3 Axis Advisors new report clears up misunderstandings about drug pricing benchmarks. The just released comprehensive report, Understanding Pharmacy Reimbursement Trends in Oregon makes general representations that are applicable to any state or group, not just Oregon.
Five key takeaways:
- The drug price benchmark (i.e., AWP, NADAC, MAC etc.) used to determine a drug’s price does not matter when the PBM doesn’t take a spread.
- An invisible floor exists on the reimbursement amount pharmacies are willing to accept
- Then, what matters most is how close the billed (plan sponsor) amount gets to pharmacy reimbursement on a per claim basis
- NADAC is compiled from a voluntary monthly invoice cost survey of 2,500 randomly selected retail pharmacies with 450-600 respondents.
- Don’t forget to tack on the dispensing fee (page 29) when comparing NADAC to AWP minus for ingredient cost analysis
Conclusion, New Report Clears Up Misunderstandings About Drug Pricing Benchmarks
This all assumes the PBM has negotiated aggressively with pharmacy networks. If not, all bets are off. The ability of a PBM to negotiate discounts and rebates varies with fire in the belly, experience, and education level of decision-makers sitting at the table.