Test 3 The PBM Toolbox Flashcards
components of the PBM toolbox
- Formularies
- Generics
- Drug Pricing
- Rebates
- Duration/Dosing Limits
- Member Cost-Sharing
- Care Management
- DUE
- Academic Detailing
- Education
- Auditing
- Value based contracting
equation for total program costs
Total Rx Program Costs = (Unit Cost * Utilization) + Administrative Costs
define total program costs
total costs incurred to manage the pharmacy benefit program including drug costs and management services costs
Drug Ingredient Cost
Drug Ingredient Cost
Drug Ingredient Cost Containment Strategies
- Lower amount reimbursed
- Promote lower priced drugs in therapeutic category
- Dispensing limitations
- Manufacturer rebates
- Lower cost generics
How do you lower amount reimbursed to pharmacy ?
+ Estimated Acquisition Cost
- how the PBM sets reimbursement rates for the pharmacy
- increase discount off AWP for brands
+ Maximum Allowable Cost
- lower maximum reimbursement amount for generics
How do you promote lowered priced drug in therapeutic category?
- Prior authorization
- Copay tier placement
- Formulary status
How do you implement dispensing limits?
- dosage selection: limit to least costly equivalent dose strategy
- duration limitations
How does a PBM go about rebates?
- Seek increased rebates for preferred products
- Include more categories in preferred product lists
How does the rebate process work?
- PBM negotiates rebates with manufacturer
- Pharmacies fill prescriptions for rebated products
- PBMs reimburse pharmacies at pharmacy contracted prices
- PBM collects rebate from the manufacturer
What is the effect on the PBM if the rebate changes from 15% to 25%?
PBM has a reduction in net ingredient cost
How does PBM affect generics to be used?
- Develop incentives for use of generics
- Develop generic only formularies
- Increase cost-sharing differentials
Utilization components
intensity (average # of rxs per pt) * population (total # of pts)
examples of containment strategy for intensity
- limiting therapeutic duplication
- limit # of claims per month, # of prescribers, # of pharmacies
- eligibility / population limitations
