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MARCH 26, 2024

How LTC Pharmacies Can Make the Most of New Insulin Pricing

With new price caps now in place for Medicare beneficiaries, LTC pharmacies face significant revenue cycle management challenges.. This article looks at ways the industry is reacting and highlights opportunities pharmacies can leverage to support healthy operations.

With new price caps now in place for Medicare beneficiaries, LTC pharmacies face significant revenue cycle management challenges.. This article looks at ways the industry is reacting and highlights opportunities pharmacies can leverage to support healthy operations.

Adjusting Formulary Tiers and Preferred Therapies

OptumRx recently announced they were moving eight insulins to its preferred formulary tier. The move was reportedly made to improve affordability, placing lower-cost insulins in their top tier. By doing so, the pharmacy benefit manager (PBM) is increasing the number of people who can access $35 per month insulin to 97% of their members. 


For one of the largest PBMs in the country, making this move toward member-friendly pricing for insulin is an important step, but implications go beyond benefitting members.

OptumRx recently announced they were moving eight insulins to its preferred formulary tier. The move was reportedly made to improve affordability, placing lower-cost insulins in their top tier. By doing so, the pharmacy benefit manager (PBM) is increasing the number of people who can access $35 per month insulin to 97% of their members. 

For one of the largest PBMs in the country, making this move toward member-friendly pricing for insulin is an important step, but implications go beyond benefitting members.

"PBMs placing certain products in preferred tiers and increasing access has been shown to decrease net costs, even if list prices continue to increase."

Insulins are especially susceptible to this kind of price battle as the clinical guidelines dictate what type and how it should be administered, not which brand should be administered. As an FDA-labeled biologic, there are many biosimilars on the market driving competition among manufacturers. 


In fact, PBMs successfully lowered the net-of-rebate price of Lantus once Basalgar entered the market in 2016. 


Humalog and Novolog are therapeutically similar and compete for preferred status on formularies. By leveraging demand and adjusting formularies, pharmacies and their associates can lower net-after-rebate prices for their preferred products.


LTC pharmacies and PBMs should identify insulin therapies that meet clinical and operational outcomes and place them in preferred tiers. 


While LTC pharmacies may not have the large network effects of the largest PBMs in the market, they serve a large population that requires complex therapies. Even at this scale, competition can promote net lower costs and offset some potential revenue losses associated with insulin price caps.

Insulins are especially susceptible to this kind of price battle as the clinical guidelines dictate what type and how it should be administered, not which brand should be administered. As an FDA-labeled biologic, there are many biosimilars on the market driving competition among manufacturers. 

In fact, PBMs successfully lowered the net-of-rebate price of Lantus once Basalgar entered the market in 2016. 

Humalog and Novolog are therapeutically similar and compete for preferred status on formularies. By leveraging demand and adjusting formularies, pharmacies and their associates can lower net-after-rebate prices for their preferred products.

LTC pharmacies and PBMs should identify insulin therapies that meet clinical and operational outcomes and place them in preferred tiers. 

While LTC pharmacies may not have the large network effects of the largest PBMs in the market, they serve a large population that requires complex therapies. Even at this scale, competition can promote net lower costs and offset some potential revenue losses associated with insulin price caps.

Supporting Formulary Adherence with Therapeutic Interchanges

When off-formulary drugs are prescribed, therapeutic interchanges can authorize alternatives, allowing LTC pharmacies to utilize their preferred insulin therapies more regularly.


By getting this kind of authorization from clinicians at partner facilities, pharmacies can dispense therapeutically equivalent medications that have a more advantageous net-after-rebate price. 


As a critical part of your formulary management strategy, therapeutic interchanges cover gaps where isolated instances of formulary or contractual violations occur. Think of them as your second line of defense in keeping your insulin dispensing on-formulary. 


By robustly defending your preferences, LTC pharmacies can lower wholesale acquisition costs and further support a healthy revenue cycle. 


Establishing therapeutic interchanges can be a timely endeavor, depending on how much bandwidth your in-house operations management team has. Vista is a proven expert in pharmacy and long-term care operations and has helped entities establish strong partnerships that align facilities and pharmacies on operational adjustments like therapeutic interchanges and formulary adherence.

When off-formulary drugs are prescribed, therapeutic interchanges can authorize alternatives, allowing LTC pharmacies to utilize their preferred insulin therapies more regularly.

By getting this kind of authorization from clinicians at partner facilities, pharmacies can dispense therapeutically equivalent medications that have a more advantageous net-after-rebate price. 

As a critical part of your formulary management strategy, therapeutic interchanges cover gaps where isolated instances of formulary or contractual violations occur. Think of them as your second line of defense in keeping your insulin dispensing on-formulary. 

By robustly defending your preferences, LTC pharmacies can lower wholesale acquisition costs and further support a healthy revenue cycle. 

Establishing therapeutic interchanges can be a timely endeavor, depending on how much bandwidth your in-house operations management team has. Vista is a proven expert in pharmacy and long-term care operations and has helped entities establish strong partnerships that align facilities and pharmacies on operational adjustments like therapeutic interchanges and formulary adherence.

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Providing Clinically Sound Alternatives

Once adherence is improved in a manner that supports optimal revenue potential, LTC pharmacies can go further by providing consulting services that support safer therapies for the SNF setting. 


Sliding scale insulin (SSI) therapies, for example, have been found to have potential infection control implications and require more nursing time. With approximately 25% of long-term care residents having a diabetic condition, this improvement for patients requiring insulin therapies can support better care quality for partner SNFs.

Beyond the clinical benefits, there are additional revenue opportunities for pharmacies and SNFs that utilize safer insulin therapies.

Once adherence is improved in a manner that supports optimal revenue potential, LTC pharmacies can go further by providing consulting services that support safer therapies for the SNF setting. 

Sliding scale insulin (SSI) therapies, for example, have been found to have potential infection control implications and require more nursing time. With approximately 25% of long-term care residents having a diabetic condition, this improvement for patients requiring insulin therapies can support better care quality for partner SNFs.

Beyond the clinical benefits, there are additional revenue opportunities for pharmacies and SNFs that utilize safer insulin therapies.

Supporting Partnerships

LTC pharmacies provide essential clinical support for their partner facilities. Maintaining the quality of these relationships by controlling costs and improving operations will be increasingly important as more pressure is placed on the LTC pharmacy sector. 


At Vista, we’ve created a relationship-based suite of services that support pharmacies and their partners. Our robust technology solutions help pharmacies improve operations by simplifying the management of pharmacy data and providing actionable insights. 


Alongside our adjudication and monitoring technology, we are strong advocates for our clients, actively helping pharmacies find new facility partnerships and negotiating better terms with industry entities that translate into improved revenue opportunities. 


With more efficient operations, pharmacies that implement Vista’s solutions can better serve facilities and their patients. With Vista, pharmacy data management becomes a breath of fresh air.

LTC pharmacies provide essential clinical support for their partner facilities. Maintaining the quality of these relationships by controlling costs and improving operations will be increasingly important as more pressure is placed on the LTC pharmacy sector. 

At Vista, we’ve created a relationship-based suite of services that support pharmacies and their partners. Our robust technology solutions help pharmacies improve operations by simplifying the management of pharmacy data and providing actionable insights. 

Alongside our adjudication and monitoring technology, we are strong advocates for our clients, actively helping pharmacies find new facility partnerships and negotiating better terms with industry entities that translate into improved revenue opportunities. 

With more efficient operations, pharmacies that implement Vista’s solutions can better serve facilities and their patients. With Vista, pharmacy data management becomes a breath of fresh air.

Learn More

Founded in 2018, VistaRx (Vista) provides comprehensive pharmacy data capture and management solutions for a variety of entities in the pharmacy value chain. We utilize custom-coded technology, strategies, and partnerships to help our clients improve operations and reduce dependence on third-party vendors.