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Three years ago I published a white paper titled, Strategies to Enhance Pharmacy Benefit Managment of a Self-Insured Employer’s Employee Prescription Drug Plan. In it I discussed how employers should take more control over how their pharmacy benefit is managed. Specifically, one recommendation I made was to start your own PBM or form a strategic alliance. Anthem did both! I’m not writing today to brag or boast…well maybe a little. More important, I want to shake things up a bit to effect change.
Anthem and Express Scripts have been at odds for some time. As a result, Anthem decided to start its own pharmacy benefits manager to replace its contract with Express Scripts. Anthem and CVS Health have signed a five-year agreement to launch IngenioRx. CVS will provide prescription fulfillment and claims processing services, as well as expertise in point-of-sale engagement, such as member messaging and Minute Clinic. It will begin offering PBM services starting Jan. 1, 2020, coinciding with the end of Anthem’s current contract with Express Scripts.
What am I getting at? Anthem decided to start its own PBM but maybe for your organization the best option is to start smaller. Carve-out the specialty drug benefit or formulary management, for example. Health insurance is the third largest expense on the P&L with prescription drugs accounting for a larger share of those dollars than outpatient and inpatient hospital costs. The point is to simply take more control and don’t give TPAs or PBMs free reign over your drug benefit. For the record, a few formulary modifications or increasing employee cost share doesn’t count as taking control.
Usual complaints notwithstanding, the pharmacy benefit deserves much more attention than its getting. The smart companies are getting better educated and then taking action to control drug costs without negatively impacting healthcare outcomes. What are you doing different, really?