Pharmacy Benefits Podcast
Summary: Brian Bullock and Rob Shelley of The Burchfield Group share their insight and expertise from the world of pharmacy benefits. The Burchfield Group is a pharmacy-benefit consulting firm that helps plan sponsors understand and manage their pharmacy benefit programs. With a full understanding of drug manufacturers' influence, mail service profits and retail network margins, Brian and Rob bring innovation to managing pharmacy benefits.
As CVS Caremark celebrates the first anniversary of the merger that brought together retail pharmacy giant CVS Corp. and pharmacy benefit manager Caremark Rx, others in the pharmacy benefits industry are taking time to reflect on the significance of the trend toward consolidation. Many employers and drug plan sponsors wonder if industry consolidations will result in a decrease in choices and competition in the marketplace – or whether it could have a positive impact on their bottom lines. “These changes in the industry and the structures of the major service providers should make plan sponsors really sit up and pay attention to what impact consolidation could have on their benefit packages and their financial responsibilities,” said Brian Bullock, president and CEO of The Burchfield Group, a consulting firm that helps employers and other plan sponsors control the costs of providing prescription drug benefits. “The industry is never going to stop changing, so plan sponsors need to understand the big picture. Are you offering the most effective benefits package you can, and what language in your PBM contract might cause trouble down the road?” Plan sponsors need to understand what their PBM contracts say in terms of pharmacy access and exclusivity, which are commonly affected by corporate consolidation, Bullock said. It’s also important to avoid particularly long-term agreements, especially considering potential changes in pricing benchmarks as well as structural changes resulting from consolidation. “Consolidation is certainly not all bad for plan sponsors,” said Kent Wangsness, vice president at The Burchfield Group. “It can open doors to new services and cost savings that benefit the consumer and the payer. But as always, the devil is in the details. Not knowing the ins and outs of your PBM contract is the one sure way to run into trouble.” Today's Pharmacy Benefits Podcast features a discussion between Bullock and Wangsness, both pharmacists who now consult for plan sponsors, on consolidation trends and the impact of reduced competition. Bullock also invites employers and other plan sponsors to contact The Burchfield Group by sending an e-mail to firstname.lastname@example.org or by calling 1-800-778-1359.
As the FDA adds new drugs to the over-the-counter class, plan sponsors need to weigh their coverage options. Traditionally, employer-provided prescription drug coverage focused on just that – prescription drugs. But as many common prescription drugs, most recently Zyrtec ®, become available over the counter without a prescription, employers are increasingly interested in the cost savings associated with over-the-counter (OTC) drugs. "The increase in the types of drugs available over the counter is really changing employer-provided coverage plans," said Brian Bullock, president and CEO of The Burchfield Group, a consulting firm that helps employers and other plan sponsors control the costs of providing prescription drug benefits. "For employers that want to maintain a good set of benefits and coverage for their employees, the lower costs of many OTC drugs make it relatively painless for an employer’s plan to cover those drugs." Meanwhile, the U.S. Food and Drug Administration is considering the official establishment of a third class of drugs, referred to as "behind-the-counter" (BTC) drugs. These drugs are available without a prescription but only through direct contact – and perhaps a brief consultation – with a pharmacist. When deciding how to handle OTC and BTC drugs, employers need to consider a variety of variables, including members' current drug usage and the company's goals for coverage and costs. The BTC classification is still unsettled territory, so the current focus is on developing effective approaches to managing coverage for the two existing categories of OTC and prescription drugs. "Employers have three general approaches for how to handle OTC drugs," said Cory Belken, a senior consultant at The Burchfield Group and, like Bullock, also a pharmacist. "As OTC drugs become a larger part of their members' usage habits, employers can simply leave their plans alone and some utilization will naturally migrate to OTC drugs. They can also restrict the use of prescription drugs in a particular category to encourage OTC use, or they can implement a 'step therapy' plan that requires patients to first use OTC drugs when appropriate before moving to prescription drugs." Employers interested in learning more about potential savings from OTC drugs can request a free overview report from The Burchfield Group by sending an e-mail to email@example.com or by calling 1-800-778-1359.
Without a viable alternative to the average wholesale price benchmark, how should plan sponsors protect themselves? After more than a year since major lawsuits cast a dark shadow over the use of average wholesale price as a benchmark for prescription drug pricing, little change has taken place in the way of finding a suitable alternative for the AWP benchmark. Brian Bullock, president and CEO of The Burchfield Group, is working with employers and other prescription drug plan providers to prepare for changes that will eventually come in the wake of AWP. The Burchfield Group is a pharmacy-benefit consulting firm that helps employers and other plan sponsors control the costs of providing prescription drug coverage for their beneficiaries. He sees pharmacy benefit managers working to change contract language in preparation for a replacement benchmark, but those changes might not be enough, according to Bullock. Bullock and colleague Kent D. Wangsness, who holds a doctor of pharmacy degree and is a vice president at The Burchfield Group, discussed these issues and more in the today’s installment of the Pharmacy Benefits Podcast. Bullock says the market has seen a number of options floated as alternatives to AWP – including wholesale acquisition cost, average manufacturer price and average selling price – but none seems to fit what Bullock calls the four essential criteria for a replacement pricing benchmark. According to Bullock, the replacement must be: -accurate and reliable -current and up to date -generally and widely available -transparent and accessible "It's important for employers to have a handle on what is going on in their prescription claims data, what the pricing looks like, and how are we going to equitably adjust for pricing with new contract terms," Bullock said. "Plan sponsors can end up upside down if contract language does not protect them in the event the prescription drug pricing benchmark changes. A plan sponsor can only make solid, learned decisions with access to substantial, transparent data and an understanding of the significance of the details." For more ideas on how to handle potential changes in prescription drug pricing, or to ask a question or comment on the podcast, send an e-mail to Bullock at firstname.lastname@example.org or call 651-389-5640.
From Wal-Mart to Washington, a wide range of factors will affect prescription drug coverage in the year ahead. The major pharmacy-benefit news stories from 2006 lay foundation for pharmacy benefits planning for '07 and '08. In 2006 we saw the completion of the first year of Medicare Part D implementation, Democrats take control in Washington and promise Medicare reform, Wal-Mart introduce $4 generic drugs, and the foundation of the AWP drug pricing model come under scrutiny. All of these happenings from last year form the basis for pharmacy benefit planning for 2007 and 2008, according to Brian Bullock, president of The Burchfield Group. Bullock and his colleague Rob Shelley, vice president at The Burchfield Group, discuss the impact of the major events in 2006 and what to look for in 2007 in today's installment of The Burchfield Group's Pharmacy Benefits Podcast, downloadable for free at www.burchfieldgroup.com or from the iTunes podcast directory. The Burchfield Group is a pharmacy benefit consulting firm that helps employers and plan providers manage the prescription drug benefits they offer. "There was a lot of important news around the pharmacy benefit in 2006," Bullock said. "We saw a lot of issues that affected plan sponsors, and now those issues are forming the basis of what plan sponsors should be thinking about as they look toward 2008." For more information on managing drug spend in 2007 and beyond, visit www.burchfieldgroup.com/2007. That page includes a link to a document that illustrates the major factors that affect a plan sponsor’s costs for providing prescription-drug coverage. "As we start the new year, one very important issue for plan sponsors to look at is the lifespan of their pharmacy-benefit management contracts. If a PBM contract is set to expire within the next 12 months, this is the time to start updating and getting that contract reviewed and freshened up for plan year 2008," Shelley said. "There have been a lot of changes within the pharmacy benefit area over the past year, and these contracts need to reflect today's realities." Bullock invites his podcast listeners to submit questions and comments, which he and Shelley will address in future podcasts. Write to email@example.com or call 651-389-5640 with questions or to learn more about what to look for in planning pharmacy benefits in the year ahead.
Specialty pharmaceuticals – injectable drugs used to treat chronic and rare diseases such as multiple sclerosis, various forms of cancer, Alzheimer’s and more – currently make up a $40 billion market, and that market size is expected to increase to $75 billion by 2008. Additionally, the specialty-drug marketplace has seen a large amount of consolidation in recent years, with pharmacy-benefit management companies now owning many of the specialty drug manufacturers. With the growing market and increased consolidation toward PBM ownership, employers providing prescription drug coverage are faced with new challenges in terms of managing costs and administration, according to Brian Bullock, president and CEO of The Burchfield Group, a pharmacy-benefit consulting firm that helps employers reduce the cost of providing prescription drug coverage for their employees. Bullock and his colleague Rob Shelley, vice president at The Burchfield Group, discuss specialty pharmaceuticals and related concerns for employers in today's episode of the Pharmacy Benefits Podcast. "These biotech drugs are expensive, and cost is a major issue. But when used in the right situations, they're life-savers," Bullock said. "Employers need to keep an eye on a few critical issues related to specialty pharmacy: distribution of the drugs, administration and waste, compliance tracking, and patient education. Costs for specialty drugs can easily get out of control if employers don't have the necessary oversight." Shelley explains that The Burchfield Group has recently seen certain biotech drugs creep into the top ten common prescriptions for many employers, and costs for these drugs are increasing at nearly 20 percent per year, far outpacing increases in the rest of the pharmaceutical industry. "I've been approached by employers asking about how to increase co-pays on specialty drugs, but I'm not sure that's the best approach," Bullock said. "The drugs are expensive, yes, but it is critical to make sure the consumer can afford these drugs and will use them appropriately – otherwise they won't be effective for treating illness." Bullock invites his podcast listeners to submit questions and comments, which he and Shelley will address directly and in future podcasts. Send an e-mail to firstname.lastname@example.org or call 651-389-5640 with questions or to learn more about managing specialty pharmaceuticals.
Everyone knows that generic drugs are a good thing for prescription drug plan sponsors and for consumers, but generics still face several “barriers to acceptance” that prevent them from being used more often, according to Brian Bullock, president of The Burchfield Group. In today’s installment of the Pharmacy Benefits Podcast, Bullock and colleague Deanna Mendelow discuss these barriers to acceptance and changes on the horizon for the “generics versus branded” drug debate. The Pharmacy Benefits Podcast is hosted by The Burchfield Group, a pharmacy benefit consulting firm that helps businesses control the cost of providing prescription drug benefits for their employees. “Use of generic drugs has increased substantially during the past few years,” Bullock said. “Plan sponsors are having success, and are weathering some consumer push-back, with a generics-first strategy. Benefits executives should consider how to insert step-therapy programs to encourage or enforce the use of the lesser expensive products – available either over the counter or generically – rather than just the latest and greatest.” Although branded drugs are used more often than their generic equivalents, generics are taking a growing cut out of the branded drugs’ market share. On Thursday the Wall Street Journal reported that vigilant efforts by employers and insurers to encourage the use of less expensive generics are taking a toll on Pfizer, the world’s largest drug company. Pfizer has seen dramatic decreases in market share for many of its drugs. The most significant decline, the article said, is that of Lipitor, Pfizer’s market dominating cholesterol medication, which is steadily losing ground despite the five years of patent protection it has remaining. Even in the face of this positive trend, transitions from expensive brands could move faster, according to The Burchfield Group’s Mendelow. “After a branded drug has been off patent for six months or so, we start to see a significant drop in price,” said Mendelow, vice president at The Burchfield Group. “But generics still aren’t used as often as they should because consumers think that, to some extent, generics are second-rate.” Bullock invites listeners to submit questions and comments, which they will address in subsequent podcasts. Send an e-mail to email@example.com or call 651-389-5640.
Welcome to the first episode of the Pharmacy Benefits Podcast! This podcast arms employers and pharmacy-benefit providers with information they need to take better control and reduce corporate spending on pharmacy benefits. It deals with the pressing issues facing health-care benefit managers, CFOs, insurers and employees. Brian Bullock, CEO of The Burchfield Group, and Rob Shelley, vice president of The Burchfield Group highlight important issues such as transparency, co-payment practices, consumer-driven programs, “million-dollar” clauses and much more. The Burchfield Group is a pharmacy-benefit consulting firm that helps businesses control the costs of providing prescription drugs for their employees. It is one of only a few firms in the country that do this type of work. The Burchfield Group has a staff of professionals experienced in writing and monitoring PBM contracts, which is helpful in understanding the details of those agreements and the impact they have on potential savings of tens of thousands of dollars. Burchfield’s staff is composed of individuals from inside the pharmacy-benefit management industry who have backgrounds in operations, finance, sales and marketing, and clinical. The Burchfield Group works with several Fortune 500 companies across the country, in industries ranging from telecommunications to manufacturing to food and beverage. This is the first episode of the Pharmacy Benefits Podcast. The Burchfield Group is producing this podcast to deliver timely, practical information in a format convenient for busy people. Please send questions, which can be answered during the show, to firstname.lastname@example.org or call 651-389-5640. Thanks for listening! My Odeo Channel (odeo/e28cd35505b5a5fb)
Brian Bullock and Rob Shelley of The Burchfield Group discuss CDHP drug plans for employers and employees. CDHPs, or high-deductible plans, are a tactic by which plan sponsors hope to encourage health care consumers to make smarter purchasing decisions by giving those consumers more "skin in the game." One of the biggest areas in which consumerism affects health care costs is the prescription drug benefit. Brian and Rob discuss the pros and cons of CDHP plans, HSAs, HRAs, consumerism and the drug spend, and more. Brian invites his podcast listeners to submit questions and comments, which he will address directly and in future podcasts. Send an e-mail to email@example.com or call 651-389-5640 with questions.
Much of the news coverage about Medicare Part D prescription drug coverage deals with eligible senior citizens not being able to get the drugs or the coverage they need. But beyond those more visible problems, according to Brian Bullock, president and CEO of The Burchfield Group, “there’s a real set of issues that employers need to be concerned about related to the Medicare Part D.” The Burchfield Group, a pharmacy benefit consulting firm that helps employers control the cost of providing prescription drug coverage for their employees, tackles employers’ Medicare Part D concerns in the most recent installment of its Pharmacy Benefits Podcast. In today’s podcast, Bullock and his colleague Rob Shelley, vice president of The Burchfield Group, discuss what they have learned from their own research and from executives on the front lines – those who are wrestling with Part D coverage options for their retirees. “As we look ahead to Part D’s second year, employers are still without the knowledge and infrastructure necessary to help them make the best decisions,” Shelley said. “Employers are left in a tough spot, with only a few months of experience to guide their Part D programs for the next year or two.” Employers who provide prescription drug coverage for their retirees need to know if they are leaving money on the table by making bad decisions or by not considering administrative and other costs, Bullock said. In the early months of Medicare Part D implementation, employers need to be concerned with what they are getting from their Part D programs, whether the choices they made are performing as expected, and whether another coverage option would perform more effectively. “Opting to receive subsidy payments from the federal government, for example, certainly provides a significant amount of reimbursement, but it doesn’t provide the same level of reimbursement that a prescription drug plan option offers,” Shelley said. “The overhead to operate and manage in a subsidy environment, however, is a lot less expensive. Employers need to balance these and other factors in deciding the right coverage path for them.” Brian invites his podcast listeners to submit questions and comments, which he and Shelley will address in future podcasts. Send an e-mail to firstname.lastname@example.org or call 651-389-5640 with questions or to learn more about making the right Medicare Part D decisions. Visit www.burchfieldgroup.com for more information.
The word “audit” sends shivers down peoples’ spines. It evokes fears of the IRS, more taxes and possibly even repossession. But in the world of pharmacy benefits, audits are an entirely different issue, according to Brian Bullock, president of The Burchfield Group. Errors can occur in the way the pricing or pharmacy benefit plan is set up, or in the way the benefit is delivered. Also, the logic that drives these benefit systems can be faulty, Bullock said, so the benefit you thought you had signed up for may not be what your employees are getting at the point of sale in the pharmacy. “It’s all about accountability and ensuring that plan sponsors get what they expect from their pharmacy benefit managers,” Bullock said. Bullock and Deanna Mendelow, vice president at The Burchfield Group, discuss the purpose and the importance of pharmacy benefit audits in today’s installment of the Pharmacy Benefit Podcast, available for free at www.burchfieldgroup.com. “Plan administrators will ask, ‘What is special about Pharmacy Benefit audits?’ ” Bullock said. “The complexities behind PBM processing and the intricacies of PBM pricing create a scenario in which employers cannot be sure that their money is being spent appropriately. They need to ensure that their employees are getting the drug coverage they expect.” Bullock invites listeners to submit questions and comments, which they will address in subsequent podcasts. Send an e-mail to email@example.com or call 651-389-5640.
In today's installment of the Pharmacy Benefits Podcast, Brian Bullock and Rob Shelley of The Burchfield Group discuss consumerism, the trend in today's health care realm that is putting more choice and more responsibility in the hands of consumers. By giving consumers more "skin in the game," employers encourage employees to take a closer look at the prescription-drug choices they make. Of all the benefits employers provide - health and medical, long-term disability, 401k - the one that's used most often is the pharmacy benefit. Consumers are heavily influenced by advertising today, and they often don't see the true costs of their prescription drug choices. The challenge is that consumers don't really understand what the drug costs really are; they're used to paying flat co-pays. These co-pays - at $10, $20, $50 - put essentially all drugs in the consumers' price range. Employers are looking for ways to create a more cost-sensitive, cost-reactive consumer. They want consumers to be more careful in choosing prescription drugs, and to consider with their doctors their options the over-the-counter and generic alternatives. As always, feel free to e-mail us your comments and questions. We'll work your comments and our responses into an upcoming show. Send an e-mail to firstname.lastname@example.org or call 651-389-5640.
In this installment of the Pharmacy Benefits Podcast, Brian Bullock and Rob Shelley of The Burchfield Group discuss the issue of transparency in the world of pharmacy benefits management. What is driving the desire for transparency? What is the definition of transparency? How can plan sponsors benefit from having transparency and knowing how their PBMs operate? Those who deal with health care and pharmacy benefits know that PBMs are making money off of more than just an administrative fee that plan sponsors or employers are paying to the vendor to administer claims. They have several revenue streams that create an environment in which the PBM is incentivized, perhaps, to do things that could be counter to interests of the plan sponsor. As health care and pharmacy benefits costs continue to rise, and press coverage of litigation against PBMs continues, the need for transparency continues to move to the forefront of the industry. Listen to this installment of the Pharmacy Benefits Podcast for insight on all these issues and more. And stayed tuned for future podcasts, which will cover issues such as the complexities in PBM contracts, an examination of the role of mail-order fulfillment in pharmacy benefit costs, and discussion of hot trends and topics in the news that related to pharmacy benefits management.
A recent article in the Wall Street Journal explained the impact of the settlement of a class-action lawsuit against First DataBank, the primary publisher of prescription-drug average wholesale prices. Published AWP price points are used by private-sector plan sponsors and government programs to determine how much they reimburse pharmacies for dispensing drugs for their members and beneficiaries. The lawsuit against First DataBank uncovered information specific to its wholesaler survey methodology and a one-time increase of 5 percent for a specific subset of highly used prescription drugs. "There are problems with AWP and how it is calculated. That situation needs to be remedied, and we need to look to the future and find a better solution to prevent something like this from happening again," said Brain Bullock, president and CEO of The Burchfield Group, a pharmacy-benefit consulting firm that helps employers and other plan sponsors control the costs of providing prescription drug coverage for their beneficiaries. "That said, finding the solution the market needs will not be an easy task." Despite its flaws, there is currently no good substitute for average wholesale price as a benchmark for pricing prescription drugs in today's marketplace, according to Bullock. The Office of Inspector General, the Centers for Medicare and Medicaid Services (CMS) and other federal agencies and state governments have been working for several years to develop a replacement for AWP, Bullock says. While some progress has been made, nothing yet fits the mold of an acceptable substitute. According to Bullock, any effective pricing system will have these qualities: - accurate and reliable - generally and widely available - current and up-to-date - transparent and accessible "With the uncertainly surrounding AWP, it is critical that we remember the importance of managing trend," Bullock said. "That's the critical end point in this business, and plan sponsors should not lose sight of the role plan design and other solutions play in controlling costs." Bullock invites his podcast listeners to submit questions and comments, which he will address directly and in future podcasts. Send an e-mail to email@example.com or call 651-389-5640 with questions.
For years, mail service for prescription drugs has been pitched as a way for employers to save money by providing deeper discounts, central control, the ability to switch to less expensive and equally effective drugs, and a convenience to members. The reality is that using mail service – as opposed to retail fulfillment – may or may not be a good deal for employers. In this installment of the Pharmacy Benefit Podcast, Brian Bullock and Rob Shelley of The Burchfield Group discuss mail-order versus retail, and what employers need to know to provide the best pharmacy benefit plans for their companies and their employees. Brian and Rob talk about finding balance among benefit design, convenience and cost-saving issues. Employers also need to provide incentives for employees to use mail-order services without reducing the value mail-order services provide for the employer. Employers also must understand that not all drugs are cheaper via mail service, and they need to determine their specific break-even point to ensure the best use of mail-order service. As always, feel free to e-mail us your comments and questions. We’ll work your comments and our responses into an upcoming show. Send an e-mail to firstname.lastname@example.org or call 651-389-5640.
As senior citizens continue to learn and understand their new Medicare Part D prescription drug coverage, so do the drug plan providers who administer these benefits. The latest hurdle for prescription drug plan providers comes in the form of the new guidance and regulations recently released by the Centers for Medicare and Medicaid Services (CMS), which set forth expectations for subcontractor accountability for managed-care organizations and their pharmacy benefits managers. Brian Bullock and Rob Shelley, president and vice president of The Burchfield Group, discuss the real-world impact of the regulations in today’s installment of The Burchfield Group’s Pharmacy Benefits Podcast, downloadable for free at www.burchfieldgroup.com or in the iTunes podcast directory. The Burchfield Group is a pharmacy benefit consulting firm that helps employers and plan providers manage the prescription drug benefits they offer. “As the government is giving money to the private sector, it insists on verifying the integrity of the administration and operation of subcontractors to the health plan,” Bullock said. “They want to ensure that the pharmacy benefit managers are administering the benefits honestly, accurately and efficiently. A PBM that administers a pharmacy benefit on behalf of a managed-care organization is expected to be held accountable as if it were a department within the managed-care organization.” CMS has submitted 12 new draft requirements to provide oversight of Medicare Part D and prescription drug programs, seven of which relate directly to the role of subcontractors in health care plans. Topics of the draft requirements include medication therapy management; fraud, waste and abuse; drug utilization management process; and contract and maintenance of records, among others. Violations of these guidelines, which can multiply quickly and dramatically if they go unnoticed or uncorrected, can cripple a managed-care organization and drag its reputation through the mud. In order to comply with the new regulations, Shelley emphasized that the first steps are to perform an audit of existing processes and examine all contracts thoroughly. “Existing contracts may not address all the aspects now subject to higher regulation,” Shelley said. “Plan providers cannot simply rely on PBMs providing oversight when the plan provider is ultimately held responsible for violations and its own integrity.” According to Bullock, CMS is essentially using these new regulations to have companies establish a “best effort” in terms of compliance. “It’s likely that the government will be looking to make an example of companies who do not make a best effort to meet the new requirements,” Bullock said. “Ultimately, subcontractor accountability is all about auditing the relationship between yourself and the PBM that is administering the program for you.” Bullock invites his podcast listeners to submit questions and comments, which he and Shelley will address in future podcasts. Send an e-mail to email@example.com or call 651-389-5640 with questions or to learn more about making the right Medicare Part D decisions.