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Transparency Among Medical and Pharmacy Benefits


The importance of transparency when assessing drug costs among medical and pharmacy benefits is discussed.


Neil B. Minkoff, MD: I’m going to build on Kevin’s example. I’m facetiously building on it, but the point is the same though, which is how do you transition to a future state where, for the drug benefit and the pharmacy benefit, maybe you’re agnostic about that. How do you get to the point where you’re taking your hand off your gun and saying, “I don’t really care who’s going to be handling this part of the drug benefit as long as I know that all of the different parts of it are being managed correctly?”

Eric Cannon, PharmD, FAMCP: I’ve been excited the last couple of years because, in terms of the conversations we’re having with our providers, those we’re having in neurology and those we’re having in rheumatology and oncology are different than they would have been 5 years ago. Looking at it in these terms, we’re not saying that you shouldn’t make a fair profit on a particular drug, or we’re not saying you shouldn’t make money as a provider to deliver care to this patient. Cheryl highlighted it when she spoke about transparency among the parties. If we want to move to that agnostic state wherein it doesn’t matter whether it’s a pharmacy benefit or a medical benefit, and it doesn’t matter if it’s a self-injectable or infused drug, the more we get toward that transparency and that open sharing of information, employers who are paying the bills absolutely have every right in the world to understand what their data say and what their total costs are.

We as carriers and as PBMs [pharmacy benefit managers], and I function as both, have a real requirement that exists for us going forward: how do we bring transparency to the table? As it relates to Cheryl and her group as far as the different employer groups that exist across the country, we still need to make money. We’ve gone for so long hiding where the revenue comes from that we’re going to need not just the providers, hospitals, and payers all to jump on board and say, “We’re willing to be totally transparent.” We’re also going to need the employers, their consultants, and brokers to be willing to step into that world of transparency and say, “We want to aim toward an overall low net cost.”

We all still need to make a fair amount of revenue to justify the services that we’re providing, and that’s key. We need to be able to justify what we’ve provided in terms of care to the patient and the benefits we’ve provided for the management that we’ve placed in a particular category. That’s the holy grail, we want to get so it doesn’t matter what benefit it’s on. We’re agnostic to benefit as we drive toward transparency. I think we’ll get there. But I’ve talked to a lot of employers who, unfortunately, say they want transparency, but then when it comes to seeing what their actual administrative fee is going to be going forward, they want to go back to the traditional model where their administrative fee was 0. Quite frankly, the PBM probably was ecstatic when they made that decision. It’s going to take some effort, and it’s going to take every party coming to the table.

Michael Fine, MD: I think it would be great to have a single drug benefit, whether the drug is health care professional-administered or from a pharmacy. What would be a gigantic mistake is to have drugs managed separately from medical services by 2 different companies because the drug management company and the PBMs don’t have any concern about the clinical outcomes. They tell you they do, but they don’t have financial risk for the clinical outcomes of the patient.

A good example is in MS [multiple sclerosis]. For the less expensive drugs like the generic for Copaxone—Glatopa [glatiramer acetate injection]—if all you’re worrying about is drug cost, you would say, “We’re going to prefer this drug. It’s the cheapest one, and we can save money.” But it’s not the best one. The patients are going to do worse, and they’re going to cost much more on the medical side. If you’ve got 2 separate companies, 1 managing the pharmacy benefit and 1 managing the medical benefit, they do not have aligned incentives. They have quite different incentives, and that would be a disaster if our system went in that direction. Yes, let’s have 1 drug benefit, but let’s have it managed in the same company.

Now, in terms of the question you asked, which was about whether we can assess drug costs easily across medical and pharmacy benefit, the answer is no, because the claims systems are quite different, and it’s hard to integrate the data. We do it for important disease states like multiple sclerosis, but it’s a challenge because we have 2 separate computer systems that we have to generate data from and then try to merge them. The claims payment system in the United States has diverged between pharmacy and medical, and that’s made it difficult to integrate the costs.

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