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March 17, 2021
You ever hear the saying less is more? Like sometimes in life, less is more.
I incorporated this question into the latest episode of Wee Dose of Radical Transparency.
There’s a certain aspect of how your pharmacy benefit manager pays your prescription drug claims that this little saying is absolutely applicable.
What you’re looking for is referred to as “lessor of” logic or “lessor of” language. In layman’s terms, its language in your PBM contract that stipulates that if there is a lower available price, the PBM must use it as a basis for payment, not the higher price. You’re supposed to pay the lowest price under lesser of logic.
Sounds like a no-brainer, right? Well, it is. Without it though, any number of PBM shenanigans play out – And, I’m here to tell you, the tables not tilted in your direction. If the PBM’s getting away with multiple sources for AWP pricing, for example, and ‘lesser of’ logic is missing, you lose. Nearly every time. Why?
The PBMs got an algorithm that catches it … and has the ability to charge the higher price and keep the difference between what it pays the pharmacy and what it bills you.
Doesn’t sound good, does it? You’re right, it’s not.
This is a black & white thing. I often see a PBM using language like, we “will use our best effort to identify a fair compensation to the pharmacy …”. Sounds vague, right? I call shenanigans.
There’s a few really specific places you want this language to show up in your PBM agreement. Is your advisor showing up for you?
If you want to dig in further into this level of transparency and want to understand how your PBM contract stacks up, just reach out. We offer a contract health assessment through our Kinetiq Health Pharmacy Benefits Consulting practice.
You can find me on LinkedIn, at apexbg.com, or give me a call at 317-341-3970.