Editing Openai/695d4253-5060-8005-95db-586e777927f4 (section)

=== Assistant:  ===
==== - Utilization: scripts/1,000, days supply mix (30/90), retail vs mail, specialty utilization, adherence impacts, induced utilization from benefit changes. ====
* Unit cost: ingredient cost basis (AWP/WAC/MAC), negotiated discounts, dispensing/admin fees, network differentials, specialty channel management.
* Mix: generic/brand/specialty mix, formulary tier migration, biosimilar uptake, pipeline/new-to-market drugs.
* Rebates & other recoveries: manufacturer rebates (guaranteed vs performance), DIR/price concessions, spread vs pass-through, timing/settlement risk.
* Trend and seasonality: price inflation, utilization trend, patent cliffs, one-time shocks.
* Member cost share: copays/coinsurance, deductibles, maxs, accumulator policies; elasticity/selection effects.
* Credibility & risk: experience credibility, pooling/high-cost claim volatility, margin/risk load, competitive constraints and MLR impacts (if applicable).

==== Assumption: ingredient reimbursement = AWP × (1 − discount); then add dispensing fee, vaccine fee, sales tax. ====

Given AWP (ingredient basis) = $80, sales tax = 0%, vaccine fee = $1.
* New ingredient reimbursement: 80×(1−0.72)=80×0.28=22.4080 \times (1 - 0.72) = 80 \times 0.28 = 22.4080×(1−0.72)=80×0.28=22.40
* Add fees: 22.40+1.50+1.00=24.9022.40 + 1.50 + 1.00 = 24.9022.40+1.50+1.00=24.90

New allowed amount = $24.90

==== Given: nominal copay = $15, dispensing fee = $1.50, discount = 80%. ====
Assumptions:
# Allowed per Rx = AWP×(1−0.80)+1.50=0.20×AWP+1.50 \text{AWP} \times (1-0.80) + 1.50 = 0.20\times \text{AWP} + 1.50AWP×(1−0.80)+1.50=0.20×AWP+1.50.
# Member pays the lesser of nominal copay and allowed (copay cannot exceed allowed).
# Ignore taxes/vaccine fee for this part (not provided).

Compute allowed and member pay by AWP band (use given average AWP per script):

|     |     |     |     |     |
| --- | --- | --- | --- | --- |
|     |     |     |     |     |
|     |     |     |     |     |
|     |     |     |     |     |
|     |     |     |     |     |
|     |     |     |     |     |

Effective copay:

0.20(3.10)+0.20(7.50)+0.25(15)+0.15(15)+0.20(15)=0.62+1.50+3.75+2.25+3.00=11.120.20(3.10) + 0.20(7.50) + 0.25(15) + 0.15(15) + 0.20(15)
= 0.62 + 1.50 + 3.75 + 2.25 + 3.00
= 11.120.20(3.10)+0.20(7.50)+0.25(15)+0.15(15)+0.20(15)=0.62+1.50+3.75+2.25+3.00=11.12
Effective copay = $11.12

==== The effective copay converts a nominal copay into the expected member-paid amount, recognizing that low-cost prescriptions are capped by the allowed amount (i.e., members cannot pay more than the claim cost). It improves pricing, benefit comparisons, and modeling of member cost-share impacts on plan liability. ====

==== Given: sales tax 0%, vaccine fee $1.00, dispensing fee $1.50, ingredient cost $77.00, discount 72.0%, pharmacy rebates 5.0%. ====

Step 1 — Allowed amount
* Ingredient reimbursement: 77.00×(1−0.72)=77.00×0.28=21.5677.00 \times (1 - 0.72) = 77.00 \times 0.28 = 21.5677.00×(1−0.72)=77.00×0.28=21.56
* Allowed total: 21.56+1.50+1.00=24.0621.56 + 1.50 + 1.00 = 24.0621.56+1.50+1.00=24.06

Assumption for rebates: rebate is 5% of ingredient cost ($77) and accrues to the plan (member cost share unaffected).
Rebate = 0.05×77.00=3.850.05 \times 77.00 = 3.850.05×77.00=3.85.

===== - Member (gross): 0.20×24.06=4.812≈4.810.20 \times 24.06 = 4.812 \approx 4.810.20×24.06=4.812≈4.81 =====
* Plan (gross): 24.06−4.81=19.2524.06 - 4.81 = 19.2524.06−4.81=19.25  (rounding to cents)
* Plan (net of rebate): 19.25−3.85=15.4019.25 - 3.85 = 15.4019.25−3.85=15.40

Result (20% coinsurance):
* Member = $4.81
* Plan = $15.40 net (gross $19.25 less $3.85 rebate)

===== - Member (gross): min⁡(16.00,24.06)=16.00\min(16.00, 24.06)=16.00min(16.00,24.06)=16.00 =====
* Plan (gross): 24.06−16.00=8.0624.06 - 16.00 = 8.0624.06−16.00=8.06
* Plan (net of rebate): 8.06−3.85=4.218.06 - 3.85 = 4.218.06−3.85=4.21

Result ($16 copay):
* Member = $16.00
* Plan = $4.21 net (gross $8.06 less $3.85 rebate)

==== Implement step therapy with prior authorization for high-cost brands/specialty drugs, requiring evidence of failure/intolerance on preferred generics/biosimilars first. This directly reduces expected cost by shifting utilization to clinically appropriate lower-net-cost alternatives and moderates utilization growth by preventing non-indicated or premature use of high-cost therapies. ====