Drug management across medical and pharmacy benefits

Our holistic approach manages drugs across both medical and pharmacy benefits.

April 8, 2019

Prescription drug spend continues to rise as a part of overall health care spending. Prescription drugs were 25 percent of health plan spending in 2017. They are expected to be 30 percent by 2020.

But not all those prescription drugs are processed under the pharmacy benefit. Nearly one quarter of prescription drug spend was covered under the medical benefit. Prime helps plans manage their medical drug spend like their pharmacy drug spend.

Medical drug spend is driven by a complex tangle of clinical and economic factors. Our holistic approach has evolved over two decades of working with our clients’ medical claims data. The approach includes a four-part model, informed by ongoing reporting and analytics and further refined through the work of our quarterly Medical Business Committee (formerly known as the Specialty Drug Management Committee).

First, the four-part model. Prime’s comprehensive four-part model helps our clients better understand and manage medical drug spend.

1. Clinical: focusing on safety and efficacy

In the Clinical component of our model, Prime assesses the safety and efficacy of drugs. We apply this knowledge to help improve member outcomes and control costs. For example, our GuidedHealth® analyses and alerts identify gaps in care and adherence. In pharmacist case management, we provide clinical pharmacists with actionable data to guide engagement with members. (Those pharmacists may be Prime pharmacists or plan pharmacists.) Prime also carefully monitors the drug pipeline. This helps us provide clients with timely information about the therapeutic and cost implications of new drugs. New drugs can change the landscape for an entire drug class or therapeutic category. Prime can provide model drug policies for plans to adopt or modify for their use. Read how medical drug policy is working with Soliris.

2. Formulary: contracting to achieve superior drug pricing

The Formulary piece of our model brings together clinical and economic analysis. It helps us better leverage competition among manufacturers. Formulary alignment across our Blue Plan clients gives us a strong rebate program. Prime also works with plans to capitalize on the appropriate use of biosimilars entering the market. We used value-based contracting to help align costs and outcomes. Read the two stories about Remicade and new biosimilars in this series to see great examples of this medical spend tool in action.

3. Utilization Management (UM): Analyzing medical claims to guide appropriate use

UM tools help us monitor the safe and appropriate use of medicines. Medical claim UM addresses how drug payment occurs within the medical benefit. Medical Claim Edits use a suite of clinical, financial, and utilization rules. These automate the evaluation of drug claims. Our Medical Drug Review program enforces a plan’s medical drug policy. This helps to ensure cost-effective, appropriate utilization. Prime also has an advanced Fraud, waste and abuse (FWA) (FWA) program that examines integrated medical and pharmacy claims. This leading PBM capability helps Prime to identify FWA before it occurs. Read an interesting example of UM for Soliris.

4. Network: evaluating locations for cost-effective treatment

The Network function finds cost savings by looking at the location where a drug is administered. Reimbursement solutions identifies savings at the doctor’s office with drug-level fixed fee drug price recommendations. These are benchmarked quarterly against average wholesale prices (AWP) and average sale prices (ASP). Our Site of Care program targets patients receiving high-cost infusion services in a hospital setting. Savings can be achieved by transitioning patients to more cost-effective locations. Remicade, Soliris and C-GSF all provide examples of Network savings.

Second, reporting and analytics lead to smarter decisions
A unique analytics platform drills down to show trends over time, which can lead to better decisions. Combined with expert analysis from Prime, our health plan clients can truly make smarter business decisions.

Last, the contribution of the Medical Business Committee

A truly unique aspect of Prime’s medical drug management approach is the Medical Business Committee (formerly known as the Specialty Drug Strategy Committee). This group meets quarterly and brings clients together with experts from Prime’s clinical, formulary, health outcomes and specialty teams. Clients bring market-specific insights and perspective.

They engage in the decision-making process for the specialty drugs that have such a big impact on their medical spend. Together we shape drug management strategies for the future.


Strategies support drug management decisions across the benefit divide


Bringing it all together: the total drug management approach

Applying all these tools on the medical side can yield substantial program savings. And by integrating the management of prescription drug spending, clients can take full advantage of Prime’s entire PBM toolbox.


Drug names are the property of their respective owners.

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