a session at the 2023 MHA Business Summit. “HOPD infusions cost on average 70% more than a physician’s office for the same infusion,” said Jacob Wiesenthal, a consultant to healthcare consultancy Recon Strategy, citing data from the Magellan Pharmacy Trend Report. But because many patients on long-term infusion therapy are often extremely sick and the treatments hard to tolerate, requiring clinical support nearby, he noted that employers and payors have not historically pushed to shift SOC for these cases, instead pursuing less risky cost-cutting opportunities. “As a pharmaceutical therapy typically covered under the medical benefit, infusion has also tended to fall through the cracks of expertise between the health plan and the pharmacy benefit manager [PBM].

• The Consolidated Appropriations Act and PBM Transparency. Pharmacy Benefit Managers (PBMs) have been extending vertical integration in new and unique ways, leading to significant issues for plan sponsors and plans (referred to as “Plans” collectively). In a new and innovative approach, several large PBMs have created an additional layer between themselves and manufacturers to effectively delegate the collection of manufacturer rebates to “rebate aggregators.” Sometimes referred to as rebate GPOs, these mysterious entities include Ascent Health Services, a Switzerland-based GPO that Express Scripts launched in 2019; Zinc, a contracting entity launched by CVS Health in 2020, and Emisar Pharma Services, an Ireland-based entity recently rolled out by OptumRx. Even some of the major PBMs (i.e., the “Big Three” PBMs) sometimes contract with other PBMs’ rebate aggregators for the collection of manufacturer rebates as seen in the case of OptumRx contracting with Express Scripts for rebate aggregation for public employee plans. Worse yet, several of these entities have claimed exemption from the federal GPO Safe Harbor, resulting in a lack of transparency, and few limitations of their profitability.

• FTC adds a third GPO to its investigation into pharmacy benefit managers. The Federal Trade Commission is building out its deep dive into the pharmacy benefit management industry yet again. The agency said Thursday that it has sent an order to the group purchasing organization Emisar Pharma Services, requiring it to provide information and records pertaining to its business practices. The order follows similar missives sent to two other GPOs, Zinc Health Services and Ascent Health Services, last month. Emisar negotiates rebates with drugmakers on behalf of Optum Rx, a UnitedHealth Group subsidiary and one of the three largest PBMs. The FTC said its order to Emisar is “substantially similar” to those issued to Zinc and Ascent.

• Report: “Specialty” Drugs are by Far the Most Expensive, but Classification Seems Arbitrary. The prescriptions with the most astonishing price tags — like cancer meds that can cost more than $20,000 a month — are usually classified as “specialty” drugs. You’d think that since they’re so costly, there would be clear criteria for putting drugs in the specialty category. But, according to a new report, you’d be wrong. The issue might seem arcane, but it’s hugely important. Specialty drugs account for only about 2% of the volume of drugs dispensed in the United States, according to industry estimates, but they also account for more than 50% of overall drug spending. The report, by data analysis firm 46Brooklyn Research, found that the three largest drug middlemen in the United States often don’t classify the same medicines as specialty. It also said that a substantial portion of the ones they do put into that category are generics — drugs that are usually no longer under patent and thus are supposed to be cheaper because multiple drugmakers can supply them.

PBMs have every motive to overcharge since plan sponsors don’t know how to measure how much money they generate from their business. How many companies do you know that wish to halve their revenue? Because of this, traditional pharmacy benefit managers and their stakeholders don’t provide a fiduciary standard of care and instead choose to generate their service fees through hidden cash flow possibilities. Need to know more? Sign up for Demystifying PBM Pricing and Unveiling the Truth Behind Pharmacy Benefit Manager Costs.

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 PBMs 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, 06/13/22 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 for Demystifying PBM Pricing and Unveiling the Truth Behind Pharmacy Benefit Manager Costs and we’ll send you the link to the session recording as soon as it’s ready. 

Employers’ New Decision Point: Whether to Cover Expensive Weight Loss Drugs and other notes from around the interweb:

• When is a Smaller AWP Discount Better? Buyers need to be able to select a cheaper product if one is available on the market to save money. It’s common sense. The pharmaceutical business, however, is not your typical market. Many people are prevented from using cheaper biosimilars and forced to pay exorbitant prices for brand name medications because of perverse incentives. Health plans and PBMs now benefit from brand manufacturer price reductions, such as rebates, in return for securing preferred positioning on formularies and excluding cheaper biosimilars from those formularies. The modest uptake of less expensive biosimilar insulin serves as a stark illustration of these processes. As evidenced by statistics from IQVIA, several health plans have continued to favor and promote the use of an expensive brand insulin.

• The Consolidated Appropriations Act and PBM Transparency. Pharmacy Benefit Managers (PBMs) have been extending vertical integration in new and unique ways, leading to significant issues for plan sponsors and plans (referred to as “Plans” collectively). In a new and innovative approach, several large PBMs have created an additional layer between themselves and manufacturers to effectively delegate the collection of manufacturer rebates to “rebate aggregators.” Sometimes referred to as rebate GPOs, these mysterious entities include Ascent Health Services, a Switzerland-based GPO that Express Scripts launched in 2019; Zinc, a contracting entity launched by CVS Health in 2020, and Emisar Pharma Services, an Ireland-based entity recently rolled out by OptumRx. Even some of the major PBMs (i.e., the “Big Three” PBMs) sometimes contract with other PBMs’ rebate aggregators for the collection of manufacturer rebates as seen in the case of OptumRx contracting with Express Scripts for rebate aggregation for public employee plans. Worse yet, several of these entities have claimed exemption from the federal GPO Safe Harbor, resulting in a lack of transparency, and few limitations of their profitability.

• Employers’ New Decision Point: Whether to Cover Expensive Weight Loss Drugs. Thanks to buzzy results and popularity among celebrities, there’s a big spike in demand for GLP-1 drugs, such as Ozempic and Wegovy, as a tool to help people shed pounds. The injectable medications, originally prescribed for diabetes management, have also shown promising results for weight loss. That demand is creating a major decision point for employers: whether their health insurance plans should cover the pricy drugs for weight loss. “It’s a really big issue for employers,” said Dr. Jeff Levin-Scherz, M.D., population health leader at consulting firm WTW. “We’re seeing a pretty dramatic increase in the rate of the prescription of [drugs such as] Ozempic, which is only approved for diabetes but is now showing to be very effective for weight loss.” As a result, employers are thinking about how to handle coverage of the drugs, industry experts say, a decision made more difficult by competing priorities of trying to hold down rising health care costs for themselves while also retaining and wooing talent in an employee-driven job market. Covering desirable drugs for weight loss could help them with the latter.

• Report: “Specialty” Drugs are by Far the Most Expensive, but Classification Seems Arbitrary. The prescriptions with the most astonishing price tags — like cancer meds that can cost more than $20,000 a month — are usually classified as “specialty” drugs. You’d think that since they’re so costly, there would be clear criteria for putting drugs in the specialty category. But, according to a new report, you’d be wrong. The issue might seem arcane, but it’s hugely important. Specialty drugs account for only about 2% of the volume of drugs dispensed in the United States, according to industry estimates, but they also account for more than 50% of overall drug spending. The report, by data analysis firm 46Brooklyn Research, found that the three largest drug middlemen in the United States often don’t classify the same medicines as specialty. It also said that a substantial portion of the ones they do put into that category are generics — drugs that are usually no longer under patent and thus are supposed to be cheaper because multiple drugmakers can supply them.

An organization’s fundamental principles form its basis. Our ethics may support successful endeavors if they are transparent, unwavering, and carefully upheld. The underlying standards that underpin our certifications’ ideas, attitudes, and actions are called ethics. High ethical standards must be upheld at all costs if we are to serve those we are responsible for, those we are accountable to, and ourselves. While the outcomes of our service efforts will always be crucially important, ethics places a greater emphasis on the decisions we make during our professional lives. We commit to the following Statement of Ethics for the Certified Pharmacy Benefits Specialist (CPBS) Program:

Transparency

We will demand full and fair disclosure of all compensation related to pharmacy benefits management, including but not limited to direct and indirect compensation to PBMs, TPAs, brokers, and consultants.

Conflict of Interest

Profiteering is not allowed by pharmacy benefit managers (PBM) or pharmacy benefit administrators (PBA). Profiteering is the act of making or attempting to make an excessively large or unjust profit, especially unlawfully, pursuant to this statement of ethics.

Best Practices

The highest standards of pharmacy benefits management best practices, including but not limited to transparency, value-based formulary management, drug utilization management, ongoing monitoring, and cost management of specialty medications will be followed.

Member Advocacy

We will fight for the health and wellbeing of plan participants, giving them access to the drugs and services they require to effectively manage their medical conditions.

Confidentiality

In line with all relevant rules and regulations, we’ll keep any health information about plan members private.

We believe that adherence to the Statement of Ethics for the Certified Pharmacy Benefits Specialist (CPBS) Program will promote the highest standards of pharmacy benefit management and will enable us to provide plan participants with the best possible service. We are committed to ongoing education and training to ensure that we remain at the forefront of pharmacy benefit management best practices. Together, we can work to ensure that the management of pharmacy benefits serves the best interests of unions, health plans, health systems, commercial and public sector employers, and the broader healthcare system.