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Financial Consequences of Drug Benefit Plans
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In Reply: Drs Clark and Garis describe what is commonly referred to as the "spread" on prescription drugs. Employers sometimes negotiate a rate with the pharmacy benefit manager (PBM) using a discount to the AWP—eg, 14% off AWP, excluding dispensing fees. At the same time, the PBM may negotiate a lower rate with the pharmacy—eg, 15% off AWP. The PBM keeps the spread, or difference. The amounts we report are costs actually paid by the employer. To the extent there are any discrepancies between what the PBM and the employer pay, we agree with them that vigilance on the part of employers—and competition among PBMs—should limit them.
Dr Hsu and Ms Reed argue for a before and after design to examine how benefit changes affect costs. But such an approach is also susceptible to bias. An employer's decision to change its drug benefit does not happen at random. Firms with . . . [Full Text of this Article]
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