pharmaceutical coalition transparency in pharmaceutical purchasing solutions tipps initiative n.
Skip this Video
Loading SlideShow in 5 Seconds..
Pharmaceutical Coalition Transparency in Pharmaceutical Purchasing Solutions (TIPPS) Initiative PowerPoint Presentation
Download Presentation
Pharmaceutical Coalition Transparency in Pharmaceutical Purchasing Solutions (TIPPS) Initiative

Loading in 2 Seconds...

play fullscreen
1 / 38

Pharmaceutical Coalition Transparency in Pharmaceutical Purchasing Solutions (TIPPS) Initiative - PowerPoint PPT Presentation

  • Uploaded on

Pharmaceutical Coalition Transparency in Pharmaceutical Purchasing Solutions (TIPPS) Initiative. April 10, 2008. Leadership & Staff. Sidney Banwart Vice President, Human Services Division, Caterpillar, Inc. Chairman, Pharmaceutical Coalition Clay Elward Caterpillar, Inc.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Pharmaceutical Coalition Transparency in Pharmaceutical Purchasing Solutions (TIPPS) Initiative' - norman-baird

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
pharmaceutical coalition transparency in pharmaceutical purchasing solutions tipps initiative

Pharmaceutical CoalitionTransparency in Pharmaceutical Purchasing Solutions (TIPPS) Initiative

April 10, 2008

leadership staff
Leadership & Staff
  • Sidney BanwartVice President, Human Services Division, Caterpillar, Inc.Chairman, Pharmaceutical Coalition
  • Clay ElwardCaterpillar, Inc.
  • Darin HindermanCaterpillar, Inc.
  • Marisa MiltonHR Policy Association
  • Steve WetzellHealth Care Policy Roundtable
hewitt s project support
Hewitt’s Project Support
  • Joshua Golden National TIPPS Project Leader
  • Kristin BegleyNational Pharmacy Practice Leader
today s discussion
Today’s Discussion
  • Closed Sessions
    • Review TIPPS Standards & Objectives
    • Lessons Learned
    • Refining TIPPS Standards and Objectives for 2009
    • TIPPS + Pricing Concept
  • Open Sessions
    • 2009 TIPPS Process
    • Managing Pharmacy for the Future
    • AWP Update
    • Considering Diversity in Benefit Design & Communication
pharmaceutical coalition primary objective
Pharmaceutical Coalition Primary Objective
  • Leverage the combined purchasing volume of a Coalition to change the way pharmaceutical products are purchased
    • create price transparent environment to encourage competition and consumerism
    • align incentives of PBMs with employers and patients
    • establish a platform for value-based purchasing
    • drive business to certified PBMs that agree with principles
  • 2005
    • Defined and identified transparency requirements for PBM certification
    • Skepticism to PBM reaction, viability of standards
    • Issued RFP to 31 PBMs in 2005
    • Certified 3 PBMs – Aetna, MedImpact, and Walgreens Health Initiatives
  • 2006
    • Added additional standards for certification
    • 10 PBMs certified/recertified
  • 2007-2008
    • Streamlined Transparency Standards and documentation process
    • 13 PBMs certified/recertified, 1 previously certified PBM failed to meet standards
current certified bidders
Current Certified Bidders
  • The 13 TIPPS-certified PBM vendors for 2008 are:
update on coalition response
Update on Coalition Response
  • At least seven member companies transitioned to certified vendor arrangements, others may have moved without notifying Coalition
  • More pricing evaluations anticipated for Q2-Q4 2008
  • High marketplace visibility has led to an increase in Coalition membership and interest
overview of transparency standards
Overview of Transparency Standards
  • Format has been streamlined from nine requirements in 2006 to six requirements for current certification
  • Still designed to capture the ultimate in financial disclosure and service capability, and allow for a true partnership between a PBM and client
  • PBMs that outsource any core functionality must provide documentation of acceptance of the Transparency Standards from their outsourced partners
transparency standard 1
Transparency Standard 1
  • Acquisition Cost for All Retail Claim Payments
    • Charge the employer no more than the amount that you pay the pharmacies in your retail network for each claim dispensed
    • Includes all brand and generic drugs
transparency standard 2
Transparency Standard 2
  • Acquisition Cost Basis for All Mail Service Claim Payments
    • Charge no more than the acquisition cost of drugs at the mail order pharmacy, plus a dispensing fee
    • Acquisition cost is defined as either:
      • actual inventoried per unit cost (AAC), or
      • published Wholesale Acquisition Cost (WAC)
    • Agree to utilize a MAC list to determine the employer’s cost for any drugs that do not have an associated WAC price
transparency standard 3
Transparency Standard 3
  • Pass-Through of 100% of All Pharmaceutical Manufacturer Revenue
    • Pass through 100% of any and all formulary rebates, market-share rebates, and other rebate revenue that the employer’s utilization enables you to earn
    • Includes Rebate Administrative Fees, Data Sale Revenue, and Compliance/Adherence program revenue
transparency standard 4
Transparency Standard 4
  • Specialty Pharmacy Transparency
    • Charge no more than the acquisition cost of drugs at the specialty mail order pharmacy, plus a dispensing fee
    • Pass through any and all pharmaceutical manufacturer revenue
    • Provide dose optimization and consolidation programs, where appropriate
    • Provide case management for critical disease states (and not build cost of programs into ingredient cost)
    • Offer a tool to enable cross-walk billing (i.e., J-Code to NDC conversion)
transparency standard 5
Transparency Standard 5
  • Plan Management/Consumer Engagement
    • Apply rebate on a per-unit basis specific to NDC-11 at the point of sale (at client’s discretion)
    • provide members with decision support tools:
      • web-based formulary lookup tool
      • web-based drug price comparison tool, with retail pharmacy pricing comparison
      • web-based or letter-based utilization summary tool that identifies member cost-share savings opportunities
    • Offer financial performance guarantees to support effective utilization management, by therapeutic class.
      • Penalties to be assessed on a dollar-for-dollar basis
transparency standard 6
Transparency Standard 6
  • Comprehensive Audit & Disclosure Rights
    • Offer full audit rights
      • Audits of Claims/Utilization Data
      • Audits of Retail Network Contracts
      • Audits of Rebate Arrangements
      • Audits of Clinical Criteria
    • No limitation to specific list of audit firms
    • Allow self-audit by client
    • Provide claims data with all financial fields
    • Outsourcing vendors must also allow audits
evaluating success
Evaluating Success?
  • Easing implementation of TIPPS contracts with certified PBMs
  • Increased number of employers moving to transparent agreements
  • Ensuring TIPPS equals savings
  • Broadening Coalition’s original objectives beyond transparency
  • Maintaining Transparency Standards
    • Continue to make transparency a key objective
    • Powerful tool to help employers in negotiations
    • PBMs like public means of demonstrating commitment to transparency
  • Need to enhance savings opportunities
  • PBM interest in presenting TIPPS offers to new clients
opportunities going forward
Opportunities Going Forward
  • Incorporating pricing protocols into standards
    • setting a fair set of rules to understand pricing
    • Ex: new to market generics
    • MAC lists
  • Strengthening audit requirements
  • Standardizing TIPPS contracts/implementation tool
  • Manufacturer revenue
  • Specialty pharmacy
  • Creating new incentives for getting competitive pricing for TIPPS arrangements
opportunities going forward1
Opportunities Going Forward
  • PBM fiduciary role
  • Acquisition cost at retail
  • Enhanced audit rights
  • Standard formulary development
challenges with current certification process
Challenges with Current Certification Process
  • Employerswant idea of financial opportunity before conducting full TIPPS-based PBM RFP
    • Cost of PBM RFP process a deterrent for some
  • Certified PBMs not guaranteed chance to present their offer to member companies
    • Clients must still “select” the PBM for inclusion in a proposal process
    • PBMs may perceive diminishing returns for the cost of certification
    • Little incentive for PBMs to offer more competitive pricing for transparent arrangements
tipps pricing concept1
TIPPS + Pricing Concept
  • Supplemental fee for PBMs in addition to standard TIPPS certification
    • Additional fee revenue funds company-specific estimates
    • Cost estimated at approx. $5,000 per member company
    • Fee would depend on number of participating employers
  • Basic data collection needed for analysis
    • High-level information needed for each member company’s current arrangement and utilization patterns
    • 1-page data request form
    • PBM will NOT have access to data, Hewitt’s use of data limited to project
tipps pricing concept2
Current TIPPS Certification

PBM offers TIPPS deals to member companies upon request (i.e. as part of a formal TIPPS-based proposal process)

Member companies must fund the solicitation/evaluation of TIPPS proposals to determine savings opportunity

TIPPS + Pricing Concept

PBM receives all the benefits of standard TIPPS certification

In addition, PBMs able to have pricing estimates presented to interested member companies via company-specific savings estimates

Estimates to include side-by-side comparison of member company’s current deal vs. each TIPPS+ certified PBM deal

Analysis results provided to all member companies free of charge

TIPPS + Pricing Concept
tipps pricing concept3
TIPPS + Pricing Concept
  • Opportunities
    • Including pricing would generate fresh excitement about the Coalition among member companies, PBMs, media
    • Addresses employer need for savings as well as transparency without Coalition members paying additional fees
    • Creates incentives for PBMs to deliver competitive pricing and transparency
    • Ensures transparency remains top priority of Coalition
    • Provides participating PBMs greater exposure to employers
tipps pricing concept4
TIPPS + Pricing Concept
  • Considerations
    • Risk of marginalizing standard TIPPS certification
    • Requires commitment from a minimum number of companies to provide data in timely fashion at outset
    • PBM concerns
      • risk of alienating PBMs who do not opt in
      • higher fees could be a barrier for some
      • shifts focus of TIPPS from certification to typical “buying coalition”
      • estimates could set false expectations for clients
      • reluctance to offer best pricing without detailed claims data
coalition activity for 2008
Coalition Activity for 2008
  • Coalition Newsletter
    • 3 editions for 2008: Spring (mid-April), Summer, and Winter
    • Focus on different topics, case studies from member companies
  • 2008 Target Dates
    • Week of April 28, follow up Coalition meeting/call
    • Week of May 12 PBM webcast/PBM forum on TIPPS process
    • Week of May 19, RFP release
    • July 14, Web conference for Coalition to review final RFP results
    • July 21, Final PBM certification decisions completed
    • Sep. 11, Washington Policy Conference, announce certified PBMs
    • Oct. TBA, Fall Coalition meeting
  • Maintaining transparency standards
    • Continue to make transparency key objective
    • Powerful tool in educating the market
    • Enables PBMs to demonstrate commitment to transparency
  • Need to blend cost and transparency
  • Need to facilitate TIPPS implementation
  • PBM interest in greater exposure to new clients
opportunities going forward2
Opportunities Going Forward
  • Strengthening TIPPS standards in 2009 RFP
    • Acquisition pricing
    • Updating MAC lists
    • Audit rights
    • Specialty pharmacy
    • Customized forumlaries
    • Request for feedback on development of standard formulary
  • Providing Coalition members tools to facilitate TIPPS implementation
opportunities going forward cont
Opportunities Going Forward (cont.)
  • Considering Pricing + Concept
  • Options for structuring Coalition meetings and interaction
  • Maximizing resources of PBMs in mutually beneficial manner
awp settlement update
AWP Settlement Update
  • Class action litigation in Massachusetts resulted in settlement with First Data Bank
    • Near term effects
      • settlement calls for one-time roll back adjustment
      • reduction in published AWP for commonly used drugs
      • PBMs likely to ask clients for adjustment
    • Long term effects
      • AWP could be phased out completely
      • No consensus reached on replacement strategy
      • “Fairness hearing” in January
      • Court failed to issue final ruling based on lingering concerns

Building the Bridge to the Next Generation of Diversity WorkAndrés TapiaChief Diversity Officer Hewitt Associates

for more information
For More Information…
  • HR Policy AssociationPharmaceutical Coalition Executive Director:Marisa MiltonMMilton@hrpolicy.org202-789-8671
  • Hewitt’s TIPPS Project Manager:Joshua Goldenjoshua.golden@hewitt.com770-956-7777
  • Hewitt’s TIPPS Vendor Manager:Vickie Loroncavickie.loronca@hewitt.com847-295-5000