PODCAST: 4 Pharmacy Insights for 2024
AI pricing, prescription reimbursement, DIR fees, and more: It’s all on the table in 2024.
If we could look into a crystal ball for 2024, what would we see for pharmacy? Episode 2 of The Inside Scrypt: The Podcast tackles this very topic. Miranda Rochol, SVP of Provider Solutions at Prescryptive Health, and Kevin Russell, Prescryptive Pharmacy Director shared their views in a wide-ranging discussion with host JD Rinne. Let’s recap the biggest insights from the conversation.
Prescription reimbursement is changing
I think that 2024 is going to be a year of reimbursement transition in pharmacies. There’s going to be a lot of disruption going on with low payments combined with new models of pharmacy coming out. And, you know, in our pharmacy, when we stopped taking CVS Caremark, we said we were able to retain over half of our business as cash prescriptions.
And we did that because we had a pricing model that made sense for patients, and it was more important that our pharmacy had great service and that we were able to help patients with drug shortage issues. And keep in mind that, you know, a lot of patients nowadays have high-deductible plans and their insurance isn’t really helping that much. And we found that particularly for generic drugs, it was a very easy sell to retain that business at our pharmacy, using profitable pricing and still giving the patient really great service.
I think from a prescription reimbursement perspective, that is a continuous struggle. There’s lots of new models like say, a direct to employer pricing model where employers and pharma manufacturers come together on a network to offer competitive pricing that may help pharmacists.
A cash transaction strategy is a must in 2024; enter AI Pricing
It’s interesting, but there’s actually a direct correlation between prescription cost and adherence. According to a 2020 report by IQVIA, the prescription abandonment rates are less than 5% when the prescription carries a zero co-pay but jump to 45% when the cost is over $125 and 60% when the cost is more than $500. Imagine if we’re able to empower the patient to see that before the pharmacy gets the prescription and see if there’s other options for that patient to pay and cover that expense.
And then if it’s all integrated into the pharmacy system and the patient’s mobile experience, which we all have one in our hand every day. Everybody will benefit from that additional transparency and that care coordination. That’s really what patients want. That is what we want when we want to be consumers of our own health care.
…an AI model for patients … could help increase reimbursement for the pharmacy, could increase adherence for the patient, and potentially help increase the pharmacy profits.Miranda Rochol, SVP of Provider Solutions
And changes to DIR fees mean maximizing your cash business now
Theoretically with this starting in January, we’ll see what we’re actually going to get paid for the prescription at the point of care versus not knowing what that’s going to be later. That still may result in poor reimbursement, but at least it’ll be transparent. But what it also does is it allows you to know whether cash options would be better or whether you want to not accept an insurance. You’ll be able to understand that dynamic much sooner than you would today.
So the other thing about DIR fees is that the pharmacies will still have to be paying their retroactive fees for 2023 at the beginning of 2024. So this really creates a cash flow problem. But really try to maximize your cash pay business during that time can help you with that cash flow problem.
The first three months of the year, it’s very likely that the pharmacies will be paying the dealer fees that they were retrospectively charged from 2023. So the cash flow problem for the pharmacy is, especially in the beginning of 2024, is going to be extremely challenging. However the changes will also force increased transparency in the PBM industry. And all of us know that we want more transparency around that industry. So ultimately the changes that are coming will be good. It’s just going to be hard for us to get there.
New technology like digital prescriptions offer opportunities for pharmacists
Let’s go back in history. Twenty years ago, patients were given their prescriptions as a piece of paper. Some of us remember it maybe a little bit better than others. But we evolved and introduced electronic prescribing, and we thought that that would actually solve medication adherence. We thought it might help in how much time it takes to fill a prescription.
I remember in the early 2000 when I was working at a pharmacy, a patient would drop off their piece of paper and we would tell them it be 30 minutes, 60 minutes, tomorrow. But that was an immediate interaction that the patient could understand. They also would be able to understand the price because I would be processing the prescription right in front of them.
But when electronic prescribing was introduced, we lost that interaction. We removed the patient from the process and that had unfortunately a different impact to the overall care experience for that patient.
So I think the technology I’m most excited for is technology that empowers the patient to become the consumer of their health care, of their prescriptions. And with that patient-first technology, pharmacies will likely get more patients, and those patients will be more empowered.
So technology that empowers the patient to be more educated about their prescription before the pharmacy receives and fills it means the pharmacy staff can be more efficient while still offering that best-in-class patient care.
Over half of patients say that they abandon prescriptions because it’s too expensive. We can help a lot with that. You know, the pharmacy staff can certainly help patients find better alternatives. But what if the patient already came to your counter already knowing what their formulary alternatives are and the price of their medicine, if they already know that information, it’s much easier for the pharmacy to help them.
Prescriptive has a technology in our patient-first platform that offers formulary switches when there’s a medication available with the same efficacy and more affordable price. The switch can happen at the doctor’s office. Think of the possibilities for the pharmacy to be able to take care of this patient and not have prescription abandonment. It’s going to be a real help for the pharmacy to have patients have that tool available to them.