Study Finds Flaws in Widely Used Pricing Model for Generic Drugs
Data Indicates That Pricing Benchmark Commonly Deployed by Pharmacy Benefit Managers Lacks Directional Accuracy
NEW YORK, NY / ACCESSWIRE / June 30, 2020 / A new industry analysis finds evidence that a longstanding price benchmark, Average Wholesale Price (AWP), does not provide an accurate representation of retail generic drug prices. AWP is used by traditional pharmacy benefit managers (PBMs) to set reimbursement rates for pharmacies on behalf of U.S. health insurers and plan sponsors. The analysis concludes that, while the actual acquisition price of generic drugs purchased by retail pharmacies has decreased over the past six years, the index by which discounts for these drugs are established has increased.
A new industry analysis finds evidence that a longstanding price benchmark, Average Wholesale Price (AWP), does not provide an accurate representation of retail generic drug prices.
The analysis concludes that, while the actual acquisition price of generic drugs purchased by retail pharmacies has decreased over the past six years, the index by which discounts for these drugs are established has increased.
Data indicates that pricing benchmark commonly deployed by pharmacy benefit managers lacks directional accuracy.
About Capital Rx
Capital Rx is redefining the way prescriptions are priced and administered in the U.S. Through its Clearinghouse ModelSM, Capital Rx unlocks the pharmacy supply chain and reduces prescription costs for employer groups. By establishing a competitive marketplace for drug pricing, Capital Rx focuses its resources on deploying actionable strategies that improve plan performance and patient outcomes. The company's commitment to innovation, technology, and service is why Capital Rx is the fastest-growing pharmacy benefit manager in America. For more information, please visit http://www.cap-rx.com.
About the Clearinghouse ModelSM
Capital Rx's Clearinghouse Model is an industry first pricing model that connects buyers and sellers and rebuilds trust across the supply chain. At the center of Capital Rx's Clearinghouse Model is a cloud-native technology platform that provides plan sponsors with full visibility to the unit price for all drugs in real time. Through this new pricing framework, Capital Rx eliminates arbitrary price variability for patients and employers.
About 3 Axis Advisors
3 Axis Advisors is a highly specialized consultancy that partners with private and government sector organizations to solve complex, systemic problems and propel industry reform through data-driven advocacy. With a primary focus on analyzing U.S. drug supply chain inefficiencies and cost drivers, 3 Axis Advisors offers expertise in project design, data aggregation and analysis. 3 Axis Advisors arms clients with independent data analysis needed to spur change and innovation within their respective industries. The firm's principles also manage 46brooklyn Research, a non-profit organization dedicated to improving the transparency and accessibility of drug pricing data for the American public. To learn more about 3 Axis Advisors, visit www.3axisadvisors.com
SOURCE: Capital Rx