AWP

Currently TDH lists as the acceptable standard:

·        Three prescription drugs a month.

·        The Net Cost is the Red Book® AWP minus 10%.

·         The drug-dispensing fee is $5.38.

 

Medicaid rates are:

Brand = AWP – 11% + 6.11

Generic = MAAC + 6.11

 

Many entities have negotiated a lower net cost:

Brand = AWP – 12% + 5.15

Generic = AWP – 40% + 5.15

 

One entity negotiated as low as:

Brand = AWP – 15% + 2.75

Generic = MAAC + 2.75

 

TDH is looking to drop the current standard to be AWP-40%, because the federal government has had issues with SSI reimbursements. This is expected to take effect as of September 1, 2005.

 

Brand vs. Generic Drugs: What's the Difference?

The main difference between generic and brand name drugs is cost. On average, generic drugs are priced 45% lower than their brand-name equivalents.

·          The generic manufacturer must prove that the generic version of the product:

·          contains the same active ingredient,

·          is identical in strength, dosage form, route of administration,

·          has the same indications, dosing and labeling, is bioequivalent,

·          meets the same batch-to-batch requirements for strength, purity and quality,

·          and, is manufactured under the same strict good manufacturing practice regulations as the branded pharmaceutical.

 

 

Case Study

 

Entity with negotiated rates:

 

Brand = AWP – 15% + 2.75

Generic = MAAC + 2.75

 

Per Month

Average Enrollment: 1200

Average Rx filled per client: 1.6

Average Rx filled: 1920

Average $/RX: $52

Monthly Cost to Entity: $100,000

 

Average County Cost: $200 / RX / Month

Monthly Cost to Entity: $384,000

 

Potential Savings of 74%

 

 

Direct Expenses include:

$1 PMP (per member per month) to PBM (Standard price)

 

40,000 Texans are under 21% FPIL at $1 PMP - $40,000 / Month (Expense)

These 40,000 clients are going to fill 64,000 prescriptions (Income)

 

CONS: Pharmacists will be against.

 

Expense is measured in clients/members

Income is measured in prescriptions filled

 

What are the benefits of TXRX?

·        Negotiate competitive contracts

·        Ensure PBN is in compliance

·        Track and Trend new drugs

·        Reduce administrative overhead for entities