People are so quick to judge NADAC pricing (which Capital Rx uses) which is published by CMS, but the people that fear change are often the ones that profit from the status quo. And I quote the Wall Street Journal (WSJ) this morning:
"Caremark has logged 643 different prices for Zytiga generics, while Express Scripts has 500 and Optum Rx carries 445. By comparison, Capital Rx, a PBM with fewer beneficiaries than the three largest firms, had two prices.
Capital Rx had few prices—either $106 or $117—because it pegged them to the benchmark that the U.S. government uses to calculate drug costs, called the National Average Drug Acquisition Cost, which is based on a survey of retail pharmacy prices, said Chief Executive Anthony Loiacono. Capital Rx’s prices were much less than the sums that many other health plans reported. 'We don’t make money on drug spend, and I do not set prices. I use what CMS gives us as the starting point,' Loiacono said."
If anyone wants to have a discussion about price volatility, please be prepared to argue from a place of logic and fact.
Let's replay the tape, in the WSJ's published example:
CVS (Caremark) = 643 Prices
Cigna (Express Scripts) = 500 Prices
United (Optum Rx) = 445 Prices
Capital Rx = 2 Prices
The two prices Capital Rx used during this data period: $117 or $106
That is a standard deviation of 6.36
We didn't create the prices, the federal government (CMS) provided us with the appropriate prescription price.
Equally important, the pharmacies were fairly reimbursed, with no clawbacks, penalties, or variable pricing nonsense.
Lastly, when people argue about NADAC price volatility, I wonder if they are even looking at the data. NADAC can experience variability, but it is negative variance (-5% to -15%), which means our customer's YOY prices on generics are falling with actual manufacturer costs. In comparison, AWP is flat over the same period (0% to 1%). Remember, the pricing benchmark (NADAC or AWP) is just the starting point for pricing, our detractors say nothing about the Actual Price the PATIENT RECEIVES under traditional PBM pricing!
You say you don't like volatility? How about 400 prices for the same drug? Or 500 prices?? Or over 600 prices??? Nobody wants to talk about this volatility? Until today...
I will say it again, and probably not for the last time... Capital Rx does not make money on drugs.
Capital Rx is the new standard for pharmacy benefit administration, not just because we are free of conflicts on all clinical, fulfillment, and pricing decisions, but because our technology (JUDI) enables us to deliver the efficiency, precision, and service levels plan sponsors deserve.
To quote the motto of our client, Johns Hopkins University: Veritas vos liberabit
The truth will set you free.
Health Policy Regulatory and Legislative Expertise; Market Innovator
6moMedical drug rebates are small because asp is a net pricing metric. There are exceptions. The problem with medical,drugs is that they often are paid by private plans to providers and rates that exceed asp, 169 percent etc.