Time to Blow Up Your PBM Strategy — Here’s How
Some of the main causes of plan sponsor excessive remuneration for pharmacy benefits include specialty medications, pharmacy benefit manager contracts, plan design strategy and employee demographics and dynamics. If you’re facing any of the main causes for cost increases listed above or are working to improve patient outcomes while managing rising pharmacy benefit costs, continue reading. It may be time to blow up your PBM strategy. Marshal In-House Experts. Mom always said, “When you absolutely need something done right, do it yourself.” Still today, this philosophy often proves true. When employers truly comprehend the ramifications of how PBMs make money, the employer is in a much better position to successfully manage the PBM relationship and to negotiate contracts that maximize the value in the prescription drug plan. This is especially true for employers who lack internal expertise, from both sides of the table, in pharmacy and/or pharmacy benefits. Vet PBM Consultants not just for "advice" but Implementation and Execution. PBM consulting is not a one-off linear implementation, but a lifecycle of iterative and multi-layered phases. Each phase has its own set of practices and disciplines that are essential for optimizing processes against set performance outcomes. PBM consultants should help clients to assess, analyze and determine a viable roadmap initially and then build momentum throughout the contract term with consistent, incremental deliveries demonstrating measurable and meaningful business gain. Reverse Auctions – Dump the Traditional RFP. Reverse auctions create a hyper-competitive environment, driving best value for payers. The process often yields savings of more than 15% and allows the payer to probe deeper into the PBM’s formulary structure and their inclusion of high-cost specialty drugs that often require special handling and administrative complexities. Once a daunting task for companies, open bids are easier to execute with newly available, sophisticated RFP technology that reduces the time and money spent on determining and securing the best prices and contractual terms. Payers must create their own fiduciary contract and put it out for bid vis-à-vis reverse auctions. Demand a Fiduciary Standard from Your PBM. A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. A fiduciary duty is the highest standard of care at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom he owes the duty (the "principal"): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary unless the principal consents. How is it that a plan sponsor, regardless of size, can sign a deal which doesn't hold its PBM accountable to a client-comes-first standard of care? High Flying Organizations (HFOs) are hustled out of their hard-earned money every day by some TPAs and pharmacy benefit managers. Add an additional safety net by requiring your PBM to sign as a fiduciary. Be prepared, your legacy PBM may not offer a fiduciary contract; here's…