Some brokers wonder whether the growth of pharmacy benefit management companies has come at the expense of employers.
Brokers who have clients with self-funded prescription plans can protect their client employers by working with pharmacy consultants who can grade the PBMs’ performance.
A detailed analysis provided by a good pharmacy management consultant can cut overall pharmacy costs at least 3%.
Drug costs trend continues to be an important indicator of how well the PBM is managing costs. Year-over-year trend of less than 10% is a good indicator of a well-managed program, but a review may indicate a PBM is holding down costs by simply shifting the burden to employees through higher co-payments and coinsurance.
Additionally, a pharmacy management consultant can help employers analyze a variety of components, including how the money flows in and out of the PBM. purchasers.
A PBM negotiates separate deals with pharmacies and drug manufacturers.
The standard approach for pharmacy reimbursement for dispensed prescriptions is to pay an ingredient cost, plus a dispensing fee. Negotiating the definition of the “ingredient cost” and the dispensing fee is the first step in structuring a more cost effective PBM contract.
Negotiating manufacturer rebates, or price concessions, can be even more complicated.
Rebates are moneys returned by the pharmaceutical manufacturer to the PBM based on volume of product purchased. PBM clients usually negotiate a share of the rebate provided to the PBM from manufacturers. As part of the analysis and contract negotiation, an employer should require a full explanation of a PBM’s rebate contracts and a detailed analysis of the projected rebate revenue stream.
Efforts to affect which drugs employees buy and how employees buy the drugs have a direct and immediate effect on employees and costs. There are a wide variety of ways to maximize savings and still maintain high quality of care.