Download Drug cost calculator –Frequently Asked Questions

January 2017 – For External Use
Drug cost calculator –Frequently Asked Questions
What is the drug cost calculator?
Prime Therapeutics’ drug cost calculator is a powerful reporting and analytics tool that allows health plans and
employers to calculate the estimated use and cost impact of new, and/or high cost drugs. Whether the Food
and Drug Administration (FDA) has approved or is expected to approve a blockbuster/notable drug, this tool
can empower users to make informed decisions about how to best manage pharmacy costs.
Why is the drug cost calculator helpful?
With more medicines, particularly specialty medicines, expected to be approved by the FDA and launched
with very high price tags, this tool can proactively help Prime’s clients (health plans or employers) prepare for
these new costs and put necessary management strategies in place.
What does the drug cost calculator do? How does it work?
The calculator estimates the number of individuals with a particular diagnosis who would potentially need to be
treated with a new, and/or high-cost drug. It also provides an estimated total per member per month (PMPM)
cost to treat that population. Prime researchers conducted extensive analyses on selected disease states that
have or will have new drug treatment regimens available, and this information powers each calculator. The
drug cost calculator is meant to be a first step toward awareness and used in discussions on how Prime can
help health plans and employers manage high cost drugs.
Users only need to input these two or three data points:
1) Number of covered commercial lives*
2) The estimated or actual drug price (entered by user if drug not yet FDA approved)
3) The level of management (aggressive v. minimal or none) a health plan/employer wishes to deploy**
* Medicare and Medicaid forecast available on the Primary Biliary Cirrhosis (PBC)/NASH calculator (only for Prime’s Book of
Business)
**available only on select calculators
After the above information is provided, the calculator produces the following estimates:
1) The number of individuals in their selected population who meet the criteria and would be eligible for
the selected drug treatment
2) The total annual cost of the drug therapy
3) The total PMPM cost
Who is the drug cost calculator for?
Prime designed the calculator for its clients, but it can be used by any health plan or employer. Prime’s health
plan clients are encouraged to use the tool with the assistance of their Client Engagement Team or Clinical
Program Manager as they have access to plan-specific calculators. Please note, the tool works best for
employers or groups with 10,000 or more employees/covered lives because the prevalence of these
conditions is often very low. Also, calculators are generally only available for commercial populations;
however, PBC/NASH calculator does provide a Prime book of business estimate for Medicare and Medicaid.
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January 2017 – For External Use
Will all specialty drugs be available in the drug cost calculator?
No. This tool is only for select high-cost drugs expected to have a considerable cost impact on clients’ and
employer groups’ PMPM spend. Cost calculators are based on a particular new drug and its impact. However,
there are some instances, such as Hepatitis C, where various treatment regimens are combined and thus
costs are based on all the latest treatments for that disease state.
Where is the calculator located?
A calculator based on Prime’s commercial book of business only can be found on Prime’s main website
primetherapeutics.com. This can be used by anyone. Plan specific calculators are protected from public view
and can be accessed by Prime’s client engagement teams and clinical program managers who will then
operate the tool with or on behalf of each plan.
Will biosimilars be available in the drug cost calculator?
No. Biosimilars will not be available at this time as those yield cost savings for plans, not an additional
expense. These may be considered in the future.
Can the drug calculator be used AFTER a drug receives approval?
Yes. The difference between using a calculator after a drug is FDA approved/launched is the price is public.
Prime recommends using it prior to a drug’s approval in order to put the appropriate management strategies in
place in time for drug launch.
How often will updates be made to the drug calculator, or will new drugs be added?
Prime plans to update a calculator whenever a drug’s price is announced, or following a significant change in
the marketplace (e.g., a competing drug is approved and prices change, guidelines for treatment change).
Prime’s goal is to reassess the data the calculator uses for each disease state/diagnosis at 6 months and one
year after its development. New drugs for different disease states will be added as Prime identifies potential
drugs that could be blockbusters or come at a very high cost and are likely to receive approval. Please check
back monthly for any updates.
What is the forecast methodology?
Each calculator explains the methodology used at the bottom of the page. When a drug price is known (after
approval or at launch) the price will be updated and is based on Wholesale Acquisition Cost (WAC).
Are calculations based on a plans’ specific information?
No. Each calculator is based on Prime’s commercial book of business of more than 15 million members in
aggregate. Analysis includes pharmacy claims and medical diagnosis history. When specific medical claims
diagnosis history is not available for particular disease states/conditions, other clinical indicators are used.
Please see each calculator for specific methodology used.
Can individual member data be identified? How are you ensuring privacy?
Prime takes the privacy of our members very seriously, thus no specific member data is shared in the
calculator. Prime researchers analyzed our claims data to determine the prevalence of a condition per
100,000 people. The tool references the estimated prevalence of that condition in Prime’s commercial book of
business when calculating estimated costs. We do not provide an actual number of how many members have
a condition at any given time. Simply put, the tool takes the input of a plan’s or employer’s size and the
prevalence for each drug, and then uses that data to estimate the number of lives likely to be treated and
treatment costs.
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January 2017 – For External Use
How accurate are the drug cost calculator estimates?
Prime uses both pharmacy and medical claims data to estimate the cost impacts. Our goal is to not
underestimate. We want to provide users with a realistic “worst case” scenario so they can prepare in advance
to manage these high-cost treatment regimens. Please note that this tool is generally most accurate for
employers with 10,000 lives or more. This cut-off point changes for each drug calculator as it depends on the
prevalence of the disease. For example, employers with fewer than 10,000 employees may calculate zero
members in their group. However, an employer can override the “# of lives” input if preset prevalence is
believed to be low (or too high); thus that input is “optional.” Additionally, it is possible for the calculator to
display 1 member with a condition in a specific Plan’s estimate, while the Book of Business calculator would
show zero. This can happen when disease prevalence is extremely low.
Can the tool provide more specific data (or something else)? Can we request additional features?
Our goal with this tool is to provide clients with an indication of how a new, and/or costly high cost drug
treatment might impact a given population. It’s meant to be easy, require limited inputs, and provide a forecast
to serve as a starting point for conversations on how to best manage high cost drugs.
Who do I contact if my question is not answered here?
Prime’s clients should contact their Clinical Program Manager or their Regional Client Director. Employer
groups may contact their Prime account executive. All others should submit their question to
[email protected].
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