Author: Tyrone Squires, MBA, CPBS

This author has written 1305 articles

New Exposé Reveals Pharmacy Benefit Manager Tactics That Hurt Patients, Providers, Employers, and Taxpayers [Weekly Roundup]

 News and notes from around the interweb:

  • PBMs ranked by market share: CVS Caremark is No. 1. Three companies dominate the pharmacy benefit manager market, accounting for 79 percent of all prescription claims in 2020, according to data from Health Industries Research Companies, an independent, non-partisan market research firm. To assess market share, HIRC used self-reported data from twenty-nine pharmacy benefit manager leaders collected in December 2020 and January 2021.

  • Documenting Patient Interventions Is Essential. The most common MRPs or medication-related problems included Beers criteria medications (mostly antidepressants, protein pump inhibitors, gabapentin, and opioids), medication omission, drug-condition interaction, duplicate therapy, medication nonadherence, drug-drug interactions, untreated conditions, dose that were too low, and doses that were too high. MRPs were also equally prevalent among face-to-face versus phone interventions. However, the presence of documentation in the “assessment” section of the comprehensive medication review (CMR) was higher when MTM was conducted via phone (42%) compared to face-to-face (28%).

  • Join the Movement!

    A shared opportunity: The future of cell and gene therapy. Despite the many challenges of the last two years, the global cell and gene therapy (CGT) market continues to rapidly expand. The investment landscape for regenerative medicine has grown 16% in 3 years, hitting an all-time high in 2021 of $23.1 billion raised. With more funding pouring in each year and over 2,261 ongoing global clinical trials in regenerative medicine, the market is expected to reach $34.31 billion in 2030. With this immense growth potential, the industry is reaching a tipping point heading towards commercialization.

  • Over 800 Prescription Medications Got More Expensive in January 2022. The list prices for 810 prescription drugs increased by an average of 5.1 percent between Dec. 29 and Jan. 31, according to a GoodRx report released Feb. 4. Of the 810 medications that saw price increases in January, 791 were brand drugs, 19 were generics, 199 were specialty drugs and 84 were healthcare practitioner-administered drugs. The 791 brand drugs’ prices increased by an average of 4.9 percent, and the 19 generic drugs’ prices increased by an average of 12.6 percent. Price hikes in January 2022 were on par with January 2021, which saw 832 price hikes. In January 2022, drug prices rose by an average of 5.1 percent, half a percentage greater than in January 2021. The price hikes came from 155 drugmakers.
  • New Exposé Reveals Pharmacy Benefit Manager Tactics That Hurt Patients, Providers, Employers, and Taxpayers. The report, “Pharmacy Benefit Manager Exposé: How PBMs Adversely Impact Cancer Care While Profiting at the Expense of Patients, Providers, Employers, and Taxpayers,” was commissioned by the Community Oncology Alliance (COA) and written by industry experts at the law firm of Frier Levitt, LLC. It provides a comprehensive exposé and legal analysis of the most pervasive and abusive PBM tactics, highlighting the adverse impact they have on patients, providers, and health care payers (including Medicare, Medicaid, employers, and taxpayers). The goal is for the report to serve as an authoritative reference for policymakers, regulators, employers, and others seeking greater understanding of PBM behavior while also suggesting solutions to reshape the health care industry for the better.
The Certified Pharmacy Benefits Specialist (CPBS) educational offering includes knowledge that is critical to effective management of the pharmacy and medical drug benefit. If you want to learn more, click here.

PBMs ranked by market share: CVS Caremark is No. 1 [Weekly Roundup]

 News and notes from around the interweb:

  • PBMs ranked by market share: CVS Caremark is No. 1. Three companies dominate the pharmacy benefit manager market, accounting for 79 percent of all prescription claims in 2020, according to data from Health Industries Research Companies, an independent, non-partisan market research firm. To assess market share, HIRC used self-reported data from twenty-nine pharmacy benefit manager leaders collected in December 2020 and January 2021.

  • Documenting Patient Interventions Is Essential. The most common MRPs or medication-related problems included Beers criteria medications (mostly antidepressants, protein pump inhibitors, gabapentin, and opioids), medication omission, drug-condition interaction, duplicate therapy, medication nonadherence, drug-drug interactions, untreated conditions, dose that were too low, and doses that were too high. MRPs were also equally prevalent among face-to-face versus phone interventions. However, the presence of documentation in the “assessment” section of the comprehensive medication review (CMR) was higher when MTM was conducted via phone (42%) compared to face-to-face (28%).

  • Join the Movement!

    Documents reveal the secrecy of America’s drug pricing matrix. Several people who work in the industry, who asked not to be named due to the confidential nature of coalitions, said most employers, regardless of how big they are, have no idea what they’re giving up when they enter coalitions. Once employers are locked into the coalition, they can’t get a full second opinion on the drug prices they pay, experts said.

  • Over 800 Prescription Medications Got More Expensive in January 2022. The list prices for 810 prescription drugs increased by an average of 5.1 percent between Dec. 29 and Jan. 31, according to a GoodRx report released Feb. 4. Of the 810 medications that saw price increases in January, 791 were brand drugs, 19 were generics, 199 were specialty drugs and 84 were healthcare practitioner-administered drugs. The 791 brand drugs’ prices increased by an average of 4.9 percent, and the 19 generic drugs’ prices increased by an average of 12.6 percent. Price hikes in January 2022 were on par with January 2021, which saw 832 price hikes. In January 2022, drug prices rose by an average of 5.1 percent, half a percentage greater than in January 2021. The price hikes came from 155 drugmakers.
The Certified Pharmacy Benefits Specialist (CPBS) educational offering includes knowledge that is critical to effective management of the pharmacy and medical drug benefit. If you want to learn more, click here.

4 Little Known Ways to Optimize Drug Spend [Tip of the Week]

Managing drug spend efficiently is no easy task. It requires quite a bit of time, effort, and skill to do it right. Anyone with business training can look at a P&L statement and determine whether a company made a profit. However, understanding the story behind the numbers requires a certain set of skills only a certified public accountant can provide, for example. The same can be said for medical and pharmacy benefit drug costs.

Pick anyone from HR, finance or procurement and they will tell you succinctly that prescription drugs are expensive. Ask these same professionals how to reduce costs without increasing employee cost share, restricting access, or trimming benefits and you’ll get crickets. You’re thinking, that’s why we hire brokers and consultants. I’ll let the note Michael Critelli, former CEO at Pitney Bowes, sent to me address that point.

“I am pleased that you wrote the particular essay I downloaded. Many corporate benefits departments do not understand that they are overmatched in negotiating with pharmacy benefit managers, as are the “independent consultants” who routinely advise them. The first step in being wise and insightful is admitting what we do not know, and you have humbled anyone who touches this field.”

For those interested in improving their company’s medical and pharmacy benefit drug cost performance and unafraid of unconventional concepts, here are 4 Little Known Ways to Optimize Drug Spend.

1) Dr. Sree Chaguturu, the chief medical officer for CVS Caremark, recently made this bold recommendation, “Combine coverage for all specialty medications—including those currently covered in the medical benefit—under the pharmacy benefit.” Regardless of the motivation behind the recommendation, Dr. Chaguturu is correct. There are some distinct advantages beyond the obvious potential for realizing lowest net cost. PBMs use utilization management (UM) programs to encourage the use of generics or preferred products, for example. UM is the unsung hero of an efficiently run pharmacy benefits management program. These programs are extremely limited in medical benefits which leads to Fraud, Waste, and Abuse.
2) Put the contract front and center during your next RFP (request for proposal).

3) Move beyond simple spreadsheet analysis. When conducting a side-by-side claims analysis it is a disservice to plan sponsors when “best price” is calculated from a claim repricing report. Instead, the data must be viewed holistically. Ask yourself, “if the plan were being managed efficiently, what would the final plan cost for this group have been?” A claims analysis or re-pricing looks primarily at retrospective pricing which is a good starting point but does not come close to telling the whole story. For example, it doesn’t usually consider poor product mix or bad utilization from which non-fiduciary PBMs intentionally profit. It’s not unusual for a legacy PBM’s management fee to be higher than your drug costs at the end of a plan year. This management fee is profit which is hidden in the final plan cost. Any cost analysis which doesn’t take into consideration the PBM’s management fee falls well short of telling the entire story.

4) Get PBM educated. “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn,” wrote Alvin Toffler. Education is the most logical and effective foundation for achieving extraordinary results in pharmacy benefit management services. To improve on the job execution and career growth, benefits consultants, finance managers, procurement and HR professionals must expand their PBM knowledge beyond a functional role and understand exactly how each domain works together within the pharmacy distribution and reimbursement system. Don’t operate an inefficient employer-sponsored pharmacy benefit program. Learn the intricacies of managing pharmacy benefits like a pro.

How Pharmacy Benefit Managers Make Money and What To Do About It [Free Webinar]

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 and instead opt for hidden cash flow opportunities such as rebate masking. Want to learn more?

Here is what some participants have said about the webinar.


“Thank you Tyrone. Nice job, good information.” David Stoots, AVP

“Thank you! Awesome presentation.” Mallory Nelson, PharmD


“Thank you Tyrone for this informative meeting.” David Wachtel, VP

“…Great presentation! I had our two partners on the presentation as well. Very informative.” Nolan Waterfall, Agent/Benefits Specialist


A snapshot of what you will learn during this 30-minute webinar:

  • Hidden cash flows in the PBM Industry
  • 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

Sincerely,
TransparentRx
Tyrone D. Squires, MBA  
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.   

Billionaire Mark Cuban steps up assault on US prescription drug prices, or is he just another player in the mail-order pharmacy market? [Weekly Roundup]

 News and notes from around the interweb:

    Billionaire Mark Cuban steps up assault on US prescription drug prices. In an interview with Pharmacy Times, Ron Lanton III, Esq, principal at Lanton Law, said entrepreneur Mark Cuban’s new venture into the pharmacy field is very interesting, although it maybe just another player in the mail-order pharmacy market. In the interview, Lanton discussed the company’s steep discounts on drugs in a myriad of disease states, as well as the company’s pharmacy benefits manager, which is expected to be operational in 2023.

  • Is a 90-Day Supply the Best Option to Improve Medication Adherence? Medication nonadherence results in upwards of 100,000 deaths per year and billions in health care spending annually. Whether it is a newly discovered medication or a tried-and-true remedy of the past, a medication only works when it is taken correctly. Medication adherence is essential for each medication to have its therapeutic effect in every patient. Interventions to improve medication adherence may have a greater impact on individual patients and the population as a whole than any novel treatment or therapy. To address nonadherence and remove the potential barrier of accessibility to medications, 90-day supplies are commonly offered as a solution.

  • Join the Movement!

    Documents reveal the secrecy of America’s drug pricing matrix. Several people who work in the industry, who asked not to be named due to the confidential nature of coalitions, said most employers, regardless of how big they are, have no idea what they’re giving up when they enter coalitions. Once employers are locked into the coalition, they can’t get a full second opinion on the drug prices they pay, experts said.

  • 3 reasons to optimize pharmacy benefits before the next open enrollment. Drug spending in the U.S. ballooned to more than $535 billion in 2020 and was projected to increase by another 4-6% by the end of 2021. Two culprits include faster price increases and higher growth in utilization. With drug costs and pharmacy spend on the rise, reducing the cost of Rx benefits is a top priority for many of your self-funded employer clients. To put it simply, sticking with the status quo is not the best option in 2022. Here are three reasons why.
  • Issues Arise as Health Plans Begin Covering At-Home COVID-19 Tests. While plan sponsors and issuers were adjusting their benefits to cover the cost of COVID-19 at-home tests, the administration moved forward with President Joe Biden’s order that the federal government purchase five hundred million at-home rapid COVID-19 testing kits to be sent free of charge to Americans who request them. The administration’s action is in addition to its policy of allowing Americans to buy and get reimbursed through private insurance for at-home tests.
The Certified Pharmacy Benefits Specialist (CPBS) educational offering includes knowledge that is critical to effective management of the pharmacy and medical drug benefit. If you want to learn more, click here.

Tip of the Week: eVouchers help circumvent health plan sponsor benefit designs to get high-cost brand drugs dispensed

Brand drugmakers are circumventing pharmacy benefit plan designs by offering eVouchers or electronic vouchers for expensive drugs at the “Switch.” Why aren’t more people outraged about this? The switch is what routes the third-party prescription claims to the PBM or health plan associated with the prescription. Within seconds, the script leaves the pharmacy, goes to the switch, and then is received at the relevant PBM.

When the benefit design has soft UM or no utilization management protocols, such as mandatory generic enforcement, it allows drugmakers to bypass a tier 1 drug for a tier 2-4 drug or even worse a non-formulary drug, with eVouchers (see process flow diagram below). The two largest switch companies are RelayHealth and Change Healthcare. As Relay Health tells the story, its electronic voucher program is a Win-Win-Win solution:
  • Doctors “set aside concerns over costs”
  • “Patients benefit from lower copays” and “increased adherence”
  • Manufacturers benefit from increased “scripts written”, “the likelihood patients will fill and adhere to them” and “increased brand loyalty”
But what about you, the health plan sponsor? You are conveniently left out of the equation even though you cover most of the cost. I teach in our CPBS Certification course how plan sponsors fund the entire USA prescription drug system but know the least about how it works. Simply put, it is your checkbook they are after. The budgetary impact of switch operators’ eVoucher programs to health plan sponsors is significant and growing with each passing day.

Click to Enlarge

There are two ways to prevent the scenario above from happening:

(1) PBM inserts language into its contract with the Switch company, preventing the action.
(2) Benefit design maximizes the drug utilization management toolkit including step therapy and mandatory generic enforcement programs.

Number two is sticky as many plan sponsors are hellbent on employees getting the drug they want without any scrutiny (i.e. step therapy). I don’t agree but it’s not my checkbook. The point is to make people happy through better outcomes not for the sake of avoiding the pain that comes with running an efficient health plan. In a sense, drugmakers, and non-fiduciary PBMs for that matter, are leveraging HR’s desire to keep employees “happy.”

For TransparentRx the choice is simple, either you want an efficient pharmacy benefit program or you don’t. If you [health plan sponsors] don’t want an efficient pharmacy benefit program then expect to pay $1000 for a drug when a $100 drug would have provided the same level of efficacy, for example. eVouchers, especially when supported with direct-to-consumer TV ads for high-cost brand drugs and soft utilization management protocols, are an expensive proposition for health plan sponsors yet lucrative one for brand drugmakers.

Issues Arise as Health Plans Begin Covering At-Home COVID-19 Tests [Weekly Roundup]

 News and notes from around the interweb:

    The Case Against Excluding Specialty Drug Coverage. Coverage and exclusion decisions for certain therapy classes that are not rooted in clinical rigor, particularly when there are not clinically equivalent alternatives available, could lead to a new round of scrutiny and more regulation that limit the ability of plan sponsors to implement effective benefit plan designs. The reality is that new costly specialty therapies will continue to come to market and that patients with complex, chronic conditions need appropriate access to them. 

  • 4 Ways Employers Can Contain Rx Costs. Providing the best mix of health care options and benefits can be a differentiator for companies trying to attract and retain top talent. Benefits leaders want to find the right mix of health care options that matches the needs (and wants) of employees and their families with plans that won’t hurt the company financially or overwhelm employees’ pocketbooks. One key benefit getting increased scrutiny by government and business leaders is prescription drug coverage, the cost of which has historically outpaced the cost of inflation.

  • Join the Movement!

    Documents reveal the secrecy of America’s drug pricing matrix. Several people who work in the industry, who asked not to be named due to the confidential nature of coalitions, said most employers, regardless of how big they are, have no idea what they’re giving up when they enter coalitions. Once employers are locked into the coalition, they can’t get a full second opinion on the drug prices they pay, experts said.

  • Health Plan Transparency Reporting in 2022: Do You Know Where Your Health Care Dollars Go? The Department of Labor, Health and Human Services and the IRS recently released an interim final rule with a request for comment, Prescription Drug and Health Care Spending. The rule implements another phase of the transparency provisions of the Consolidated Appropriations Act, 2021 (CAA), and is open for public comment through Jan. 24, 2022. This most recent rule requires reporting entities—group health plans, both fully insured and self-funded, and issuers of insured group health plans or individual coverage—to report annually information about prescription drug and health care spending.
  • Issues Arise as Health Plans Begin Covering At-Home COVID-19 Tests. While plan sponsors and issuers were adjusting their benefits to cover the cost of COVID-19 at-home tests, the administration moved forward with President Joe Biden’s order that the federal government purchase five hundred million at-home rapid COVID-19 testing kits to be sent free of charge to Americans who request them. The administration’s action is in addition to its policy of allowing Americans to buy and get reimbursed through private insurance for at-home tests.
The Certified Pharmacy Benefits Specialist (CPBS) educational offering includes knowledge that is critical to effective management of the pharmacy and medical drug benefit. If you want to learn more, click here.

The Case Against Excluding Specialty Drug Coverage [Weekly Roundup]

 News and notes from around the interweb:

    The Case Against Excluding Specialty Drug Coverage. Coverage and exclusion decisions for certain therapy classes that are not rooted in clinical rigor, particularly when there are not clinically equivalent alternatives available, could lead to a new round of scrutiny and more regulation that limit the ability of plan sponsors to implement effective benefit plan designs. The reality is that new costly specialty therapies will continue to come to market and that patients with complex, chronic conditions need appropriate access to them. 

  • 4 Ways Employers Can Contain Rx Costs. Providing the best mix of health care options and benefits can be a differentiator for companies trying to attract and retain top talent. Benefits leaders want to find the right mix of health care options that matches the needs (and wants) of employees and their families with plans that won’t hurt the company financially or overwhelm employees’ pocketbooks. One key benefit getting increased scrutiny by government and business leaders is prescription drug coverage, the cost of which has historically outpaced the cost of inflation.

  • Join the Movement!

    Documents reveal the secrecy of America’s drug pricing matrix. Several people who work in the industry, who asked not to be named due to the confidential nature of coalitions, said most employers, regardless of how big they are, have no idea what they’re giving up when they enter coalitions. Once employers are locked into the coalition, they can’t get a full second opinion on the drug prices they pay, experts said.

  • Health Plan Transparency Reporting in 2022: Do You Know Where Your Health Care Dollars Go?. The Department of Labor, Health and Human Services and the IRS recently released an interim final rule with a request for comment, Prescription Drug and Health Care Spending. The rule implements another phase of the transparency provisions of the Consolidated Appropriations Act, 2021 (CAA), and is open for public comment through Jan. 24, 2022. This most recent rule requires reporting entities—group health plans, both fully insured and self-funded, and issuers of insured group health plans or individual coverage—to report annually information about prescription drug and health care spending.
  • It’s time to bring competition back to health care. We have allowed our health care system to fall victim to a highly consolidated group of pharmacy benefit managers (PBMs). These organizations control drug pricing using formulary inclusion fees and other bizarre techniques which we permit to the detriment of those who need life enhancing or life-saving medications. We also permit the acquisition of patent rights for orphan drugs (important drugs that don’t have a large market) by venture capitalists who corner the market and raise prices to very high levels because that’s the point of cornering the market. Such conduct may or may not be illegal but it certainly is immoral.
The Certified Pharmacy Benefits Specialist (CPBS) educational offering includes knowledge that is critical to effective management of the pharmacy and medical drug benefit. If you want to learn more, click here.

The Chief Medical Officer for CVS Caremark Said What?!

In response to rising costs for prescription drugs, Sree Chaguturu, M.D the chief medical officer for CVS Caremark made a rather bold statement. More specifically, to combat specialty drug costs, Dr. Chaguturu offered as the first option, “to combine coverage for all specialty medications—including those currently covered in the medical benefit—under the pharmacy benefit.” Say what?!

When I initially read this I about fell out of my chair. Once the shock wore off, I started thinking out loud why would Dr. Chaguturu write this? There is little to no chance the article was submitted without approval from the CEO if not the entire board of directors. So, what gives? 

1) Is the article politically motivated?
2) Is CVS’s specialty pharmacy business under pressure by other externalities?
3) Is this a strategy to thwart Big 5 competitors who don’t own a chain pharmacy business?
4) All of the above?
5) None of the above?

Regardless of the motivation behind the statement, Dr. Chaguturu is 100% correct. However, it isn’t so simple moving medications to the pharmacy benefit. There are some distinct advantages beyond the obvious potential for realizing lowest net cost. Let’s take a look at UM or utilization management, for example. PBMs use utilization management programs to encourage the use of generics or preferred products. UM is the unsung hero of an efficiently run pharmacy benefits management program.
Click to Learn More

UM programs include services such as prior authorization, drug utilization review (concurrent, retrospective, and prospective), quantity limits, refill to soon, and dose optimization just to name a few. PBMs have also developed specific edits for the senior population. These edits include identifying drugs that are not appropriate for a member’s age (e.g., oral contraceptives), or dosing regimens that are not adjusted for an elderly metabolism.

For employer-sponsored pharmacy benefit programs, there is gold in combining coverage for all specialty medications—including those currently covered in the medical benefit—under the pharmacy benefit. All it requires is sophistication and courage. Be advised there will be all sorts of naysayers who will advise against it. 

Don’t listen to them. They either benefit from the status quo or aren’t sophisticated enough to help you navigate change. I would argue most of the innovation in health care comes from pharmaceuticals. They are the primary cost driver and will remain so for the foreseeable future. So, there are two options; get ahead of it or get left behind.