Pharmacy reimbursement is currently comprised of two
elements: Average wholesale price (AWP) for the drug
ingredient(s) and a dispensing fee for the pharmacist services.
In exchange for the volume of prescriptions associated with
group drug plans, pharmacies extend a percentage discount off
of AWP to employers and other drug benefit plan sponsors.
The survey collects reimbursement data from employers for
retail, mail, and specialty pharmacy dispensing channels as
shown in Table 33. The average percentage discount off of
AWP for mail generic prescriptions is collected because not
all employers apply maximum allowable cost (MAC) pricing
to generic prescriptions dispensed by mail-service pharmacies.
MAC pricing is used by 86.6% of employers for retail generic
prescriptions and 61.1% of employers for mail-service generic
prescriptions, which is an increase since 2007.
Specialty pharmacy reimbursement for 2008 is very similar to
retail brand rates with a slightly higher average dispensing fee.
The average discount off of AWP is 16.8%, with an average
dispensing fee of $2.61.
Negotiated AWP prices for retail brand and generic prescriptions
are flat or show a very modest decline. AWP discounts
for mail-service declined.
A majority (79.7%) of employers do not have mail-service
dispensing fees. As a result, mail-service reimbursement data
are split into two groups: employers with dispensing fees and
employers with no dispensing fees, as detailed in Table 36.
The AWP discounts for employers with no dispensing fees
are more reflective of today’s competitive reimbursement for
mail than the overall average for all employers in Table 35.
The steady erosion of pharmacy reimbursement, particularly
for mail-service, continues its 10-plus year trend. A total of
49.1% of employers said they did not know their pharmacy
reimbursement rates. Understanding how much pharmacies
are paid for each prescription is a critical step in drug cost