PBM Overview Pharmacy Benefit Managers (PBMs) work with health insurers, large employers and other payers to manage prescription drug benefits. The initial role of PBMs was to negotiate reimbursement rates with drug manufacturers, manage prescription drug claims, and reimburse pharmacies for dispensed medications. Since its inception, the role of the PBMs have evolved over time…
Cost-Effectiveness Models: A Strategic Tool for Pricing and Market Access In today’s market, clinical efficacy alone is rarely enough to differentiate a product. Payers, health systems, and policy bodies want to know: Is the price justified by the value delivered? Cost-effectiveness modeling provides a structured way to answer that question by connecting clinical outcomes to…
Introduction to Patient Support Services Models A patient support services model is a data-driven tool or framework that helps forecast and analyze the various aspects of manufacturer-sponsored patient support programs. Patient support services models simulate real-world scenarios. They predict how changes in patient needs, insurance policies, program rules, and regulations impact patient support program enrollment, utilization, costs,…
The Congressional Budget Office (CBO) is an independent, nonpartisan agency that serves Congress by providing economic and budgetary analyses of proposed legislation. It estimates the financial impact of proposed bills and assigns them a budget score, which is used by lawmakers to determine how the bill will affect the federal budget over a typical 5-to-10-year…
What Is Frailty? Frailty is a clinical syndrome characterized by a reduction in an individual’s physiological reserve and increased vulnerability to stressors, often seen in older adults.1 Characteristics of frailty include low physical activity, muscle weakness, slowed performance, fatigue or poor endurance, and unintentional weight loss.2 Health Risks and Clinical Impacts of Frailty Frail patients…
What Is Inverse Probability of Treatment Weighting (IPTW)? Inverse Probability of Treatment Weighting (IPTW) is a method used to control for confounding in observational data. IPTW methods use propensity scores to assign weights to each subject creating a pseudo-population where covariates are balanced across exposure groups. Understanding Confounding in Observational Research In a typical study,…
Overview of Preferred Drug Lists (PDLs) A Preferred Drugs List (PDL), sometimes called a formulary, is a list of medications covered by a health insurance plan in a way that gives patients easier access to these drugs compared to non-PDL drugs. The cost of prescription drugs for members usually depends on whether the medication is…
What is the 340B Drug Discount Program? The 340B Drug Discount Program requires pharmaceutical manufacturers participating in Medicaid to provide eligible outpatient drugs at significantly reduced prices to eligible healthcare facilities, known as 340B CEs. The program was established in 1992 under the Veterans Health Care Act and is overseen by the Office of Pharmacy…
What are PDABs? Prescription Drug Affordability Boards (PDABs) are state-appointed entities empowered to review drug prices, and, in some cases, set upper payment limits (UPLs) in an attempt to lower drug costs for identified populations within the state. The boards typically consist of five to nine members with expertise in healthcare economics, pharmacology, medicine, health…
Direct Drug Price Negotiations and Inflation Rebates The Inflation Reduction Act (IRA) made several key changes to Part D. The Centers for Medicare and Medicaid Services (CMS) can now negotiate drug prices for certain high-priced/high-utilization medications. Additionally, drug companies are now required to pay CMS a rebate for Part D and B drugs if prices…