SOME OF US ARE OLD ENOUGH to remember the good old days in the 1970s and ‘80s, when a fight with multiple pharmacy benefit managers (PBMs) was not a daily occurrence. Third-party billing was a small percentage of overall prescriptions filled. Many states went so far as to require price boards prominently posted, and generics were always profitable. But like the airport payphone and the pharmacy soda fountain, these are things of the past.
Read more about the current trends in the LTC pharmacy market in the September/October 2022 cover story.
PBM Audits, MAC, and Clawbacks
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The world today is PBM driven. MACs (maximum allowable costs), audits, and clawbacks are today’s reality. However, usual and customary pricing still plays a role. To the PBM commercial plans it functions as a tool to prevent pharmacies from undercutting high-tiered copays. Long-term care (LTC) pharmacies, by virtue of varied patient payers, regularly use usual and customary, and it often becomes an important part of pricing and negotiation with nursing home owners and operators to determine charges for their Medicare Part A patients.
Savings from Multisource Generics
Usual and customary pricing on branded pharmaceuticals is straightforward. Generics are where there can be tremendous variations. For multisource generics, discounts can be significant. But what about single- or limited-source generics, where pricing in many cases is much higher? Multisource generics discounts on AWP (average wholesale price) can be as high as 80% or more. This is not the case with limited-source generics.
PMChek for LTC Market Product Availability
The challenge for long-term care pharmacies is to identify product availability in the marketplace. A drug lookup in standard drug references like Medi-Span or First Databank can yield a long list of products that will include all registered products regardless of availability. Many products, by virtue of manufacturer discontinuations, manufacturing and supply chain issues, and other market factors, can change availability. If a pharmacy cannot identify these or does not have access to this information, it can be very costly. The ability to monitor product availability on a timely basis can have a significant impact on pricing and profitability.
LTC pharmacies now have access to a product that for many years was only available to manufacturers. PMChek provides a wide range of market analytics, market share information, average market pricing, and trend analyses, to mention a few. Of particular interest to LTC pharmacies is a customizable report that identifies all products that have availability with the same generic equivalency and number of active manufacturers.
By virtue of feeds from numerous wholesaler/distribution channels, an accurate picture of market availability is assured.
To sum up, product selection and the need to maintain usual and customary pricing are important components in assuring ongoing PBM reimbursement for long-term care pharmacies. CT
Mike Sosnowik is president of PharmSaver. The company lets pharmacies, hospitals, clinics and governmental agencies buy prescription drugs at a substantial discount. You can reach the author at mike@pharmsaver.net.