Transcript How does Elect Rx provide “True Lowest Net Cost”?

and Health Solutions LLC
Who is Elect Rx?
Elect Rx is an organization of strategic partnerships with a
singular purpose:
To Reduce the overall cost of prescription drug products for you the
Benefit Plan Sponsor.
Elect Rx provides the only “fully integrated” PBM service for Benefit Plan
Sponsors in the United States with a Personal Importation component.
Elect Rx is a Pharmacy Benefit Strategist composed of independent and
synergistic organizations with full PBM oversight and governance. Elect
Rx provides prescription drug fulfillment services through the following
divisions:
 US Retail
 US Mail Order
 International Mail Order/ Personal Importation (PI)
 Specialty
What does Elect Rx do?
Elect Rx provides prescription drugs at
“True Lowest Net Cost” to your Benefit
Plan Members. Overall savings
average 13% to 30% annually.
Why do you need Elect Rx ?
PBM standard business practices result in
higher net cost of prescription drug
products to your Plan.
A traditional PBM contract works much
better for their Shareholders, not for you,
the Sponsor.
How does your PBM keep more of your
organization’s money for their Shareholders?
 By utilizing “Spread Pricing”. The PBM charges you more money than
they pay the dispensing Pharmacy. The bigger the “spread”, the
more of your money they keep.
 A Generic Drug pricing benchmark such as MAC (Maximum Allowable
Cost) pricing alone does not fully protect you, the Sponsor, from
excessive “spread” pricing practices used by most traditional PBM
business models. Widening the “spread” is a critical mechanism of
revenue generation by PBM’s. Another favorite PBM practice is
“Formulary Manipulation” to further excessively increase the
revenue potential of “spread” pricing. Specific contractual
language allows PBM’s to engage in such practices at the expense
of you, the Sponsor.
 By engaging in excessive pricing practices for 90 day Mail Order supply
by charging up to 3 times more than equivalent pricing at retail
pharmacies particularly with generic maintenance medications.
 By retaining Rebates from Drug Manufacturers and developing
formularies that maximize rebate revenue vs. pursuing “lowest net cost”
strategies in the best interest of the client.
How does your PBM keep more of your
money for their Shareholders? (contd.)
 By utilizing contract terms and language that favor the PBM with
restricted auditing rights.
 By monopoly through in house and non-independent Mail Order,
Specialty, and Retail Divisions.
 By charging fees and expenses other than Transaction Fees Per Net Paid
Claim or Per Employee Per Month (PEPM)
 By selling data or accepting rebate management fees or other Pharma
based funding.
 By confusing you with terms like Generic Utilization Index (GUI). This
is NOT the same as a Generic Utilization Rate (GUR). Data will always
confirm that when a PBM suggests a Generic Utilization Index in the
97% range, the actual GUR is usually in the 70% range which
approximates the national average GUR of around 70 %. PBM’s use
terms like GUI to give you a false sense of security as to their
performance. Beware of this false sense of security!
How does Elect Rx provide
“True Lowest Net Cost”?
 Our Generic MAC (Maximum Allowable Cost) lists are the most
inclusive and aggressively priced in the industry. Significantly more
generic drugs are on our MAC list versus our PBM competitors
and always at “true lowest net cost”. Additionally, the Sponsor is
contractually protected from harmful business practices such as
spread pricing, formulary manipulation, steering and other
practices that drive your Benefit Plan costs up, not down. Elect Rx
is always governed by transparency, accountability and integrity
in all our dealings with you, the Sponsor. That’s why you will
always benefit the most from our “true lowest net cost” model.
Also, be wary of benchmarks like AWP (Average Wholesale Price).
They do NOT reflect the deep discounts available to large purchasers
like your PBM. AWP more accurately reflects “ain’t what you pay”!
 Our Generic Drugs are subsequently up to 50% cheaper than
competitors like Express Script, Medco, and CVS Caremark.
How does Elect Rx provide
“True Lowest Net Cost”? (cont’d)
 By dramatically increasing the Generic Utilization Rate (GUR) of your
plan members. Our benchmark GUR is 80%. The national GUR
average is around 70%. GUR is your most powerful cost containment
tool. Each 1 % upward movement in GUR can decrease drug spend by
up to 2%.
 By providing 90 day fills (3 months) of “maintenance” generic
medications from one of our 60,000 participating retail pharmacies.
 By providing an “Over the Counter” (OTC) program for Antihistamines
such as Allegra, Claritin and Zyrtec and Acid Suppressants such as
Prevacid and Prilosec. These former brand drug “stars” were the main
competition for current brand drugs such as Nexium. These OTC drugs
are proven to be equally clinically effective at a fraction of the cost.
How does Elect Rx provide
“True Lowest Net Cost”? (cont’d)
 By passing along all manufacturers’ rebates to you if applicable by PBM
practice. Brand drug manufacturers pay rebates to PBM’s which can
promote sales of higher cost Brands. This is both a major revenue
stream and a conflict of interest for most PBM’s. Expensive Brand drugs
are promoted through practices like “formulary steering” when many
less costly options for both Sponsors and Members are available. PBM
Shareholders are benefiting, not you. Our “ true lowest net cost”
approach means we don’t “chase” rebates at your expense.
 By providing an International Mail Order/Personal Importation (PI)
Program for certain Brand drugs with no Generic equivalent. The
average cost of brand drugs through PI is up to 60% less than US priced
brands. The average savings per Brand drug claim per year using PI is
$440.
 By customizing our approach to meet your goals. Education and the
provision of voluntary options for your Plan Members can and will
change their drug buying behavior. Huge savings will result for both the
Plan and the Member through zero or reduced co-payments.
How does Elect Rx provide
“True Lowest Net Cost”? (cont’d)
 By providing a free no-obligation analysis of detailed claims data from
your current PBM. This line by line analysis of 3 months or more of
claims data is 100% evidence based and mathematically indisputable.
Elect Rx provides objective evidence of the actual savings generated by
our program. Your detailed claims data is run using the same drug
pricing our other clients paid for the same drugs on the same day.
 By indemnifying you from any liability. The Elect Rx program is fully
insured. Elect Rx has set “best in industry” benchmarks for care,
custody, and control in the supply chain of all PI brand medications
between the manufacturer and the end consumer.
 By managing your plan attributes with a laser like focus. Our
technology assures that your plan design will be rigidly adhered to.
With real time Drug Utilization Review (DUR) at every point of sale
(POS), both plan governance and client safety is guaranteed.
Why use Personal Importation (PI)?
 Enormous savings on the cost of Brand “Maintenance Medications.”
Brand prices through PI are up to 60% cheaper than US priced Brands.
 The average savings to your plan per Brand drug claim per year using PI
is $440.
 Using PI for brand drugs make rebates a non-issue because of the
enormous price difference over US Brand prices.
 If the FDA subsequently approves a Generic equivalent of a Brand drug
available through PI, the Member is referred to their local Pharmacy for
a 90 day fill of the new Generic product. This maximizes savings to you,
the Plan Sponsor.
 If a Member’s PI order is delayed for any reason, the US Mail Order
division will provide interim product to ensure therapeutic continuity.
Why are our Brand prices up to
60% cheaper than in the United States?
 Canadian, European, and Australian Brands are up to
60% less because:
No rebates are permitted.
There are significant differences in the policies
and tax codes on sales and marketing soft costs.
Options Presented by Elect Rx
 A “fully integrated” Elect Rx program with all
components including US Retail, US Mail Order,
International Mail Order (PI) and Specialty, all with
PBM oversight and governance.
 A stand alone International Mail Order (PI) only
program to provide brand medications with no generic
equivalent to Plan Members which can be coupled with
a US Mail Order facility providing the lowest available
pricing on the 30 top Generic “Maintenance
Medications”.
No Risk Trial
 Take the “no risk test drive” to ensure your complete
satisfaction.
 Keep your current program in place .
 Run individual components or the entire Elect Rx program
in parallel with your current PBM for three to six months.
 Analyze the metrics of your overall drug spend in months
four and five. You will validate the significant savings while
seeing clearly the new dynamics created by Elect Rx that
changes the drug buying behavior of plan members.
What are “Maintenance Medications”?
 Maintenance Medications are for the treatment of numerous chronic
medical conditions. Some of these include High Blood Pressure,
Diabetes, High Cholesterol, and Asthma.
 A Physician has already monitored the effect of the medication on a
Plan Member for at least 60 days (2 months).
 If the therapeutic goals and outcomes are satisfactory to the Physician, a
Plan Member is then likely to be on that same medication for extended
periods without significant dosage adjustments or new side effect
profile.
 With subsequent repeat prescriptions from the Physician, these
medications can be safely fulfilled in ninety (90) day fills.
Program Monitoring
 Initial evaluation reports completed after the end of the third
month.
 Detailed claims data provided monthly to Client.
 Quarterly progress reports.
 No risk and open ended contracts. The Client can cancel without
cause with 30 days written notice.
Future Cost Containment
The Proactive Approach
 Currently over $1 trillion annually is spent on the direct and indirect cost
of Chronic Disease.
 Sponsors of Drug Benefit Plans just like you continue to underwrite
some of that cost through ongoing benefit utilization by your employees
and retirees.
 Sponsors can help employees maintain healthier lifestyles.
 Sponsors can reduce the risk of many Chronic Diseases in both their
workforce and retiree populations through our co-sponsored programs
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On-site Employee Health Centers
Wellness Programs
Disease Management Programs
Disability Management Programs
Frequently Asked Questions
(FAQ’s) about our program
1.
How do we move forward with an analysis?
2. What does the detailed claims file consist of? How do we get it ?
3. Will our current PBM/Insurance Company allow us do this?
4. What is the effect on our “Stop Loss” coverage?
5. How do we know if the International Mail Order/PI drugs are safe?
Are they the same as FDA approved versions? What countries do these
medications come from? Do those countries have similar regulatory
agencies like the FDA?
6. Are you insured? Are Sponsors fully indemnified?
7. Is PI legal and are others currently using PI? Have there been seizures
and or cease and desist action taken by the FDA?
FAQ’s : (Cont.)
8. What happens if a Member’s local pharmacy is not part of your
Pharmacy Network?
9. How much more work will this be for our Administration Staff?
10. What are your hours of operation and customer support levels?
How do I know if a drug is covered? Is there a number to call if
I have a question or if a medication order is delayed and I am
running out of my prescription?
11. How long does it take to receive medications from the
International Mail Order (PI) program? Do you use Courier
Mail or US Postal Services?
12. Is Elect Rx a US company? Do you provide references. Do
you have a web site?
FAQ’s : (Cont.)
13. Walk me through the process of how a Plan Member would
order prescription drugs using International Mail Order (PI).
14. What if my Physician will not fax the script?
15. What is the difference between a Generic Utilization Index
and a Generic Utilization Rate?
16. What is the cost of setting up an Elect Rx program?
17. How do we set up an Employer based Health Center?
18. How will this work with our existent Collective Bargaining
Agreement (CBA)?
Is International Mail Order/Personal
Importation (PI) Legal in the US?
 The Short Answer – No
 The Long Answer – International Mail Order/PI is referred to as “a
permissive violative transaction” in the current FDA Operations
Manual. Yes, that is the Food and Drug Administration’s current
Operations Manual. This is FDA jargon for: It’s allowed under certain
circumstances even though it is against the law.
 How did this come about? The US Congress passed “The Medicare
Prescription Drug, Improvement and Modernization Act of 2003”
and in “Subtitle C—Importation of Prescription Drugs” Congress
made it’s intent clear that individuals could obtain a waiver with a valid
prescription to import drugs through a Canadian Pharmacy in
quantities of up to 90 days (3 months) for personal consumption only
and where it was economically justified. In fact, Congress decreed that
the Secretary of the FDA shall, by regulation, grant an individual a
waiver in these circumstances. Sec 1121-sub section (j) Titled “Waiver
Authority for Importation by Individuals”.
Is Personal Importation Legal in the US? (cont’d)
 In 2006, Congress went even further. They withdrew the funding for
enforcement of the ban on International Mail Order/PI by the
Department of Homeland Security and the FDA when that
importation was consistent with the criteria outlined in the above Act
 The FDA’s current Operations Manual clearly directs personnel to use
“discretionary enforcement“ with regard to the importation of drugs
through a Canadian Pharmacy that meet the criteria specified in the
Act. Hence the jargon of a “permissive violative transaction“.
 Cities, Counties, and businesses began implementing International
Mail Order/PI options as a part of their Employee Benefit Plans after
passage of this Act in 2003. Numerous communities across the United
States from Anderson, IN to Montgomery, AL and businesses across the
United States have operated International Mail Order/PI options for
their employees since 2003. Millions of dollars have been saved
through significantly reduced brand drug costs. Millions more dollars
have been put back into the pockets of their employees through Zero or
reduced Co-Pays on prescription drugs.
Is Personal Importation Legal in the US? (cont’d)
 Several individual States, including Nevada, home to US Senate Leader
Harry Reid, have adopted International Mail Order/PI programs. Any
resident of Nevada can import drugs through a Canadian pharmacy.
There is even a link on the Nevada State Web Site. Nevada’s program
has been running without issue since 2005. See
http://govcha.state.nv.us/new_CP_Index.htm
 The Department of Defense and Veterans Administration are the largest
purchasers of international drugs according to CBS Evening news
reported by Cynthia Bowers “Inside Story” shown on December
09/2003. Since then, a growing number of Law Makers in both Houses
from both sides of the aisle want to see further relaxation of FDA
regulations on the importation of prescription drug products. They see
potential savings of billions of dollars a year to healthcare budgets.