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Acquisition Cost Index Pricing for Medications

Posted by Mark Morgan on February 4, 2019 at 8:23 PM

 

What is Acquisition Cost Index?

Acquisition cost index (ACI) refers to the proprietary national database that reflects the actual recognized costs for which a pharmacy or retailer acquires a drug.

ACI differs from other medication purchasing methods like average wholesale price (for name brands substances) and maximum allowable cost (for generic substances). The latter two methodologies involve pharmacy benefit managers (PBMs) determining how much an employer will pay for medications at the wholesale level. For example, the term that may be used when reporting the cost of the medication may be “ingredient costs”. This term denotes that the ultimate discounted rate of the average wholesale price, otherwise referred to as the maximum allowable cost, has been applied. The acquisition cost index compares the difference between the average wholesale price and maximum allowable cost to what the retailer actually paid for the medication.

Who Can Participate in the ACI Program?

Any employer group that is self-funded can participate in an ACI program. Most retailers in the country accept ACI as an adequate payment methodology. Even if a retailer does not accept ACI as an acceptable methodology, it does not imply that an employer should remove that retailer from their program. However, the employer may not experience the savings that they would with other retailers that utilize ACI.

Working with a pharmacy benefit manager that is willing to accept a fee for service instead of accepting the margin on a drug, which can be about 15% more than what the retailer actually pays, is necessary for participating in the ACI program. As of now OwnRx is the only PBM that currently accepts ACI, but hopefully there will be more within the next five years.