The OIG report also points out what non-Medicare funded pharmacy benefit programs are facing with expanded copay coupon use: higher costs.
A survey by the Pharmaceutical Care Management Association (PCMA) revealed that copay coupon use could increase drug costs in Medicare Part D by $18 Billion over the 2012-21 period due to the support of brand drugs over equally effective but far less expensive generic drug use.
Rebates are also impacted. Rebates are moneys paid for inclusion in a PBM’s formulary that by the power of wordsmithing avoid the negatively connoted term “kickback.”
Because of the anti-kickback laws, PBMs have to refocus their business direction to participate in Medicare’s Part D pharmacy programs. Fully 40% of a PBM’s profit are earned through rebate management. The avoidance of anti-kickback possibilities means that rebates for prescribed drugs cannot be passed back to the payer which in itself increases costs of brand drugs to the Part D participants. There must be a monetary fire-wall separating Part D business with the rest of the contracted paying partners not involved in federally supported drug purchases.
Interestingly, PBMs that do participate in Part D benefits are showing a savings over expected budgeted costs yearly. By avoiding rebate manipulation and covering generic drug alternatives as soon as they are available, PBMs can be a positive factor in overall cost savings by not chasing rebate dollars.
While copay coupons and rebates appear to lower drug costs for the end user, real total costs for the plan payer escalate.
Navigating through the copay coupon and rebate cost decisions
faced by plan administrators is what APC does every day. A partnership built on knowledge of the PBM
industry is what APC brings to the pharmacy benefit discussion. Let us help you solve the cost equation for
your pharmacy benefit dollar with our understanding of plan design impact.
