Updated: Mar 4, 2021
Last month we gave you two strategies, carefully developed by our pharmacy team, that can help you craft a solid approach to pharmacy benefits. Let’s review:
Strategy 1: Monitor NDC Exclusions. Know what NDCs your plan covers and be on the look-out for significant anomalies in prescription prices to ensure you are covering the most cost-effective drugs.
Strategy 2: Expect PBM accountability. Periodically compare contracted rebates, dispensing fees, and discounts to actual rates paid in claims to ensure your plan guarantees are being met.
With a solid pharmacy strategy, you can make 2020 the year you control pharmacy spend and put your plan on the path to financial sustainability. Here are two more strategies that help you dig into your pharmacy data, start conversations, and impact positive change.
Strategy 3: Analyze controlled substances
A solid pharmacy strategy should start with an emphasis on participant health. Healthy prescription drug habits result in lower health care costs, less absenteeism, and greater workplace productivity. Reviewing controlled substances – how often they are prescribed and how often prescriptions are filled – helps plan sponsors encourage healthy decisions and limit additional costs.
In addition to elvated health care costs (e.g. hospitalization, doctor visits, treatment of side effects and addiction), controlled substances can lead to increased pharmacy costs. Opioid and benzodiazepine prescriptions are most commonly paid for with insurance, which drives up plan costs. Doctor shopping may also result in multiple prescriptions, thus multiple claims, for the same drug.
Armed with insight into how participants and their physicians are filling and prescribing controlled substances like opioids and benzos, assists plan sponsors in developing programs and formularies to battle excessive, costly prescribing.
What to look for:
- Participants with high and consistent controlled substance use
- Timeline of fills for controlled substances
- Potentially harmful drug interactions
Strategy 4: Review DAWs
Dispense as Written (DAW) codes are used by physicians and pharmacies to indicate if and why a generic alternative to a prescribed brand drug was filled. While occasionally a brand drug is medically or legally necessary, DAW codes can automatically exclude generic drugs without cause. In these instances, plan sponsors are overpaying for brand name drugs when lower-cost generic alternatives are available.
Establishing a solid pharmacy strategy includes monitoring DAW codes. Pharmacy claims files contain DAW codes because insurers and PBMs use these codes to determine how prescriptions are covered and if discounts are impacted. Examining this data allows plan sponsors to identify which physicians are using DAW codes to eliminate generic drug fills. Engaging these physicians or putting formulary restrictions in place could help build a solid pharmacy strategy focused on increasing generic utilization.
What to look for:
- Physicians or pharmacies relying on less cost-effective DAW codes
- Spend by DAW code
Pharmacy benefits are complex but developing a pharmacy strategy that highlights claims issues, identifies outliers, and finds solutions starts with implementing these four strategies:
1. Monitor NDC exclusions
2. Expect PBM accountability
3. Analyze controlled substances
4. Review DAW codes
By digging into your pharmacy claims and identifying spend patterns you can save large sums every month. Exploring a good pharmacy analytics tool can simplify this process and provide a useful breakdown of data which allows you to take action. Don’t waste another year doing what you’ve always done and hoping for the best. Use your data to optimize your pharmacy benefits.
Feeling overwhelmed? PCM’s new Analytics tool assesses pharmacy claims data, line-by-line to show you actionable insights and savings solutions. Click here to see how.