Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
Pharmacy 201Session 2
3
Session 1 Assignment
Does the Client/Prospect Have a Pharmacy Contract?
How Long is the Term of the Contract or Agreement?
Is the Client/Prospect currently in a carved-in or carved-out arrangement?
Does the arrangement provide audit rights or allow for a market check?
1
2
3
4
4
Introductions
Kristen BoydDirector of Training, Development and
Engagement
Robert LewisBusiness Development Executive
5
Agenda
Pharmacy Contracts1
Pharmacy Analysis2
Best Candidates and RxBenefits Differentiators3
Q&A4
6
PBM Contracts:Key Considerations in Pharmacy Pricing
7
A Contract is Only as Good as the Sum of Its Parts
8
Pharmacy Pricing—Key Considerations
Client-Held Contract OR Carrier-Held Contract
One Year Length OR Multi-Year Length
Traditional OR Transparent (or Pass Through)
All-In Discounts OR Discounts based on PBM Definitions
Exclusive Specialty OR Open Specialty
Aligned Formulary OR Non-Aligned Formulary
Rebate Credits OR Administrative Fee Credits
Zero Balance Logic (ZBL Off) OR Zero Balance Logic (ZBL On)
Audit Rights OR Not Eligible for Audit
9
What is the length of the contract term (number of years)?
How do you protect yourself?
Two roads to protect yourself:• Three year contracts with annual market checks• One year price contracts
Vast majority of PBM contracts are long-term three year arrangements with harsh penalties to terminate early
Why is this bad?• Stale pricing in second and third year• Inability to respond to the rapidly changing pharmacy marketplace• Costly to exit contract early
10
Who Holds the Contract?
Client-Held Contract Carrier-Held Contract
Client-Held (Direct) Contract with PBM • Vary greatly depending upon the PBM and
arrangement• Client-centric contracts
• Protect clients from inadequate terms and conditions
• Can provide client-level guarantees vs book of business guarantees
• Provide great accountability
Carrier-Held (Or Indirect) Contract with PBM through Carrier or TPA• Client has indirect relationship with PBM since
Carrier holds the contract• Relying on the holding party to look out for
client’s best interest • No audit rights• Limited PBM accountability: i.e. “estimated
discounts,” “book of business rates,” “aggregate not client specific,” etc.
11
What Pharmacy Arrangement is Best?
Traditional Transparent (Or Pass Through)
• PBM agrees to set pricing terms • PBMs has broader sources of revenue
(may receive revenue from spread pricing, mail order, % rebate retention, data sales, ancillary fees, etc.)
Transparent/Pass Through Contract• All retail discounts and rebates are “passed
along” to the group in return for high administrative fees
• PBM has limited sources of revenue (admin fee, mail order, data sales, ancillary fees, etc.)
PBMs may receive revenue from spread pricing, mail order, % rebate retention, data
sales, ancillary fees, etc.
PBMs offer less aggressive guarantees because they have zero upside.
12
How are Brand & Generics Defined?
What’s best for the client?
All-in Discounts? Discounts Based on PBM Definitions?OR
General pricing tactic in which PBMs classify brand and generics based on the PBM's proprietary algorithms or definitions.
These classifications generally result in a brand or generic being reclassified
Result: Easier for the PBM to meet their pricing guarantees during reconciliation.
Best approach: Drug Classification is determined by Medispan Prescription Pricing Guide.This accurately places drugs in the proper categories.
13
How are Single Source Generics (SSGs) Defined?
What are the contract pitfalls?
“Single source generic” status is assigned to generic manufacturer who receives an exclusive approval to market as first time generic
6-month exclusivity period
In a typical contract, instead of the SSG drug getting a deep generic discount (74%), they get a typical discount of 35%
14
Which is the Best Deal?Value of SSGs & DSGs in the Generic Discount
Generic pricing applies to drugs with more than 2 manufacturers. SSGs &
DSGs are included in the brand guarantee
All-in Generic Guarantee
SSGs & DSGs are reconciled with generics
Generic pricing applies to drugs with more than 1 manufacturer. SSGs are
included in the brand guarantee
Actual Effective Rate Performance
Contract 1 Contract 2 Contract 3AWP-78.00% AWP-77.50% AWP-77.00%
AWP-72.00% AWP-74.00% AWP-77.00%
NOTE: Dual source generics (DSG’) refer to generic with only two manufacturers
15
How is Specialty Being Purchased?
Exclusive Open Specialty
• Specialty is accessed through an exclusive network
• Generally deeper discounts • Some PBMs provide greater clinical
support for members
• Specialty can be accessed through open network
• Discounts not as deep • Adherence and clinical support can be
more difficult for members
What specialty network options can impact pricing?
16
How Can Formulary Impact Pharmacy?
What is a Formulary?The purpose of the formulary is to encourage the use of safe, medically appropriate and cost-effective medications that results in improved health care outcomes at a reasonable cost. Each PBM will have their own tailored and unique formulary that they will agree to cover.
Why Formularies Matter?
Successful formularies are able to:• Encourage generics, • Maintain clinical integrity, • Secure competitive pricing, • Incorporate rebates to maximize overall value, &• Adapt to the changes of the marketplace
Plans with open formularies:•Receive lower rebates,•Less competitive pricing, •More difficult to clinically manage pharmacy, &•Assume greater risk
17
Understanding Rebates
How do you discuss rebates with your customers?
Rebates may approach 15%-20% of a client’s gross drug costs. Rebates represent a significant financial opportunity for the employer Typical optics related to rebates:
• PBM retains the majority of the rebate dollars.
• Carrier shares a small portion of the rebates in the form of an admin credit.
• Rebates based on only a subset of brand claims (rebate-able brand drugs).
• Defining rebates as a percentage with no per brand guarantees.
• Days’ Supply Caveats
Rebate Credits? or Administrative Fee Credits?
18
What is Zero Balance Logic (ZBL)
How does Zero Balance Logic impact plan performance?
A zero balance claim is a claim where the member pays for in its entirety and the employer pays zero…often times because the pharmacy’s cash price (U&C) is lower than copay.
ZBL impacts effective rates. If a PBM uses an AWP-100% discount on ZBL claims instead of the actual discount, the PBM will inflate the overall discount performance to help them meet their guarantees.
19
How ZBL Can Impact MembersIf ZBL is Turned On If ZBL is Turned Off (RxB standard)
Benefits the PBM; Tactic allows pharmacy to charge “up to” the copay when the discounted claim cost is less than the copay.For example:
Discounted claim cost = $4
Usual & Customary (Cash Price)= $15
Copay = $10
Member will pay $10 (the lower of U&C or copay). The PBM then benefits from the extra $6.
Benefit to Client; Tactic allows employees to pay the lowest possible price by paying the lowest of U&C, copay, or discounted claim cost. For example:
Discounted claim cost = $4
Usual & Customary (Cash Price)= $15
Copay = $10
Member will pay $4 ( lower of the discounted claim cost, U&C, or copay). The member benefits from always paying the lowest available cost.
20
Does your contract have Audit Rights?
Must translate to a monetary recovery process to recover any shortfalls in the pharmacy contract performance Pricing terms on paper are not always
what a client’s actual performance is Periodic audits can ensure client are
receiving the full guarantees and value of the contract
Very rare to have any monetary recovery for underperformance Clients have general discount rates Little can be done to address
discounts performing below the stated discounts
Audit Rights Not Eligible for Audits X
21
Case Study Check-In
How do PBM contracts and pricing considerations impact the customer you have identified for your case study?
22
Pharmacy Analysis
23
What is the Value in Completing a Pharmacy Analysis?
• Full visibility into how the current contract is performing
• Measure the current arrangement against others to see if your contract is truly competitive
• RxBenefits can compare against other pharmacy offerings as well (Current, Renewal Offer, plus three RxBenefits PBM partners)
• Proactive approach to pharmacy - current clients can either confirm the value of their pharmacy arrangement or transition the client to a better option before it becomes an issue
Average Overall Savings % 24.17%
Carved-In Groups analyzed with average savings of 24.24%
Carved-Out Groups analyzed with average savings of 23.98%
24
The Overall Value of Data Analysis
Contract Check-ups at No Cost
for Your Clients/Prospects
Gain Valuable Insight into
Current Arrangement
Compare against Other National
PBMs
Offense vs. Defense –
Safeguard Your Clients/Prospects
Let RxBenefits Help You Play Offense
25
Customized Data Request Letter
Detailed Analysis RequirementsCurrent contract pricing terms and copy of contract (if available) providing:• Brand AWP Discount• Generic AWP Discount• Brand Dispensing Fee• Generic Dispensing Fee• Specialty Discounts• Rebate Credits
Claim File Detail
Timeframe• Most recent 12 months of Rx
claims history
Rx Claim File Data Elements
• Member Copay/Coinsurance• Fill Date• Ingredient Cost• Brand/Generic Indicator• AWP• Etc.
26
How It All Comes Together…the Process
1 Initiate Strategy Call – Needs Assessment
2 Collect Data for Analysis (estimate 2 weeks)
3
5 Review Customer Analysis Results with Consultant
4 Analysis Illustrates Client Results- NDA required to release
6 Present Analysis Results to Customer
7 Client’s Decision Process
Detailed Analysis of Contract Performance & Effective Rates (Estimate 8-10 business days for completion)
27
Key Metrics of Differentiation & Savings: Sample Pharmacy Analysis
Reprice by Channel and Drug Type
Claim Distribution by PBM
Claim Statistics
Formulary Disruption (Group & Member)
Clinical and Utilization Programs
Effective Discount Comparison
Contract Comparison
Executive Summary
Plan Design
28
Case Study Check-In
What questions/concerns do you have for completing a pharmacy analysis for the customer you’ve identified for your case study?
29
Best Candidates Discussion
30
Things to Consider
Other Considerations:Industry TPA/Carrier ConnectivityFormal RFP Process Implementation Timeline
Self -Insured
Carve-In
Under 10,000 EEs
Single Pharmacy Plan / Locations
Fully-Insured
Carved-Out
Over 10,000 EEs
Multiple Pharmacy Plans / Locations
vs.
vs.
vs.
vs.
31
Why RxBenefits?
32
Market Niche
THERE IS A VOID IN THE MARKET• Three largest PBMs earn $200 billion in combined revenue. • Majority of resources focused around health plans, governmental and large commercial
employers.• Best resources assigned or reallocated to larger payor market.• Choose “not to quote” on smaller groups.• Approach has created a void in the marketplace.
RxBenefits is uniquely positioned to fill this void with our advanced capabilities and dynamic, personalized service approach.
33
RxBenefits Model Delivers…
Real Program Savings
Full Suite of Services
MeaningfulAnalytics
Rx
Aggregate Purchasing for All Employers
Client-Facing ServicesContracting Clinical Management
Data Analytics Independent Audits
Billing Performance Reviews
Account Management Performance Guarantee/Oversight
Core PBM Services
Pharmacy Networks Clinical Resources
Mail Order Mobile App
Account Management Performance Guarantee/Oversight
34
The Ongoing Value of RxBenefits in the Numbers
“Our clients not only experience real savings in year one, but ongoing value through “evergreen” pricing that ensures
our clients’ contracts remain highly competitive.”
Average Savings over Previous Contract for RxBenefits Prospects
20%+
Average Contract Price Improvement
Year over Year
9%
Clients Had a Surplus of Savings over
Contract Guarantees
90%+
NOTE: Statistics based on national consulting firm book of business with RxBenefits
35
Our Approach to Serving C2 Clients
36
RxBenefits Service Model
IMPLEMENTATIONTEAM
DATA MANAGEMENT
CONCIERGE SERVICES
MEMBER SERVICES
CLINICAL SERVICES
PLAN PERFORMANCE
Strategic Oversight & Expertise acting as an Extension of HR
37
Account Management Approach
Proactive Resource Team & Consulting Partner to Support HR
Each Client has an assigned Strategic Account Executive with one or more Account Managers to support all account-related activities
Seasoned teamExtensive
experience
MonthlyCustomized
plan reporting
CustomizedClinical
recommendations
30+
Service standards employed to ensure client satisfaction
38
Member Services
Individualized High Service Approach for Members with Better Support
Individualized – High Touch ServiceHands-on approach and 1st call resolution –Emergency access to Pharmacist
Member access 24/7Dedicated email and toll-free number for membersSaves member time and money
Supports Member’s Rx Management
In-house Member Service RepsDedicated service team to respond to emailsAverage 8+ years experience
RxAssure
Service standards employed to ensure client satisfaction
39
Client Services Associates
Member ServicesLatrina Hicks, Manager
Client ServicesStacy Bell, Manager
Specialized team supporting the daily
needs of clients, consultants and account
management teams
Experienced, high-performing
call center team delivering superior level of service to members
For HR and Consultants: 866-769-5987,
For Members: 800-334-8134,
Member ServicesSupervisors
Member Services Representatives
Client ServicesCase Manager
Issue resolution for clients, consultants, and members
Client and Member Services Teams
40
Open Discussion: Questions from the Field
Thinking of your case study, how will you position RxBenefits
based on your clients needs?
What additional questions do you
think your customer will have?
What additional information do you
need in order to close this sale?
41
What’s Next?
Complete the course evaluation– You will receive the evaluation through email– Your thoughtful feedback is very valuable to us
Think Pharmacy– Integrate pharmacy into your planning and customer conversations– Consider the impact Rx has on your customer’s total spend
Complete the “Top 10 Pharmacy Questions” worksheet– Complete Part 2– Prepare to discuss with your customer
42
Questions?