Featured Health Business Daily Story, Dec. 28, 2017

For Purchasers, There Is No ‘Hotter or More Frustrating Topic’ Than Benefits

Reprinted from HEALTH PLAN WEEK, the most reliable source of objective business, financial and regulatory news of the health insurance industry. Subscribe today!

By Diana Manos, Senior Reporter
November 27, 2017Volume 27Issue 42

At the National Alliance of Healthcare Purchaser Coalitions’ annual conference, held in Arlington, Va., Nov. 13-15, NAHPC President and CEO Mike Thompson introduced the session titled “Pharmacy Value: Getting to the Heart of the Matter,” saying “we spend more time talking about PBM than any other topic.” He ventured to say that the industry may spend more time talking about PBMs than they spend money on pharmacy benefits.

Brenda Motheral, CEO and co-founder of Archimedes, Inc., a health care modeling and technology firm, who moderated the panel, said, “There isn’t a hotter or more frustrating topic” than benefit management in health care today.

“Having been in the industry for the last 20 years, I can tell you there is no more interesting time than there is today in terms of really seeing potentially significant market changes that represent the best interest of employers,” she said.

Motheral kicked off the discussion with pricing, which she said remains at the center of debate — particularly the question of rebates. “Do they actually save money or do they inflate the whole system, and why?” she asked the panelists.

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Jason Twombly, senior vice president at MedImpact Healthcare Systems, Inc., a PBM, said rebates do drive down costs when managed correctly, and “when you look at how formularies are constructed and the market shares.”

He conceded, however, that results can vary depending on how a plan contracts with a PBM. But “if we are doing the right thing by the member and the plan, then we are getting that value back.”

Twombly said he thinks rebates will “look different” in the future. In the past 10 years, rebates focused on market access and market share shift, but now “we’re looking at 88% to 98% generic fill rates” and at specialty becoming a larger part of overall drug spend.

Those products have tremendous value when used appropriately, but they carry a significant cost, he said. “How do we define that and manage that and bring the value back to the conversation?” he asked, urging health plans and employers to get involved.

Neal Masia, vice president of the Patient Health and Impact Centers of Excellence at Pfizer Inc., agreed the rebate model needs to evolve. “We’re looking hard at ways to adjust the pricing model to ensure that patients see the benefits [of the rebates] in a direct way, because I think that’s been lost a little bit,” he said.

“That takes a lot of technology, data and investment and we’re working on that.” Masia noted that looking across the industry — whether at PBMs or any other part of the industry — the rebate pie has consistently gotten bigger and the transparency hasn’t matched that. With the higher cost-sharing models, “I think the patients should be seeing more and more of the benefit of rebates,” if they’re going to be carrying more of the burden, he said.

Visit the NAHCP conference website at http://bit.ly/2fV5q1o.

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