Breaking Down the Fine Print:

Presented by: Jim Farley

The Value of Pharmacy Benefit Contract Differences

Value of Contracting Definition Differences

Contract Provisions

Does the PLAN pay the pharmacy's cash price (usual & customary price or 'U&C') when the cost is lower than the PBM's discounted/AWP cost? (i.e. $4 Walmart generic program)

If not, reduces both brand and generic AWP 1% to 2%

Contract Provisions

Except for applicable administrative fees, will the plan always have zero claim cost liability when a member's copayment covers the full cost of the prescription at the point of sale?

If not, reduces both brand and generic AWP 1% to 2%

Contract Provisions

Does the generic discount rate exclude Single Source Generics? If yes, are the excluded Single Source Generics limited to just those generics in the 180 exclusionary period?

If yes, meaning they are limited, this reduces 2% to 4% from generic

AWP

Contract Provisions

Does the brand discount include the Single Source Generics excluded from the generic discount?

If not, this reduces 1% to 2% from the brand AWP

Contract Provisions

Are non-MAC generic drugs included in the brand drug discount price?

If yes, reduce 4% to 6% from the generic AWP or 0.5% to 0.75% from the brand AWP

Value of Contracting Definition Differences

The provisions make a difference in what you pay.

Additional Points

• It’s not about the deal…it’s about the contract provisions

• A ½% difference in your brand discount may make up for a lower generic discount

• Higher the rebate the higher the net costs