Abstract
Purpose. The difference between what pharmacy benefit management companies (PBMs) charge prescription benefit plan sponsors and what dispensing pharmacies are paid ("spread") was studied. Methods. Data from prescription transaction invoices from two large employer groups, each using a different PBM, and 84 community pharmacies (which differed for each employer group due to clear geographic separation) participating in these plans between October 1, 2002, and December 31, 2004, were studied. Detailed community pharmacy payment transaction records were compared with PBM claim records from two employers. One employer provided 49,633 prescription claim records, and the other employer provided 120,684 prescription claim records. Spread between amount due billed to the employer by the PBM and amount due paid to the dispensing pharmacy by the PBM for all prescriptions, for brand-name prescriptions, and for generic prescriptions was analyzed. Results. For the two PBMs combined, the mean ± S.D. spread for 20,376 paid transactions was $1.82 ± $8.26 per prescription. The mean ± S.D. spread for brand-name prescriptions was $0.07 ± $5.18 and for generic medications was $4.20 ± $10.69 per prescription. The two PBMs differed significantly in their spread for all drugs ($2.30 ± $6.17 and $1.78 ± $8.40) and for brand-name drugs ($0.47 ± $3.21 and $0.04 ± $5.30). The difference between PBMs for spreads on generic medications did not achieve statistical significance. Conclusion. Wide variations in spread pricing existed between two PBMs and between brand-name and generic medications. Pharmacists and prescription benefit plan sponsors should be aware of this discrepancy and seek a more transparent contract with PBMs.
| Original language | English |
|---|---|
| Pages (from-to) | 552-557 |
| Number of pages | 6 |
| Journal | American Journal of Health-System Pharmacy |
| Volume | 65 |
| Issue number | 6 |
| DOIs | |
| State | Published - Mar 15 2008 |
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All Science Journal Classification (ASJC) codes
- Pharmaceutical Science
- Leadership and Management
- Medicine(all)
Cite this
Undocumented source of pharmacy benefit manager revenue. / Siracuse, Mark; Clark, Bartholomew E.; Garis, Robert I.
In: American Journal of Health-System Pharmacy, Vol. 65, No. 6, 15.03.2008, p. 552-557.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Undocumented source of pharmacy benefit manager revenue
AU - Siracuse, Mark
AU - Clark, Bartholomew E.
AU - Garis, Robert I.
PY - 2008/3/15
Y1 - 2008/3/15
N2 - Purpose. The difference between what pharmacy benefit management companies (PBMs) charge prescription benefit plan sponsors and what dispensing pharmacies are paid ("spread") was studied. Methods. Data from prescription transaction invoices from two large employer groups, each using a different PBM, and 84 community pharmacies (which differed for each employer group due to clear geographic separation) participating in these plans between October 1, 2002, and December 31, 2004, were studied. Detailed community pharmacy payment transaction records were compared with PBM claim records from two employers. One employer provided 49,633 prescription claim records, and the other employer provided 120,684 prescription claim records. Spread between amount due billed to the employer by the PBM and amount due paid to the dispensing pharmacy by the PBM for all prescriptions, for brand-name prescriptions, and for generic prescriptions was analyzed. Results. For the two PBMs combined, the mean ± S.D. spread for 20,376 paid transactions was $1.82 ± $8.26 per prescription. The mean ± S.D. spread for brand-name prescriptions was $0.07 ± $5.18 and for generic medications was $4.20 ± $10.69 per prescription. The two PBMs differed significantly in their spread for all drugs ($2.30 ± $6.17 and $1.78 ± $8.40) and for brand-name drugs ($0.47 ± $3.21 and $0.04 ± $5.30). The difference between PBMs for spreads on generic medications did not achieve statistical significance. Conclusion. Wide variations in spread pricing existed between two PBMs and between brand-name and generic medications. Pharmacists and prescription benefit plan sponsors should be aware of this discrepancy and seek a more transparent contract with PBMs.
AB - Purpose. The difference between what pharmacy benefit management companies (PBMs) charge prescription benefit plan sponsors and what dispensing pharmacies are paid ("spread") was studied. Methods. Data from prescription transaction invoices from two large employer groups, each using a different PBM, and 84 community pharmacies (which differed for each employer group due to clear geographic separation) participating in these plans between October 1, 2002, and December 31, 2004, were studied. Detailed community pharmacy payment transaction records were compared with PBM claim records from two employers. One employer provided 49,633 prescription claim records, and the other employer provided 120,684 prescription claim records. Spread between amount due billed to the employer by the PBM and amount due paid to the dispensing pharmacy by the PBM for all prescriptions, for brand-name prescriptions, and for generic prescriptions was analyzed. Results. For the two PBMs combined, the mean ± S.D. spread for 20,376 paid transactions was $1.82 ± $8.26 per prescription. The mean ± S.D. spread for brand-name prescriptions was $0.07 ± $5.18 and for generic medications was $4.20 ± $10.69 per prescription. The two PBMs differed significantly in their spread for all drugs ($2.30 ± $6.17 and $1.78 ± $8.40) and for brand-name drugs ($0.47 ± $3.21 and $0.04 ± $5.30). The difference between PBMs for spreads on generic medications did not achieve statistical significance. Conclusion. Wide variations in spread pricing existed between two PBMs and between brand-name and generic medications. Pharmacists and prescription benefit plan sponsors should be aware of this discrepancy and seek a more transparent contract with PBMs.
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UR - http://www.scopus.com/inward/citedby.url?scp=41049096757&partnerID=8YFLogxK
U2 - 10.2146/ajhp070389
DO - 10.2146/ajhp070389
M3 - Article
C2 - 18319501
AN - SCOPUS:41049096757
VL - 65
SP - 552
EP - 557
JO - American Journal of Health-System Pharmacy
JF - American Journal of Health-System Pharmacy
SN - 1079-2082
IS - 6
ER -