The New Face of Preferred Pharmacy Networks:
What you need to know
Chris von Heymann
Senior Vice President
September 8, 2011
INTRODUCTION
3 PRIMARY STEPS TO CONSIDER:
1) SELECTING THE RIGHT PHARMACY PARTNER(S):
WHAT EXACTLY IS PREFERRED IN “PPN”?
2) ENSURING UPTAKE AMONG PLAN MEMBERS
3) ENSURING THE ONGOING SUCCESS OF THE
NETWORK
WHAT EXACTLY IS PREFERRED IN “PPN”?
 Which basic type of pharmacy is preferred to your
organization: retail pharmacy, mail order/central dispensing
pharmacy, or both?
 Retail pharmacy incentives (e.g. discount cards for front
shop)
 Lower dispensing fees
 90-day fills for maintenance medications – what about
weekly Dispills/Dosettes?
 Key consideration: will your plan realize cost savings only
when specific milestones are reached, or right out of the
starting gate at 1st dollar?
WHAT EXACTLY IS PREFERRED IN “PPN”?
PRICING & INGREDIENT COSTS
1) Ensure everyone is speaking the same language: proposed
cost structures based on MLP vs. AAC vs. AWP
2) What is being offered, and what does it mean to you? Do
your due diligence, know your numbers
CASE EXAMPLE #1: National group, $500K+ annual spend
DRUG TYPE
REGION
NON-PREF
PREFERRED
BRAND
Region A
MLP + 17.6%
MLP + 13.6%
Region B
MLP + 9.4%
MLP + 22.2%
Region A
MLP + 13.4%
MLP + 8.9%
Region B
MLP + 6.3%
MLP + 24.4%
GENERIC
WHAT EXACTLY IS PREFERRED IN “PPN”?
PRICING & INGREDIENT COSTS …cont’d…
3) Determine how agreed upon cost structure will be
implemented and adhered to – at the pharmacy provider
level, adjudicator level, or both?
CASE EXAMPLE #2: ASO plan, 1 province, $4M+ annual spend
PHARMACY
DRUG TYPE
SUBMITTED
PREFERRED A
Brand
MLP + 10.0%
Generic
MLP + 8.0%
Brand
MLP + 17.1%
Generic
MLP + 10.0%
PREFERRED B
WHAT EXACTLY IS PREFERRED IN “PPN”?
ENHANCED PHARMACY SERVICES
• Programs to facilitate adherence with therapy among plan
members
• Screening programs/clinics in the workplace
• Disease statement management programs
• Health & wellness, and education programs
NOTE: Key for pharmacy here is that these services can be directly
funded by the savings realized by other preferred provisions,
facilitating the business case and determination of ROI of these
enhanced services for employers.
ENSURING UPTAKE AMONG MEMBERS
PLAN DESIGN IS CRITICAL – YOU CAN’T HAVE
ONE WITHOUT THE OTHER
• If the financial incentive for members isn’t there, and if that
incentive isn’t significant enough, then desired movement of
prescriptions over to PPN will not occur
• PDD card vs. manual reimbursement incentive – once again,
due diligence is required
COMMUNICATION & PROMOTION TO EMPLOYEES
ENSURING ITS ONGOING SUCCESS
ROUTINE MONITORING IS KEY
• For compliance with preferred arrangements among all
pharmacies within network
• For desired change in plan member Rx filling behaviour; if goal
not being met, further adjustments in plan design & coverage
may be required
CASE EXAMPLE #3: National group, $2.5M annual spend
•
•
•
•
Two-tiered design, per Rx deductible
PPN structure (retail + mail)
After first 6 months: only 7% of claimants using preferred retail and 1.2%
of claimants using mail order option
Management re-evaluating incentives
QUESTIONS
Chris von Heymann, RPh, B.Sc.Phm.
Senior Vice President
Cubic Health Inc.
cvonheymann@cubichealth.ca
416.203.1446