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How to manage drug cost in a value-based world.
It’s like “dÃ©jÃ vu” all over again! This phrase summarizes the world of pharmacy in 2019.
As the cost and use of pharmaceuticals is now on the front page of newspapers and a top priority for employers, government, and individuals, some people think that this is a new phenomenon. However, drug costs have been discussed and analyzed for decades. As you plan for 2020 and beyond, here are some key questions to consider:
1. Who is the customer for pharmaceuticals and pharmacy services?
The customer is changing from a physician-centric to a patient-centric world.
2. What are appropriate pharmaceutical pricing strategies?
Employers are questioning the value of new drug treatments and their price. As patients pay more of the cost of these expensive therapies, drug companies are trying to develop value-based contracting ties to outcomes to address the cost problem.
Drug companies are also launching more “specialty drugs” that are covered under the medical benefit, so these drugs cannot be managed.
Related article: Top 6 Pharmacy Challenges of 2019
The current conversation around the future of rebates is interesting, but drug companies will always discount their products or purchases that can drive market share.
3. What is the role of the pharmacists?
As prescription dispensing is increasingly handled by automation and pharmacy technicians, pharmacists will need to manage a patient’s drug therapy and be connected to others on the healthcare team (e.g., physicians and homecare providers). Using information technology can enable timely communication.
4. Is there a better model?
Yes. As companies like Amazon impact the drug distribution model for pharmacy and reshape the consumer experience in buying prescription drugs, pharmacy needs to invent care models to remain relevant.
5. What is the value of pharmacy benefit management (PBM) companies?
Created in the 1990s to consolidate purchasing power for employers and health plans, PBMs have done a nice job getting discounts from pharmacies and drug companies to lower the cost of the pharmacy benefit. Serving as the middle man between drug companies and pharmacies, PBMs have also amassed large databases of pharmacy claims data to analyze drug utilization and track financial performance. They used this role to “manage” the cost of the pharmacy benefit while simultaneously creating new ways to create profits for themselves.
PBMs are currently selling commodity services (e.g., pharmacy claims processing, pharmacy network contracting, and drug rebates) to employers and health plans.
As the focus for drug cost management moves to the drugs covered under the medical benefit, PBMs will try to position themselves to manage these medications.
6. What technology enabled services will impact pharmacy?
As pharmacies strive for greater efficiency, two technologies are emerging that ensure every patient is receiving the right medication in the prescribed dosages: (1) using digital imaging makes it much easier and faster for the tech and pharmacist to verify the prescription and (2) improvements in machines specifically engineered to count dosages ensures that the pill count is correct.
Technology such as telemedicine extends pharmacy services to the internet. Individuals in remote locations can fill prescriptions that can then be mailed to their location.
Related article: How to Successfully Transition to Value-Based Care
Pharmacies will increasingly use analytics such as EHR (Electronic Health Records) systems to gain a better picture of the overall health of the patient and in turn provide better services to its customers. In addition, pharmacies will use business analytics to identify customer choices and take action to improve its brand.
Pharmacies will be impacted as consumers embrace technologies (devices and applications) that give them greater access to relevant information. For example, technologies that provide consumer awareness of drug pricing disparities between retail pharmacies will impact their decision on where to get the prescription filled.
7. What is a managed healthcare executive to do?
A forward-thinking healthcare executive should have a process to scan the industry for innovative applications for consumer-centered healthcare and be willing to make incremental strategic investments that can benefit their members.
For example, you need to focus on lowering drug costs by having a “state of the art” fraud, waste, and abuse program.
Redefine the role of the PBM in your organization and focus on total cost care benefits when approving new drug coverage.
Perry Cohen is an editorial advisor for Managed Healthcare Executive and is Chief Executive Officer, The Pharmacy Group.