Reimbursment for Dispensing Services
Key Points
Pharmacy Benefit Managers (PBMs) were created to streamline the drug distribution and reimbursement process. Three PBMs now control 80% of prescription drug transactions.
Lack of adequate reimbursement for dispensing-related services forces pharmacies to close or increase costs. Implementing fair reimbursement models such as NADAC-plus provides an opportunity for increased transparency.
Unreasonable reimbursement – PBMs reimburse pharmacies for medications at rates lower than what the pharmacy can buy them for. Problem – This may cause the pharmacy not to carry that medication for patients.
Spread Pricing – A PBM charges the insurance company one price but reimburses the pharmacy at a lower price. Problem – The PBM is keeping money and driving up drug costs.
Rebates – Manufacturers must provide a rebate to the PBM to get their medication on the formulary. It may not be in the PBMs best interest to include the best or cheapest medication in the formulary, but the one that would make the PBM the most money. The money should go to the patient or insurance company. Problem – The PBM is keeping money for themselves which can raise the cost of medications and may not be putting the correct drug on the formulary based on guidelines.
Discount Cards- Insurance companies partner with discount card distributors to apply the discount card to prescription claims. Problem- This decreases the reimbursement rate that pharmacies receive without adequate transparency to inform pharmacies of this process.
Holding PBMs accountable for transparency in pricing reimbursement will ensure pharmacies receive adequate coverage for ingredient cost and ancillary activies related to dispensing.
Next Steps for Indiana
Pass legislation that increases PBM accountability and allows for adequate reimbursement for pharmacies to ensure pharmacies can continue to provide necessary services for Indiana residents.