Reference Pricing: “Gross” Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 228)

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 a 5% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means 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.

Amazon’s PillPack deal puts PBMs, advisers on notice

Image result for amazon pillpack
Learn More:  How to become a Certified Pharmacy Benefits Specialist

Insurance industry leaders predict the way medications are purchased today could come to an end in the next five years, potentially doing away with pharmacy benefit managers and how benefit brokers work with insurance product sales.

That new healthcare landscape may emerge in the wake of Amazon’s purchase of the online prescription drug company PillPack, which was announced last week. The deal — which gives the online retail giant the infrastructure to deliver prescription medications in the U.S. — could potentially make redundant middlemen such as PBMs and even some benefit advisers from the healthcare industry.

Tyrone’s Commentary:

Those who believe this is the end for PBMs are being myopic. One, Amazon was in the mail-order pharmacy business a few years back, with drugstore.com, and failed. Sure they’ve learned from this failure. But, the point is it isn’t easy nor a forgone conclusion the PillPack acquisition alone will serve as a catalyst for widespread cuts in pharmacy costs. Second, PBMs offer a valuable service and as a result PBMs who offer radical transparency will survive. Naysayers who say this is the end for all PBMs don’t fully understand all the services a PBM offers nor the impact of those services. One thing is for sure, if Amazon is successful it will force non-fiduciary PBMs to become much more efficient.

Rob Piazza, product manager, analytics, at Benefitfocus, says payers and PBMs had many chances to work together in the past to better control rising drug costs, but they did not do enough.

[Read More]

Reference Pricing: “Gross” Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 227)

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 a 5% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means 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.

IFEBP provides tips on managing specialty drugs

The retail price of specialty drugs increased by almost 10 percent in 2015, following nine years of increases, according a study from the AARP. In the report, No Magic Pill to Cure Specialty Drug Costs (But Some Preventive Measures), the International Foundation of Employee Benefit Plans (IFEBP) provided tips for employers to help manage the cost of specialty medications.

The IFEBP provided the following tips:

1)  Change where specialty drugs are administered (called site of care). Having the patient go to a clinic or the doctor’s office increases costs. Could the drug be self-administered at home? Or, if someone must administer the drug to the patient, could it be done via a less costly home care service?

2)  Review the pharmacy benefit manager (PBM) contract. Look for inconsistent definitions. Ensure the PBM passes all rebates on to the employer plan.

3)  Refer participants to patient and copayment assistance programs to receive financial help.

[Read More]

Reference Pricing: “Gross” Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 226)

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 a 5% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means 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.

Clawbacks: Settling the score with non-fiduciary pharmacy benefit managers

Click to Learn More

This billing practice is known as a “clawback” and you may have no idea it’s happening to your employees or how it impacts your pharmacy costs. Furthermore, pharmacists aren’t allowed to tell patients, under a gag order, that restricts pharmacists from telling patients they are being
overcharged.

These clawback monies are a contributing factor to the unchecked service fees non-fiduciary PBMs rely upon to cover overhead.

Tyrone’s Commentary:

It’s all about the contract. 

1) Demand radical transparency
2) Negotiate financial and nonfinancial contracting terms for both direct and indirect revenues
3) Get educated

[Read More]

Reference Pricing: “Gross” Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 225)

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 a 5% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means 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.

What is a fair share? Pharmacy middlemen made $223.7M from Ohio Medicaid

The middlemen, called pharmacy benefits managers, are under scrutiny for how transparent they are in how the public money gets spent. The new report shows the companies retained $223.7 million last year of the money they billed Medicaid.

CVS Caremark, with the same parent company as CVS retail pharmacies, manages pharmacy benefits for four of the five Medicaid managed care companies. Last year it kept 8.7 percent or the payments it received, or $197.3 million. OptumRx does work for the other insurer and kept 9.4 percent, or $26.4 million.

Tyrone’s Commentary:

Finally, someone is tackling a critical issue that too often gets tabled. I’ve been trying to bring PBM service fees (watch video below) to the mainstream for six years! The one question I have is why are public sector managers leading the charge?

6-Minute Video: Click to Learn More

I don’t know the answer to that question but I do know the public sector is better at managing pharmacy costs than are commercial payers and that my loyal readers is a problem. Worst case scenario, it may very well be a dereliction of fiduciary duty by CFOs and HR Execs.

Greg Moody, the director of the Ohio Department of Health Transformation, which oversees Ohio Medicaid, said Ohio needs more information before it determines what is a fair share for the pharmacy benefit managers.

“At this stage we’re not saying that’s too high or too low,” Moody said. “What we’re saying is this is information we’ve never had before. And now the state, the managed care plans, the pharmacies have more information to make their argument and determine if that number is too high or too low or what should happen next.”

[Read More]

Reference Pricing: “Gross” Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 224)

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 a 5% or more price differential (paid versus actual cost) we consider this a problem.

Multiple price differential discoveries means 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.

Dereliction of Fiduciary Duties by CFOs and HR Execs Triggering Department of Labor Investigations

Click to Learn More

The first shots across the bow have been fired highlighting how benefits leaders need to pay as close attention to health benefits as they have been paying to retirement plans. The most recent lawsuits name the HR leaders in the companies involved (GAP and CB&I) as defendants since they are listed as the plan administrator (sometimes CFOs are the plan administrators).

Tyrone’s Commentary:

It’s been my experience that most brokers and consultants are well-schooled in medical benefits but have not quite yet reached that same level of proficiency in the pharmacy benefits arena. Furthermore, there exists an expectation gap between what HR Execs and CFOs believe their brokers to know and what they actually know [do] about pharmacy benefits management. This is a good time to close that gap and get ahead of the problem before it bites you in the you know what. 

It’s clear that there is going to be the increased scrutiny for health benefits that has been commonplace for retirement benefits. For example, you can Google “ERISA class action” to find the many cases surrounding retirement benefits going after plan administrators for failing in their fiduciary duties. Similar cases in health care could have as far-reaching implications as Obamacare in driving employers to health benefits that deliver value.

[Read More]