October 25, 2018

PBM Without Rebates (aka Kickback?)

Pharmacy Benefits Manager Express Scripts has announced a program with 18 large employers where rebates are passed back to the employer, in total. The Blog Drug Channels says;
You should pay close attention to this b.i.g. news. It is structured so that Express Scripts will not profit from the flow of funds from a brand-name manufacturer to a plan sponsor. What’s more, the PBM’s compensation will be fully delinked from drug list prices.
Drug Channels sees this as a "PBM compensation approach could be an important step in our industry’s journey toward a world without rebates."


I hope so. I am not convinced. No rebates and lower prices make more sense to me. In the meantime is this a move to no rebates or a move to the employer getting all the money.

Rebate bucks are not clearly linked to the people and conditions that generate them. So chronic health issues can become a source of subsidizing healthcare at large employers that are not seen as connected. For example, insulin rebates flow to employers, even if the plan doesn't cover the insulin and the PWD pays full price. So the process transfers deductibles from people with diabetes to other employees in the system. I am sure the argument would be that all plan member face similar deductibles.

Drug Channels asks:
Will the funds be used primarily to offset total plan costs for the employer and premiums for everyone? Or, will the money offset the out-of-pocket costs incurred by the patients whose prescription activity generates the rebates and fees?
No rebates and lower drug prices are the best ideas. It seems to me that like rebates at the point of sale would be a better step in a move to a no rebate system for equitable reduction of rebate distortions. But any step to eliminating rebates is a step in the right direction IMHO.

Buried in here is something else to be concerned about. The PBM will get paid for managing care with a better spend. From Express Scripts press release:
Pay-for-performance for clinical and administrative plan management that improves patient and plan outcomes. Express Scripts will demonstrate, definitively, that it does not just buy better, but manages trend and spend better. Express Scripts' ability to deliver clinical and financial outcomes is directly tied to its compensation. Pay-for-performance means Express Scripts will take on more risk from clients, and be rewarded only when it delivers on agreed-to commitments. 
Is spend better, better care? Is it patient-focused care? It could be. It could also be more treat to failure restrictions. I have little confidence in middlemen working for patient-focused health-care. It didn't work for HMOs and PMB history isn't good. I could be wrong.

Stay tuned.

See:
https://www.drugchannels.net/2018/10/pbm-pricing-overhaul-express-scripts.html
https://www.prnewswire.com/news-releases/national-drug-purchasing-coalition--member-companies-include-pepsico-inc-and-exxonmobil--and-express-scripts-team-up-to-create-new-pharmacy-benefit-design-for-greater-performance-accountability-transparency-and-alignment-300735793.html