Independents create new benefit model

January 8, 2007

It's hard enough to get an employer and labor union to sit at the table, but what happens when you add pharmacists, a wholesaler, and a pharmacy benefit administrator to the mix? For Aerospace Contractors Trust (ACT) union members working at Jacobs Engineering, the answer is a transparent pharmacy benefit plan that seeks to strengthen the tie between healthcare providers and patients, providing low-cost coverage, while at the same time supporting local pharmacy businesses.

It's hard enough to get an employer and labor union to sit at the table, but what happens when you add pharmacists, a wholesaler, and a pharmacy benefit administrator to the mix? For Aerospace Contractors Trust (ACT) union members working at Jacobs Engineering, the answer is a transparent pharmacy benefit plan that seeks to strengthen the tie between healthcare providers and patients, providing low-cost coverage, while at the same time supporting local pharmacy businesses.

Beginning this month, ACT is embarking on a new pharmacy benefit plan that will utilize local independent pharmacies to hold down costs while at the same time improving medication compliance and overall health care. In addition to ACT and a network of 27 independent pharmacies in central Tennessee, the new plan also brings together AmerisourceBergen, to provide coordination and support; PDMI, a pharmacy benefit administrator; and iMetrikus, a software company that provides medication therapy management (MTM) and disease management tools.

"It's a real partnership between healthcare buyers and providers," explained Ray Marcrom, owner of Marcrom Pharmacy in Manchester, Tenn., and a driving force behind the new plan. "Together we can change the model to benefit everyone. If we are truly pharmacists, our concern should not be just keeping the business and filling prescriptions. It ought to be providing top-quality health care."

A transparent pharmacy benefit structure is one of the keys to the plan's ability to hold down prescription drug costs. Unlike with traditional PBMs, the plan's pharmacy benefit administrator does not profit from utilizing its own mail-order pharmacy or by squeezing margin from pharmacy providers. Most of this revenue is generated through "spread pricing" by negotiating low reimbursement levels with the pharmacy, noted Goebel.

For the ACT plan, PDMI charges a set fee for the transactions it processes for true transparency. Moreover, Goebel noted, the transparent structure allows pharmacies to worry less about a diminishing margin or deciding which drugs are the most profitable, and more about finding the best healthcare solution for patients. "Independent pharmacies have been there as a solution to the problem all along," he argued. "But they have not been engaged in the process. Under this plan, the pharmacy is being elevated as a key player."

With a seat at the table and a true stake in the plan's success, pharmacies have much greater incentive to help save money for the plan, especially since they know any steps they take will not reduce their own compensation but might actually help the plan grow. In consultation with ACT, pharmacists will be encouraged to take a number of steps to reduce costs: shifting to less expensive drugs, reducing the supply dispensed when they have a concern about how the patient will react to the medication, and other forms of compliance monitoring. Since pharmacists don't have to worry about some drugs coming from mail order, they'll have complete knowledge of patient histories and drug usage.

The plan will also allow MTM services to be delivered at multiple levels of complexity, and drug utilization reviews can include health screening and assessments, lab testing, immunizations, disease management, and wellness programs. Furthermore, ACT and pharmacists will be able to review how these steps are working and make changes along the way.

This type of approach also depends on an educated patient base. "You can't just jump from point A to point Z, you have to take the employees along with you," pointed out Goebel. "We are bringing them along over time. We had two days of meetings to kick off the program. We explained the philosophy and intent of the program at each session. Both management and union officials explained why they went in this direction."

Both Goebel and Marcrom noted the important role AmerisourceBergen has played in developing the program. Amerisource helped bring together the various partners like PDMI and iMetrikus and has provided critical help along the way. "They're in it to help independents because that's who their customers are," offered Marcrom. Still he noted that pharmacies that are not AmerisourceBergen customers are part of the program and that as it grows, they may add chain pharmacies as well.

As the program rolls out, Marcrom admitted that there is a great deal of pressure on its success. "We cannot afford to fail; I've made that very clear to our folks," he said. "The market has evolved to where this is a viable concept for us as we go forward. Our pharmacists are very excited."