A new CMS rule requiring greater transparency in prescription-drug pricing should help lower Medicare Part D beneficiaries drug costs and lengthen the time it takes for beneficiaries to reach coverage-gap periods known as doughnut holes, according to a news release.
The new rule will go into effect Jan. 1, 2010, and will require pharmacy benefit managerscompanies contracted by Part D insurers to fulfill beneficiary ordersto disclose their contracted drugs prices, known as lock-in prices. Under the current system, Part D insurers pay a negotiated fee to PBMs to fulfill beneficiaries claims. PBMs in turn negotiate a cut-rate price with pharmacies for bulk purchases of drugs on a Part D providers formulary. Beneficiaries copayments, however, are based on the higher formulary rates paid by an insurer to the PBM.
Under the new CMS ruling, PBMs will be required to disclose how much they actually pay for the drugs, and beneficiaries copays will be adjusted accordingly, according to acting CMS Administrator Kerry Weems. For patients whose plans used the lock-in model, this regulation will reduce what they pay at the pharmacy counter because their copayments will no longer be based on a higher negotiated price, Weems said in the release. The current lock-in approach also moves beneficiaries through the Part D benefit more quickly, bringing them to the coverage gap sooner than under the pass-through price model. -- by Shawn Rhea