Transforming Kidney Care and the Impact on Pharmacy Benefit Managers

Ben H.

Hatched by Ben H.

Sep 05, 2023

3 min read


Transforming Kidney Care and the Impact on Pharmacy Benefit Managers

Duo Health, a groundbreaking medical group focused on providing comprehensive care for patients with chronic kidney disease (CKD) and end-stage kidney disease (ESKD), has recently partnered with Gold Kidney Health Plan in Arizona. This collaboration aims to revolutionize the way kidney patients receive medical care, offering them an enhanced model of care that addresses their specific needs.

In the realm of healthcare, pharmacy benefit managers (PBMs) play a crucial role in ensuring patients have access to affordable medications. However, recent restrictions imposed by drugmakers on 340B pharmacy sales have the potential to disrupt PBMs' profitability. PBMs typically profit by directing patients to pharmacies owned by the same parent company and by charging providers referral and dispensing fees for filling prescriptions. With drugmakers limiting discounted prescription sales to certain pharmacies participating in the 340B program, which was initially designed to support safety-net providers, the financial stability of PBMs may be at risk.

The 340B drug discount program was established by Congress in 1992 to provide hospitals that serve low-income and uninsured patients with substantial discounts on medications. The program's intention was for participating hospitals to reinvest the savings into charity care. Currently, approximately 2,600 hospitals participate in the 340B program, including cancer centers, children's hospitals, rural providers, and others. These hospitals often collaborate with external pharmacies to fulfill 340B prescriptions for their patients.

The partnership between Duo Health and Gold Kidney Health Plan highlights the growing need for innovative approaches to kidney care. By combining their expertise and resources, they aim to deliver a new model of care that caters specifically to the requirements of kidney patients in Arizona. This partnership recognizes the unique challenges faced by individuals with CKD and ESKD and seeks to provide them with the comprehensive support they need.

While the restrictions on 340B pharmacy sales may impact PBMs' profitability, it also underscores the need for greater transparency and accountability within the healthcare industry. By limiting the availability of discounted medications, drugmakers inadvertently put pressure on PBMs to find alternative solutions and strategies to address patients' needs. This situation presents an opportunity for PBMs to reevaluate their business practices and explore new avenues for revenue generation and cost optimization.

In light of these developments, it is essential for all stakeholders within the healthcare ecosystem to adapt and find innovative solutions. Here are three actionable pieces of advice for pharmacy benefit managers, medical groups, and healthcare organizations:

  • 1. Embrace Collaboration: Foster partnerships and collaborations between different healthcare entities. By working together, PBMs, medical groups, and health plans can leverage each other's strengths and resources to deliver more comprehensive and cost-effective care to patients.
  • 2. Explore Value-Based Care Models: Move away from fee-for-service models and embrace value-based care arrangements. By focusing on patient outcomes and incentivizing providers based on quality and efficiency, healthcare organizations can ensure that patients receive the highest standard of care while optimizing costs.
  • 3. Invest in Technology: Embrace digital solutions and telehealth to improve access to care and enhance patient outcomes. By leveraging technology, healthcare organizations can reach patients in remote areas, improve care coordination, and streamline administrative processes, ultimately leading to better patient experiences.

In conclusion, the partnership between Duo Health and Gold Kidney Health Plan represents a significant step forward in transforming kidney care in Arizona. While the restrictions on 340B pharmacy sales may pose challenges for PBMs, they also present an opportunity for innovation and collaboration within the healthcare industry. By adopting a patient-centric approach, exploring new care models, and embracing technology, stakeholders can navigate these changes and deliver better outcomes for kidney patients and the healthcare system as a whole.

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