Industry
Retail
Omnichannel CX and Intelligent Innovation – The Future of Retail
HIGHLIGHTS
- Prescription drug prices have been a key concern for the US healthcare consumers with no reasonable solutions in sight, giving rise to a host of assorted issues for the medical industry.
- Pharmacy retailers help ensure patients get access to drugs at the best price with the help of pharmacy benefit manager (PBM). However, the lack of pricing transparency has invited regulatory scrutiny against the big PBMs.
- PBMs will have to rebuild to better engage with customers, evaluate innovative pricing strategies, increase transparency in drug pricing, and be a part of integrated cost minimizing programs to ensure benefits flow to patients.
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Drug prices a concern
Prescription drug prices have been a key concern for the US healthcare consumers for a while now.
Amid the discourse against high prices, the lack of reasonable solutions and policy regulations to effectively resolve the challenge has resulted in other assorted issues for the medical industry. These include patients not adhering to medication schedules, a rise in hospital re-admission rates, and a gap in care records, to name a few. Retail pharmacies, as the dispensers of drugs, play an important role in ensuring patients receive crucial prescription medicines in time.
Pharmacy benefit managers and drug pricing
Pharmacy benefit managers (PBMs) are a critical arm of the pharmacy retail operations in the US.
With the help of PBMs, pharmacy retailers ensure patients get access to drugs at the best price.
As a business practice, PBMs negotiate with drugmakers to determine the cost of medications covered by a health insurance plan.
That means PBMs can help secure drugs at lower costs for the health plans they serve using their purchasing power. Importantly, PBMs coordinate drug logistics between manufacturers and pharmacies. So, pharmacies rely on PBMs to negotiate the price with the drug manufacturers to make medications available to consumers at an affordable cost. In addition, PBMs set up pharmacy networks, decide what medications are covered in the insurance plans, and process claims. All this means, PBMs have a critical role in ensuring the right drug prices.
However, as is evident, drug prices haven’t really been under control. Federal bodies have said that despite negotiations, the discounted rates are not made available to the end-users (patients) by the PBMs. The lack of pricing transparency has only made matters worse and given rise to regulatory scrutiny against the big PBMs.
The healthcare impact
Retail pharmacies in the US not only supply medical products to patients, but they also serve as keepers of healthcare records.
Streamlined and updated healthcare records are critical to offering the right treatment at the right time, especially during health emergencies. However, the drug pricing challenge has meant patients have to look for affordable alternatives. Additionally, consumers with higher deductibles or those who are under-insured often seek the most affordable options like discount cards or direct-to-consumer online pharmacies.
That has resulted in PBMs losing customers to these third-party discount card companies or direct-to-consumer online pharmacies that offer generics and biosimilars of the prescription drugs at lower cost. Several of these cheaper alternative routes offer drugs at the lowest cost only outside of the plan benefit. This means the cost would not apply to the member’s annual insurance deductible. The non-continuity of drug purchase weighs on the PBMs in the form of a break in patient care records as the affiliated pharmacies and insurers can no longer have the complete drug and claim history of a patient or a member. This ultimately impacts the quality of care.
Rebuilding trust
For PBMs looking to reduce the cost burden on customers, rebuilding trust is crucial to better engage with them.
TPBMs are evaluating innovative pricing strategies in their quest to reduce the cost burden on customers and rebuild trust.
There’s an increased focus on transparent operating models where the PBMs strive to show the break-up of the final cost of the medical expense, through the entire drug pricing supply chain all the way to the patients. The process is aimed at ensuring end-consumers have clear visibility into what they are paying for.
In addition to ensuring transparency, PBMs can evaluate ways to work with discount card companies and incorporate the discount card pricing into the pharmacy benefit plans to help stem the increase in prescription costs. Such a collaboration between a PBM and discount card companies can result in more affordable drug options for PBM members. Additionally, PBMs can dynamically shop for the best price on behalf of their consumers.
Pricing intelligence secured via this kind of collaboration can help access lower-priced generic drug coupons from the third-party in real-time. A system with an integrated view can run a comparison with third-party prices and automatically pick the lowest mark-up, with out-of-pocket costs for members counted in their deductibles. This would enable substantial savings, especially for patients with chronic conditions on perpetual medication schedules.
The road ahead
Integrated cost minimizing programs ensure the electronic health records (EHRs) remain within the system.
When there is no gap in EHRs, there is greater visibility into adherence records, which help create a 360-degree view of the patient profile.
Gap-free EHRs enable the prescribers and pharmacies to perform effective drug utilization reviews (DURs) that can ward off any negative drug interactions, bolstering patient safety—a win-win for all stakeholders. Patients can access the cheapest drugs, discount card companies get access to the PBM member base, potentially improving membership fee, and pharmacy retailers get to maintain an unbroken care-record of the patients. Such breakthroughs can offer some respite from the persisting PBM market turmoil until federal laws are in place to ensure uniformity of operations and uncomplicate the overly entangled drug pricing system in US healthcare.
