Common PBM Cost Tactics
May 2024
Understanding pharmacy program costs:
Amidst the myriad of articles exposing the questionable practices of PBMs, the urgency to address these issues intensifies. These practices not only inflate medication costs for patients but also jeopardize the integrity of the US healthcare system. Yet, one critical aspect often overlooked is the profound impact on members’ health.
When PBM’s create formularies, the original idea was to build these formularies to ensure that the safest, most efficacious, and cost-efficient drugs were preferred. As we all know, PBM’s “prefer” certain drugs by offering lower prices. Tier 1 drugs are generics, and tier 2 are preferred brands. Tier 3 is usually reserved for non-preferred, brand drugs; and sometimes there is a 4th tier for specialty products. The member’s copay usually increases with each tier.
Unfortunately, many PBM’s have strayed from this original model. The brand drugs that they “prefer” are usually those that provide the most financial benefit to the PBM, usually through rebates. And most PBM’s also offer “closed” formularies that are supposed to deliver an even greater level of savings to their clients by excluding coverage of certain, branded drugs.
Prior Authorization and Step Therapy programs are other ways that PBM’s encourage members to use the pharmaceuticals that provide the most benefit to the PBM. While these programs are supposed to encourage members (and their doctors) to try lower cost, first line therapies before prescribing higher cost drugs; today these programs are used to encourage the use of high-cost pharmaceuticals that provide the highest levels of rebates to the PBM. Patient outcomes are secondary considerations, at best.
Crystal Clear Rx understands that while pricing is a primary concern, and critical to managing overall pharmacy program costs; other factors such as Drug Mix are also a VERY important factor in managing overall costs. Simply getting the biggest discount isn’t enough. We must review and analyze all PBM practices, including formularies, Prior Authorization, Step Therapy, and other factors in order to get the best possible health outcomes for members at the lowest possible cost.
If you have Rx Benefit question(s) please reach a CCRx Consultant.
Recent Newsletters
Managing the Costs of GLP-1 Drugs: A Strategic Approach
Managing the Costs of GLP-1 Drugs: A Strategic Approach June 2024At Crystal Clear Rx (CCRx), we understand that the rising popularity and costs of GLP-1 drugs have raised many questions and concerns. We aim to provide clarity and guidance on managing these expenses...
What Is The Right Copay Strategy?
What Is The Right Copay Strategy? January 2024Crystal Clear Rx clients know that effectively managing the pharmacy benefit involves more than just PBM pricing. Utilization, Drug Mix, and Plan Design also impact the amount of money the Plan spends on their pharmacy...
The “Skinny” on Weight Loss Drugs
The “Skinny” on Weight Loss Drugs November 2023A lot of attention has been given lately to a new class of drugs called GLP-1’s. These drugs are increasingly being prescribed for type 2 diabetes and weight loss. Most Crystal Clear Rx clients cover these drugs for...
What to look for in a pharmacy benefit consultant
What to look for in a Pharmacy Benefit Consultant November 21, 2023Nobody wants to pay more than they should for any product or service. So, when many companies become concerned over pharmacy benefit costs, they may look for a Pharmacy Benefits Consultant or firm who...
Walgreens and CVS pharmacist Walk-outs
Walgreens and CVS pharmacist Walk-outs October 30th, 2023You may have recently seen news stories regarding pharmacist walk-outs at both Walgreens and CVS, and the potential for further work stoppages in the future at both of these companies, and potentially at other...
Choosing a PBM
Choosing a PBM September 2023 One of the primary services CCRx offers prospective clients is to assist them in the selection of a new pharmacy benefit manager, or PBM. Sometimes we are asked to utilize a Request for Proposal (RFP) process to narrow down the field of...
Effective Prior Authorization Management
Effective Prior Authorization Management August 2023 The effective management of the Prior Authorization (PA) function is a crucial aspect of healthcare that ensures patients receive the appropriate medications while controlling costs. Pharmacy Benefit Managers (PBMs)...
Conflict of Interest
Conflict of Interest July 2023 Recently a respected competitor published an article condemning most pharmacy benefit consultants for not disclosing conflicts of interest. They correctly pointed out that many big corporations such as “Boeing and UPS to local school...
New Transparency Models
New Transparency Models May 23, 2023 Both Express Scripts and OptumRx have announced new, optional Pass-Through pricing programs. Their clients can adopt this new pricing strategy, or they can continue with non-transparent pricing where the PBM won’t disclose the true...
Invokana Pricing slashed via The Mark Cuban Cost Plus Drug Company
Invokana Pricing slashed via The Mark Cuban Cost Plus Drug Company April 2023 The Mark Cuban Cost Plus Drug Company has announced that they have entered into a contract with JanssenUS, a subsidiary of Johnson and Johnson, to distribute Invokana, an important...