Why Attend: Unlocking the Secrets of PBMs will share valuable insights into the intricacies of Pharmacy Benefit Managers (PBMs) and learn strategies to effectively navigate their profit tactics. This webinar is designed to equip you with the knowledge and tools to optimize pharmacy benefits management, reduce costs, and improve patient outcomes.
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Who Should Attend:
Vendors
Brokers
Consultants
Human Resources Managers
Chief Financial Officers
Topics Covered:
Understanding the role and influence of PBMs in the healthcare ecosystem
Best practices for contract negotiations with PBMs
Case studies and real-world examples of successful PBM management
When: Second Tuesday of every month at 2PM ET
Join Us! Don’t miss this opportunity to enhance your understanding and capabilities in managing pharmacy benefits by attending Unlocking the Secrets of PBMs.
Prescription Rebate Guarantees: Employer Insights. This study sheds light on employers’ perspectives of rebate guarantees, dependency upon rebate dollars, and the role that pharmaceutical rebates or employer benefits consultants play in their pharmacy benefits manager (PBM) selection. The common occurrence of rebate guarantees in the study sample raises concern given that rebate guarantees may obscure employer visibility into the actual net prices of drugs, resulting in formulary inclusion of higher-cost products and higher overall total pharmacy costs. Employers should consider the role of employer benefits consultants in presenting drug contracting options and, ultimately, PBM selection. It is important to keep the employer perspective in mind when considering reforms to the current rebate-centric incentives of pharmacy benefit management.
Delaware paid over $12 million more on weight loss drugs than expected, trend increases to follow. The body in charge of state employee health insurance plans — the State Employee Benefits Committee (SEBC) — is now preparing to vote on new trend increases after ending the year in a $10 million deficit. The Office of Management and Budget transferred the state’s GHIP $7.3 million to help cover the plan’s fiscal year 24 deficit, but as the new fiscal year begins, the SEBC is leaning towards being less conservative when deciding on new trend increases in medical and pharmacy claims to avoid repeating this year’s shortfalls. The SEBC already committed to raising state employee health insurance premiums by 27% for FY25, which started July 1, 2024. The FY24 deficit is largely due to underestimating the rising cost of prescription drugs, the utilization of bundled surgery rates and the growing popularity of weight loss drugs known as GLP-1s. The state’s pharmacy benefit manager projected the state would pay $2 million for GLP-1s in FY24. By the end of the fiscal year in June, the state had paid over $14 million for GLP-1s for weight loss purposes and close to $24.7 million for diabetes treatment.
FTC Releases Interim Staff Report on Prescription Drug Middlemen. The Federal Trade Commission published an interim report on the prescription drug middleman industry that underscores the impact pharmacy benefit managers (PBMs) have on the accessibility and affordability of prescription drugs. The interim staff report, which is part of an ongoing inquiry launched in 2022 by the FTC, details how increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States. This vertically integrated and concentrated market structure has allowed PBMs to profit at the expense of patients and independent pharmacists, the report details. “The FTC’s interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs—including overcharging patients for cancer drugs,” said FTC Chair Lina M. Khan. “The report also details how PBMs can squeeze independent pharmacies that many Americans—especially those in rural communities—depend on for essential care. The FTC will continue to use all our tools and authorities to scrutinize dominant players across healthcare markets and ensure that Americans can access affordable healthcare.”
The Leap to Self-Insurance. Health insurance, like any insurance, is about pooling risk and paying premiums to create some financial cushion against costly events. For years, though, many large employers — what constitutes large means varies, but it’s typically 500 or more employees — have self-insured, meaning they have taken on the responsibility of setting funds aside to pay healthcare claims instead of a health insurer. In other words, they act as their own insurer, although they often hire a health insurer as a third-party administrator (TPA) to process claims and to take advantage of that insurer’s provider networks. Under the Employee Retirement Income Security Act of 1974 (ERISA), companies that self-insure are exempt from state health insurance mandates. ERISA exemption means those large employers can offer the same benefit package to their far-flung workforces working and living in different states and very likely save money by not covering some of the state-level health insurance benefits.
In the dynamic landscape of employee benefits, pharmacy benefit management (PBM) plays a pivotal role in both cost management and employee health outcomes. HR should become experts in pharmacy benefit management (PBM) because it is now essential, not optional. Here’s why:
1. Cost Control and Savings
Pharmacy benefits can constitute a significant portion of overall healthcare expenses. By understanding the intricacies of PBM, HR professionals can make informed decisions that lead to substantial cost savings. This involves negotiating better terms with PBMs, understanding rebate structures, and implementing cost-effective formulary management strategies.
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2. Fiduciary Responsibility
HR professionals have a fiduciary duty to act in the best interest of their employees and the organization. By becoming PBM experts, they can fulfill this responsibility more effectively. They can ensure that the PBM services chosen are truly beneficial and not just superficially attractive. This fiduciary approach builds trust with employees, knowing their best interests are being looked after.
3. Improved Employee Health and Productivity
An effective PBM strategy ensures employees have access to necessary medications without undue financial burden. When employees can afford their prescriptions, they are more likely to adhere to their medication regimens, leading to better health outcomes. Healthy employees are more productive, take fewer sick days, and contribute more effectively to the organization.
4. Navigating Regulatory Compliance
The healthcare sector is heavily regulated, with frequent updates that can impact pharmacy benefits. HR professionals who are well-versed in PBM can navigate these regulations effectively, ensuring compliance and avoiding costly penalties. Staying ahead of regulatory changes also positions the company as a responsible and compliant employer.
5. Leveraging Data Analytics
Advanced PBM systems generate a wealth of data that can provide insights into drug utilization patterns, costs, and employee health trends. HR professionals with PBM expertise can leverage this data to make strategic decisions, optimize benefit plans, and predict future healthcare needs.
6. Bridge the Expectation Gap
Employee benefit brokers and PBCs (PBM consultants) often lack broad PBM expertise or maintain conflicts of interest, which can lead to suboptimal choices for organizations. HR professionals who are experts in PBM can bridge this expectation gap. By having a deep understanding of PBM, HR can critically evaluate the advice and services offered by brokers and consultants. This ensures that the organization’s PBM strategy is aligned with its goals and not influenced by potential conflicts of interest. Being informed enables HR to demand transparency and accountability, leading to better outcomes for both the organization and its employees.
7. Strategic Decision-Making
Knowledge beyond fundamental ideas and principles that underpin pharmacy benefits management empowers HR professionals to make more informed and strategic decisions about their organization’s healthcare plans. They can better evaluate PBM proposals, understand the implications of various contract terms, and choose the best options for their organization. This strategic oversight can lead to significant cost savings and improved employee satisfaction.
Conclusion
Becoming experts in pharmacy benefit management empowers HR professionals to drive significant value for their organizations. From cost savings and employee satisfaction to improved health outcomes and regulatory compliance, the benefits are multifaceted. As the role of HR continues to expand, so too should its expertise in critical areas like PBM, ensuring a holistic approach to managing employee benefits.
How to Become an Expert
The best way to gain expertise in pharmacy benefit management is to become a Certified Pharmacy Benefit Specialist (CPBS). The CPBS program provides comprehensive education on the intricacies of PBM, covering everything from cost management and regulatory compliance to strategic plan design and data analytics. By earning this certification, HR professionals can:
Gain a deep understanding of PBM mechanisms and best practices.
Enhance their ability to negotiate and manage PBM contracts effectively.
Stay updated on the latest industry trends and regulatory changes.
Improve their ability to design benefit plans that optimize costs and employee health outcomes.
Investing in CPBS certification not only equips HR professionals with the necessary skills and knowledge but also positions them as trusted advisors within their organizations. This expertise enables them to make informed decisions that benefit both the company and its employees, ultimately leading to a healthier, more satisfied workforce.
In the ever-evolving landscape of healthcare and employee benefits, becoming a CPBS-certified expert in pharmacy benefit management is a strategic move that can drive significant value and ensure long-term success.
The Unseen Influence: How Pharmacy Benefit Managers Outsmart Regulators. Pharmacy benefit managers wield significant power in the pharmaceutical supply chain, yet their opaque and complex business models enable them to consistently outmaneuver regulatory efforts aimed at transparency and fairness. As a result, consumers, healthcare providers, and insurers often bear the brunt of higher costs and limited access to essential medications. To address these challenges, ongoing regulatory scrutiny and innovative policy solutions are crucial to ensure that PBMs operate in a manner that truly benefits the healthcare system and its stakeholders. Despite increased scrutiny and regulatory efforts to bring transparency to PBM practices, these middlemen continue to find ways to outsmart the system. Here’s how.
Mail-Order Drugs Were Supposed to Keep Costs Down. One employer was paying about $100 for a prescription for a generic antidepressant, though it could be bought elsewhere for about $12. A key tool that businesses have counted on to keep a lid on employees’ drug spending—filling workers’ prescriptions by mail—is now driving up their costs. Unity Care NW, a nonprofit health clinic in Washington state, forecasts the cost of medical and drug benefits for its 365 employees and their family members will increase this year by 25% to more than $3 million. A big reason: Drugs delivered by mail are costing multiples more than those picked up at a store counter. Markups were as much as 35 times higher than what other pharmacies charged, according to a recent analysis of millions of prescriptions in Washington state. The stakes nationally are huge, in a medical market with escalating prescription prices and increasing concentration of medical providers in direct employment by hospital groups.
FTC Releases Interim Staff Report on Prescription Drug Middlemen. The Federal Trade Commission published an interim report on the prescription drug middleman industry that underscores the impact pharmacy benefit managers (PBMs) have on the accessibility and affordability of prescription drugs. The interim staff report, which is part of an ongoing inquiry launched in 2022 by the FTC, details how increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States. This vertically integrated and concentrated market structure has allowed PBMs to profit at the expense of patients and independent pharmacists, the report details. “The FTC’s interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs—including overcharging patients for cancer drugs,” said FTC Chair Lina M. Khan. “The report also details how PBMs can squeeze independent pharmacies that many Americans—especially those in rural communities—depend on for essential care. The FTC will continue to use all our tools and authorities to scrutinize dominant players across healthcare markets and ensure that Americans can access affordable healthcare.”
The Leap to Self-Insurance. Health insurance, like any insurance, is about pooling risk and paying premiums to create some financial cushion against costly events. For years, though, many large employers — what constitutes large means varies, but it’s typically 500 or more employees — have self-insured, meaning they have taken on the responsibility of setting funds aside to pay healthcare claims instead of a health insurer. In other words, they act as their own insurer, although they often hire a health insurer as a third-party administrator (TPA) to process claims and to take advantage of that insurer’s provider networks. Under the Employee Retirement Income Security Act of 1974 (ERISA), companies that self-insure are exempt from state health insurance mandates. ERISA exemption means those large employers can offer the same benefit package to their far-flung workforces working and living in different states and very likely save money by not covering some of the state-level health insurance benefits.
Navigating the complex world of pharmacy benefit management (PBM) requires the expertise of certified consultants and brokers. As CHROs and CFOs, you are responsible for both the financial health of your organization and the well-being of your employees. Making the right decisions in managing pharmacy benefits is crucial, as mistakes can lead to financial waste and employee dissatisfaction. CHROs and CFOs should not underestimate the importance of hiring certified consultants and brokers, as their expertise is key to successfully navigating the complexities of pharmacy benefit management.
Certify high-level stakeholders and decision-makers
Expertise You Can Trust
Certified consultants and brokers bring a level of expertise that is indispensable in navigating the intricate world of pharmacy benefits management (PBM). These professionals have undergone rigorous training and certification processes, ensuring they possess the knowledge and skills necessary to make informed, strategic decisions. Their expertise extends beyond basic cost analysis to encompass a comprehensive understanding of PBM contracts, formulary management, and the latest industry trends.
Ensuring Fiduciary Responsibility
One of the core tenets of the Pharmacy Benefit Institute of America is the fiduciary standard of care. Certified Pharmacy Benefit Specialists (CPBS) are trained to prioritize your organization’s best interests above all else. This means transparent pricing, unbiased recommendations, and a commitment to optimizing your pharmacy benefits program without compromising on quality or patient care.
Maximizing ROI on Benefits Spending
In an era where every dollar counts, the ability to maximize the return on investment (ROI) of your benefits spending is crucial. Certified consultants and brokers are adept at identifying cost-saving opportunities that do not sacrifice employee benefits. They leverage their expertise to negotiate better terms with PBMs, implement effective cost-containment strategies, and ensure that your benefits program is both financially sustainable and highly valued by your employees.
Navigating Regulatory Changes
The regulatory environment for pharmacy benefits is continually evolving. Staying compliant with new regulations requires a deep understanding of both current laws and impending changes. Certified professionals are well-versed in the latest regulatory requirements and can help your organization navigate these changes smoothly, avoiding potential legal pitfalls and ensuring that your benefits program remains compliant.
Aligning with the Consolidated Appropriations Act
The Consolidated Appropriations Act (CAA) introduced several requirements for transparency and accountability in pharmacy benefits management. Certified consultants and brokers are equipped to ensure your organization complies with these regulations. Their training includes understanding the intricacies of the CAA, such as reporting on pharmacy benefit and drug costs, and ensuring transparency in PBM practices. This alignment with the CAA not only helps in maintaining regulatory compliance but also fosters trust and accountability in your pharmacy benefits program.
Enhancing Employee Satisfaction
A well-managed pharmacy benefits program can significantly enhance employee satisfaction and retention. Employees who feel supported in their healthcare needs are more likely to be engaged and productive. Certified consultants and brokers work to design benefits programs that are not only cost-effective but also meet the diverse needs of your workforce, from chronic disease management to mental health support.
Strengthening Internal Expertise
While hiring certified consultants and brokers is crucial, having certified internal staff can further strengthen the relationship between your organization, the broker, and the PBM. Certified internal staff members are well-versed in the nuances of pharmacy benefits management, allowing them to effectively collaborate with external consultants and brokers. This internal expertise ensures that your organization can maintain a high level of oversight and strategic direction, ultimately leading to better outcomes and a more cohesive benefits management strategy.
Access to a Network of Certified Experts
At the Pharmacy Benefit Institute of America, we maintain a directory of Certified Pharmacy Benefit Specialists who are ready to assist you in optimizing your pharmacy benefits program. These professionals have demonstrated their commitment to excellence and fiduciary responsibility. We invite you to explore our directory of Certified Pharmacy Benefit Specialists and find the right partner to help you achieve your organizational goals.
By prioritizing the expertise and fiduciary responsibility that certified consultants, brokers, and internal staff bring to the table, CHROs and CFOs can make strategic decisions that benefit both their organizations and their employees. Investing in certified professionals is an investment in the future health and financial well-being of your company.
Employer Coverage of GLP-1 Drugs Jumps. As the popularity of GLP-1 drugs like Ozempic and Wegovy grows, so does the percentage of employers covering the drugs for employees. A new employer survey out June 13 from the International Foundation of Employee Benefit Plans (IFEBP) found that employer coverage of the drugs is up 8 percentage points since last fall, with roughly one-third of companies now offering GLP-1 drug coverage for both diabetes management and weight loss. More than half of employers (57%) currently provide coverage for diabetes only—the original intended use for the drugs—up from 49% in 2023. Perhaps even more significant, 34% provide coverage for both diabetes and weight loss (up from 26% in 2023), according to the benefits organization’s May survey of 279 employers. IFEBP, which counts some 31,000 organizations as members, last surveyed employers abut GLP-1 drugs in October 2023. It’s a big jump that shows employers are getting serious about coverage of the drugs, especially as employees express interest, said Julie Stich, vice president of content at IFEBP.
Mail-Order Drugs Were Supposed to Keep Costs Down. One employer was paying about $100 for a prescription for a generic antidepressant, though it could be bought elsewhere for about $12. A key tool that businesses have counted on to keep a lid on employees’ drug spending—filling workers’ prescriptions by mail—is now driving up their costs. Unity Care NW, a nonprofit health clinic in Washington state, forecasts the cost of medical and drug benefits for its 365 employees and their family members will increase this year by 25% to more than $3 million. A big reason: Drugs delivered by mail are costing multiples more than those picked up at a store counter. Markups were as much as 35 times higher than what other pharmacies charged, according to a recent analysis of millions of prescriptions in Washington state. The stakes nationally are huge, in a medical market with escalating prescription prices and increasing concentration of medical providers in direct employment by hospital groups.
The path to cheaper prescription drugs runs through PBMs. The power of PBMs to determine what drugs insurers will cover has also negatively impacted patient access and costs. PBMs charge drug manufacturers administrative and other fees in exchange for insurance companies covering those drugs. These fees are linked to the retail price of a drug. As a result, PBMs prioritize more expensive brand medicine. If a brand arthritis medicine, for example, nets a PBM $200 in fees, but the generic version of it would only earn them $30 in fees, it’s easy to guess which one a PBM will make sure insurers cover. The PBM market is broken. It has become a profit center for big health care companies that is hurting patient access and driving up costs. PBMs now take nearly 50 cents of the retail price of many prescription drugs. That’s more than some drug companies take home. Novo Nordisk, for example, recently told the Senate Committee on Health, Education, Labor, and Pensions that it receives just 25% of the list price of the medicines it manufactures.
Tricare PBM contract anti-competitive, lawmakers allege. A group of twenty-four lawmakers expressed concern Express Scripts could be limiting Tricare beneficiaries’ choice of pharmacies. In a June 26 letter to the director of the Defense Health Agency and the assistant secretary of defense for health affairs, lawmakers alleged Express Scripts has “leveraged its market power to squeeze independent pharmacies and steer Tricare beneficiaries to their own mail-order pharmacy.” The lawmakers also expressed concern that the government could be overpaying for drugs dispensed by Express Scripts. In their letter, the lawmakers cited a Wall Street Journal investigation that found that Express Scripts charged insurers 27.4 times more for drugs than Cost Plus Drugs Co.
A Venn diagram is a visual tool that uses overlapping circles to show the relationships between different sets of items. Each circle represents a set, and the areas where circles overlap indicate elements that are common to those sets. It’s often used to illustrate logical relationships and shared characteristics among groups. This Venn diagram illustrates the interplay between three key components of an effective pharmacy benefits management strategy:
Certified Consultants & Brokers
Certified Internal Staff
Compliance with the Consolidated Appropriations Act (CAA)
Each circle represents one of these components, and their intersections show how they work together to enhance your organization’s pharmacy benefits program.
Intersection of Benefits: Certified Consultants, Internal Staff, and Compliance with CAA
What Each Section Represents:
Certified Consultants & Brokers (left circle): These professionals bring specialized expertise to navigate complex PBM contracts, negotiate better terms, and ensure cost-effective benefits programs.
Certified Internal Staff (right circle): Having certified internal staff strengthens your organization’s ability to oversee and collaborate effectively with external consultants and brokers. They bring in-depth knowledge and ensure strategic alignment within your company.
Compliance with CAA (bottom circle): Ensuring that your pharmacy benefits management adheres to the requirements set out by the CAA, such as transparency and accountability, is critical for regulatory compliance and building trust.
Intersections:
Certified Consultants & Brokers + Certified Internal Staff: When both external consultants/brokers and internal staff are certified, they can work synergistically to optimize your pharmacy benefits program. This combination ensures thorough oversight, strategic implementation, and effective collaboration.
Certified Consultants & Brokers + Compliance with CAA: Certified consultants and brokers help your organization stay compliant with CAA regulations by ensuring transparency and proper reporting. This alignment fosters trust and accountability in your benefits program.
Certified Internal Staff + Compliance with CAA: Certified internal staff are equipped to ensure that all regulatory requirements are met, maintaining compliance, and avoiding potential legal pitfalls.
All Three Components Together: The center intersection where all three circles overlap represents the optimal scenario. In this case, your organization benefits from the combined expertise of certified consultants and internal staff, working together to ensure compliance with the CAA. This creates a robust, transparent, and effective pharmacy benefits program that maximizes cost savings and employee satisfaction.
What This Means for a CHRO or CFO
As a CHRO or CFO, understanding this Venn diagram underscores the importance of integrating certified expertise and regulatory compliance into your pharmacy benefits management strategy. By doing so, you can:
Ensure your benefits program is cost-effective and sustainable.
Maintain high levels of employee satisfaction and engagement.
Navigate regulatory changes confidently and stay compliant with the CAA.
Foster a culture of transparency and accountability in managing pharmacy benefits.
At the Pharmacy Benefit Institute of America, we maintain a directory of Certified Pharmacy Benefit Specialists who are ready to assist you in optimizing your pharmacy benefits program while ensuring compliance with the Consolidated Appropriations Act (CAA). These professionals have demonstrated their commitment to excellence, fiduciary responsibility, and regulatory adherence. We invite you to explore our directory of Certified Pharmacy Benefit Specialists and find the right partner to help you achieve your organizational goals.
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