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The Role of PBMs and Third Parties in the Medicare Prescription Drug Discount Card Program

This article discusses the various roles of Pharmacy Benefit Managers (PBMs) and other third parties in supporting health plans and Medicare-endorsed programs through drug discount negotiation, pharmacy network coordination, home-delivery prescription services, service administration, and drug utilization review facilitation.

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The Role of PBMs and Third Parties in the Medicare Prescription Drug Discount Card Program

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  1. Kirby Bessant Vice President, Consumer Programs Medicare Prescription Drug Discount Card Program:The Role of PBMs and Other Third-Parties Pharma Congress Audioconference Jan. 27, 2004

  2. Role of PBMs Support Health Plans, Third Parties As: • Drug discount negotiator • Pharmacy network coordinator • Home-delivery prescription provider • Service administrator • Drug utilization review facilitator

  3. PBMs to Partner with Clients to Support Their: • Medicare+Choice offerings (health plan only) • Medicare-endorsed programs

  4. Role of PBMs: Drug Discount Negotiator • Secure discounts from retail pharmacies • Negotiate discounts from drug manufacturers • Provide cost savings through mail service

  5. Role of PBMs Discount Card Study Findings • Save cardholders 11% on 17 common drugs used by seniors (GAO1) • Save hundreds of dollars per year for patients on multiple drugs (Brandeis University2) with average discounts being: • 26% ($7 per Rx) on generic drugs • 14% ($11 per Rx) on brand drugs • Save cardholders 10% to 15% off a retail pharmacy’s price (GAO3) Sources: 1 Rx Drugs: Prices Available Through Discount Cards and from Other Sources, GAO Dec. 2001. 2PBM-Administered Prescription Drug Discount Cards: Savings for Uninsured Seniors, Brandeis University Schneider Institute for Health Policy, March 2003. 3Prescription Drug Discount Cards: Savings Depend on Pharmacy and Type of Card Used, GAO Sept. 2003

  6. Role of PBMs: Pharmacy Network Coordinator • Develop and maintain large national networks of retail pharmacies • Customize local, regional networks of retail pharmacies

  7. Role of PBMs: Home-Delivery Prescription Provider • Provide convenient mail-order prescriptions • Ideal for maintenance drug programs • Access via phone and Internet • Access to clinical staff

  8. Role of PBMs:Service Administrator • Develop members communication materials • Enroll new members • Serve members’ ongoing needs • Process prescription claims • Provide reports

  9. Role of PBMs: Drug Utilization Review Facilitator • Send electronic pharmacy messages • Alert pharmacies to potentially dangerous drug interactions • Improve patient safety

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