Arxcel - Excellence in Prescription Benefit Management

In this issue:

PBM Audits

Drugs From Canada

FDA Update

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Fourth Quarter 2004

Arxcel News Brief

PBM Audits: Building Trust in the
Prescription Benefit Industry

While an audit is an effective tool used in many industries as a way to evaluate an organization’s financial performance, the practice has only recently been applied by plan sponsors who want to take a closer look at their Pharmacy Benefit Manager (PBM).

Performed regularly by health plan payors on their contracted vendors, audits have not been a common practice for health plan payors when it comes to their PBMs. In part, this is due to the tenuous relationship that can develop during the course of an audit and its potential findings that may require financial restitution on the part of the PBM.

Often a painstakingly thorough examination of a company’s internal operations and procedures, an audit results in a detailed analysis of the company’s financial operations. Because PBM audits identify and correct inaccuracies in the areas of claims processing and reimbursement, the plan sponsor has an opportunity to improve its financial performance.

However, the trend is changing as more and more health plan sponsors are seeking to perform audits of their PBMs.

What needs to be reviewed during a PBM audit? An integral part of the review is to analyze the prescription claims data processed by the PBM, which allows the auditor to compare the claims history and payments against industry norms and contracted terms. An audit can also identify opportunities for additional savings in the pharmacy budget.

Keeping in step with industry trends, Arxcel has partnered with a technology firm to develop state-of-the-art auditing tools that can be used to evaluate the performance of PBMs. To find out more about these types of audits and how they can impact your prescription benefit program, contact Arxcel.

The Debate Over Drugs from Canada

With prescription drug prices continuing to soar, more and more Americans are struggling to afford the drugs they need to improve and maintain their health. And the hardest hit by this trend are those who can least afford it – the elderly and working poor.

Given this scenario, many Americans are searching desperately for alternative ways to obtain affordable prescription drugs. One of the most controversial options, which has received significant media and legislative attention in recent months, is the purchase of drugs from Canada.

At the heart of the issue, buying drugs from Canada is illegal in the United States. Opponents of this practice cite safety concerns, claiming that the quality of drugs available to Canada is not equal to the quality of those purchased here.

On the other hand, proponents argue that the majority of drugs manufactured for distribution throughout North America are from the same manufacturing plant. Further, the cost savings—between 30% and 50% for brand name drugs—are undeniable.

Individuals are not the only ones seeking drugs from Canada. More and more plan sponsors are looking at ways to implement a Canadian program for inclusion in their pharmacy benefit programs.

These programs can be successful as long as the plan sponsor works with a reputable Canadian pharmacy. A reputable pharmacy will ship only drugs that have received approval from Health Canada, which is Canada’s version of the Food and Drug Administration. Among its numerous policies, Health Canada will not ship drugs that are controlled substances or perishable, thereby alleviating concerns regarding drug quality.

While the outcome of the battle over Americans purchasing drugs from Canada is unclear, it is apparent that both individuals and plan sponsors will continue to investigate and pursue this opportunity.

FDA Update

Vioxx – Merck & Co., Inc. announced a voluntary withdrawal of Vioxx (rofecoxib) from the U.S. and worldwide markets due to safety concerns over an increased risk of cardiovascular effects, including heart attack and stroke, in patients taking Vioxx.

Merck will reimburse consumers for unused Vioxx. Patient’s seeking a refund should return any unused Vioxx tablets and oral suspension via regular U.S. mail to:

ATTN: NNC Dept.
Merck Order Fulfillment Center
1645 Satellite Blvd.
Duluth, GA 30097

For further information access www.vioxx.com or www.merck.com.

Actra-Rx and Yilishen – The FDA warned consumers not to purchase or to consume diet supplements Actra-Rx or Yilishen, two products promoted and offered for sale on Web sites for treating erectile dysfunction and enhancing male sexual performance.

FDA testing of Actra-Rx found that the product contained undeclared prescription-strength sildenafil. An interaction between sildenafil and certain prescription drugs containing nitrates (such as nitroglycerin) or nitrates found in illicit substances (such as amyl nitrate) may cause a significant lowering of blood pressure to an unsafe level.

Consumers who have taken Actra-Rx or Yilishen should stop taking it and consult with their health care providers regarding erectile dysfunction treatment.