In the complex world of pharmaceuticals, drugmakers are often scrutinized for the high prices of their medications. These prices, while reflective of the research and development costs involved in bringing new drugs to market, also highlight the industry’s strategic efforts to protect profit margins. As consumers and healthcare systems worldwide grapple with escalating drug costs, understanding the tactics employed by pharmaceutical companies to maintain their financial edge becomes crucial. From patent protections to direct-to-consumer advertising, these methods reveal a multifaceted approach to sustaining high drug prices. Here are ten strategies pharmaceutical companies use to maximize profits on drugs.

1. Patent Protection: Drugmakers often obtain patents for their new drugs, giving them exclusive rights to sell the drug for a certain period, typically 20 years. This prevents other companies from making generic versions.
2. Evergreening: This involves making slight modifications to existing drugs and re-patenting them. These modifications could be changes in dosage, delivery method, or combination with other drugs. This extends the patent life of the drug.
3. Litigation: Pharmaceutical companies sometimes engage in legal battles to extend their patent exclusivity. This could involve suing generic manufacturers alleging patent infringement.
4. Pay-for-Delay: In some cases, brand-name drug manufacturers pay generic drugmakers to delay the release of generic versions of their drugs. This agreement benefits both parties but can keep drug prices high.
5. Exclusive Contracts: Some drugmakers enter into exclusive contracts with suppliers or distributors to control the drug’s supply chain, making it difficult for competitors to access these channels.
6. Controlled Release of Generics: Companies might release their own generic version of a drug when the patent is about to expire. This allows them to capture a portion of the generic market.
7. Bundling Products: Pharmaceutical companies might bundle a popular drug with a less popular one, forcing buyers to purchase both, thereby sustaining the sales of the less popular drug.
8. Orphan Drug Designation: Companies might seek orphan drug status for drugs intended to treat rare diseases. This provides benefits like tax credits and market exclusivity, even for drugs that might have broader applications.
9. Direct-to-Consumer Advertising: This increases consumer demand for specific drugs, which can help maintain unaffordable prices due to increased demand.
10. Lobbying and Political Contributions: Pharmaceutical companies invest heavily in lobbying efforts and political contributions to influence drug-related policies and regulations in their favor.

The tactics employed by pharmaceutical companies to protect their profit margins encompass a broad spectrum of strategies, from leveraging patent laws to engaging in sophisticated marketing and legal maneuvers. While these practices are integral to recovering the substantial investments made in drug development, they also raise questions about the accessibility and affordability of essential medications. As policymakers, healthcare providers, and consumers navigate the challenges of ensuring drug availability at reasonable costs, the balance between rewarding innovation and preventing monopolistic practices remains a pivotal concern.

In the complex and dynamic realm of Pharmacy Benefit Management (PBM), the strategic use of data analytics stands as a cornerstone for achieving competitive advantage, cost efficiency, and superior patient outcomes. As decision-makers—pharmacy benefit consultants, employee benefit brokers, CFOs, and CHROs—it’s imperative to understand the transformative role of leveraging data analytics in PBM and the critical need for a shift towards digital transformation, moving beyond traditional reliance on spreadsheets.

The Strategic Role of PBM Data Analytics

Data analytics in PBM transcends mere number crunching; it’s about deriving actionable insights that drive strategic decisions. This involves analyzing diverse datasets, including prescription claims, patient demographics, drug pricing, and pharmacy networks, to:

• Enhance Cost Management: Strategically reduce costs while maintaining or improving care quality.
• Improve Fraud Detection: Employ sophisticated analytics to identify and mitigate fraudulent activities effectively.
• Optimize Patient Care: Utilize data to personalize medication management, improving health outcomes.
• Boost Operational Efficiency: Identify and address inefficiencies, streamlining processes for better performance.

Why Digital Transformation is Essential

The reliance on spreadsheets for managing and analyzing PBM data is increasingly becoming a bottleneck in an era defined by big data. Here’s why embracing digital transformation is not just an option but a necessity for industry leaders:

Scalability and Complexity

As organizations grow, the volume and complexity of data escalate, making spreadsheets impractical. Digital analytics platforms are designed to handle large datasets effortlessly, providing the scalability needed to adapt and thrive.

Enhanced Accuracy and Reliability

The manual processes associated with spreadsheets are prone to errors. Digital solutions automate data processing, significantly reducing the risk of inaccuracies and enhancing the reliability of insights.

Advanced Analytical Tools

Digital transformation opens the door to advanced analytics, including predictive modeling, machine learning, and AI, offering deeper insights and foresight that are invaluable for strategic planning and decision-making.

Seamless Data Integration

Integrating data from various sources is crucial for a comprehensive view of PBM operations. Digital platforms facilitate this integration, breaking down silos and enabling a unified analysis.

Regulatory Compliance and Data Security

In the healthcare sector, data security and regulatory compliance are paramount. Digital platforms offer sophisticated security features and compliance capabilities, ensuring data is managed responsibly and securely.

Charting the Path Forward

For decision-makers in the PBM space, the move towards digital analytics is a strategic imperative. Here’s how to navigate this transition:

1. Conduct a Thorough Assessment: Evaluate your current data management and analytics practices to identify gaps and opportunities for improvement.
2. Invest in the Right Technology: Choose data analytics platforms that align with your strategic goals and operational needs.
3. Develop Skills and Knowledge: Ensure your team is equipped to leverage new technologies through training and professional development.
4. Implement Robust Data Governance: Establish clear policies for data management to ensure accuracy, security, and compliance.

Conclusion

For pharmacy benefit consultants, employee benefit brokers, CFOs, and CHROs, the journey towards leveraging data analytics in PBM is not just about adopting new technologies; it’s about strategically positioning your organization for success in a rapidly changing landscape. By embracing advanced data analytics, you can unlock unparalleled opportunities for cost savings, operational excellence, and improved patient care. The future of PBM is data-driven, and the time to act is now.

Copay Adjustment Programs: What’s Next for Manufacturers and other notes from around the interweb:

• Copay Adjustment Programs: What’s Next for Manufacturers? The ongoing battle over controversial copay adjustment programs that shift more of the costs of specialty medications onto patients—otherwise known as accumulators and maximizers—continues to draw significant interest from the healthcare community. As payers and manufacturers clash over cost-shifting strategies while state and federal courts increasingly become involved, patients keep getting caught in the middle. Since these programs are designed to ensure that manufacturer copay assistance payments no longer count toward a patient’s deductible or out-of-pocket costs, the stakes are particularly high for manufacturers. With their assistance coupons restricted from counting toward their annual out-of-pocket maximums, patients are far more likely to stop taking their medications because they can no longer afford them.

• Best Pharmacy Benefit Consultants for Cost-Effective Drug Plans. In the complex world of healthcare and pharmaceuticals, managing costs while ensuring the best possible care can be a daunting challenge for businesses of all sizes. Pharmacy Benefit Consultants (PBCs) play a crucial role in navigating this landscape, offering expertise that can lead to significant savings and more effective drug plan management. This article delves into the importance of PBCs, what to look for when selecting a consultant, and how they can transform the cost-effectiveness of drug plans.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

In the evolving landscape of healthcare benefits, corporations find themselves at a crossroads, especially when it comes to covering weight loss medications like Wegovy. A recent development has seen Novo Nordisk, the pharmaceutical giant behind Wegovy, imposing penalties on employers who limit access to these expensive drugs, have led at least two major employers to discontinue their coverage, unveiling a weight loss drug coverage dilemma:

• Increased Healthcare Costs: Employers face rising expenses in providing health benefits, driven by the excessive cost of weight loss medications.
• Access and Affordability for Employees: Restricting or discontinuing coverage affects employees’ access to potentially life-changing treatments, raising questions about healthcare equity.
• Negotiation Dynamics: The power struggle between pharmaceutical companies, PBMs, and employers over drug pricing and discounts reveals the complex negotiations that underpin healthcare benefits.
• Corporate Responsibility and Employee Well-being: Companies must balance their financial constraints with their responsibility to support employees’ health and well-being.
• Broader Healthcare Debate: This situation contributes to the ongoing debate about drug pricing, insurance coverage, and the right to healthcare, highlighting the need for systemic changes in how medications are priced and covered.

The crux of the matter lies in the negotiation dynamics between employers, Pharmacy Benefit Managers (PBMs), and drug manufacturers. PBMs play a crucial role in negotiating drug prices, but their ability to secure discounts is being challenged by the manufacturer’s aggressive tactics. This situation leaves employers grappling with soaring healthcare costs, putting them in a difficult position: either absorb the excessive costs of these medications or face the manufacturer’s financial penalties.

The standoff has major implications for both companies and their health plans, as well as for employees dependent on these medications for their health. Despite a company’s financial resources, deciding whether to cover weight loss drugs remains a complex issue. Additionally, there’s a significant risk of fraud associated with GLP-1 weight loss medications. This concern arises from the potential for these drugs to be overprescribed, misused, or diverted, leading to unnecessary costs for companies without corresponding health benefits for users.

The bar chart (figure 1) could simplify this decision-making process regarding their inclusion in the formulary. I suggest holding off until prices decrease. Meanwhile, consider exploring other options such as diet and exercise. As corporations navigate this tricky terrain, the broader conversation about drug pricing, healthcare benefits, and corporate responsibility continues to evolve. This scenario underscores the complex interplay of financial, ethical, and healthcare considerations that companies must balance in the modern corporate landscape.

A good pharmacy benefits consultant plays a vital role in guiding organizations through the complexities of pharmacy benefits management, aiming to optimize healthcare outcomes while controlling costs. Here are some key attributes and certifications that define a good pharmacy benefits consultant which are key to unlocking the value of pharmacy benefits:

1. Expertise in Pharmacy Benefits Management (PBM): A deep understanding of how PBMs operate, including drug pricing, rebate management, benefit design, formulary, and utilization management, is crucial. This knowledge helps in negotiating contracts and ensuring that clients receive the best possible terms.
2. Analytical Skills: The ability to analyze data effectively is essential. This includes interpreting drug utilization reports, identifying trends in prescription drug spending, and evaluating the financial impact of different pharmacy benefit strategies.
3. Certifications: Relevant professional certifications can enhance a consultant’s credibility and expertise. Certifications such as the Certified Pharmacy Benefits Specialist (CPBS) or Certified Employee Benefit Specialist (CEBS) with a specialization in healthcare and benefits can demonstrate a consultant’s commitment to their profession and expertise in the field.
4. Regulatory Knowledge: A thorough understanding of healthcare regulations, including the Affordable Care Act (ACA), Medicare, and Medicaid, as well as compliance issues related to pharmacy benefits, is important. This ensures that advice and strategies are compliant with current laws and regulations.
5. Communication Skills: Effective communication and negotiation skills are vital. A good consultant must be able to explain complex pharmacy benefits concepts in understandable terms to clients and negotiate effectively with PBMs and drug manufacturers.
6. Ethical Standards: High ethical standards and transparency are essential, particularly in areas such as rebate management and contract negotiations, to build trust with clients.
7. Continuous Learning: The healthcare landscape, especially pharmacy benefits, is constantly changing. A good consultant stays updated with industry trends, new drugs, technologies, and regulatory changes to provide informed advice.
8. Strategic Thinking: The ability to develop innovative and strategic solutions that align with the client’s healthcare goals and financial constraints is critical. This might involve designing custom formularies, implementing cost-saving measures, or leveraging technology to improve pharmacy benefits management.

In summary, a good pharmacy benefits consultant combines industry-specific knowledge and certifications with analytical, strategic, and communication skills, all underpinned by a commitment to ethical practice and continuous learning. These attributes enable them to play a critical role in unlocking the value of pharmacy benefits and delivering value to their clients, helping them to manage their pharmacy benefits effectively and efficiently.

Best Pharmacy Benefit Consultants for Cost-Effective Drug Plans and other notes from around the interweb:

• Best Pharmacy Benefit Consultants for Cost-Effective Drug Plans. In the complex world of healthcare and pharmaceuticals, managing costs while ensuring the best possible care can be a daunting challenge for businesses of all sizes. Pharmacy Benefit Consultants (PBCs) play a crucial role in navigating this landscape, offering expertise that can lead to significant savings and more effective drug plan management. This article delves into the importance of PBCs, what to look for when selecting a consultant, and how they can transform the cost-effectiveness of drug plans.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

• Lawsuit alleges J&J health plan fiduciaries mismanaged prescription drug benefits. A lawsuit filed on February 5, 2024, against Johnson and Johnson and its health plan fiduciaries is a good reminder that the fiduciary duties that exist under the Employee Retirement Income Security Act of 1974 (ERISA) do not just apply to qualified retirement plans. They apply to ERISA health and welfare plans, too. There is likely a very strong “rest of the story” to the allegations in this lawsuit and the defendants will no doubt vigorously dispute and defend this case, but the allegations in this new class action complaint give employers and their plan fiduciaries much to think about. Among the allegations in the proposed class action complaint, the plaintiff alleges that someone with a 90-pill prescription for one generic drug could fill that prescription without insurance for between $28.40 – $77.41, and yet, it alleges, the defendant fiduciaries contractually agreed to have the plan pay $10,239.69 for the same 90-pill prescription.

In this legal dispute, employees hit Johnson & Johnson with a major lawsuit. Ann Lewandowski and other plaintiffs are suing Johnson & Johnson for allegedly mismanaging their prescription-drug benefits, resulting in significant financial losses for participants in the company’s ERISA plans. The complaint asserts that Johnson & Johnson and its benefits committee failed in their fiduciary duties by allowing the plans to overpay for prescription drugs, notably generic medications, through arrangements with their Pharmacy Benefits Manager (PBM).

This purported mismanagement led to inflated costs for the plan participants, including higher premiums, deductibles, and out-of-pocket expenses, while potentially costing the plans and their beneficiaries millions of dollars. The case underscores the complex interplay of corporate practices, legal responsibilities, and the financial well-being of employees in the healthcare benefits landscape.

Pharmacy Benefit Managers (PBMs) play a critical role in the healthcare system by acting as intermediaries between employers or health plans and the pharmaceutical world. Their primary functions include negotiating discounts with drug manufacturers, determining the list of covered medications (formulary management), and setting the amount pharmacies are reimbursed for drugs. PBMs aim to reduce prescription drug costs and improve convenience and safety for patients, but their practices and the transparency of their operations have been subjects of debate and scrutiny in the context of overall healthcare affordability and access.

Employers can mitigate the risk of litigation like the Johnson & Johnson case by investing in education around Pharmacy Benefit Managers (PBMs), specifically through Certified Pharmacy Benefit Specialist (CPBS) training. CPBS training equips employers with comprehensive knowledge on how PBMs operate, strategies to ensure that their PBM contracts are cost-effective, and insights into maintaining transparency and accountability in their pharmacy benefits management. By understanding the intricacies of PBM operations and learning to navigate the complex healthcare landscape effectively, employers can safeguard against excessive prescription drug costs and ensure that their benefits plans are managed in the best interest of their employees.

Tyson Foods, Employing 140,000, Parts Ways with Major PBM and other notes from around the interweb:

• Tyson Foods, Employing 140,000, Parts Ways with Major PBM. Tyson Foods will become one of the first Fortune 100 companies to stop using the nation’s traditional large pharmacy benefits managers, as it looks to cut spending on high-cost drugs. Tyson’s decision adds to an upheaval in the industry, as startups promising lower costs and transparency challenge the largest benefit managers and pushed them to change their own business models. Tyson made the decision as it saw pharmacy costs soar. “We were going anywhere between 12% to 14% increases for pharmacy — and on a $200 million spend that’s quite a bit. We found that the specialty (drug) component of our trends … were picking up a lot of the increase year over year,” said Renu Chhabra, Tyson vice president and head of global benefits. When she tried to get answers on what was driving those trends from the company’s old pharmacy benefit manger, or PBM, Chhabra says she couldn’t get the kind of data she wanted.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

• Cigna Group to Sell Medicare Businesses to Health Care Service Corporation (HCSC). The Cigna Group today announced that it has entered into a definitive agreement whereby Health Care Service Corporation (HCSC) will acquire The Cigna Group’s Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D and CareAllies businesses, for a total transaction value of approximately $3.7 billion. As part of the transaction, The Cigna Group and HCSC have agreed to enter into a four-year services agreement under which Evernorth Health Services, a subsidiary of The Cigna Group, will continue to provide pharmacy benefit services to the Medicare businesses, effective on closing of the transaction.

The healthcare landscape is constantly evolving, and one notable change that’s garnering attention is the shift of J-code drugs to pharmacy benefits. This shift has wide-ranging implications for patients, healthcare providers, and insurers alike. In this post, we delve into the benefits and challenges of this move, offering a balanced perspective that is essential for stakeholders in the healthcare industry.

Understanding J-Code Drugs

Before we dive into the specifics, let’s clarify what J-code drugs are. These are typically injectable drugs administered in a physician’s office. They are categorized under ‘J-codes’ in the Healthcare Common Procedure Coding System (HCPCS). These drugs have traditionally been covered under medical benefits but are increasingly being moved to pharmacy benefits.

The Shift to Pharmacy Benefits: Benefits and Challenges

Benefits of the Shift

1. Cost Transparency: Pharmacy benefits often come with clearer cost information, making it easier for patients to understand and manage their expenses.
2. Streamlined Administration: This transition can simplify administrative processes, potentially reducing the paperwork and time involved in drug dispensing.
3. Potential for Lower Costs: Through pharmacy benefits, there might be better negotiation leverage for prices, potentially leading to lower costs for patients.
4. Enhanced Medication Management: Pharmacy benefits could offer better support in medication management, ensuring adherence and improving patient outcomes.
5. Broader Access to Discounts and Rebates: Patients might benefit from discounts and rebates that are more readily available through pharmacy benefits.

Challenges of the Shift

1. Access Issues: Patients might face more restrictions, such as limited networks of preferred pharmacies, impacting their access to necessary medications.
2. Complex Approval Processes: The transition might involve more complex prior authorization processes, potentially delaying treatment.
3. Disruption of Care: Switching systems could disrupt existing care plans, causing inconvenience and potential health risks for patients.
4. Insurance Plan Limitations: Some insurance plans might offer less favorable terms for pharmacy benefits, impacting coverage and costs.
5. Challenges in Coordination of Care: Coordinating care between healthcare providers and pharmacies can be complex and time-consuming.

J-code drugs are typically injectable drugs that are administered primarily in a physician’s office. Moving these to the pharmacy benefit could have several implications. Here’s a table that outlines some potential benefits and challenges:

Implications for Stakeholders

For Patients

Patients need to be aware of how this shift could affect their access to medication and overall costs. Understanding the nuances of their insurance plans is more crucial than ever.

For Healthcare Providers

Providers must navigate the new administrative landscapes, ensuring that they can still deliver the best care while dealing with different billing and authorization processes.

For Insurers

Insurers play a critical role in this transition, balancing the need to manage costs while ensuring patient access to necessary treatments.

For Pharmacists

Pharmacists will likely see an increased role in patient care, requiring a deeper understanding of J-code drugs and associated management protocols.

Conclusion

The transition of J-code drugs to pharmacy benefits is a complex process with both benefits and challenges. It’s essential for all stakeholders to stay informed and adapt to these changes to ensure that patient care remains effective and efficient. As the healthcare industry continues to evolve, staying ahead of trends like this will be key to navigating the future of healthcare successfully.

5 ways to improve your PBM procurement process in 2024 and other notes from around the interweb:

• Federal mandates bring big lawsuit worries for health plan administrators. The Consolidated Appropriations Act of 2021, enacted on December 27, 2020, introduces significant new disclosure mandates for health plan providers, heightening the risk of substantial legal challenges. This Act amends the Employee Retirement Income Security Act of 1974, aiming to enhance transparency in employee health benefit plans. The implementation of various components of this law has been gradual, with compliance deadlines for certain sections only recently becoming due. Jennifer S. Berman, a seasoned employee benefits attorney and compliance consultant, emphasizes the surge in fiduciary responsibilities for sponsors of health and welfare plans. Three years into the enactment of the CAA, plan sponsors are diligently working to fulfill these newly imposed duties. This legislation represents more than a mere federal requirement for health plan administrators. It carries the potential for significant class-action lawsuits against plans that fail to comply with the updated legal requirements.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

• New limits on prior authorization hailed as good first step. New federal rules requiring health insurers to streamline requests to cover treatments are being hailed as a good first step toward addressing a problem that’s increasingly aggravated patients and doctors. Health insurers will have to provide coverage decisions on urgent treatment requests within 72 hours for patients in Medicare Advantage, Medicaid or Affordable Care Act plans under federal rules finalized Wednesday. The deadline is seven days for non-urgent requests. Insurers’ requirements for their sign-off on some physician-ordered care is a major tension point with providers and has faced recent scrutiny from Congress. The new protocols, which largely take effect in 2026, may cut the review process in half for some insurers.