Several changes within the federal government have been taking place this year and perhaps none are of more interest to Pharmacy Benefit Managers (PBMs) than the recent change to the Food and Drug Administration (FDA) Commissioner role. Scott Gottlieb, M.D., has been named the new FDA commissioner and has the opportunity to impact both PBMs and the price of prescription medicines.
A common concern among those in the insurance industry is the average wholesale price (AWP) of prescription drugs. The Office of the Assistant Secretary for Planning and Evaluation (ASPE) reports that Americans spent over $457 billion on prescriptions in 2015. These rising pharmaceutical prices can take a toll on an insurance company administering workers’ compensation and automobile no-fault claims.
The Pharmaceutical Care Management Association (PCMA) highlighted Alex Brill’s report (“How the Next FDA Commissioner Can Address Drug Prices by Promoting Drug Competition”) showing several potential avenues for reducing drug prices. Review times for new brand name, generic and biosimilar drugs are currently greatly drawn out. This report suggests prescription prices may drop if the FDA took steps to improve these lengthy review times.
Additionally, the PCMA article suggests that a change to the Risk Evaluation and Mitigation Strategies (REMS) program may be called for. Under the current REMS program, there exists cases of abuse involving brand-name drug makers blocking out potential competition by refusing to make samples available to another drug manufacturer. If other manufacturers are not able to receive these brand-name drugs they will not be able to produce a generic, and therefore more affordable, version.
If Gottlieb implements any or all of these processes to encourage competition between drug manufacturers there is a chance that the AWP of prescriptions may be lowered. Lower prescription drug pricing would be an immense help to insurance companies administering automobile no-fault and workers’ compensation claims since it would represent a reduction in overall claims costs.
Insurance companies could take this savings potential even further by partnering with a PBM such as Northwood. Over more than two decades, Northwood has built up an extensive network of medical services providers that offer high-quality care and discounted rates on pharmaceutical services. By taking advantage of Northwood’s resources, an insurance company will realize a significant reduction in claims costs. If the new FDA commissioner implements cost-saving measures for prescription drugs as well, an insurance company can combine these savings with the already discounted prescription prices offered by Northwood’s network to further reduce costs. Insurance companies may pass these savings on to their claimants as well, ensuring high claimant satisfaction levels.
Northwood also offers many other cost-saving procedures as a PBM and has representatives available to review these multiple benefits and provide additional information for your company.Leave a reply →