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PBM Benefit Insights

Mail Order: Greater discounts do not always equal greater savings

Retail drug pricing begins with what is called the MAC (Maximum Allowable Cost), this is a ceiling cost on most generic medications. For example, Amoxicillin 500mg, a commonly prescribed antibiotic, typically wouldn’t cost an employer a MAC greater than 50 cents per pill.

Retail outlets shop around to use the drug manufacturer with the lowest costs. This makes business sense as it is a necessity to keep operating costs low. However, mail order facilities are not retail outlets, and have different business priorities. Mail order facilities may use just ONE manufacturer which may not always be offering the lowest cost. If they use MAC pricing at all, it is substantially different from retail Mac and it is not uncommon to see a prescription filled at a mail order facility cost 3 times more than retail.

There are alternatives to a Mail Order network that can generate actual plan savings. Let APC negotiate aggressive discounts on the plan’s lowest MAC setting. APC can help design a plan that can provide your members with convenience and true savings across the board.

If you’re unsure what type of networks your PBM will allow or need guidance on choosing a plan that fits, please contact an APC consultant for a complimentary plan review.

Mail order services have always been depicted as a cost reduction strategy for pharmacy plans, but the untold truth is it’s not. While most PBM contracts show a greater discount at mail order, it’s important to note that it is usually a greater discount on a greater cost.

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