Author: Tyrone Squires, MBA, CPBS

This author has written 1305 articles

Express Scripts to handle drug rebate negotiations, on the pharmacy benefit, for Prime Therapeutics

Express Scripts to handle drug rebate negotiations, on the pharmacy benefit, for Prime Therapeutics.
Cigna’s Express Scripts pharmacy benefit management unit and a PBM owned by 18 Blue Cross and Blue Shield plans have joined forces to tame drug costs for a massive client list that covers 100 million people.

In an announcement Thursday night, Express Scripts and Prime Therapeutics said their new three-year collaboration is “designed to deliver more affordable care for clients and their members by enhancing pharmacy networks and pharmaceutical manufacturer value.”

The collaboration will allow Prime’s member Blue Cross health plans to gain leverage through Express Scripts’ buying clout and large pharmacy network. Express Scripts will handle negotiations for drugs on the pharmacy benefit.

Source: Becker’s Hospital Review

Tyrone’s Commentary:

This collaboration is a prelude to a complete acquisition of Prime. It’s smart to take baby steps which permits the attention to die down and to keep the regulators at bay for a while. This will allow ESI to win even larger discounts from drugmakers. Let’s hope they pass these savings back to their clients without punishing independent pharmacies.

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Reference Pricing: “Gross” Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 297)

This document is updated weekly, but why is it important? Healthcare marketers are aggressively pursuing new revenue streams to augment lower reimbursements provided under PPACA. Prescription drugs, particularly specialty, are key drivers in the growth strategies of PBMs, TPAs, and MCOs pursuant to health care reform.

The costs shared here are what the pharmacy actually pays; not AWP, MAC or WAC. The bottom line; payers must have access to actual acquisition costs or AAC. Apply this knowledge to hold PBMs accountable and lower plan expenditures for stakeholders.

How to Determine if Your Company [or Client] is Overpaying

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.
 

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

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

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

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

— Tip —

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

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization. In this case, the market check language is effectually meaningless.

Researchers find surgery for blocked arteries is often unnecessary

Image result for blocked artery
Clogged Artery

New research indicates that heart disease patients with blocked coronary arteries who received only drug therapy did not have more heart attacks or die more frequently than individuals who also received bypass surgery or stents. The findings, presented at the annual meeting of the American Heart Association on Saturday, held true for individuals with several severely blocked coronary arteries. Stenting and bypass procedures were helpful for some patients with angina, however.

Tyrone’s Commentary:

When properly prescribed and administered, prescription drugs are a cost offset opportunity

The more than 5,100 participants were followed for a median of 3.5 years. There were 145 deaths in the group that was randomized to receive stents or bypass in addition to medical therapy, compared with 144 among those who received medication alone. Additionally, there were 276 heart attacks in the stent and bypass group, vs. 314 in the medication group, a difference that was not considered significant.

Glenn Levine, MD, director of cardiac care at Baylor College of Medicine in Houston and a member of the guidelines committee of the American Heart Association, said the trial is “extraordinarily important” and the results will be incorporated into treatment guidelines.

Continue Reading >>

Reference Pricing: “Gross” Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 296)

This document is updated weekly, but why is it important? Healthcare marketers are aggressively pursuing new revenue streams to augment lower reimbursements provided under PPACA. Prescription drugs, particularly specialty, are key drivers in the growth strategies of PBMs, TPAs, and MCOs pursuant to health care reform.

The costs shared here are what the pharmacy actually pays; not AWP, MAC or WAC. The bottom line; payers must have access to actual acquisition costs or AAC. Apply this knowledge to hold PBMs accountable and lower plan expenditures for stakeholders.


How to Determine if Your Company [or Client] is Overpaying

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.
 

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

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

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

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

— Tip —

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

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization. In this case, the market check language is effectually meaningless.

Geesh! UnitedHealth’s Optum paying $300 million for Diplomat specialty pharmacy

As part of the deal announced Monday, Minnetonka-based UnitedHealth also would assume the debt of Diplomat Pharmacy Inc., which analysts said is valued at about $540 million. The acquisition price of $4 per share is roughly a 30% discount to Diplomat’s market value on Friday, and the acquired company’s stock traded down sharply on Monday.

Tyrone’s Commentary:

I wrote about Diplomat’s demise just four weeks ago in my blog post, “Holy cow! Diplomat Pharmacy is a shell of its former self.” This was a fire sale $300M plus $400M in debt for a company which did over $5B in annual revenue. I hate to see them go it makes it tougher to compete with the Big Three. But, victory will be even sweeter when they [Big Three] are eventually humbled. Let this serve as a warning to those seeking to enter the PBM market. It is not nearly as easy as you think it is.

Image result for pbm rankings by size"


Diplomat has a track record of providing specialty pharmacy and infusion services, analysts said, but ran into trouble developing a pharmaceutical benefits management (PBM) business. Diplomat was founded in 1975 and employs about 2,200 people. The company operates in 50 states and dispensed 918,000 prescriptions last year, generating annual revenue of $5.5 billion. But Diplomat saw a net loss of $302 million last year due in part to client losses in the PBM business.

Continue Reading >>

Specialty Generic and Biosimilar Drug Pipeline Update

Courtesy of our friends over at Ventegra.











References for Pipeline

• Manufacturer websites/press releases 
• Biopharmcatalyst.com/calendars/FDA-calendar 
• AMCP 2019 annual meeting presentation 
• AMCP website 
• Asembia Specialty Pharmacy Summit 2019 
• FiercePharma/fiercebiotech.com 
• www.centerforbiosimilars.com 
• https://biosimilarsrr.com/us-biosimilar-filings/ 
• Clinicaltrials.gov 
   – Subscription required 
   – Pharmacist’s Letter

PBM 101 Webinar: How to Slash PBM Service Fees, up to 50%, Without Reducing Benefits or Shifting Costs to Employees

How many businesses do you know will voluntarily cut their revenues in half? This is the reason non-fiduciary pharmacy benefit managers are reluctant to offer radical transparency. Instead, they opt for hidden cash flow opportunities to foster growth. Want to learn more?


Here is what some participants have said about the webinar:

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

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

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

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

 

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

  • Hidden cash flows in the PBM Industry such as formulary steering, rebate masking, and differential pricing 
  • How to calculate the cost of pharmacy benefit manager services
  • Specialty pharmacy cost-containment strategies
  • The financial impact of actual acquisition cost (AAC) vs. maximum allowable cost (MAC)
  • Why mail-order and preferred pharmacy networks may not be the great deal you were sold
 
Sincerely,
TransparentRx
Tyrone D. Squires, MBA  
10845 Griffith Peak Drive, Suite 200  
Las Vegas, NV 89135  
866-499-1940 Ext. 201


P.S.  Yes, it’s recorded. I know you’re busy … so register now and we’ll send you the link to the session recording as soon as it’s ready.

Generic Drug Pipeline Update

Courtesy of our friends over at Ventegra.

References for Pipeline

• Manufacturer websites/press releases 
• Biopharmcatalyst.com/calendars/FDA-calendar 
• AMCP 2019 annual meeting presentation 
• AMCP website 
• Asembia Specialty Pharmacy Summit 2019 
• FiercePharma/fiercebiotech.com 
• www.centerforbiosimilars.com 
• https://biosimilarsrr.com/us-biosimilar-filings/ 
• Clinicaltrials.gov 
   – Subscription required 
   – Pharmacist’s Letter

In 2020, Optum To Provide More Than 50% Of UnitedHealth’s Total Company Earnings

The rapid growth of UnitedHealth Group’s Optum health care services unit will contribute more than 50% of the company’s earnings in 2020, executives disclosed Tuesday.

Tyrone’s Commentary:

I’ve noticed a growing trend whereby non-fiduciary PBMs are offering $0 admin and/or $0 dispensing fees in their proposals. Additionally, these non-fiduciary PBMs are proposing a pass-through or transparent pricing model as requested by the broker or plan sponsor. How can a PBM be transparent or pass-through if there is no admin fee? How are they making money otherwise? Any reasonable definition of transparency requires that a plan sponsor know how much revenue a PBM is keeping for itself and the source of those revenues on a client specific basis.

UnitedHealth chief executive David Wichmann vowed at the start of the company’s annual investor day to continue the momentum and growth of the nation’s largest health insurer at a cumulative annual earnings growth rate of 13% to 16%. This means that the Optum unit will contribute more than 50% of total company earnings.

Source:  https://www.drugchannels.net

Optum will generate $112 billion in revenues in 2020, Wichmann said. UnitedHealth Group’s revenues will surpass $260 billion next year, the company has said. “With more than 50% of our earnings coming from Optum in 2020, it’s a good time to reflect on the accelerating impact diversification has had on the capacities of UnitedHealth Group, now a broad-based, health care company still in its formative stages of development,” Wichmann told the investor day attendees.

Continue Reading >>

Reference Pricing: “Gross” Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 295)

This document is updated weekly, but why is it important? Healthcare marketers are aggressively pursuing new revenue streams to augment lower reimbursements provided under PPACA. Prescription drugs, particularly specialty, are key drivers in the growth strategies of PBMs, TPAs, and MCOs pursuant to health care reform.

The costs shared here are what the pharmacy actually pays; not AWP, MAC or WAC. The bottom line; payers must have access to actual acquisition costs or AAC. Apply this knowledge to hold PBMs accountable and lower plan expenditures for stakeholders.

How to Determine if Your Company [or Client] is Overpaying

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.
 

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

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

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

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

— Tip —

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

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization. In this case, the market check language is effectually meaningless.