Prescription drug plan sponsors get help navigating uncertain times in drug pricing

Without a viable alternative to the average wholesale price benchmark, how should plan sponsors protect themselves?

After more than a year since major lawsuits cast a dark shadow over the use of average wholesale price as a benchmark for prescription drug pricing, little change has taken place in the way of finding a suitable alternative for the AWP benchmark.

Brian Bullock, president and CEO of The Burchfield Group, is working with employers and other prescription drug plan providers to prepare for changes that will eventually come in the wake of AWP. The Burchfield Group is a pharmacy-benefit consulting firm that helps employers and other plan sponsors control the costs of providing prescription drug coverage for their beneficiaries. He sees pharmacy benefit managers working to change contract language in preparation for a replacement benchmark, but those changes might not be enough, according to Bullock.

Bullock and colleague Kent D. Wangsness, who holds a doctor of pharmacy degree and is a vice president at The Burchfield Group, discussed these issues and more in the today’s installment of the Pharmacy Benefits Podcast. Bullock says the market has seen a number of options floated as alternatives to AWP – including wholesale acquisition cost, average manufacturer price and average selling price – but none seems to fit what Bullock calls the four essential criteria for a replacement pricing benchmark.

According to Bullock, the replacement must be:

-accurate and reliable
-current and up to date
-generally and widely available
-transparent and accessible

"It's important for employers to have a handle on what is going on in their prescription claims data, what the pricing looks like, and how are we going to equitably adjust for pricing with new contract terms," Bullock said. "Plan sponsors can end up upside down if contract language does not protect them in the event the prescription drug pricing benchmark changes. A plan sponsor can only make solid, learned decisions with access to substantial, transparent data and an understanding of the significance of the details."

For more ideas on how to handle potential changes in prescription drug pricing, or to ask a question or comment on the podcast, send an e-mail to Bullock at bbullock@burchfieldgroup.com or call 651-389-5640.