The continuously rising cost of prescription Average Wholesale Prices (AWP) has been a troubling trend that impacts insurance companies, especially those within the workers’ compensation sector. Some generic prescriptions more than doubled in price between 2013 and 2014, according to a study conducted through Elsevier. Insurance companies face not only these rising prescription costs but also must address the potential for dissatisfied claimants due to prescription costs that are largely, yet not completely, out of their control.
A multitude of factors have come into play regarding the general rise in the AWP of prescriptions. One of the major considerations involves a lack of competition in the generic prescription drug marketplace. The Food and Drug Administration (FDA) also employs laborious approval processes and lengthy, mandatory review periods for new drugs and for their generic formulations as well.
Recently, the state of Nevada passed a transparency bill that could act as a pilot program to increase transparency in the pricing of prescription drugs. The new law currently only addresses transparency in relation to the cost of insulin drugs but it does have implications for future and more expansive use. The recent legislation mandates that certain details must be disclosed by drug manufacturers when a price increase is implemented, according to a summary of the law from Business Insider. Furthermore, sales personnel in the prescription drug industry will now have to register with the state of Nevada and will be required to disclose some specifics of discussions they have carried out with healthcare professionals.
The article from Business Insider goes on to report that pharmacy benefit managers (PBMs) also come into play with the new law. Organizations acting as a PBM must now divulge the costs they have negotiated with drug companies and what percentage of these negotiated discounts are kept by the PBM. Furthermore, the PBM will now be mandated to implement actions that are in the best interests of insurance companies and PBMs in Nevada can no longer prevent pharmaceutical providers from conversing with claimants or patients about less expensive prescription treatment options.
Nevada’s state legislature has implemented some important changes with this new law. As a PBM for insurance companies administering workers’ compensation claims, Northwood has always acted in the best interests of its clients. Northwood has a proven track record of implementing cost-saving processes and procedures for insurance companies and for the claimants it works with.
For more information on how Northwood can partner with your insurance company as a PBM to bring reduced costs, increased claimant satisfaction and a network of trusted pharmaceutical and medical providers to your company please contact a representative today by calling 1-877-684-9276.Leave a reply →