Life Sciences

Wholesale acquisition cost reimbursement uptake means more consistency for providers, payers

Medicare & Reimbursement Advisor Weekly, December 4, 2009

The following are some trends circling in the reimbursement universe:

  • First Data Bank is listing pharmaceutical manufacturer–suggested pricing for drugs and biologics at 20%–25% of wholesale acquisition cost (WAC). On the flip side, another WAC model has emerged: it’s the list price that the wholesaler pays to the drug company.
  • Major managed care plans, such as CIGNA and Aetna, continue to use average wholesale price (AWP), but use the WAC as well—typically reimbursing at WAC +5% up to WAC +9%, says John Aforismo, Pharm, RPh, partner at RJ Healthsystems in Wethersfield, CT. RJ Healthsystems released a new WAC methodology this month for the commercial payers to use for reimbursing physicians, mail-order pharmacies, and specialty pharmacies.
  • Although more than 70% of commercial contracts are tied to AWP (usually AWP minus something such as 18%–23% for home infusion companies), there’s uptake in the WAC model because it carries less fluctuation than AWP, and payers and providers like that.
  • Plans are using average sales price (ASP), mostly for physician groups, and the ranges are often tied to various outcomes and other contractual arrangements, such as aligning around hematocrit level dosing guidelines. ASP +6% up to ASP +24% is a wide range but represents where payers are willing to go with ASP for certain physicians.