Diff between traditional prescription drug plan and “carved out”
Traditional required members to pay upfront and submit receipts while carved out reducing costs
PBM
pharmacy benefit manager
the variety of prices involved in the supply chain of pharma drugs (3)
- avg wholesale price (AWP) - assigned by manufacturer
- wholesale acquisition cost (WAC) - price wholesalers buy from pharma manufacturers
- maximum allowable cost (MAC) - places a ceiling on reimbursements for generic
Design and managing options available to employers for a pharmacy benefit plan
- manage the benefit and adjudicate claims internally
- outsource the benefit management to a health plan, PBM, or TPA
- contract directly with pharmacies and adjudicate claims internally
What happens when an employee presents his Rx card to a pharmacy in the network?
- pharmacy uses computer network to answer questions (eligibilty, etc)
- employee pays a copay
- payer is bill at prenogiated discount rate
Medications excluded under a Rx plan
- contraceptive
- lifestyle drugs
- OTC drugs
Factors cited in dramatic increase in Rx drug costs
- increased volume, mix, & availability of products
- cost increases passed on by pharma industry
- demographics
- new drug therapies targeting the “young old”
In a three tier prescription plan the
- lowest tier is _______
- next highest tier is _______
- highest tier is _______
- generics
- preferred brands
- nonpreferred brands (or non formulary)
Restricts coverage under the plan for certain drugs based on the patients conditions and maximizes the outcome of the medication
prior authoriation (PA) program
Predefined maximal quantities for specific medications. Restrict the number of dosage units over a 30, 60, 90 day period
Quantity Limits (QLs)
Factors that influence cost of drug benefits (7)
- demographics
- benefits, copay, formulary design
- drug cost and mix of branded products
- utilization of Rx’s
- costs charged by PBM’s
- fraud/prescription misuse
- plans ability to manage costs
common techniques plan sponsors use to control pharmacy costs (3)
- review the design of the pharmacy benefit and how it fits into the overall medical program
- analyze areas to identify what areas need better management
- use other pharmacy management tools and techniques
- reduce pharmacy network
- mail in
- generic encouragement
- promote cost effective drugs
- utilization mgmt
DUR
drug utilization review
3 types of DUR
- concurrent - at point of service
- retrospective - review of profile to ensure compliance with drug therapy
- prospective - education physicians and patients
a list of drugs preferred by a helath plan or PBM. Designed by a process of evaluation and analysis that is usually under the auspices of a pharmacy and therapeutics (P & T) committee
Formulary
different types of formularies
- open
- preferred
- closed
developed to measure and manage all health care outcomes and costs associated with a particular disease across the entire continuum of health care delivery
disease state management (DSM)
an approach to medical decision making that emphasizes scientific evidence and statistical methods for evaluating outcomes and risk of treatments
Evidence based medicine (EBM)
an entity that administers managed pharmacy programs. It is defined as an application of programs, services, and techniques designed to control costs associated with the delivery of pharma care
PBM (pharmacy benefit manager)
How do PBM’s generate profits
- claim administration fees
- mail service
- rebates
An agreement between a PBM and a drug manufacturer to secure significant reductions in the cost of Rx drugs. Some of the savings are passed along to employers
rebate
