State: Fla.
Florida's Solution to the High Cost of Repackaged Drugs: [2010-10-11]
Health Strategy Associates, CompPharma
Mike Whitely of WorkCompCentral's piece [subscription required] on Oct. 7 about Miami-Dade Schools' solution to the high cost of repackaged drugs should be required reading for any employer or insurer operating in the Sunshine State.
As noted here and elsewhere, a loophole in the Florida workers' comp law allows drug repackagers and their affiliated technology and billing companies to set the price for drugs at whatever amount they desire. As the law requires payers to reimburse at Average Wholesale Price plus $4.18 for dispensing, if the AWP for a repackaged drug is five times what the same drug would cost at a retail pharmacy, too bad for the payer.
However, there's another law on the Florida books that provides a solution simply stated, employers and insurers that contract with a PBM or a retail pharmacy for drugs can pay that contracted amount for any script from any dispenser. That's correct the payer's liability to the dispenser is the same as if that drug was dispensed through one of the payer's contracted pharmacies.
Miami-Dade Schools began implementing this policy Sept. 15, 2009. Since that time, the schools have saved an estimated $700,000 the equivalent of about eight teachers' pay and benefits.
A letter [opens .pdf] from Florida CFO Alex Sink (currently a candidate for Governor) cites the specific statute:
Section 440.13(12)(c), Florida Statutes, which provides: As to reimbursement for a prescription medication, the reimbursement amount for a prescription shall be the average wholesale price plus $4.18 for the dispensing fee, except where the carrier has contracted for a lower amount. Fees for pharmaceuticals and pharmaceutical services shall be reimbursable at the applicable fee schedule amount. Where the employer or carrier has contracted for such services and the employee elects to obtain them through a provider not a party to the contract, the carrier shall reimburse at the schedule, negotiated, or contract price, whichever is lower. No such contract shall rely on a provider that is not reasonably accessible to the employee.
And makes this recommendation:
The Division urges employer/carriers providing reimbursement for prescription medication under Chapter 440, Florida Statutes, to take section 465.0267(1), Florida Statutes, into consideration when making prescription provider reimbursement decisions.
What does this mean for you?
Well, what are you waiting for? Talk with your PBM, ask them to implement Ms. Sink's recommendation, and start reducing your drug costs.
Disclosure - I gave $250 (or something like that) to Ms Sink during her campaign for CFO some years ago. She's been a strong advocate for Florida's employers and workers and I remain a supporter.
Joe Paduda is principal of Health Strategy Associates in Connecticut and co-owner of CompPharma, a consortium of pharmacy benefit managers. This column was reprinted with his permission from his blog, http://joepaduda.com