Wednesday, March 03, 2010

Transparent Pricing Benchmarks (sponsor)

I am pleased to welcome a new sponsor to Drug Channels--ChainDrugStore.net’s Transparent Pricing Benchmarks Conference. The conference will be held in Washington DC, on May 26-27, 2010, and moderated by Ben Sasse, PhD, U.S. assistant Secretary of Health and Human Services, 2007-2009, currently Public Policy Faculty Member, LBJ School of Public Affairs, University of Texas.

The conference’s goal: “Identify and discuss the emerging strategies for implementing a transparent prescription drug pricing benchmark and motivate attendees to begin to solve the problem together as an industry.”

Great topic! As you all know, this topic is near and dear to my heart. I’ve written extensively about pricing issues, including the post-AWP fallout, cost-plus network models, the flaws in Federal Upper Limit (FUL) computations, and the challenges of introducing Average Manufacturer Price (AMP).

I’m also impressed by ChainDrugStore.net's policy: “In the spirit of transparency, no sponsorships will be available for this event. All registration fees will go toward covering the costs of the event.” Very cool.

For a complete agenda, including additional speakers and breakout sessions, and to register, please visit http://www.kinsleymeetings.com/ChainDrugStore/index.htm. Below you’ll find a more detailed description from ChainDrugStore.net.


OFFICIAL DESCRIPTION

On September 26, 2009, the Average Wholesale Price (AWP) values in the First DataBank and Medi-Span drug databases were adjusted to comply with a court settlement. Further adjustments were made by First DataBank and Medi-Span to establish a uniform cost markup, which meant an adjustment for nearly all branded pharmaceutical AWPs.

Because the AWP is often utilized as a benchmark for the reimbursement paid to pharmacies for drug claims, adjustments in the AWP have a corresponding impact on the reimbursement rates. The benchmark for many reimbursement contracts was altered without there being an actual change in the acquisition cost of the drugs. Pharmacies, pharmacy benefit managers (PBMs) and payers were all impacted:

  1. Payers wanted to recoup perceived overpayments for the last approximately seven years,
  2. Some PBMs saw arbitrage opportunities between their payer clients and pharmacy networks, while others struggled to keep pharmacies whole and
  3. Pharmacies essentially were left paying for this adjustment, though payers will argue pharmacies had “windfall” profits from inflated AWPs.
ChainDrugStore.net worked with many PBMs and pharmacy operators to develop a “factor model” which would assist in retaining financial neutrality for all parties subsequent to the change in the AWP benchmark. This effort quickly established ChainDrugStore.net as a neutral party that could be trusted to assist in finding a resolution to a very sensitive issue.

It is anticipated that an alternative benchmark will evolve as publishers, such as First DataBank and Medi-Span, cease to publish an AWP value over the next two years, at which time the “revenue neutrality” provisions of reimbursement contracts will allow for new formulas to be utilized for drug claim costs.

Many key players in the industry see the opportunity to introduce a new pricing benchmark that is transparent and accurately reflects the pricing of the branded pharmaceutical. This new benchmark, along with changes to the healthcare reimbursement model, has the opportunity to significantly change the “system” for the better – better for the patient, pharmacy, PBM, payer and manufacturer.

The dilemma – how does the industry move forward to create and support this new pricing benchmark?

CONFERENCE OVERVIEW

The goal of the conference is to “Identify and discuss the emerging strategies for implementing a transparent prescription drug pricing benchmark and motivate attendees to begin to solve the problem together as an industry.”

The conference is to be held in Washington, D.C. on May 26-27, 2010, and will bring together industry thought leaders for two days of critical analysis, policy reviews and in-depth discussions regarding emerging strategies for implementing a transparent pricing benchmark for pharmaceutical products.

There will be two comprehensive session tracks:

  • PAYER track
  • PROVIDER track
General and breakout sessions:
  • Facts and myths about Government drug pricing
  • Mechanics of payer, provider, government systems and influence of pricing benchmarks
  • Value proposition for a single transparent pricing benchmark
  • Impacts of a new pricing benchmark on plan/benefit design
  • Impacts of a new pricing benchmark on reimbursement
  • Obstacles and hurdles to implementing a new pricing benchmark
SPEAKERS

Moderator: Ben Sasse, PhD, U.S. assistant Secretary of Health and Human Services, 2007-2009, currently Public Policy Faculty Member, LBJ School of Public Affairs, University of Texas.

The distinguished line-up of keynote speakers will include:

  • David Cutler, PhD, Senior Health Care Advisor, Obama Presidential Campaign, member of Council of Economic Advisors and National Economic Council for President Clinton, Professor of Applied Economics, Harvard University
  • Charlie Baker, Secretary of Administration and Finance 1994-1998, CEO of Harvard Pilgrim Health Care, currently running for Governor of Massachusetts
  • The Honorable Tom Davis, U.S. Congressman, 1995-2008, former chair, House Committee on Government Reform and Oversight
Due to the developing nature of the issue, ChainDrugStore.net will be announcing the balance of the speakers between now and April 1, in order to provide attendees access to the thought leaders representing the most current perspective on industry trends.

For a complete agenda, including additional speakers and breakout sessions, and to register, please visit http://www.kinsleymeetings.com/ChainDrugStore/index.htm.

2 comments:

  1. Adam, transparent pricing for retail pharmacies is apparently something you support. However, it also appears that you do not believe that PBMs and drug manufacturers should be transparent. Why the contradiction?

    ReplyDelete
  2. Actually, I think the marketplace can decide on the level of transparency. Walmart and Walgreens entered into a voluntary contract with Caterpillar for cost-plus pricing. As I point out in the comments section of Why do pharmacy owners care about PBM transparency?, plan sponsors can choose pass-through (transparent) pricing for their PBM, but many choose spread pricing arrangements instead. I see no need for a government mandate for any particular form of contract.

    ReplyDelete

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