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Demystifying Rx Costs: Regain Control of Your Plan Costs

Learn how to save money on prescription drugs by eliminating unnecessary fees, transparent PBM auditing, and utilizing preferred pharmacy networks.

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Demystifying Rx Costs: Regain Control of Your Plan Costs

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  1. MASI – September 28, 2017 • Presenters: • John Addelman, Chief Sales Officer – ProCare Rx • Danny Toth, CEO – Timber Ridge Consultants

  2. Traditional Spread Model v Pass-Through Model • PBM earns fees through spread in traditional model • Difference between what is paid to pharmacy and what is billed • PBM pays pharmacy $100.00 and bills client $113.00 • NO Administration Fee charged to client • Client pays $113.00 total; PBM profit is $13.00 • PBM earns administration fee in pass-through model • PBM pays pharmacy $100.00 and bills client $100.00 • $4.00 Administration Fee charged to client • Client pays $100 for the claim plus a transparent $4.00 admin. fee

  3. AWP discounts Average Wholesale Price (AWP) • AWP discounts have become meaningless in traditional spread models • Game of Definitions: brands, high-priced generics, single source generics, etc. • PBM guarantees a brand discount rate of AWP minus 18% • PBM guarantees a generic discount rate of AWP minus 84% • Pass-Through PBMs guarantee to pass through their true discounts!

  4. AWP Discounts

  5. What Happens

  6. Payers Problem Traditional Spread PBMs look better on paper i.e. the spreadsheet • What happens if you put your worst priced generics into the brand bucket? • Including single source generics, multi-source brands, and certain high priced generics into brand bucket artificially improves brand discount rate • Moving these same drugs into the brand discount bucket also artificially inflates the generic discount rate • After hundreds of repricings it is very clear • Payers consistently pay more by using the spread model

  7. The Spreadsheet Spread Model Pass-Through Model Brand AWP – 16.5% Generic AWP – 78% Dispensing Fee - $1.40 Admin Fee - $2.75 Broker Fee - $0.75 • Brand AWP – 18.5% • Generic AWP – 81% • Dispensing Fee - $0.50 • Admin Fee - $0.00 • Broker Fee - $0.00

  8. How Do We Know It’s your data • Simply request your claims file • NDC • Pharmacy ID • Fill Date • Quantity • Days Supply • Ingredient Cost • Rx # • Dispensing Fee

  9. Actual Repricing DataSame Drug, Same Pharmacy, Same DaySavings of $9.32/claim or $227,244 Spread Model ProCare Rx Net Rx Claims – 24,368 Ingredient Cost - $2,667,732 Pass-Through $2,667,732 Administration fee - $4.00 24,368 x $4.00 = $97,472 Total Payment - $2,765,204 • Net Rx Claims – 24,368 • Ingredient Cost - $2,992,448 • Spread of $324,716 • $324,716/24,368 = $13.32 • PBM makes $13.32/claim • Total Payment - $2,992,448

  10. The Time is Right Now • You have options • It’s not what the PBM pays the pharmacy for drugs • It’s what you pay the PBM for those drugs • We have seen this scenario play out hundreds of times • Stop overpaying for medications

  11. Thank You! • John Addelman – CSO ProCare Rx • jaddelman@procarerx.com • Cell – (813) 220-3904

  12. The Great RevealDemystifying Rx Costs How to Regain Control of your Plan Costs April 30, 2017

  13. Four Buckets of Savings Preferred vs. Non-Preferred Transparent PBM Audit and determine your provider outliers and structure Preferred and Non-Preferred Pharmacy Provider Networks Tier change in pricing eliminates the discrepancy Does not eliminate these retailers from network • Elimination of Spreads using totally transparent PBM • Data analysis reveals spread per prescription • Eliminate the spread with current PBM, or work with a PBM without a spread

  14. Four Buckets of Savings Specialty Drug Savings Preferred vs. Non-Preferred Finds therapeutic drugs with same medical and therapeutic results, with substantially lower price. • Assure that specialty drugs are not introduced if not necessary. • Find Innovative ways to reduce the Plan cost for this class of drugs.

  15. PBM SPREAD AGGREGATE REPORT

  16. BRAND NAME DRUGS NOT COVERED BY PLAN 2105

  17. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

  18. COMPARISON 6 Rx claims (20mg/30 quantity) with 3 different NDC-11 codes. Filled at one independent and three chains. Incumbent PBM had 5 different prices Timber Ridge had 1. Incumbent average price was $40.75 and Timber Ridge was $3.60 90% savings ($37.15 per Rx)

  19. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

  20. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

  21. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

  22. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

  23. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

  24. The Choice is Yours Contact danny a. toth, r.ph. to review your pharmacy claims and plan design 706.402.1065 danny@trconsultants.net

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