Understanding the Fine Print in PBM Proposals and Agreements

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

By now it is common knowledge that drug prices are rising in nearly every category. In 2015, branded drug costs increased by 14.77%, specialty drug costs increased by 9.21%, and generic drug costs increased by 2.93% when compared to the previous year (as reported by Employee Benefit News). With that said, many have looked to try and control these costs, and earlier this month, Express Scripts, a PBM, announced that they are working to develop more strategies that result in employers being able to offer drug benefits in a more affordable way.

Specialty drugs, drugs that are used to treat more complex disease states such as cancer, are said to have an extremely high inflation rate - about 10% - 20% each year. With this in mind, Express Scripts developed what they refer to as their Inflation Protection Program. As of January 1, 2016, Express Scripts is now offering a program, which sounds too good to be true, to “shield participating plans from the full cost impact of year-over-year price increases on brand drugs.” This program only addresses high cost “brand” drugs for which PBMs negotiate significant rebates and for which there are often lower cost “generic” drugs and “over the counter” alternatives. However, it is in the fine print where the unveiling of the ambiguity lies.

Too good to be true?

To employers who offer pharmacy benefits to their employees or members, knowing that Express Scripts is willing to cover the cost of services when inflation goes above an agreed upon threshold can result in a heavy sigh of relief. However, it is “understanding” the fine print, not only in the proposal, but more importantly in its entirely in the actual PBM Agreement. For example, how is your plan’s inflation cap determined and what must YOU do in order to ensure that Express Scripts will continue to uphold their side of the deal?

If something sounds too good to be true, listen to your gut. This is why you need to work with PBIRx, which is independent of the PBM. That means we always put our clients’ best interests first and not the PBM’s profitability. As a pharmacy benefit auditing and consulting firm for over 25 years, PBIRx is a master and expert at understanding, interpreting and negotiating PBM Agreements and adjunct agreed upon calculation methodology language so that our clients come out the winner. Together we challenge PBM Agreement language that sounds too good to be true!

For more information about our pharmacy benefit consulting and auditing services, please visit www.pbirx.com or call (888) 797-2479 today.

Get Control Over Your Health Care Costs In 2016 With PBIRx

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

Just like we all set individual goals for ourselves when the first of every new year rolls around, it is important for businesses to do the same. As experts in the pharmacy benefit field, something we recommend is for business leaders to look deeper into their health care spend and see what total health care costs look like. And if, in fact, pharmacy benefit spend specifically is over budget, it is time to take more control. Below, take a look at how the PBIRx team can help with doing so.

Pharmacy Benefit Consulting

Through our pharmacy benefit consulting services, we will deliver our unbiased, objective financial analysis to you that considers both sensitivity to member and client impact after a comprehensive client needs analysis and discussion. Utilizing our knowledge of, and ability to anticipate change to the industry, we will provide you with our savings projections based on actual claim utilization, which is measured monthly and reported back to every client demonstrating our dedication to making accurate savings projections for clients.

Pharmacy Benefit Auditing

Our proprietary prescription claim audit program, AuditRx®, was designed to help your company get more control over the terms in your contract with your PBM. Through this service, we can help negotiate recoveries for times when there was a difference in claims billed versus your contract’s language. PBIRx AuditRx is used for commercial PBM auditing, 340B auditing and Medicare Part D auditing. 

Third Party 340B Compliance Audits

Covered entities may lose their 340B status if they are not completely compliant with the program, which is why we can provide a compliance audit that helps determine any potential cause for concern. Completed on site, our reports will help prepare you for a true HRSA audit of this nature. References include clients who retained PBIRx for second audits after having successfully passed a HRSA audit after PBIRx compliance audit. 

Clinical Technology Intelligence (CTIRx)

The goal of our CTIRx service is to promote clinically appropriate prescription drug utilization, that results in positive health care outcomes adjunct to pharmacy benefit savings. What we do here is run your claims through our CTIRx data processor, then analyze the findings to devise strategies that can lead to pharmacy savings. PBIRx staffs a large IT department including programmers and clinicians. As a result proprietary clinical algorithms are built and managed so that a Clinical Recommendation and Savings report can run within an hour of receiving actual client claims utilization.  

Pharmacy Benefit Actuarial Services

This particular service comes in handy for those who offer pharmacy benefits to retired employees or employees who are eligible for Medicare. Since the government provides a 28% drug subsidy for qualified retiree plans, it is important for you to determine if you are eligible and if so, know how to proceed; through this service, our team will help you with all of that. Fee estimates are provided at no charge after initial review of data.

Considering that health care costs are still on the rise, we encourage you to start speaking with an expert like ourselves to make sure you are properly managing yours. To learn more about each of our services and how you can take advantage of them in 2016, please call (888) 797-2479 or fill out our online contact form.

Medicare Proposes Lower Drug Reimbursements to Hospitals and Doctors

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

Earlier this month, Medicare announced a plan to change how they reimburse doctors and hospitals for certain medications under Medicare Part B in order to encourage them to choose less expensive drug treatments for patients. Specifically, the drugs to be targeted under this new proposal include intravenous medications, injectable drugs and some eye treatments. 

As of right now, the Medicare Part B program reimburses doctors and hospitals for the “average price” of the medication used plus an additional 6% fee. Thus, doctors and hospitals bring in more of a profit when they decide to use drug treatments that are on the expensive side. However, under a new reimbursement program, Medicare is proposing to lower the reimbursement for Medicare Part B drugs to “average price” plus 2.5% along with a flat fee of $16.80 per drug per day. As a result of the new method of reimbursement, the Centers for Medicare and Medicaid Services (CMS) hopes that doctors and hospitals would be more inclined to choose less costly treatments, especially since they often choose high-priced drugs even though lower cost, same efficacious therapies are available.

Value-Based Pricing

In addition to changing the way doctors and hospitals are reimbursed for certain services, CMS is also hoping to test what they call “value-based pricing” programs, something similar to what some pharmacy benefit managers and commercial health plans are already testing. One example is the indication-based pricing idea, which would cause reimbursement amounts to vary depending on how effective a drug is in treating a type of cancer. Essentially, if one particular type of cancer therapy is used to treat different conditions and has more success in one over the other, the plan is to pay for what works best for optimal health care outcomes at the lowest cost.

Medicare Proposal Critiques

Although some may welcome this proposal, many have expressed their concern - particularly some drug manufacturers and cancer doctors. In their eyes, this new plan is too heavily focused on saving money rather than the patient’s best interest. Furthermore, they suggest that following through with these changes to Medicare Part B could “limit access to care for some of the sickest Medicare beneficiaries,” according to The New York Times. Although the Obama administration has expressed that these changes are not intended to disrupt or interfere with a doctor’s true medical judgement or their ability to order Medicare Part B drugs when appropriate, doctors and hospitals continue to remain skeptical of the proposal.

As a pharmacy benefit consulting firm that works with a diverse group of clients including hospitals, we are always on the lookout for information about how they may be affected by industry changes. If you have questions about the Medicare Part B proposal or are curious to learn more about how it could affect revenue for certain companies and organizations, please do not hesitate to call PBIRx at (888) 797-2479.

Pharmaceutical Drug Advertising As It Relates to Pharmacy Benefit Spend

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

Did you know that in 2014, the health care industry spent a whopping $14 billion on advertising? That’s a jump of nearly 20% since 2011, and it would not be out of line to wonder if advertising spend is going to increase moving forward. In fact, in the first nine months of 2015, $2.4 billion was spent on United States TV ads for prescription drugs alone.

To date, the United States and New Zealand are the only two countries that permit consumer advertising for drugs. And although drug manufacturers of brand drugs might see this as a good opportunity to promote their products, others disagree, saying that advertising drugs and medical treatments could have a negative effect on our health care system, and most notably, the cost of services.

According to an article from The New York Times, many of the latest drug advertisements are pointing patients in the direction of some of the most expensive new drug treatments new to the market. A specific example, given on a recent episode of 60 Minutes, referred to four costly brand drugs that were promoted even though there are generic drugs available that cost much less. But since these TV ads are promoting the expensive treatments as opposed to those that are more cost-effective, it is only natural for patients/viewers to bring them to the attention of their doctor. 

Another example comes from the January 31, 2016 broadcast of Grease Live on Fox. During the show, a commercial for Opdivo, a treatment that costs over $12,000 per month, was shown to viewers. Additionally, the Opdivo advertisement was also run regularly during the NFL season. As a result, The Wall Street Journal explains that this could encourage patients to “pressure their health-insurance plans to cover the drugs,” and the result of such could mean increased costs for providers.

In addition to contributing to rising health care costs, a major problem with many of today’s drug advertisements is that viewers are not provided with information on risks and side effects as compared to the drug benefits. For those commercials that do specify the treatment, risks are usually listed very quickly at the end, not giving the viewer enough time to process them. On the other hand, some advertisers have even steered towards not stating the drug, but focusing on the disease state so that mention of side effects is not necessary. While drug manufacturers may be acting in accordance with advertising regulations, the way information is presented may not be the most beneficial for patients as there is zero focus on patient risk and plan sponsor cost.

For more information about recent pharmaceutical drug advertising and the serious effects it could have on our health care system and all those involved, be sure to check out the articles from The New York Times and The Wall Street Journal, linked above.

Having no preferred relationships with any PBM, PBIRx benefits clients by utilizing cutting edge technology and an experienced staff totally focused on the pharmacy benefit. PBIRx strives to help entities get more control over their health care costs. We realize how the changing nature of drug advertisements could increase the pharmacy benefit spend for our clients. That is why PBIRx has developed proprietary clinical algorithms based on new drug information reviewed on a continuum to proactively advise clients of new recommendations weekly and monthly, whereas the PBM “maybe” provides information quarterly as the PBMs and Manufacturers partner together to profit from rebates.  

To learn how YOU can benefit from our pharmacy benefit consulting and auditing services, please give us a call at (888) 797-2479 today.

The Cybersecurity Act of 2015’s Effect on Health Care

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

On December 18, 2015, President Barack Obama signed the Cybersecurity Act of 2015 into law - an act that was a part of the federal omnibus government spending package. Within the Cybersecurity Act, approximately nine pages of health care related concerns are covered, outlining a plan for how to improve security within the health care system.

Considering that we live in a world nearly dominated by technology, it is not unusual to hear of cyber attacks and breaches in online security. However, knowing the nature of health care data passed through digital systems, it is important that action be taken to limit the amount of breaches that occur. Not to mention, a report from Accenture found that “data breaches over the next five years will cost U.S health systems $305 billion in cumulative lifetime revenue,” making it even more critical that something be done to prevent this.

Below, we highlight some of the main points regarding the health care industry that are included in the Cybersecurity Act:

1. According to congress.gov, the Department of Health and Human services must bring together a task force that can: a) put together a single system that the federal government can use to share intelligence about cybersecurity threats that affect the health care industry; and b) recommend protections for electronic health records and medical devices that are networked.
2. Within one year of the act’s enactment, the Secretary must submit a report on the preparedness of the health care industry when it comes to responding to cybersecurity threats to the Committee on Health, Education, Labor and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives.
3. Information about how to improve preparedness for and responses to cybersecurity threats in the health care industry must be distributed to health care industry stakeholders.

For more information about improving cybersecurity in the health care industry, be sure to read through all of Section 405 of the Cybersecurity Act.

At PBIRx, we place a great deal of our focus on cybersecurity efforts to ensure that our clients’ data and protected health information (PHI) is kept secure. Not only have we worked to make our office a safe place through the use of access key pads and secure locks, but we have also worked with IT professionals to protect and encrypt any and all technological devices. For example, our computers become locked when not in use and we have software installed to prevent access to unsafe websites. Last but not least, our employees are required to attend quarterly cybersecurity trainings to ensure that they are up to date on the latest policies and procedures along with annual HIPAA Certification requirements.

For more information about PBIRx and how we work to protect our clients’ information, please give us a call at (888) 797-2479 today.

Lower Cost Gleevec Generic Receives FDA Approval

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

In December of 2015, Sun Pharmaceutical Industries Ltd. (Sun Pharma), a company headquartered in Mumbai, India, received U.S. FDA approval for their generic version of Gleevec, a brand drug that was designed by Novartis to interfere with the growth of certain cancer cells (leukemia being one FDA approved indication). Gleevec currently is approved for ten indications, however, the generic was approved for only seven of those.

The generic version, known as imatinib mesylate and which comes in tablet form, is a kinase inhibitor, which can be used to treat adults who have chronic myeloid leukemia with Philadelphia chromosomes and a few select other cancers. Earlier last month, Sun Pharma officially released the tablet to the United States market.

Upon receiving approval, the FDA granted Sun Pharma a six month exclusivity period to sell this generic. To incentivize utilization they offer a minimum $10.00 member copay card up to $700 out of pocket per 30 day fill for up to six months. Copay cards will be disseminated to over 4500 oncologists nationwide. And last, but certainly not least, qualifying patients may even be able to receive imatinib mesylate for free through the Sun Pharma Patient Assistance Program.

Currently, the brand Gleevec costs approximately $12,000 per month for the 400-milligram daily dosage, which results in a total yearly cost of over $120,000 per patient. Now that a generic version is available, Novartis also offers a minimum $10.00 member copay card up to $9,690 per 30 day fill not to exceed an annual maximum of $30,000.

What This Means For You:

Considering how Gleevec comes at such a high cost, it is important that all providing entities know generic imatinib mesylate tablets are now available, and at a much lower price. In fact, during the exclusivity period, providing entities can save approximately 8%-10%, with a discount estimated to be 30% after the 6 month generic exclusivity period ends.

Knowing just how cost effective this new generic can be, it is critical that companies have a plan design that encourages members and doctors to discuss prescribing generic imatinib mesylate rather than brand Gleevec - this is where our team can come into play. 

Here at PBIRx, we can analyze your current pharmacy benefit plan and then provide our recommendations to be sure that your current plan design tiers are incentivizing the lower cost generic equivalent of Gleevec.

For more information about the services we offer and how they can benefit you, please give us a call at (888) 797-2479 or visit us at www.pbirx.com.