Video Explainer: Understanding PBM Rebate Aggregation for Self-Insured Employers In today's complex healthcare landscape, understanding the roles of rebate aggregators and Group Purchasing Organizations (GPOs) owned by Pharmacy Benefit Managers (PBMs) is crucial. These entities significantly influence prescription drug costs and the management of pharmacy benefits. This comprehensive guide explores their functions, origins, and how you—as an employee benefit broker, HR executive, or CFO—can leverage these relationships in maximizing benefits with rebate aggregators and controlling costs. What Is Rebate Aggregation? Understanding Rebate Aggregators Rebate aggregation involves the collection and management of pharmaceutical manufacturer rebates by PBMs. Manufacturers offer these rebates to promote their drugs' inclusion on PBM formularies and to incentivize higher utilization. PBMs negotiate rebate terms based on expected drug volumes and market share, aggregating rebates across multiple plan sponsors to enhance negotiating power. Depending on contractual agreements, rebates are either passed back to plan sponsors like employers and insurers or retained by PBMs. The Purpose of Rebate Aggregation The primary aim is cost reduction. By pooling rebates, PBMs can lower the net cost of prescription drugs for plan sponsors. This aggregation increases market leverage against pharmaceutical manufacturers and streamlines processes for employers and insurers, simplifying the rebate management process. The Role of PBM-Owned GPOs What Are Group Purchasing Organizations? GPOs are entities that consolidate the purchasing power of multiple organizations to secure discounts from vendors, including drug manufacturers. In healthcare, they play a pivotal role in reducing costs for medications and medical supplies by negotiating lower prices and improved contract terms. Why PBMs Own GPOs PBMs have acquired or established GPOs to enhance their negotiating power further. Owning GPOs allows PBMs to amplify their purchasing volume, streamline procurement and rebate processes under one umbrella, and potentially increase revenue by retaining more rebates and fees. However, this ownership structure can raise transparency concerns, potentially obscure rebate flows and fee arrangements, and lead to conflicts of interest where PBMs might prioritize their profits over client savings. It also attracts regulatory scrutiny over anti-competitive practices and compliance issues. Why Were Rebate Aggregators and GPOs Created? Historical Context and Intended Benefits The creation of rebate aggregators and GPOs was driven by rising drug prices and a fragmented market where individual buyers lacked the clout to negotiate favorable terms. Employers and insurers sought efficient strategies to manage complex pharmacy benefits. These entities were designed to achieve cost savings by reducing prices for all members through collective bargaining, simplify negotiations, and provide improved access to medications through broader bargaining power. Leveraging Relationships with Rebate Aggregators and PBM-Owned GPOs Effectively navigating these relationships is key to maximizing benefits and minimizing costs. Strategies for Employee Benefit Brokers Demand Transparency: Insist on clear disclosure of rebate amounts and distribution methods from PBMs.Thorough Contract Review: Examine PBM contracts for terms related to rebates and GPO affiliations, ensuring they align with client interests.Market Comparison: Evaluate multiple PBMs and GPOs to secure the best terms for clients, considering both cost and service quality. Empower Your Benefits Strategy with the CPBS®…

Walgreens will pay $106.8 million to settle claims of fraudulently billing for undispensed prescriptions and other notes from around the interweb: Stand Out Among Employee Benefit and HR Professionals Walgreens paying $106.8 million to settle US prescription billing fraud charges. Walgreens Boots Alliance (WBA.O), agreed to pay $106.8 million to settle charges it fraudulently billed the U.S. government for prescriptions that were never dispensed, the Department of Justice said on Friday. The Justice Department said Walgreens violated the federal False Claims Act between 2009 and 2020 by submitting payment claims to Medicare, Medicaid, and other healthcare programs for prescriptions it processed but which were never picked up. This caused the pharmacy chain to receive tens of millions of dollars for prescriptions it never provided to patients, the department said. "Federal health care programs provide critical health care services to millions of Americans," said Brian Boynton, head of the Justice Department's civil division. "We will hold accountable those who abuse these programs by knowingly billing for goods or services they did not provide." Elevance intensifies Ozempic crackdown. Anthem Blue Cross Blue Shield is requesting payments from some providers it alleges falsified patients' medical records when prescribing Ozempic, Bloomberg reported Sept. 12. A spokesperson for Elevance Health, which owns Anthem BCBS, told Bloomberg it contacted a small number of providers about repayments for Ozempic prescribed to their patients. In some cases, the amount of repayment requested was more than $1 million. Representatives for Elevance told Bloomberg that Anthem BCBS only covers Ozempic for patients with Type 2 diabetes. The drug is not approved by the FDA for weight loss but is often prescribed off-label for that purpose. Ozempic is a prescription medication used to improve blood sugar control in adults with type 2 diabetes. It's a once-weekly injection that also helps with weight loss by reducing appetite. Its active ingredient is semaglutide, a GLP-1 receptor agonist. Copay Adjustment Chess Match: What Will Payers Do Next?. The primary reason that payers created copay adjustment programs lies within the very nature of their business, namely that insuring patients means taking on the risk of patients’ lives for the pharmaceutical benefit. Additionally, the payers’ clients—employers—demand that payers and pharmacy benefit managers (PBMs) keep drug costs under control since the cost of providing healthcare to their employees remains high. Over the years, formularies, exclusions, and prior authorizations have been created to support this cost control, but using the accumulator technique, in which the patient’s annual out-of-pocket (OOP) maximum is affected by taking off the manufacturer’s contribution, is a newer approach. It all stems from the same reasoning—payers are seeking ways to control costs to benefit their bottom line, while employers are seeking ways to control the costs of providing healthcare to their employees. 3 Trends Reshaping Pharmacy Benefits Management. We offer a comprehensive analysis of three critical areas transforming the sector: GLP-1 medications, biosimilars, and PBM transparency. Our analysis covers diabetes and weight loss management trends, the impact of biosimilars on the market, and the complexities…

Navigating the world of pharmacy benefits can be complex, but it’s essential for those managing employee health plans. A key piece of this puzzle is understanding how formulary positions are decided. Formulary position refers to the placement of drugs on a list that determines how easily they can be accessed and how much they will cost. This placement can have significant cost implications for employers and employees alike. Here are three main points from the paper "The Market Design for Formulary Position" that are particularly relevant for employee benefit brokers and self-funded employers. Formulary Position as a Market: How It Works Imagine the formulary position like a market where drug manufacturers (Pharma) bid for prime spots on the list. These spots are often managed by Pharmacy Benefit Managers (PBMs), who act as gatekeepers. The more favorable the position, the more likely a drug will be used, which means big business for Pharma companies.This process is similar to an auction. Like Google’s ad placement system, where higher bids secure better ad positions, Pharma companies pay rebates (a type of discount given after a drug is sold) to PBMs for these prime formulary positions. The PBMs then decide which drugs to favor based on these rebates, expected demand, and other factors like drug effectiveness. Impact on Costs: Mature vs. Immature Therapeutic Classes The paper explains that the way drugs are positioned can depend on whether the therapeutic class (the category of treatment) is "mature" or "immature." Mature classes have a lot of competition with multiple drugs offering similar benefits, like different brands of painkillers. In these cases, PBMs have a history of how well these drugs work, which helps them make cost-effective decisions.For immature classes, where new drugs are just entering the market, things get trickier. There’s uncertainty about how well these new entrants will perform. This uncertainty gives established drugs (incumbents) more power because PBMs are hesitant to favor new drugs that might not meet demand, even if they are cheaper. This dynamic can keep prices high and limit the cost-saving potential of new competition. Key Factors Influencing Formulary Position Rebates and Exclusionary Tactics: A Double-Edged Sword Rebates can help lower the cost of drugs by incentivizing PBMs to choose certain drugs over others. However, the paper highlights that these rebates can also be used in ways that exclude new market entrants. Incumbent drugs might offer lump sum rebates, a large upfront payment to PBMs, to maintain their dominance and keep new competitors out.This practice can drive up the overall cost for employers and employees because it limits competition. Without competition, there’s less pressure on incumbents to lower prices. This can result in higher costs for health plans and, ultimately, higher premiums for employees. Key Takeaway for Employers and Brokers: Understanding the market dynamics of formulary positions can help you advocate for more cost-effective pharmacy benefits. By recognizing the strategies PBMs and Pharma companies use, you can push for formulary designs that prioritize not just rebates but also value and access,…

Chairman Comer Calls on PBM Executives to Correct Hearing Testimony and other notes from around the interweb: Stand Out Among Employee Benefit and HR Professionals Chairman Comer Calls on PBM Executives to Correct Hearing Testimony. House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) today is calling on the CEOs of three major Pharmacy Benefit Managers (PBMs)—CVS Caremark, Express Scripts, and Optum Rx—to correct the record for statements made during their appearance before the House Oversight Committee at a hearing titled, “The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part III: Transparency and Accountability.” At the House Oversight Committee’s hearing, the PBM chief executives made statements that contradict the Committee’s and the Federal Trade Commission’s findings about the PBMs’ self-benefitting practices that jeopardize patient care, undermine local pharmacies, and raise prescription drug prices. The chief executives for CVS Caremark, Express Scripts, and Optum Rx claimed they do not steer patients to PBM-owned pharmacies. The executives also made claims contradicting the Committee’s and FTC’s findings regarding contract negotiations, contract opt outs, and payments to pharmacies. Three Things That Employer Health Plan Sponsors Should Do When the New MHPAEA Rules Are Published. In particular, the proposed rules would implement amendments to MHPAEA that were passed under the Consolidated Appropriations Act of 2021 (CAA) to require documentation of comparative analyses for Non-Quantitative Treatment Limits (NQTLs). We anticipate that the Tri-Departments will publish new regulations for MHPAEA that will finalize most provisions of the NPRM in the coming days or weeks. We anticipate that most provisions of the new regulations will finalize the proposed requirements without significant modifications. However, robust public comments were submitted regarding several key provisions that may cause the Tri-Departments to modify or rescind the proposed rules. Three of the most controversial provisions from the proposed rules to watch for in the final rules are: Quantitative testing for Non-Quantitative Treatment Limits, Application of MHPAEA to intellectual and developmental disabilities, including autism spectrum disorder, and Fiduciary liability for health plan sponsors. 3 Trends Reshaping Pharmacy Benefits Management. We offer a comprehensive analysis of three critical areas transforming the sector: GLP-1 medications, biosimilars, and PBM transparency. Our analysis covers diabetes and weight loss management trends, the impact of biosimilars on the market, and the complexities of PBM rebate structures. The prevalence of diabetes in the United States has reached alarming levels, with approximately 12% of adults diagnosed with the condition. Even more concerning is the additional 40% of the population classified as pre-diabetic, underscoring the potential for a significant increase in diabetes diagnoses in the near future. This epidemiological landscape has profound implications for employer-sponsored health plans, particularly in relation to the coverage of GLP-1 (Glucagon-Like Peptide-1) receptor agonists. CMS' negotiated drug prices: 12 notes. The brand names of the 10 drugs included under IRA price negotiations are as follows: Januvia; multiple Novo Nordisk variations to treat diabetes, including Fiasp; Farxiga; Enbrel; Jardiance; Stelara; Xarelto; Eliquis; Entresto; and Imbruvica. The largest discount among all 10 drugs is 79%, lowering the…

The 340B Drug Pricing Program, designed to provide discounted medications to healthcare organizations serving vulnerable populations, has long been a point of debate within the pharmaceutical industry. While its intent is noble, the ripple effects of 340B on commercial contracts are significant and complex, warranting a closer examination. Understanding the impact of the 340B program on commercial contracts is essential for navigating the complexities of the U.S. pharmacy reimbursement and distribution system. The Basics of 340B The 340B Program requires drug manufacturers to provide outpatient drugs at reduced prices to eligible healthcare organizations, known as covered entities. These entities include hospitals, community health centers, and clinics that serve many uninsured or low-income patients. The savings from these discounts are intended to support the covered entities' ability to provide care to underserved communities. Commercial Contracts and 340B: The Intersection While the 340B Program is primarily aimed at supporting public health objectives, its impact on commercial contracts cannot be overlooked. Pharmaceutical manufacturers and commercial payers are increasingly scrutinizing the program's influence on drug pricing dynamics and contract negotiations. This scrutiny stems from the fact that 340B pricing can distort the traditional market mechanisms that govern commercial drug pricing. Click to Learn More Key Impacts: Price Differentials and Contracting Challenges:One of the most significant impacts of 340B on commercial contracts is the creation of price differentials. Manufacturers are required to offer steep discounts under 340B, often leading to substantial differences between 340B prices and those negotiated in commercial contracts. This disparity can complicate negotiations between manufacturers and commercial payers, as the latter may seek to leverage 340B pricing in their contracts, potentially leading to lower reimbursement rates.Shift in Market Dynamics:The expansion of the 340B Program has also led to changes in market dynamics. Covered entities may purchase drugs at 340B prices but dispense them to insured patients, including those with commercial insurance. This practice, known as "spread pricing," allows covered entities to benefit financially from the difference between the 340B acquisition cost and the higher reimbursement rates from commercial insurers. While this can provide financial relief to covered entities, it also introduces complexities in commercial contracting, as payers attempt to address the potential for inflated drug costs.Contractual Safeguards and Compliance:As the influence of 340B on commercial contracts grows, manufacturers and payers are increasingly incorporating safeguards and compliance measures into their agreements. These may include clauses that adjust reimbursement rates based on the covered entity's 340B status or provisions that require transparency in how 340B savings are utilized. The goal is to ensure that the 340B Program's benefits are aligned with its original intent without inadvertently undermining commercial contracting integrity. Navigating the 340B Landscape For stakeholders in the pharmaceutical industry, understanding the nuances of the 340B Program is crucial for effective contract negotiation and management. As the program continues to evolve, manufacturers and payers must remain vigilant in assessing its impact on pricing strategies and commercial relationships. Best Practices: Transparency: Ensuring transparent communication between manufacturers, payers, and covered entities can help mitigate the potential…

Three Things That Employer Health Plan Sponsors Should Do When the New MHPAEA Rules Are Published and other notes from around the interweb: Stand Out Among Employee Benefit and HR Professionals Three Things That Employer Health Plan Sponsors Should Do When the New MHPAEA Rules Are Published. In particular, the proposed rules would implement amendments to MHPAEA that were passed under the Consolidated Appropriations Act of 2021 (CAA) to require documentation of comparative analyses for Non-Quantitative Treatment Limits (NQTLs). We anticipate that the Tri-Departments will publish new regulations for MHPAEA that will finalize most provisions of the NPRM in the coming days or weeks. We anticipate that most provisions of the new regulations will finalize the proposed requirements without significant modifications. However, robust public comments were submitted regarding several key provisions that may cause the Tri-Departments to modify or rescind the proposed rules. Three of the most controversial provisions from the proposed rules to watch for in the final rules are: Quantitative testing for Non-Quantitative Treatment Limits, Application of MHPAEA to intellectual and developmental disabilities, including autism spectrum disorder, and Fiduciary liability for health plan sponsors. 3 Trends Reshaping Pharmacy Benefits Management. We offer a comprehensive analysis of three critical areas transforming the sector: GLP-1 medications, biosimilars, and PBM transparency. Our analysis covers diabetes and weight loss management trends, the impact of biosimilars on the market, and the complexities of PBM rebate structures. The prevalence of diabetes in the United States has reached alarming levels, with approximately 12% of adults diagnosed with the condition. Even more concerning is the additional 40% of the population classified as pre-diabetic, underscoring the potential for a significant increase in diabetes diagnoses in the near future. This epidemiological landscape has profound implications for employer-sponsored health plans, particularly in relation to the coverage of GLP-1 (Glucagon-Like Peptide-1) receptor agonists. CMS' negotiated drug prices: 12 notes. The brand names of the 10 drugs included under IRA price negotiations are as follows: Januvia; multiple Novo Nordisk variations to treat diabetes, including Fiasp; Farxiga; Enbrel; Jardiance; Stelara; Xarelto; Eliquis; Entresto; and Imbruvica. The largest discount among all 10 drugs is 79%, lowering the list price for a 30-day supply of Januvia in 2023 from $527 to $113. The most expensive drug covered, also the drug with the smallest discount at 38%, is Imbruvica for the treatment of blood cancers. Imbruvica’s list price for a 30-day supply in 2023 was just under $15,000 and will now be offered at $9,319 for Medicare-covered patients in 2026. Some of the other drugs included were approved to treat various conditions including diabetes, cardiovascular diseases, kidney disease, arthritis, psoriasis, Crohn’s disease, ulcerative colitis, blood clots, and more. Prescription Rebate Guarantees: Employer Insights. This study sheds light on employers’ perspectives of rebate guarantees, dependency upon rebate dollars, and the role that pharmaceutical rebates or employer benefits consultants play in their pharmacy benefits manager (PBM) selection. The common occurrence of rebate guarantees in the study sample raises concern given that rebate guarantees may obscure employer visibility…

In the intricate world of pharmacy benefits, few topics are as controversial and impactful as DIR (Direct and Indirect Remuneration) fees. These fees, often buried within the fine print of PBM contracts, have far-reaching consequences that can significantly affect the financial health of self-funded employers. As a CHRO or CFO, understanding DIR fees and their implications is crucial to managing your organization's pharmacy benefit strategy effectively. What Are DIR Fees? DIR fees are post-sale adjustments that PBMs (Pharmacy Benefit Managers) apply to the payments they make to pharmacies. Initially introduced as a way to capture rebates or discounts that weren’t accounted for at the point of sale, DIR fees have evolved into a complex and often opaque mechanism that PBMs use to claw back funds from pharmacies long after a prescription has been filled. For pharmacies, this means that they might receive a payment for dispensing a medication, only to have a portion of that payment reclaimed by the PBM months later. This practice not only adds a layer of uncertainty to pharmacy revenue streams but also indirectly inflates drug costs for plan sponsors like your organization. https://youtu.be/fOAlgLesFjQ Watch our video explainer to dive deeper into how DIR Fees impact your bottom line and what you can do about it! The Financial Burden on Employers While DIR fees were originally intended to reduce overall drug costs by ensuring pharmacies are reimbursed fairly, the reality has been quite different. These fees often increase the out-of-pocket costs for your employees and inflate the overall spend of your pharmacy benefit plan. The lack of transparency surrounding DIR fees makes it challenging for employers to understand the true cost of their pharmacy benefits, leading to budgeting difficulties and unexpected financial strains. For CFOs, the impact is clear: DIR fees contribute to the rising cost of providing healthcare benefits to employees, which can strain your organization’s financial resources. For CHROs, the implications are just as significant. Higher out-of-pocket costs and increased premiums can lead to dissatisfaction among employees, potentially affecting retention and recruitment efforts. Legal Precedents and Employer Protections Recent legal developments highlight the growing scrutiny of DIR fees and the efforts to protect plan sponsors and pharmacies from their detrimental effects. A notable case involved Frier Levitt, a law firm that secured a landmark $22 million trial victory against Caremark. This case recovered 100% of DIR fees, interest, and attorney fees on behalf of an independent pharmacy. The ruling underscored the importance of transparency and fair dealing in PBM contracts, setting a precedent that could benefit plan sponsors who are vigilant in managing their pharmacy benefit arrangements. This victory is a reminder to employers that they are not powerless in the face of PBM practices. By carefully reviewing and negotiating PBM contracts, and potentially pursuing legal action when necessary, employers can protect their financial interests and ensure that their pharmacy benefit plans are truly serving their employees. What Can CHROs and CFOs Do? To mitigate the impact of DIR fees, CHROs and CFOs should:…

3 Trends Reshaping Pharmacy Benefits Management and other notes from around the interweb: Stand Out Among Employee Benefit and HR Professionals 3 Trends Reshaping Pharmacy Benefits Management. We offer a comprehensive analysis of three critical areas transforming the sector: GLP-1 medications, biosimilars, and PBM transparency. Our analysis covers diabetes and weight loss management trends, the impact of biosimilars on the market, and the complexities of PBM rebate structures. The prevalence of diabetes in the United States has reached alarming levels, with approximately 12% of adults diagnosed with the condition. Even more concerning is the additional 40% of the population classified as pre-diabetic, underscoring the potential for a significant increase in diabetes diagnoses in the near future. This epidemiological landscape has profound implications for employer-sponsored health plans, particularly in relation to the coverage of GLP-1 (Glucagon-Like Peptide-1) receptor agonists. CMS' negotiated drug prices: 12 notes. The brand names of the 10 drugs included under IRA price negotiations are as follows: Januvia; multiple Novo Nordisk variations to treat diabetes, including Fiasp; Farxiga; Enbrel; Jardiance; Stelara; Xarelto; Eliquis; Entresto; and Imbruvica. The largest discount among all 10 drugs is 79%, lowering the list price for a 30-day supply of Januvia in 2023 from $527 to $113. The most expensive drug covered, also the drug with the smallest discount at 38%, is Imbruvica for the treatment of blood cancers. Imbruvica’s list price for a 30-day supply in 2023 was just under $15,000 and will now be offered at $9,319 for Medicare-covered patients in 2026. Some of the other drugs included were approved to treat various conditions including diabetes, cardiovascular diseases, kidney disease, arthritis, psoriasis, Crohn’s disease, ulcerative colitis, blood clots, and more. Prescription Rebate Guarantees: Employer Insights. This study sheds light on employers’ perspectives of rebate guarantees, dependency upon rebate dollars, and the role that pharmaceutical rebates or employer benefits consultants play in their pharmacy benefits manager (PBM) selection. The common occurrence of rebate guarantees in the study sample raises concern given that rebate guarantees may obscure employer visibility into the actual net prices of drugs, resulting in formulary inclusion of higher-cost products and higher overall total pharmacy costs. Employers should consider the role of employer benefits consultants in presenting drug contracting options and, ultimately, PBM selection. It is important to keep the employer perspective in mind when considering reforms to the current rebate-centric incentives of pharmacy benefit management. FTC Releases Interim Staff Report on Prescription Drug Middlemen. The Federal Trade Commission published an interim report on the prescription drug middleman industry that underscores the impact pharmacy benefit managers (PBMs) have on the accessibility and affordability of prescription drugs. The interim staff report, which is part of an ongoing inquiry launched in 2022 by the FTC, details how increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States. This vertically integrated and concentrated market structure has allowed PBMs to profit at the expense of patients and independent pharmacists, the report…

In the complex landscape of healthcare, designing a robust Pharmacy Benefit Management (PBM) program is essential not only for controlling costs but also for reducing fraud, waste, and abuse (FWA) while ensuring optimal patient outcomes. Designing a pharmacy benefit management program to reduce FWA and improve patient outcomes demands careful planning and strategic implementation. The following tips will guide you in crafting a PBM program that aligns with these goals. 1. Adopt a Fiduciary PBM Model Choosing a PBM partner that operates under a fiduciary model is the first step toward reducing FWA. Fiduciary PBMs, like TransparentRx, are legally obligated to act in the best interests of their clients. This model eliminates hidden fees and conflicts of interest, ensuring transparency in pricing and decision-making. By aligning the PBM's incentives with your organization's goals, you can reduce unnecessary costs and focus on improving patient care. 2. Implement Rigorous Audit Processes Regular audits are a cornerstone of any effective PBM program. By implementing comprehensive, systematic audit processes, you can identify and address potential instances of FWA early. This includes reviewing pharmacy claims for unusual patterns, verifying the accuracy of rebates, and ensuring compliance with formulary guidelines. These audits should be conducted regularly and be detailed enough to catch even subtle discrepancies. 3. Leverage Data Analytics Harnessing the power of data analytics can significantly enhance your ability to monitor and prevent FWA. Advanced analytics can identify unusual prescription patterns, detect fraud, and optimize drug utilization. By analyzing data from multiple sources—claims, patient outcomes, and pharmacy behavior—you can gain a holistic view of your PBM program's performance and make data-driven decisions to improve efficiency and patient outcomes. Employer's Process Flow for In-House Pharmacy Benefit Management 4. Establish Strict Formulary Management Formulary management is crucial in reducing FWA and ensuring that patients receive the most effective treatments. By creating a well-structured formulary that prioritizes clinically proven, cost-effective medications, you can limit the use of unnecessary or overpriced drugs. Regularly review and update your formulary to reflect the latest clinical guidelines and market changes. This approach not only reduces costs but also improves patient outcomes by ensuring access to the most appropriate therapies. 5. Enhance Medication Adherence Programs Medication adherence is directly linked to patient outcomes. Implementing programs that encourage patients to follow their prescribed treatment plans can reduce hospitalizations, prevent complications, and lower overall healthcare costs. Consider strategies such as personalized patient education, automatic prescription refills, and reminders to take medication. Additionally, working with pharmacies that offer adherence support services can further enhance patient engagement and outcomes. 6. Integrate Value-Based Contracting Value-based contracting is an innovative approach that ties payment to patient outcomes rather than the volume of prescriptions. By integrating value-based contracts with manufacturers and providers, you can incentivize the use of treatments that deliver the best outcomes for patients. This model encourages the selection of therapies based on their clinical effectiveness and cost-efficiency, ultimately reducing FWA and improving patient care. 7. Promote Specialty Drug Management Specialty drugs represent a significant portion of pharmacy…

Class action against Wells Fargo and other notes from around the interweb: Stand Out Among Employee Benefit and HR Professionals Here we go again: Class action against Wells Fargo alleges fiduciary breach and mismanagement of prescription drug plan. Wells Fargo is now the second of many expected and anticipated class action suits against employers for breach of fiduciary duties with respect to their health plans. As previously stated, plaintiff law firms have been investigating several large employers as to whether they are acting in the best interest of their plan participants, exercising care and prudence with respect to the selection of service providers and administration of their plans, and ensuring that plan costs are reasonable. There’s no time better than the present for plan sponsors to ensure they are minimizing risk, following their fiduciary obligations, and stepping up their oversight. Action steps include considering the formation of a health and welfare benefits committee to monitor ERISA benefits, including the selection of service providers, reviewing contract terms, ensuring appropriate value for the price, and monitoring service providers and aggregate costs. Understanding the debate over PBMs. As policymakers seek to stem rising drug costs, they have focused closely on the role of Pharmacy Benefit Managers. PBMs contend they help to make prescription drugs more accessible and affordable. However, the industry has evolved in ways that make it difficult to evaluate their actual impact on cost. Critics point to vertical integration, pharmacy steerage, and lack of pricing transparency, and recent media stories have fueled this debate by highlighting cases where a participant can purchase a specific drug for less if they don’t use their prescription drug benefits. Employers are concerned both about prescription drug costs, which are rising faster than other medical plan costs, and about their fiduciary responsibility to members. Prescription Rebate Guarantees: Employer Insights. This study sheds light on employers’ perspectives of rebate guarantees, dependency upon rebate dollars, and the role that pharmaceutical rebates or employer benefits consultants play in their pharmacy benefits manager (PBM) selection. The common occurrence of rebate guarantees in the study sample raises concern given that rebate guarantees may obscure employer visibility into the actual net prices of drugs, resulting in formulary inclusion of higher-cost products and higher overall total pharmacy costs. Employers should consider the role of employer benefits consultants in presenting drug contracting options and, ultimately, PBM selection. It is important to keep the employer perspective in mind when considering reforms to the current rebate-centric incentives of pharmacy benefit management. FTC Releases Interim Staff Report on Prescription Drug Middlemen. The Federal Trade Commission published an interim report on the prescription drug middleman industry that underscores the impact pharmacy benefit managers (PBMs) have on the accessibility and affordability of prescription drugs. The interim staff report, which is part of an ongoing inquiry launched in 2022 by the FTC, details how increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States. This vertically…