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 amount that they are paid for the prescriptions that they process for their clients.

If you’re like us, you’re probably wondering why anyone would choose a non-transparent option for their pharmacy benefit program, or for anything else? The big PBM’s have for years claimed that their spread model programs save their clients’ money. They won’t share with you (or anyone else) the actual cost that they pay for the claims they process on your member’s behalf. But going forward they claim that they WILL share this information with their clients who choose these new, transparent model options. But they will continue to hide this information from clients who choose the traditional offering.

So why this sudden change? The answer is largely due to continuing legislative efforts to force PBM’s to become more transparent. And the growing popularity of Pass-Through model PBM’s that claim to disclose all pricing details to their clients.
But won’t this expose their true pricing practices, which is something they have long claimed was proprietary, and therefore not something they can share with the public? Does this seem like a logical business decision for the PBM’s?

The Express Scripts announcement also states that they will cap member copayments to $5 for generics, $25 for preferred branded medications, and $45 for preferred, specialty brands. But what does this have to do with transparency? And shouldn’t the employer be allowed to design their own benefit programs, and set the copays at whatever level makes the most sense for their unique plan?

For years ESI has maintained that their non-transparent, spread pricing model saves clients’ money. Now they are telling us that this new program “Further Advances Transparency and Affordability for Consumers and Clients”. How can both be true?

Most PBM’s have long offered pass-through pricing options to their clients. But they maintain that the traditional model offers bigger savings for their clients, and they claim that they can offer bigger, AWP pricing discounts via the hidden pricing arrangements than they can by being transparent. This makes no sense, of course, but because the traditional model options look better on paper, many Plan Sponsors end up choosing that option, which is precisely the outcome that the PBM’s desire.

PBM’s are able to greatly influence their clients’ pharmacy spend in ways other than pricing. As CCRx clients know, managing pharmacy costs requires not just fair pricing, but it also requires proper management of utilization, drug mix, and plan design. While increased transparency is a step in the right direction, it is only one part of the solution. Your CCRx team is here to help you navigate the complex, pharmacy benefit landscape to ensure the best possible outcomes at the lowest, possible cost.

New Transparency Models

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