While this paper deals with generic definitions of drugs, this type of concept is relevant to many types of definitions of drug categories. The best practice is to rely on simple definitions in a PBM contract to avoid litigation and differences of opinion and to ensure the transparency of contractual votes. Definitions of Brands, Generic Drugs and SpecialTy Drugs One of the most important parts of each contract is the Definitions section. It is interesting to note that many PBM agreements never even contain a definition of what a brand, generic or specialty drug is. Drug classification is extremely important because a client`s prices and discounts depend on the classification of a drug as a brand name, generic or specialty drug. Through author Michael J. Staab, J.D. LL.M., is President and Co-Founder of Innovative Rx Strategies, LLC, a leading pharmaceutical company based in Deerfield, Illinois. He is also a partner of PBM and Pharmacy Law Group, P.C., the parent company of Innovative Rx Strategies.
As a former vice president of legal services and management of one of the country`s largest PBMs, Staab has been involved in negotiations on numerous PBM agreements. He uses his knowledge to help others understand the complexity of the PBM world and reduce their paid drugs. Although a simple concept, the actual way to define pbms a generic drug, have become extremely complex. Complex definitions can lead to disputes and discrepancies over what constitutes a generic drug, which is very important when there is a guarantee related to the distribution between generic and brand-name drugs. PBMs may eventually change the brand or generic status of drugs to help them better meet the aggregate discount guarantees they have indicated in the price contract. Performance Guarantees Most PBM agreements contain a “performance guarantee” section in which the PBM is exposed to financial risk if it does not operate at a certain level. Customers should take the initiative to determine the dollar amount or percentage of the total amount that PBM endangers if the PBM lacks a performance guarantee, and performance guarantees, customer-specific guarantees (e.g. B the satisfaction of the participants` plan) and those that are the pbm book of commercial guarantees (for example. B the time it takes for the after-sales service to reflect the response to the phone). Data Sales In most PBM agreements, you will find a language that allows a PBM to sell an unidentified data from a customer to a company that then sells it to pharmaceutical companies that use the information to guide their marketing efforts.
This unidentified data usually consists of the doctor`s name and medications prescribed to participants in a client`s plan. The sale of unidentified data is quite controversial and some states have taken steps to ban it. The question is whether the customer should receive the economic value of the data sold. Many customers do not want their unidentified data to be sold. In order to address the sale of unidentified data, it is possible to include a language that prohibits PBM from selling unidentified data or allows PBM to sell an unidentified customer`s data with the customer`s written consent, and requires PBM to pay the customer. The purpose of these assessments is to protect patients during the prescribing process. Drug Use Evaluations aim to make prescription drug use safer and identify potential hazards to patients. Read the May 2010 issue of Benefits – Work-Life Focus.
Plan sponsors should also consider the important financial elements of the PBM contract. PBM contracts generally include financial guarantees for average wholesale price (AWP) rebates, levy fees, administrative fees and discounts. All of these pricing elements have an impact on pharmacy costs and trends. The review should compare the guarantees of the PBM contract with the actual pricing obtained by PBM, assessing with