Transcript Pharmacy Benefit Managers (PBMs)

Pharmacy Benefit Managers
(PBMs)
Dimitry Gotlinsky
Western University
Managed Care Clerkship
ProPharma Pharmaceuticals Consultants, Inc.
5/2/2006
What are PBMs?
 Rising
health care costs have forced
employers and health plans to develop
methods to manage costs
 PBMs-are
private companies hired by
employers and health plans to help
administer drug benefits
PBM’s function
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Purchase and dispense medications
Pay claims
Financial intermediary between pharmacies and
plan sponsor
Manage prescribing choices
Maintain pharmacy networks
PBM’s added services
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Real-time medication check
PBMs conduct electronic clinical reviews before
medications are dispensed
Prescription is checked for:
●Drug-drug interaction
●Drug-age interaction
●Appropriate dosage
●Excessive utilization
■ Pharmacists at point-of-sale receives a real time alert
Why is there a rise in PBMs
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3 main reasons:
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1)Number of RXs per person increases
2)Newer, higher costs RXs are replacing older,
less costly medications
3)The prices of RX drugs are increasing
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Most Dominant PBMs
Caremark, Inc. (merged with Advance
PCS)-90 million covered lives
 Medco Health Solutions, Inc.-60 million
covered lives
 Express Scripts, Inc-40 million covered
lives
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Focus of PBMs
■ Negotiate the customer’s ultimate cost
a) reimbursement to retail pharmacy
b)payment to manufacturer of the drug
■ Establish network of participating pharmacies
■ Negotiate rebates with drug manufacturers
Who is in charge?
 Ultimately,
the health plan is in charge
 PBMs
are not wholesalers and do not
generally purchase and sell RX drugs
 But,
many PBMs own a mail order
pharmacy
Problems with PBMs
 PBMs
are paid for services which are
not considered rebates
 Use of call centers to actively encourage
doctors to switch individual patients to
preferred drug
 Refusal to disclose information on the
prices they pay for drugs, as well as the
rebates amounts
Problems with PBMs continued
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Collection and sale of PBM data on
patients
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Pharmacy spread-the difference between the
price charged health plans and the price paid
pharmacies
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Mail-order pharmacy
Pharmacist’s Role in PBMs
3
Clinical Interventions
 A)Therapeutic
Interchange
 B)Medication Adherence
 C)Therapy Management
Pharmacists Role Goals
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Increase quality of care to members
Promote appropriate drug therapy
Enhances medication compliance
Improves preferred drug compliance
Increases utilization of cost-effective
pharmaceuticals
Things to ask for when selecting a PBM
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Does the PBM uses the same AWP in
calculating price to clients and payments to
pharmacies?
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Are there any other payments a PBM gets from
drug manufacturers besides rebates?
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How often a PBM changes their formulary?
More questions to ask
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How are co-payments set?
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Ask for detailed disclosure and explanation
of a PBMs fee schedule
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What is PBM’s policy on selling pharmacy
data?
Duties to be performed by the client in the
contract
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Must provide a PBM with :
● Eligible member list
● Benefit plan information
●Notification requirements
● Provision of Eligibility Info
● Business development
In Summary
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PBMs manage the majority of prescriptions that
flow through health care system
PBM industry has evolved from small claims
processing firms to more concentrated industry
with comprehensive service offerings
Keep in mind that PBMs are a for-profit
business
Not always looking out for the best interest of
the client or patient