Pharmacy Reimbursement Needs To Be Re-Aligned With Effort

I know this is not a popular topic, but I really believe that reimbursement on a per Rx basis in misaligned.  Today, a pharmacy (retail, mail, specialty) is paid based on either a discount off a standard price (e.g., AWP) or based on a MAC (maximum allowable cost) list.  They may also receive a dispensing fee.  According to the latest PBMI Benefit Design Report, those dispensing fees are:

  • $1.62 retail
  • $2.33 mail (noting that only 21% of their surveyed employers pay dispensing fees at mail)
  • $3.26 specialty

And, the reimbursement rate is the same whether it’s a new Rx or a refill.  Does anyone out there believe that the amount of effort to fill a new Rx and a refill is the same?  Why not pay differently?

An industry number that has held up anecdotally when I’ve talked to lots of people is that 40% of new Rxs require some type of work to become a “clean Rx”.  That might mean that they are subject to a utilization management program (step therapy, prior authorization, quantity level limit).  It might mean that there is a DUR issue such as a drug / drug interaction which has to be addressed.  It might mean that the drug isn’t covered.  It might mean that the cost is too much based on formulary tier.

Additionally, the first few times a patient fills a drug is when they have questions.  When do I take the drug?  Are there any side effects?  Should I avoid any foods?  Should I eat with my meal?  Are there alternatives?

Once the patient has titrated to the right strength and is taking their medication on a regular basis, the job is pretty much to count the pills and get them to the patient in a timely manner.  It has been my argument for a while that if we could fix this reimbursement misalignment then you would see a better coordination between retail and mail order.

The right model in my mind shifts reimbursement dollars through dispensing fees or some other payment structure to compensate for these cognitive services on the initial fill and acknowledge where the effort is.  I believe this would allow for a “mail at retail” type model of central fill or a kiosk model at the store or encourage retailers to better support mail order efforts when appropriate.

Everyone is aligned (at some level) with getting patients to:

  1. Start on the appropriate medication
  2. Understand their medication and their condition
  3. Make appropriate choices that lower overall costs to the payers
  4. Stay on their medications
With that said, it seems like there is an opportunity here.  It won’t be easy, and I don’t hear anyone talking about it…but I’ll continue on my soapbox for now.
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