Insurance story: Pharmacy Benefit vs Medical Benefit

Insurance story: Pharmacy Benefit vs Medical Benefit

Specialty drugs are notably expensive, often exceeding $1,000 per month. These drugs are used to treat complex, chronic conditions such as rheumatoid arthritis, multiple sclerosis, and cancer, and they often require special handling or monitoring. They are administered and reimbursed through two different channels: Pharmacy Benefit (Rx) and Medical Benefit.

>A pharmacy benefit plan is an insurance policy that covers the costs of prescription medications for members. This includes drugs that are self-administered at home, such as oral medications and self-injectables. Drug tiers affect patient out-of-pocket costs, including copays and coinsurance. The higher the tier, the greater the out-of-pocket expense for the patient.

>On the other hand, some drugs are administered in hospital settings, outpatient facilities, infusion centers, clinics, or healthcare providers' offices and are covered under the Medical Benefit. The price variability of these medications is high.

Pharmacy companies generally prefer pharmacy benefits (PBMs) over medical benefits because PBMs allow for greater control over drug costs and utilization, access to rebates, and streamlined claim processing, ultimately leading to potentially higher profits for the company. And patients also prefer drugs which can be administered at home as it saves time and comfort of home.

One example, initially, Humira was administered in a healthcare provider's office and covered under the medical benefit. Over time, it became available for self-administration at home, allowing it to be covered under the pharmacy benefit

"Follow" me for more such storiesInsurance story: Pharmacy Benefit vs Medical Benefit

Specialty drugs are notably expensive, often exceeding $1,000 per month. These drugs are used to treat complex, chronic conditions such as rheumatoid arthritis, multiple sclerosis, and cancer, and they often require special handling or monitoring. They are administered and reimbursed through two different channels: Pharmacy Benefit (Rx) and Medical Benefit.

>A pharmacy benefit plan is an insurance policy that covers the costs of prescription medications for members. This includes drugs that are self-administered at home, such as oral medications and self-injectables. Drug tiers affect patient out-of-pocket costs, including copays and coinsurance. The higher the tier, the greater the out-of-pocket expense for the patient.

>On the other hand, some drugs are administered in hospital settings, outpatient facilities, infusion centers, clinics, or healthcare providers' offices and are covered under the Medical Benefit. The price variability of these medications is high.

Pharmacy companies generally prefer pharmacy benefits (PBMs) over medical benefits because PBMs allow for greater control over drug costs and utilization, access to rebates, and streamlined claim processing, ultimately leading to potentially higher profits for the company. And patients also prefer drugs which can be administered at home as it saves time and comfort of home.

One example, initially, Humira was administered in a healthcare provider's office and covered under the medical benefit. Over time, it became available for self-administration at home, allowing it to be covered under the pharmacy benefit

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