The Importance of Business Transparency from Hospice Pharmacy Vendors

Patrick White, M.D.

Chief Medical Officer, BJC Home Care

In light of all that is negatively trending within the media about drug pricing hurdles nationwide: Do you think there are sufficient levels of business transparency from pharmacy vendors, or benefit managers, when it comes to pharmaceutical purchasing options for hospices expected to pay for medication treatments related to their patients’ terminal disease states?

I think transparency is clearly lacking. It is very concerning when I hear about episodes where commonly used medications at end-of-life are marked up as high as 10,000% over their real acquisition cost. These highly inflated generic drug costs have the potential to lead to patients not receiving optimal therapies that could help better relieve their symptoms. This process appears to be increasing among my hospice colleagues with vendors often chosen for niche service levels.

My organization has had the benefit of working with a transparent pharmacy benefit manager who has been a great partner. However, as a Chief Medical Officer these days you have be a smart shopper and really dig through the details to obtain a pass-through purchasing model that keeps you from paying vendors “spread money” off the products dispensed, or you can incur massive fees that are hard buried in the notes. I feel like a forensic accountant at times and much prefer to pay a low administrative fee and not have to continually watch every medication. This is especially true as opiate supplies tighten – putting pressure on prices.

What communication do you believe is lacking? What can pharmacy professionals do to improve communication, and how can they inform that transparency? On the other side, what questions should hospices, or payers, be asking to facilitate such transparency?

I would urge hospices nationwide not to accept today’s drug prices and opaque models. Organizations should host Request for Proposals at least every couple years and work with their colleagues to find out what strategies have been effective. Strong peer networks for hospice leaders are critical to hold these groups accountable.

Mary Mihalyo

Chief Executive Officer, Delta Care RX

No, there are not sufficient levels of business transparency among all vendors serving the hospice industry today. We have worked tirelessly over the past decade to promote a fair playing field for hospices (clients of ours or not) with respect to achieving purchasing power equal to what non-hospice health care payers enjoy. We absolutely embrace, practice, and promote real business transparency.

What are the areas where there is a lack of transparency? Also, with negative media in mind, and a pervading sense of distrust, what do you believe hospices are looking for when it comes to selecting pharmacy vendors or benefit managers? On the other count, what do you recommend hospices keep an eye out for? Why?

The lack of transparency primarily resides within relationships between traditional Hospice Pharmacy Benefit Managers (PBMs) or large Rx mail order providers. Hospices need to keep an eye on pricing spreads, fees for formulary non-adherence, rogue administrative fees, and other carefully hidden costs buried within contracts.

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