Prescription Drug Plans pt 2 Flashcards
Module 6
What is a formulary
A list of drugs preferred by a health plan or PBM
Who is a formulary designed by
Pharmacy and therapeutics (P&T) committee.
Who composes a P&T committee
Physicians, pharmacists and nurses who may be complemented by pharmacoeconomists, ethicists, the lay public and plan administration
Why is the use of a formulary common
Because they are very effective at moving patients to lower cost drugs and maximizing rebate potentials
What is a drawback of a formulary
Constant communication to physicians and patients that is necessary regarding the current list of preferred products. When a PBM changes its formulary and does not communicate those changes, members may become dissatisfied.
This type of formulary allows plan enrollees and covered prescription drug prescribed for them
Open formulary
This type of formulary encourages patients to use the preferred or formulary drugs in return for reduced payment
Preferred formulary
This type of formulary will not cover nonformulary drugs. Typically found in hospital settings and tightly managed HMO programs
Closed formularies
What nonformulary cost-management tools are available to contain prescription drug costs?
- Network management, better discounts with retail and mail order programs
- Designing plans that meet the objectives of the overall benefit programs
- Quantity limits and maximum dollar limits
- Step-therapy programs
- Prospective review of new drugs and early policy determination
- Clinical management
- Other DUR programs such as concurrent and prospective programs
- Quality data management that provides early intervention reporting
Developed to measure and manage all health care outcomes and costs associated with a particular disease
Disease state management (DSM)
Describe two main types of DSM programs
Medical Model
Therapy Directed Model
Follow up on patients with select diseases to ensure that the patients are scheduling physician appointments, receiving appropriate tests and procedures and understand the importance of taking their medications
Medical Model
Administered by PBMs, pharmaceutical manufacturers, health plans and disease management companies
Therapy directed model
Approach to medical decision making that emphasizes scientific evidence and statistical methods for evaluating outcomes and risk of treatments. Response to arrive at objective decisions in the face of mass media advertising, direct to consumer advertising or drugs, and the promotions of pharm and device manufacturers.
Evidence based medicine
How does a network system in a prescription drug program operate?
Employees must have their prescriptions filled by a network pharmacy, except in emergencies.
Pharmacies join networks and provide services at reduced rates in exchange for volume business.
Allows PBMs to control costs and quality
What is a PBM
Entity that administers managed pharmacy programs. Application of programs, services and techniques designed to control costs associated with the delivery of pharmaceutical care
What are the benefits of a PBM
Streamline the prescribing and dispensing process through online and real time claims adjudication
Maintain retail network of pharmacies and mail order options that in turn offer discounts
Offers limited DUR online at point of sale
Provides data and reporting regarding drug use
Controls cost of prescriptions
Summarize the common services that PBMs provide
Claims processing Account management and support Retail network of pharmacies Mail order Communication to patients Formulary development Some drug utilization management Industry trends Education
How can PBM prices vary
Region Age of enrollees Type of industry Overall health of beneficiaries Size of group covered Elements plan sponsor wants to include
How do PBMs generate profit
Admin fees
Retaining rebate administrative fees negotiated with manufacturers
Mail service
Securing Discounts
Retaining pharmacy spread
Retaining MAC list payments
Reducing payments to pharmacies based on certain package sizes
Discuss the features of rebates under prescription drug programs
A rebate is an agreement between a PBM and a drug manufacturer to secure significant reductions in the cost of prescription drugs.
- Growth in rebates paid to payers has paralleled the rise of pharmacy benefit inflation and the advent of multi tiered copay designs
What factors should an employer consider in the selection process of a PBM
Cost Claim administration Service delivery Administration oversight Transparency or pricing
