Purchaser Business Group on Health Launches PBM

The employer-led nonprofit coalition announced Monday that the Health Procurement Business Group has launched a Pharmacy Benefit Manager.

The PBM, which manages prescription drug benefits on behalf of payers, arose out of frustration with employers as they were denied access to information on drug costs, rebates and administrative fees, Health Buyers Business Group, which represents 40 large companies, said. … private employers and public health buyers. EmsanaRx will be the first division of PBGH Emsana Health, an independent company targeting large employers and their employees.

“Employers just want a clinically acceptable and transparent formulation. These things don’t exist now, which is surprising, ”said Elizabeth Mitchell, President and CEO of Purchaser Business Group on Health and Chairman of the Board of Emsana Health. “It’s a reflection of the frustration in the market – incumbents had the opportunity to make changes, but they just didn’t.”

Business groups, physicians, pharmacists, patient advocates and insurers are creating their own PBMs that aim to cut 80% of the market share of CVS, Cigna Express Scripts and OptumRx UnitedHealth Group.

Mark Cuban, owner of Dallas Mavericks, is also committed to reducing health care costs and unnecessary use through an all-inclusive generic drug company. Mark Cuban Cost Plus Drug Co. will combine manufacturing, distribution and pharmacy services by selling generic drugs at a flat rate.

PBMs create and maintain lists or forms of covered drugs on behalf of insurance companies. Some rule out less expensive generic drugs, which can encourage patients to use brand name drugs and increase out-of-pocket costs. They also use their purchasing power to negotiate rebates and rebates with manufacturers and contract individual pharmacies to reimburse the cost of drugs dispensed to recipients.

Major PBMs use a spread pricing model that critics say favors high-priced drugs. PBM will charge the payer more than it reimburses the pharmacy for a particular drug and retains the difference. Benefit managers often receive discounts based on the manufacturer’s price list, which can incentivize the use of more expensive drugs.

It is unclear how much of the rebate PBM gives pharmacies and how much is kept by PBM.

“There is a general lack of transparency about the true costs of the pricing of the spread,” said Lovisa Gustaffson, vice president of the Commonwealth Foundation’s Healthcare Cost Control Program, noting that prices, rebates and administrative costs are often “trade secrets”. “Without transparency, you don’t know how much money they are making for you.”

EmsanaRx will offer a fixed price per prescription. According to Greg Baker, clinical pharmacist and CEO of EmsanaRx, pharmacists will work with employers to create their own pharmacy network and amend the formulary.

“We found that about 30% of this population never uses their pharmacy benefits, which is where the per-request fee came from. If the recipes are not received, we are not paid, ”he said, adding that every contract would be verifiable. “The scenario fees are the same whether the drug costs $ 10 or $ 1,000, so our incentive is to do the right thing clinically at the lowest net cost. We create a system that does not create conflicts that can lead to poor clinical judgment. ”

While small PBMs may not have the same bargaining power, they can customize their offerings more than large companies, Gustaffson said. They could save more by making the most of biosimilars and generics, or by simplifying the pre-authorization process for certain products, she said.

It will be interesting to see if the big three PBMs react to new competitors and how they do it, Gustaffson said.

“It is projected that monthly drug costs per participant will continue to rise, which worries employers. They didn’t see the solutions – not even the data and information they asked for. They just have to pay the bill. , “she said.” If there is so much interest from various organizations that are launching new PBMs, there must be a market. ”

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