1. MASI – September 28, 2017
Presenters:
John Addelman, Chief Sales Officer – ProCare Rx
Danny Toth, CEO – Timber Ridge Consultants

2. Traditional Spread Model v Pass-Through Model
PBM earns fees through spread in traditional model
Difference between what is paid to pharmacy and what is billed
PBM pays pharmacy $ and bills client $113.00
NO Administration Fee charged to client
Client pays $ total; PBM profit is $13.00
PBM earns administration fee in pass-through model
PBM pays pharmacy $ and bills client $100.00
$4.00 Administration Fee charged to client
Client pays $100 for the claim plus a transparent $4.00 admin. fee

3. AWP discounts Average Wholesale Price (AWP)
AWP discounts have become meaningless in traditional spread models
Game of Definitions: brands, high-priced generics, single source generics, etc.
PBM guarantees a brand discount rate of AWP minus 18%
PBM guarantees a generic discount rate of AWP minus 84%
Pass-Through PBMs guarantee to pass through their true discounts!

4. AWP Discounts Brand Single Source Generics High Priced Generics
Low Priced Generics
AWP – 16.5%
AWP – 30%
AWP – 60%
AWP – 84%

5. What Happens Brand Single Source Generics High Priced Generics
Low Priced Generics
AWP – 16.5%
AWP – 30%
AWP - 60%
AWP – 84%
AWP-18.5%
Middle 2 pushed left
Spread models push left
AWP-16.5%
Middle 2 pushed right
Pass-through follow RFP directions even though 4 distinct columns
AWP – 74%
The
Spreadsheet
Game

6. Payers Problem
Traditional Spread PBMs look better on paper i.e. the spreadsheet
What happens if you put your worst priced generics into the brand bucket?
Including single source generics, multi-source brands, and certain high priced generics into brand bucket artificially improves brand discount rate
Moving these same drugs into the brand discount bucket also artificially inflates the generic discount rate
After hundreds of repricings it is very clear
Payers consistently pay more by using the spread model

7. The Spreadsheet Brand AWP – 18.5% Generic AWP – 81%
Spread Model
Pass-Through Model
Brand AWP – 18.5%
Generic AWP – 81%
Dispensing Fee - $0.50
Admin Fee - $0.00
Broker Fee - $0.00
Brand AWP – 16.5%
Generic AWP – 78%
Dispensing Fee - $1.40
Admin Fee - $2.75
Broker Fee - $0.75

8. How Do We Know It’s your data Simply request your claims file NDC
Pharmacy ID
Fill Date
Quantity
Days Supply
Ingredient Cost
Rx #
Dispensing Fee

9. Actual Repricing Data Same Drug, Same Pharmacy, Same Day Savings of $9
Actual Repricing Data Same Drug, Same Pharmacy, Same Day Savings of $9.32/claim or $227,244
ProCare Rx
Spread Model
Net Rx Claims – 24,368
Ingredient Cost - $2,992,448
Spread of $324,716
$324,716/24,368 = $13.32
PBM makes $13.32/claim
Total Payment - $2,992,448
Net Rx Claims – 24,368
Ingredient Cost - $2,667,732
Pass-Through $2,667,732
Administration fee - $4.00
24,368 x $4.00 = $97,472
Total Payment - $2,765,204

10. The Time is Right Now You have options
It’s not what the PBM pays the pharmacy for drugs
It’s what you pay the PBM for those drugs
We have seen this scenario play out hundreds of times
Stop overpaying for medications

11. Thank You! John Addelman – CSO ProCare Rx jaddelman@procarerx.com
Cell – (813)

12. The Great Reveal Demystifying Rx Costs
How to Regain Control of your Plan Costs
April 30, 2017

13. Four Buckets of Savings
Transparent PBM
Preferred vs. Non-Preferred
Elimination of Spreads using totally transparent PBM
Data analysis reveals spread per prescription
Eliminate the spread with current PBM, or work with a PBM without a spread
Audit and determine your provider outliers and structure Preferred and Non-Preferred Pharmacy Provider Networks
Tier change in pricing eliminates the discrepancy
Does not eliminate these retailers from network

14. Four Buckets of Savings
Specialty Drug Savings
Preferred vs. Non-Preferred
Assure that specialty drugs are not introduced if not necessary.
Find Innovative ways to reduce the Plan cost for this class of drugs.
Finds therapeutic drugs with same medical and therapeutic results, with substantially lower price.

15. PBM SPREAD AGGREGATE REPORT DRUG NAME STRENGTH RX QTY
TOTAL $ ALLOWED BY THE PBM FOR RX
PATIENT PAID FOR RX
AMT. PBM PAID PHARMACY FOR RX
AMT. PBM BILLED THE PLAN FOR RX
AMT PBM OVERBILLED (SPREAD)
Acyclovir
800mg 35
$12.25
$10.00
$2.25
$17.97
$15.72
Amlodipine/Benaz
5-20mg 90
$59.38
$5.00
$54.38
$139.38
$85.00
Anastrozole
1mg 30
$7.64 $-
$128.97
Atorvastatin
40mg
$12.36
$2.36
$46.14
$43.78
Buproprion XL
300mg
$18.55
$8.55
$113.01
$104.46

16. Generic ingredient(s) Generic/OTC Alternative/30 Days
BRAND NAME DRUGS NOT COVERED BY PLAN 2105
Brand Name
Generic ingredient(s)
Used For
Brand Cost/
30 days
Generic/OTC Alternative/30 Days
Duexis tablet 26.6mg/800mg
famotidine/ibuprofen
Arthritis pain
$1,400.00
$18.00
Vimovo tablet 20mg/375mg or 20mg/500mg
esomeprazole/naproxen
$50.00
Arestin microsphere 1mg
minocycline
Periodontitis
$1,800.00
$25.00
Conzip ER capsule 100mg, 200mg or 300mg
tramadol
Moderate/severe pain
$350.00
$170.00
Zipsor capsule 25mg
diclofenac
Mild/moderate pain
$650.00
$35.00
Fexmid tablet 7.5mg
cyclobenzaprine
Muscle spasm
$410.00
$15.00
Amrix ER capsule 15mg or 30mg
Muscle Spasm
$775.00
Lorzone tablet 375mg or 750mg
chlorzoxazone
Muscle pain
$520.00
$22.00

17. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL
TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

18. COMPARISON
6 Rx claims (20mg/30 quantity) with 3 different NDC-11 codes. Filled at one independent and three chains Incumbent PBM had 5 different prices Timber Ridge had Incumbent average price was $40.75 and Timber Ridge was $ % savings ($37.15 per Rx)

19. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL
TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

20. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL
TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

21. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL
TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

22. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL
TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

23. COMPARISON COMPARING 90 DAY MAIL AND 90 DAY RETAIL
TO THE COST AT AN INDEPENDENT OR GROCERY STORE PHARMACY

24. The Choice is Yours
Contact danny a. toth, r.ph. to review your pharmacy claims and plan design