Should Pharmacy Trend Go Up or Down?

As we enter the “drug trend report” season and we get to see everyone pull out their rules (not always equal) to show that their smaller, a friend asked me a good question the other night.  Is lower trend better?

It’s an interesting discussion.  We always assume that lower trend means the PBM is doing a better job shifting utilization to generics, moving people to mail order, driving specialty claims to the specialty pharmacy, implementing utilization management programs, etc.

BUT, if the PBM improves adherence, the trend’s going to go up.

If the PBM does a better job of moving specialty claims from medical to pharmacy, the trend’s going to go up.

If the PBM does a better job of making sure people get a claim after a step therapy reject, the trend’s going to go up.

If the PBM does a better job of getting people to fill their initial claims, the trend’s going to go up.

If the PBM does a better job of closing gaps in care, the trend’s going to go up.

I think this is one of the big reasons why a captive PBM (i.e., owned by the managed care company) should be viewed differently and has a unique opportunity.  They can make a convincing case that the trend should go up and be offset by lower medical costs.  That’s much harder for a standalone PBM to make.

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Trackbacks/Pingbacks

  1. Prime Therapeutics Drug Trend Report 2014 Report | Enabling Healthy Decisions - June 19, 2014

    […] what really should matter is net ingredient cost not trend.  I’ve made the point before that trend isn’t a great number to focus on for many reasons.  And, if you’re comparing trend numbers (which we all do), then you need […]

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