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Paduda: Transparency in Drug Pricing

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One of the top issues in work comp pharmacy — heck, in all pharmacy — is transparency.

Joe Paduda

Joe Paduda

More than half of the 27 respondents to our latest survey of pharmacy management in workers’ comp want more transparency, while several others “need more transparency as I don’t feel comfortable not knowing if pricing is fair.”

The question is, what exactly is transparency?

Is it the customer knowing what the pharmacy benefit manager paid for the drug?

What about rebates?

Is it knowing what the pharmacy “charged” the PBM for that drug (which may or may not be what was paid)?

What about MAC pricing (maximum allowable cost), where the PBM fixes the price it pays for a type of drug — say, ibuprofen 800 milligrams — at a flat rate regardless of the drug manufacturer’s average wholesale price (there are lots of companies making ibuprofen 800 milligrams)?

Net “transparency” isn’t quite transparent.

What does this mean for you?

If you are evaluating PBMs, make very sure you understand exactly how they define transparency. The best way to compare is to have them reprice specific drugs from the same pharmacy dispensed on the same day.

Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.

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