PBMs skip in­sur­ers in new di­rect-to-con­sumer deals

Modern Healthcare - - NEWS - By Adam Ruben­fire

In the quest to help pa­tients lower their pre­scrip­tion drug costs and deal with high-de­ductible health plans, phar­macy ben­e­fit man­agers and tech star­tups are el­bow­ing out in­sur­ers. They’re en­cour­ag­ing pa­tients to trade their in­sur­ance cards for dis­count cards when they reach the phar­macy reg­is­ter.

Star­tups such as Blink Health and Re­fillWise are of­fer­ing dis­counts to con­sumers who don’t use their pre­scrip­tion cov­er­age. Mean­while, phar­macy ben­e­fit man­agers, along with tech firm Cast­light Health have built an app that of­fers drug price trans­parency to physi­cians and pa­tients.

They’re part of a cot­tage in­dus­try that’s sprung up to help con­sumers and em­ploy­ers rein in pre­scrip­tion drug costs. The pro­grams are also a de­par­ture for PBMs, which have mostly been serv­ing as third-party ad­min­is­tra­tors of pre­scrip­tion drug cov­er­age for in­sur­ers and em­ploy­ers. More im­por­tantly, those moves mean that pay­ers and the cov­er­age they pro­vide are be­ing chal­lenged in the drug-pric­ing par­a­digm.

The com­pa­nies hope to of­fer re­lief to Amer­i­cans who are un­der­in­sured or on high-de­ductible health plans. But the pro­grams don’t con­trib­ute to a pa­tient’s de­ductible, so they risk higher costs later on.

Woonsocket, R.I.-based CVS Health is launch­ing Re­ducedRx, a dis­count card of­fered through the com­pany’s PBM busi­ness, CVS Care­mark. For now, dis­counts are only be­ing of­fered on cer­tain brands of Novo Nordisk in­sulin, which pa­tients can get for $25 per 10 mil­li­liter vial, but the card can be used at over 67,000 phar­ma­cies in the PBM’s net­work, in­clud­ing CVS phar­macy lo­ca­tions. The me­dian re­tail price of these vials of in­sulin is around $165, ac­cord­ing to the Amer­i­can Di­a­betes As­so­ci­a­tion.

Ex­pressScripts, a ma­jor PBM based in St. Louis, also re­cently launched an in­sulin dis­count pro­gram, in part­ner­ship with drug­maker Eli Lilly and Co. and Blink Health, a New York-based startup. Pa­tients can pay the startup a dis­counted price for drugs through an on­line plat­form and pick up the pre­scrip­tion at a par­tic­i­pat­ing phar­macy. The pa­tient presents the Blink card as its payer in­stead of an in­sur­ance card.

The Ex­pressScripts part­ner­ship of­fers up to 40% off the re­tail price of most in­sulin prod­ucts made by Lilly. It’s the first time that Blink has of­fered dis­counts on branded medicines. The com­pany has since launched a di­rect deal with At­lanta-based Ar­bor Phar­ma­ceu­ti­cals on brand-name high­blood-pres­sure med­i­ca­tions. Lilly pro­vides re­bates for the in­sulin.

CVS spokes­woman Erin Britt said in a state­ment that the Re­ducedRx pro­gram—which the com­pany plans to ex­pand to other med­i­ca­tions—is aimed at help­ing con­sumers with high out-of-pocket costs.

Ex­pressScripts said in a state­ment that be­ing an in­de­pen­dent PBM— rather than be­ing at­tached to an in­surer or phar­macy—gives it “the scale, flex­i­bil­ity and ex­per­tise to cre­ate in­no­va­tive so­lu­tions” that bring down the cost of medicine. “We’re con­tin­u­ally eval­u­at­ing so­lu­tions that lever­age our many ca­pa­bil­i­ties and put medicine within reach of unin­sured and un­der­in­sured pa­tients,” the com­pany said.

Sev­eral pay­ers are try­ing to make it eas­ier to pro­vide af­ford­able in­sulin to the coun­try’s 29.1 mil­lion di­a­betes suf­fer­ers, in­clud­ing the 1.25 mil­lion with Type 1 di­a­betes, who re­quire reg­u­lar in­sulin treat­ment un­like Type 2. Ad­her­ing to an in­sulin reg­i­men pre­vents costly emer­gency vis­its if a pa­tient’s blood su­gar drops or rises.

Unit­edHealth Group, which in­cludes the in­dus­try’s other ma­jor PBM, Op­tumRx, and in­surer Unit­edHealth­care, didn’t re­spond to a re­quest for com­ment on this story.

CVS has taken sev­eral steps to draw savvy cus­tomers into their drug­stores. It re­cently an­nounced it would of­fer the generic ver­sion of Adrenaclick, a less-pre­scribed EpiPen al­ter­na­tive, to pa­tients for $109.99, re­gard­less of in­sur­ance and be­fore a pos­si­ble $100off man­u­fac­turer coupon.

Keith Ja­cobs, pres­i­dent of tech firm Lus­cinia Health, which also of­fers dis­count pre­scrip­tion cards, said, CVS “prob­a­bly saw a re­ally amaz­ing re­ac­tion to their Adrenaclick price and said ‘Let’s pick an­other area that’s con­stantly frus­trat­ing con­sumers . . . and maybe we’ll get more peo­ple in our stores.’ ”

Ja­cobs be­lieves dis­count cards and other al­ter­na­tives will drive con­sumers away from us­ing their pre­scrip­tion cov­er­age, es­pe­cially those with high­d­e­ductible plans. An un­sci­en­tific sur­vey of a few hun­dred mem­bers in Lus­cinia’s Re­fillWise card pro­gram found

“The health­care sup­ply chain is very com­pli­cated, and it’s wild that in the USA you can pay hun­dreds of dol­lars a month for your health in­sur­ance and as­sume you’re get­ting the low­est ne­go­ti­ated price, even though that’s not the case.”

MATTHEW CHAIKEN Co-founder Blink Health

that 70% had some form of health in­sur­ance. The startup’s lead­ers were stunned—they ex­pected that the over­whelm­ing ma­jor­ity of the com­pany’s 1 mil­lion users would be unin­sured.

Amer­i­cans buy­ing their own cov­er­age and doc­tors pre­scrib­ing drugs should ed­u­cate them­selves on the true costs of med­i­ca­tion, said Matthew Chaiken, a Blink co-founder.

“The health­care sup­ply chain is very com­pli­cated, and it’s wild that in the USA you can pay hun­dreds of dol­lars a month for your health in­sur­ance and as­sume you’re get­ting the low­est ne­go­ti­ated price, even though that’s not the case,” Chaiken said.

PBMs have come un­der fire for ben­e­fit­ing from soar­ing drug prices, be­cause their rev­enue is most of­ten based on the amount of trans­ac­tion rev­enue they han­dle. Some also be­lieve that the added player in the sup­ply chain—in ad­di­tion to the in­surer, drug dis­trib­u­tor and phar­macy, among other par­ties—con­trib­utes to higher costs. These deals may be a re­sponse to that back­lash.

Chaiken be­lieves that drug-pric­ing strate­gies and the cur­rent struc­ture of pre­scrip­tion cov­er­age will need to evolve if it in­tends to keep up with in­no­va­tors in the space. “The cur­rent struc­ture of the sys­tem is not sus­tain­able,” he said.

Dis­count pro­grams may help pa­tients save money on pre­scrip­tion costs, but they al­low over­all health­care costs to con­tinue to sky­rocket be­cause they’re not ad­dress­ing the un­der­ly­ing prob­lem, said Caitlin Mor­ris, di­rec­tor of af­ford­abil­ity ini­tia­tives at con­sumer ad­vo­cacy group Fam­i­lies USA, which is call­ing for fed­eral ac­tion on the is­sue.

Mor­ris wor­ries that dis­count pro­grams may hurt pa­tients by push­ing them away from pre­scrip­tion cov­er­age that could save them more money in the long term if they reach their de­ductible.

“There may be some cases where unin­sured pa­tients or pa­tients with higher cost-shar­ing re­quire­ments might find this ben­e­fi­cial. But in the long run, I don’t think this helps any­body if we can’t find a more sys­tem­atic so­lu­tion,” Mor­ris said.

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