by Tim Watson, Pharm.D., M.B.A
Pharmaceutical Strategies Group

The hottest trend in employer-sponsored pharmacy benefit programs is pass-through pricing. In a pass-through pricing model, PBMs earn their revenue directly from the plan sponsor, rather than from a combination of direct payments from the sponsor and indirect payments from suppliers. This contracting trend has been driven by the market’s desire for more clarity on PBM pricing strategies and tactics. Initially, only a handful of startup PBMs offered this pricing option. Many of the leading PBMs now offer pass-through pricing, as the approach has evolved from mere fad to something greater.

by Michael Hajdun
Sr. Vice President
CBCA Rx

Medical and prescription costs continue to rise at double digit rates. All indications from the marketplace point to increasing challenges for plan sponsors that will test the creative limits of benefit managers over the next several years. Concepts and theories of possible savings from the past are out of date. Effective communications will be more critical to the success of your prescription program because the educated consumer will take on new responsibilities as a result of increased cost sharing as well as consumer directed health plan (CDHP) programs.

by Craig S. Stern, RPh, PharmD, MBA
President
Pro Pharma Pharmaceutical Consultants, Inc.

The pharmacy benefit has delivered a double digit trend since the late 1990s. Media attention to the PBM industry over lack of transparency in pricing and rebate collections has fueled payor apprehension. Further, acknowledgement of pharmacy spreads kept by PBMs as revenue; re-packaged mail service prescriptions priced higher than at retail; and generic pricing based on maximum allowable cost (MAC) that provides additional revenues for PBMs has added uncertainty into whether payers are getting the best deal.

2005 brought quite a few enhancements to CAI direct provider negotiation services.  These enhancements include adding additional services to our line of negotiations products as well as lowering the dollar threshold for one-on-one telephone negotiations.