5 Strategies for Employers to Address Social Determinants of Health (SDOH)

Social Determinants of Health (SDOH) refer to the conditions in the environments where people are born, live, learn, work, play, worship, and age that affect a wide range of health, functioning, and quality-of-life outcomes and risks. SDOH can be grouped into five key areas: economic stability, education access and quality, healthcare access and quality, neighborhood and built environment, and social and community context. Here are 5 strategies for employers to address social determinants of health:

5 Strategies for Employers to Address Social Determinants of Health (SDOH)
SDOH through a mosaic of interconnected puzzle pieces
  • Promote Economic Stability: Employers can provide competitive salaries, offer financial wellness programs, and create opportunities for career advancement. Ensuring job security and offering benefits such as retirement plans can significantly improve the economic stability of employees.
  • Enhance Education Access and Quality: Employers can invest in their employees’ education through tuition assistance programs, professional development opportunities, and on-the-job training. This not only helps employees advance in their careers but also contributes to their overall well-being.
  • Improve Healthcare Access and Quality: Offering comprehensive health insurance, providing access to mental health resources, and organizing health and wellness programs can make a significant difference in employees’ health. Employers can also offer flexible work hours or telemedicine services to make healthcare more accessible.
  • Support a Healthy Neighborhood and Built Environment: Employers can contribute to a healthy work environment by ensuring workplace safety, offering ergonomic workstations, and creating spaces that encourage physical activity, like gyms or walking trails. They can also support local initiatives that aim to improve community health and environmental conditions.
  • Foster Social and Community Context: Creating a workplace culture that values diversity, inclusion, and social support can have a positive impact on employees’ mental health and overall well-being. Employers can organize community service activities, support local businesses, and encourage employee participation in social groups or clubs to build a sense of community.

By addressing these 5 strategies for employers to address social determinants of health, employers can not only improve the health and well-being of their employees but also contribute to a more productive and engaged workforce. If you collaborate with TransparentRx and opt for our Care Navigation services, we’re equipped to pinpoint factors influencing the health of our members. The Care Navigation team is dedicated to coordinating referrals to local service providers, ensuring a streamlined approach to healthcare management.

Pharmacy Benefit Managers: History, Business Practices, Economics, and Policy [Weekly Roundup]

Pharmacy Benefit Managers: History, Business Practices, Economics, and Policy and other notes from around the interweb:

  • Pharmacy Benefit Managers: History, Business Practices, Economics, and Policy. Pharmacy benefit managers evolved in parallel with the pharmaceutical manufacturing and health insurance industries. The evolution of the PBM industry has been characterized by horizontal and vertical integration and market concentration. The PBM provides key functions: formulary design, utilization management, price negotiation, pharmacy network formation, and mail order pharmacy services. Criticism of the PBM industry centers around the lack of competition, pricing, agency problems, and lack of transparency. Legislation to address these concerns has been introduced at the state and federal levels, but the potential for these policies to address concerns about PBMs is unknown and may be eclipsed by private sector responses.
  • Copay Accumulators: Implications for PBMs and Health Plans After Court Strikes Down HHS Rule. The striking down of the 2021 HHS rule on copay accumulators represents a significant development that necessitates adaptation from health plans and PBMs, who will need to adjust their operations on not just copay accumulator programs, but also copay maximizers and potentially alternative funding programs (the most recent evolution of these copay adjustment programs), to align with the reinstated federal rule. This may involve revising policies and procedures to ensure compliance and communicating the changes in copay accumulator policies to members to ensure transparency and clear communication so that members understand their cost-sharing responsibilities. Additionally, health plans and PBMs may need to reevaluate their formulary and benefit design to accommodate the new regulatory landscape while continuing to provide cost-effective and quality care to patients.
  • Pharmacy Benefit Manager Pricing for High Utilization Generic Drugs. The practice by pharmacy benefit managers (PBMs) of spread pricing—charging the client (i.e. insurer) a higher amount than is reimbursed to the pharmacy—has garnered substantial attention from policymakers. The bipartisan proposals in the PBM Transparency Act and PBM Reform Act and numerous state laws prohibit spread pricing. However, others in the pharmaceutical supply chain, such as pharmacies and wholesalers, also rely on spread pricing to earn profits. The gross profit for each entity in the supply chain remains unexplored in the literature. Using Medicare Part D data, this study analyzed entity-level gross profit in the pharmaceutical supply chain for high-utilization generic drugs.
  • Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update. Based on 2020 data and newly acquired 2021 data for people with a commercial drug benefit tied to a medical benefit and the PBMs used by insurers, the updated analysis presents market insight on five PBM services performed for insurers: rebate negotiation, retail network management, claim adjudication, formulary management, and benefit design. Insurers face a make-or-buy decision—they can perform these functions in-house or buy them from a PBM. The AMA Policy Research Perspectives report, “Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update”, found that insurers use a PBM for three of them—rebate negotiation, retail network management and claims adjudication—and therefore assessed market competition for those three product markets.

TransparentRx Recognized in the Prestigious 7th Annual Vet100 List

TransparentRx, a renowned leader in fiduciary pharmacy benefit management solutions, is proud to announce its inclusion in the esteemed 7th Annual Vet100 List. This honor underscores the company’s unwavering commitment to excellence and its continued dedication to providing transparent pharmacy benefit solutions to clients worldwide.

The Vet100 List is an annual compilation that celebrates the top 100 veteran-led companies that have demonstrated remarkable growth, innovation, and leadership in their respective industries. Being featured on this list is not only a testament to TransparentRx’s business acumen but also its dedication to upholding the values and discipline instilled from military service.

Tyrone Squires, the Managing Director of TransparentRx and a U.S. Navy veteran, commented on the achievement, “Being recognized in the Vet100 List is a significant milestone for our team. It reflects our relentless pursuit of excellence and our commitment to serving our clients with integrity, transparency, and dedication. We are deeply honored and will continue to uphold the high standards that this recognition represents.”

Since its inception, TransparentRx has revolutionized the pharmacy benefit management industry with its groundbreaking fiduciary business model. This recognition in the Vet100 List further solidifies its position as an industry frontrunner.

TransparentRx would like to extend its gratitude to its dedicated team, loyal clients, and partners for their unwavering support and trust. The company looks forward to further advancements, collaborations, and milestones in the coming years.

For more information about TransparentRx or to schedule an interview with Tyrone Squires, please contact Maricor Bonjoc at 866-499-1940 ext. 244 or maricor.bonjoc@transparentrx.com.

About TransparentRx:
Established in 2014, TransparentRx has carved out a niche in the healthcare industry with its innovative fiduciary pharmacy benefit management solutions. Dedicated to guiding organizations through the intricate landscape of healthcare expenses, the company is anchored by a philosophy of unwavering transparency, robust cost control, and unparalleled customer support. This steadfast commitment has earned TransparentRx distinguished recognition on the 2023 Vet100 list, underscoring its role as a pioneering force in healthcare innovation.

About the Vet100 List:
The Vet100 List is an annual recognition of the top 100 fastest-growing veteran-led companies in the country. Curated based on growth metrics, leadership, and innovation, the list celebrates the entrepreneurial spirit of military veterans and their contributions to the business world.

Tyrone D Squires
TransparentRx
866-499-1940
tyrone.squires@transparentrx.com
Visit us on social media:
Facebook
Twitter
LinkedIn
YouTube

Pharmacy Benefit Questions to Ask for HR

Benefits Pro recently published “5 Pharmacy Benefit Trends on Every Employer’s Mind.” The article claims half of employers feel very knowledgeable about pharmacy benefits. From my unique perspective, this figure is exaggerated, and the real percentage is closer to 10%. If you’re skeptical, let’s confirm it together. Embark on this brief quiz to discover the truth. When employers are truly knowledgeable about pharmacy benefits, it often leads to better healthcare decisions for employees and more cost-effective management of benefits. Here are critical pharmacy benefit questions to ask for HR.

Human Resources (HR) professionals can improve their knowledge of pharmacy benefits management (PBM) by following these steps:

  1. Education and Training: Enroll in courses or workshops that cover the basics of PBM, including understanding drug pricing, pharmacy networks, formulary management, and the regulatory environment.
  2. Industry Research: Stay updated with industry reports and publications from reputable sources to keep track of trends, innovations, and changes in PBM practices and regulations.
  3. Networking: Join professional HR and PBM groups and forums to exchange knowledge, experiences, and best practices with peers and experts in the field.
  4. Vendor Partnerships: Work closely with PBM vendors to understand the specifics of contracts, cost management strategies, and to receive tailored training on their platforms and services.
  5. Employee Feedback: Gather feedback from employees about their experiences and challenges with the current pharmacy benefits to identify areas for improvement.
  6. Compliance Understanding: Ensure a deep understanding of compliance requirements, such as those related to the Consolidated Appropriations Act (CAA), Health Insurance Portability and Accountability Act (HIPAA), and the Affordable Care Act (ACA), which can all affect pharmacy benefit managers.
  7. Use of Technology: Leverage technology and data analytics to understand usage patterns, cost drivers, and to evaluate the effectiveness of current PBM strategies.

By focusing on these areas, HR professionals can develop a well-rounded expertise in pharmacy benefits management (PBM) that can contribute to better healthcare decisions, more cost-effective and employee-friendly benefits plans.

Copay Accumulators: Implications for PBMs and Health Plans After Court Strikes Down HHS Rule [Weekly Roundup]

Copay Accumulators: Implications for PBMs and Health Plans After Court Strikes Down HHS Rule and other notes from around the interweb:

  • Copay Accumulators: Implications for PBMs and Health Plans After Court Strikes Down HHS Rule. The striking down of the 2021 HHS rule on copay accumulators represents a significant development that necessitates adaptation from health plans and PBMs, who will need to adjust their operations on not just copay accumulator programs, but also copay maximizers and potentially alternative funding programs (the most recent evolution of these copay adjustment programs), to align with the reinstated federal rule. This may involve revising policies and procedures to ensure compliance and communicating the changes in copay accumulator policies to members to ensure transparency and clear communication so that members understand their cost-sharing responsibilities. Additionally, health plans and PBMs may need to reevaluate their formulary and benefit design to accommodate the new regulatory landscape while continuing to provide cost-effective and quality care to patients.
  • Pharmacy Benefit Manager Pricing and Spread Pricing for High Utilization Generic Drugs. The practice by pharmacy benefit managers (PBMs) of spread pricing—charging the client (i.e. insurer) a higher amount than is reimbursed to the pharmacy—has garnered substantial attention from policymakers. The bipartisan proposals in the PBM Transparency Act and PBM Reform Act and numerous state laws prohibit spread pricing. However, others in the pharmaceutical supply chain, such as pharmacies and wholesalers, also rely on spread pricing to earn profits. The gross profit for each entity in the supply chain remains unexplored in the literature. Using Medicare Part D data, this study analyzed entity-level gross profit in the pharmaceutical supply chain for high-utilization generic drugs.
  • Employers take tougher measures because of rising health costs. Employers are facing the biggest annual increase in health care costs in a decade, according to Mercer. Two-thirds of the employer health insurance market is in self-insured plans, in which an employer is on the hook for some or all of workers’ health care costs rather than an insurer, according to KFF. However, they work with third parties — often well-known health insurance brands and pharmacy benefit managers — to administer their benefits. Large, self-insured employers over the past year have been able to examine insurers’ negotiated rates with providers, thanks to federal price transparency rules. Congress, meanwhile, is looking at strengthening transparency requirements. These employers are beginning to see that their own arrangements aren’t always working to their benefit, said Rob Andrews, CEO of the Health Transformation Alliance, which includes member companies like Marriott, Coca-Cola and American Express.
  • Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update. Based on 2020 data and newly acquired 2021 data for people with a commercial drug benefit tied to a medical benefit and the PBMs used by insurers, the updated analysis presents market insight on five PBM services performed for insurers: rebate negotiation, retail network management, claim adjudication, formulary management, and benefit design. Insurers face a make-or-buy decision—they can perform these functions in-house or buy them from a PBM. The AMA Policy Research Perspectives report, “Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update”, found that insurers largely use a PBM for three of them—rebate negotiation, retail network management and claims adjudication—and therefore assessed market competition for those three product markets.

Unlocking the Power of Net Promoter Score (NPS) in the PBM Industry

In the highly competitive world of healthcare, Pharmacy Benefit Managers (PBMs) play a crucial role in ensuring that patients have access to affordable and high-quality medications. To gauge their performance and customer satisfaction, many PBMs turn to Net Promoter Score (NPS). In this blog, we will explore what NPS is, how it is calculated, strategies to improve a low NPS score, and take a closer look at the Net Promoter Score (NPS) in the PBM industry.

Understanding Net Promoter Score (NPS)

Net Promoter Score, developed by Fred Reichheld in 2003, is a metric used to measure customer loyalty and satisfaction. It provides a straightforward way to assess how likely customers are to recommend your company’s products or services to others.

NPS is based on a single, simple question: “On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?” Based on their responses, customers are categorized into three groups:

  1. Promoters (score 9-10): These are enthusiastic and loyal customers who are likely to recommend your company.
  2. Passives (score 7-8): These customers are satisfied but not enthusiastic. They are less likely to promote your company.
  3. Detractors (score 0-6): These are unhappy customers who may even spread negative feedback about your company.

Calculating NPS

To calculate NPS, you subtract the percentage of Detractors from the percentage of Promoters. The formula looks like this:

NPS = % Promoters – % Detractors

NPS scores can range from -100 (if all respondents are Detractors) to +100 (if all respondents are Promoters). A higher NPS indicates better customer loyalty and satisfaction.

Unlocking the Power of Net Promoter Score (NPS) in the PBM Industry
Source: Retently

Strategies to Improve a Low NPS

  1. Analyze Feedback: Start by collecting and analyzing customer feedback. Understand the reasons behind low scores and identify areas for improvement.
  2. Close the Feedback Loop: Reach out to Detractors and Passives to gather more detailed feedback. Show that you value their opinions and are committed to addressing their concerns.
  3. Continuous Improvement: Implement changes based on customer feedback. Communicate these improvements to your customers, showing them that their input matters.
  4. Employee Training: Ensure that your employees are well-trained and equipped to provide excellent service. Happy employees often lead to satisfied customers.
  5. Personalization: Tailor your services to individual customer needs. Personalized experiences can significantly boost customer satisfaction.

PBM Industry NPS Performance:

The PBM industry’s NPS performance can vary widely based on factors such as the size of the PBM, the quality of services provided, and the effectiveness of cost-saving measures. The overall Net Promoter Score (NPS) of PBMs has suffered a dramatic decline from 38 in 2021 to 8 in 2023. Typically, PBMs with a strong focus on customer service and transparency tend to have higher NPS scores.

In recent years, there has been a growing emphasis on transparency and accountability in the PBM industry, which has driven PBMs to improve their customer satisfaction efforts. PBMs that excel in areas like medication access, cost control, and customer support often receive higher NPS scores, reflecting their commitment to enhancing the patient experience. TransparentRx guarantees one-prompt access to a live, USA-based member support representative with hold times under 20 seconds for 90% of calls to its call center, for example. An independent third-party has measured TransparentRx’s NPS, which stands at 86.

In conclusion, Net Promoter Score (NPS) in the PBM industry is a valuable metric for assessing customer loyalty and satisfaction. By understanding NPS, calculating it correctly, and implementing strategies to improve low scores, PBMs can enhance their customer relationships and drive positive outcomes in the ever-evolving healthcare landscape. Continual efforts to improve NPS can lead to increased customer loyalty and success in the competitive world of healthcare management.

Employers take tougher measures because of rising health costs [Weekly Roundup]

Employers take tougher measures because of rising health costs and other notes from around the interweb:

  • Employers take tougher measures because of rising health costs. Employers are facing the biggest annual increase in health care costs in a decade, according to Mercer. Two-thirds of the employer health insurance market is in self-insured plans, in which an employer is on the hook for some or all of workers’ health care costs rather than an insurer, according to KFF. However, they work with third parties — often well-known health insurance brands and pharmacy benefit managers — to administer their benefits. Large, self-insured employers over the past year have been able to examine insurers’ negotiated rates with providers, thanks to federal price transparency rules. Congress, meanwhile, is looking at strengthening transparency requirements. These employers are beginning to see that their own arrangements aren’t always working to their benefit, said Rob Andrews, CEO of the Health Transformation Alliance, which includes member companies like Marriott, Coca-Cola and American Express.
  • Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update. Based on 2020 data and newly acquired 2021 data for people with a commercial drug benefit tied to a medical benefit and the PBMs used by insurers, the updated analysis presents market insight on five PBM services performed for insurers: rebate negotiation, retail network management, claim adjudication, formulary management, and benefit design. Insurers face a make-or-buy decision—they can perform these functions in-house or buy them from a PBM. The AMA Policy Research Perspectives report, “Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update”, found that insurers largely use a PBM for three of them—rebate negotiation, retail network management and claims adjudication—and therefore assessed market competition for those three product markets.
  • Hawaii Targets PBMs With Suit Alleging Unfair Pricing System. Hawaii has joined the legal fray against the country’s top companies managing prescription drug benefits, alleging the entities are driving up high drug costs for patients they’re supposed to serve. CVS Health’s Caremark, UnitedHealth Group’s OptumRx, and Cigna Group’s Express Scripts have “engineered a business model which distorts the market to their benefit, rather than serving the best interest of their client, the payer, or the end consumer, the patient,” Hawaii Attorney General Anne E. Lopez wrote in the complaint filed Wednesday in Hawaii state court. The lawsuit claims the three pharmacy benefit managers—which together control 80% of the market—violated state laws prohibiting deceptive commercial acts and practices, and unfair methods of competition, among other actions. PBMs manage prescription drug benefits on behalf of health plans and employers, including by negotiating collecting rebates and other fees from drug manufacturers.
  • ICER Updates Assessment Framework to Include New Measures of Value. The Institute for Clinical and Economic Review (ICER) has updated the framework it uses to assess the cost-effectiveness and value of prescription drugs. The organization has for 15 years provided information that has assessed the available evidence about a product’s value. Its first formal value assessment framework was published in 2015 with updates in 2017 and 2020. One of the more significant changes will be to include an assessment of a drug’s impact from a societal perspective, for example on patient and caregiver productivity, what ICER calls “non-zero” inputs. Clinical trials often do not gather this information and health economists have been conservative when there is no data, which leads to a “zero” input on measures of societal impact.

Trends in Compensation of PBMs and PBM Contracting Entities

In the ever-evolving landscape of healthcare, Pharmacy Benefit Managers (PBMs) play a pivotal role in the drug pricing ecosystem. Historically, their business model was heavily reliant on rebates negotiated with drug manufacturers. However, a recent report by healthcare equity researcher Nephron has shed light on a significant shift in the PBM profit paradigm over the past decade. This shift has seen PBMs pivot from their traditional rebate-centric model to one that emphasizes fees and specialty pharmacies as primary revenue sources. Here is a summary of the report, Trends in Compensation of PBMs and PBM Contracting Entities:

  • Over the past decade, PBMs have shifted their profit sources from rebates negotiated with drugmakers to two primary areas: fees and specialty pharmacies.
  • Profits derived from fees have increased fourfold since 2012, and those from specialty pharmacy have more than doubled.
  • The report, by healthcare equity researcher Nephron, is based on a survey of biopharma companies from 2018 to 2022.
  • PBMs are now relying less on commercial rebates and more on opaque fees and directing patients to pharmacies they own.
  • Three major PBMs control about 80% of the market and charge fees to various stakeholders, including manufacturers and health insurers.
  • In 2023, lawmakers held several hearings to address the lack of transparency in PBM pricing practices. Bipartisan efforts aim to increase clarity around costs.
Trends in Compensation of PBMs and PBM Contracting Entities.
Earnings After Cash Disbursement (EACD)
  • Fees charged to pharma companies have doubled over the last five years, reaching $7.6 billion in 2022.
  • New types of fees, such as vendor fees and data portal fees, have emerged and grown significantly.
  • Rebates negotiated with drugmakers have decreased as a profit source for PBMs, dropping from 46% of estimated profit in 2012 to 13% in 2022.
  • Specialty pharmacy is now the largest PBM profit source, accounting for 39% of PBM profits.
  • Other profit sources include rebates, pricing protection, spread pricing, and mail order.
  • A qualitative survey revealed that PBMs are directing more fee proceeds to subcontractors, potentially reducing transparency.
  • PBM fees are often tied to list prices, also known as wholesale acquisition costs. There’s an ongoing debate about delinking these fees from medicine prices.

The Nephron report underscores a transformative period in the PBM industry, highlighting the diversification of profit sources away from the once-dominant rebate model. With specialty pharmacies emerging as the most significant profit pool and the rise of new fee structures, the PBM landscape is undeniably changing. As lawmakers and industry stakeholders grapple with these revelations, the call for transparency and reform becomes even more pressing. The future of PBMs will undoubtedly be shaped by these discussions, with a potential focus on ensuring clarity, fairness, and value for all parties involved.

ICER Updates Assessment Framework to Include New Measures of Value [Weekly Roundup]

ICER Updates Assessment Framework to Include New Measures of Value and other notes from around the interweb:

  • ICER Updates Assessment Framework to Include New Measures of Value. The Institute for Clinical and Economic Review (ICER) has updated the framework it uses to assess the cost-effectiveness and value of prescription drugs. The organization has for 15 years provided information that has assessed the available evidence about a product’s value. Its first formal value assessment framework was published in 2015 with updates in 2017 and 2020. One of the more significant changes will be to include an assessment of a drug’s impact from a societal perspective, for example on patient and caregiver productivity, what ICER calls “non-zero” inputs. Clinical trials often do not gather this information and health economists have been conservative when there is no data, which leads to a “zero” input on measures of societal impact.
  • Specialty drug cost trend projected to be nearly 15 percent. Specialty drug trend alone is projected to be nearly 15 percent, driven by higher utilization of new high-cost specialty drugs replacing lower-cost therapies. Diabetes, autoimmune disease, and psoriasis have been the top three disease indications for prescription drugs over the past few years. However, since the first quarter of 2021, anti-obesity medications have shown the greatest growth, climbing 114 percent. This is due to many factors, including the off-label, weight-loss use stemming from social media buzz and exponential market investments in anti-obesity drugs as well as the American Diabetes Association recommending GLP-1 medication to reduce health complications. GLP-1 drugs will account for more than half of all diabetes drug therapies claim costs by the end of this year.
  • Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update. Based on 2020 data and newly acquired 2021 data for people with a commercial drug benefit tied to a medical benefit and the PBMs used by insurers, the updated analysis presents market insight on five PBM services performed for insurers: rebate negotiation, retail network management, claim adjudication, formulary management, and benefit design. Insurers face a make-or-buy decision—they can perform these functions in-house or buy them from a PBM. The AMA Policy Research Perspectives report, “Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update”, found that insurers largely use a PBM for three of them—rebate negotiation, retail network management and claims adjudication—and therefore assessed market competition for those three product markets.
  • STAT News investigation takes deep dive into PBM broker conflicts of interest. Employers across the country — from big names like Boeing and UPS to local school systems — pay consulting firms to handle a straightforward task with their prescription drug coverage: Get the best deals possible, and make sure the industry’s middlemen, known as pharmacy benefit managers, aren’t ripping them off with unfair contracts. But a largely hidden flow of money between major consulting conglomerates and PBMs compromises that relationship, a STAT investigation shows. Some consulting firms often are getting paid more — a lot more — by the PBMs and health insurance carriers that they are supposed to scrutinize than by companies they are supposed to be looking out for.

eVouchers Circumvent Benefit Designs to Get High-Cost Brand Drugs Dispensed [Rerun]

Brand drugmakers are circumventing pharmacy benefit plan designs by offering eVouchers or electronic vouchers for expensive drugs at the “Switch.” Why aren’t more people outraged about this? The switch is what routes the third-party prescription claims to the PBM, or health plan associated with the prescription. Within seconds, the script leaves the pharmacy, goes to the switch, and then is received at the relevant PBM. eVouchers circumvent benefit designs to get high-cost brand drugs dispensed.

When the benefit design has soft UM or no utilization management protocols, such as mandatory generic enforcement, it allows drugmakers to bypass a tier 1 drug for a tier 2-4 drug or even worse a non-formulary drug, with eVouchers (see process flow diagram below). The two largest switch companies are RelayHealth and Change Healthcare. As Relay Health tells the story, its electronic voucher program is a Win-Win-Win solution:

  • Doctors “set aside concerns over costs”
  • “Patients benefit from lower copays” and “increased adherence”
  • Manufacturers benefit from increased “scripts written”, “the likelihood patients will fill and adhere to them” and “increased brand loyalty”

But what about you, the health plan sponsor? You are conveniently left out of the equation even though you cover most of the cost. I teach in our CPBS Certification course how plan sponsors fund the entire USA prescription drug system but know the least about how it works. Simply put, it is your checkbook they are after. The budgetary impact of switch operators’ eVoucher programs to health plan sponsors is significant and growing with each passing day.

There are two ways to prevent the scenario above from happening:

  1. PBM inserts language into its contract with the switch company, preventing the action.
  2. Benefit design maximizes the drug utilization management toolkit including step therapy and mandatory generic enforcement programs.

Number two is sticky as many plan sponsors are hellbent on employees getting the drug they want without any scrutiny (i.e. step therapy). I don’t agree but it’s not my checkbook. The point is to make people happy through better outcomes not for the sake of avoiding the pain that comes with running an efficient health plan. In a sense, drugmakers, and non-fiduciary PBMs for that matter, are leveraging HR’s desire to keep employees “happy.”

For TransparentRx the choice is simple, either you want an efficient pharmacy benefit program, or you don’t. If you [self-funded employers] don’t want an efficient pharmacy benefit program then expect to pay $1000 for a drug when a $100 drug would have provided similar healthcare outcomes, for example. eVouchers, especially when supported with direct-to-consumer TV ads for high-cost brand drugs and soft utilization management protocols, are an expensive proposition for health plan sponsors yet lucrative one for brand drugmakers.