Express Scripts announces new 'cost-plus' drug pricing model

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Express Scripts has announced a new pharmacy network option that offers "cost plus" drug pricing for employers and health plans. 

Clients pay the estimated acquisition cost that the pharmacy pays for the medication, plus a small markup for pharmacy dispensing and service costs.

The "cost plus" model option covers all brand, specialty and generic medications on the client's formulary. Other models in the market offer pricing only on a select group of generics at a small group of pharmacies, Express Scripts said.

Express Scripts is the pharmacy benefits management business of Evernorth, a subsidiary of Cigna. The new pharmacy network option, ClearNetwork is for employers, government organizations and health plans.

WHY THIS MATTERS

The new model is designed for clients seeking an option for cost-based pricing for prescription drugs and pharmacy services. 

ClearNetwork clients pay an estimated acquisition cost for individual medications, in addition to a small markup for pharmacy dispensing and service costs.

The network uses the lowest of several established third-party industry benchmarks – including Predictive Acquisition Cost, National Average Drug Acquisition Cost, and Wholesale Acquisition Cost – to estimate the acquisition cost for an individual drug. Then, pharmacy and administration costs are added. First, a flat fee goes to the pharmacy to dispense medications. Second, a fee of no more than 15% of the cost of the drug is added. This fee is shared with participating pharmacies to ensure a reasonable profit for them, and covers the management of claims and network services by Express Scripts, the company said.

THE LARGER TREND

Available beginning in early 2024, Express Scripts ClearNetwork will apply to all prescription drugs on a plan sponsor's list of covered generic, branded and specialty medications. Express Scripts is making this reimbursement model available to a broad network of more than 65,000 retail pharmacies in its network.

This latest pharmacy pricing model builds on transparency options offered by Express Scripts, such as ClearCareRx, which was announced earlier this year. Programs such as the Copay Assurance Plan, SafeGuardRx, Embarc Benefit Protection and the Patient Assurance Program, combined with negotiation and medical management, helped save consumers and clients more than $56 billion in 2022, Express Scripts said. 

ON THE RECORD

"We are constantly innovating to provide our clients with new options that meet their needs and enable them to build custom pharmacy benefits that best support their plans and members," said Adam Kautzner, Pharm.D., president of Express Scripts. "The Express Scripts ClearNetwork leverages our scale, relationships, and deep understanding of the pharmaceutical supply chain to create an easy-to-follow option for clients looking to simplify what they pay for prescription drugs, while supporting a seamless, convenient member experience."

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org