Module 3
Managing Drug Spend in Practice
Formulary and utilization tools and where they become barriers, the two levers that change price without changing therapy, and why nearly every published figure is the wrong number.
By the end of this module, you will be able to:
- Aim utilization management at waste rather than at indicated therapy
- Apply site of care and substitution, and answer the objections honestly
- Identify whether a figure or contract term is gross or net of rebates
- Formulary and Utilization Management The standard tools for controlling drug spend, what each is good at, and the line where management becomes a barrier to indicated care. About 5 min
- Site of Care and Substitution Two levers that change what a drug costs without changing what the patient receives. They are the most defensible savings available. About 5 min
- Gross, Net, and the Rebate Problem Nearly every published drug spending figure is gross. Rebates can be a large share of the price, and which number you use decides which decision looks right. About 5 min
Module quiz
Answer all questions to see your score.
1. When is utilization management least useful?
It does not change what is ultimately dispensed. It changes when, after how much clinician time, and whether the patient gives up in the meantime.
2. What is the honest objection to moving infusions out of hospital outpatient departments?
That does not make site-of-care strategy wrong. It means anyone advancing one should know they are shifting a cross-subsidy and be able to say so.
3. How can switching from a rebated brand to a cheaper generic raise net cost?
One manufacturer reported rebates and fees at about 40 percent of its GLP-1 products' cost. Knowing which number you are judged on is the entire skill.