NovoLogix brings cost savings structure to emerging world of medical pharmacy

Insurers/Employers can save millions a year lost to imprecise and inconsistent coding

EDEN PRAIRIE, MINN. (Jan. 13, 2010) – In the world of medical pharmacy, drug prices essentially are a free-for-all, with an explosion of new biotech drugs about to come to market. For example, a reasonable price for the injectible drug infliximab would be $59.22 per unit, but NovoLogix has found it being paid at anywhere from $0.78 per unit to $671.00 per unit due to imprecise and inconsistent coding.

Medical pharmacy includes pharmaceuticals covered by the medical benefit – not the pharmacy benefit – and administered in a physician’s office, an infusion suite, or a patient’s home. For example, for oncology alone there are more than 600 new drugs that fit this description in the pipeline.

Rising at the rate of 10 to 15 percent annually, the cost of drugs and services that qualify under the medical benefit is expected to eventually outpace drugs paid under the traditional pharmacy benefit. Most states, insurers and large employers do not have sophisticated programs in place to track pharmaceutical products and procedures covered under the medical benefit, unlike the electronic systems used by pharmacy benefit managers (PBMs).

“Back in the mid-‘70s, the approach to processing pharmacy claims was giving a sheet of paper to the pharmacist and asking him to write down the name of the patient, the name of the drug, and the dollar amount,” said David J. McLean, Ph.D., CEO of NovoLogix. “When we look at some of the things being done with drugs paid for under the medical benefit today, some aren’t much further along.”

NovoLogix uses technological innovations to improve the way services and drugs are priced, paid for, and delivered to patients across the U.S. The company has issued a white paper, “Innovations in Healthcare Technology:  Managing Medical Pharmacy,” that explores the issue, as well as hosting multiple conferences for medical pharmacy leaders from around the country. The white paper is available at www.novologix.net/about.htm.  

Key concepts discussed include:

  • A limiting factor for medical pharmacy stakeholders, including patients, health plans and healthcare providers is the inability to gather accurate, timely information and integrate this information into decision making.
  • Challenges facing the industry stem from the systems in place that typically utilize Healthcare Common Procedure Coding System (HCPCS) J-codes, rather than the more precise National Drug Codes (NDC), resulting in reimbursements that can vary by thousands of dollars for the same dose of the same drug.
  • The claims process is often performed manually, lengthy lag times can occur, and the data that result are often incomplete or inaccessible.
  • Future goals for managing medical pharmacy spend include improving clinical outcomes, implementing utilization management programs, and creating data consistency across the pharmacy and medical benefits.

With many health plans moving toward performance-based contracts with pharmaceutical companies (manufacturers), the importance of NDCs is growing.

Using its MedRx suite of services, NovoLogix equips organizations to continuously deliver improved clinical, financial, and humanistic outcomes related to medical pharmacy for patients, providers and payers. NovoLogix’s innovative information system and services platform creates customizable, PBM-like capabilities that effectively and efficiently manage drugs covered under the medical benefit.

NovoLogix also delivers significant cost savings. An organization can save between $6 million and $10 million per year, based on a medical pharmacy spend of $100 million per 1 million members.

About NovoLogix:

NovoLogix, Inc. is a medical pharmacy benefit management company delivering a breakthrough Software-as-a-service (SaaS) medical pharmacy information system called MedRx. NovoLogix manages the pharmaceuticals covered under an insurer’s medical benefit. Drugs covered under the medical benefit are usually dispensed in either a physician’s office or a patient’s home and include injectables and infusables. They are quite often biotech drugs, commonly used to treat diseases such as cancer, rheumatoid arthritis and multiple sclerosis. MedRx’s SaaS technology and management model has consistently reduced these relatively unmanaged pharmaceutical costs. These savings can be realized within the rapidly increasing $9.87 per member, per month (PMPM) medical benefit pharmacy spend. NovoLogix is dedicated to increasing the level and quality of data available to manage these disease states.

< Back to News