The Employer's Guide Blog for Overseeing PBMs

The Definition of Oversee: to watch over and direct (an undertaking, a group of workers, etc.) in order to ensure a satisfactory outcome or performance.

OptumRx is now caught up in the court battle between Anthem and Express Scripts

I’m often asked, “Tyrone why does TransparentRx charge a fee when requested to respond to a request for proposal?” There are several reasons. 

1.  There is tremendous value in the information a fiduciary PBM submits in response to a RFP. The burden is placed on us [as a fiduciary] to deliver radical transparency as opposed to the plan sponsor having to drive disclosure of performance details important to them. 

 
Figure 1:  Developed by James Prochaska
2.  We’ve learned even offering a fiduciary standard may not make a difference if the proposal evaluators aren’t pharmacy benefits subject matter experts. This includes but is not limited to being well-versed in PBM contracts, plan design and formulary management. These evaluators know a serious problem exists, a lack of transparency, yet haven’t taken any meaningful action to fix it (see figure 1).

3.  We provide recommendations on how to better manage pharmacy benefits whether we win the business or not.

4.  Sometimes a RFP isn’t that at all it’s really a request for information or consulting services disquised as a RFP.

On Tuesday, the U.S. District Court for the Southern District of New York will hold a hearing on Express Scripts’ motion (PDF) to compel Optum to turn over documents related to a drug pricing proposal it prepared for Anthem. The insurer requested the proposal after it sued Express Scripts back in 2016, seeking $14.8 billion in damages from what it argued was the pharmacy benefits manager’s failure to provide “competitive benchmark pricing” on prescription drugs.

Express Scripts said it is entitled to both documents and testimony concerning the proposal Optum prepared for Anthem, arguing that they are “critically relevant” to the case and that Optum knew full well they would be used in the litigation. From Express Scripts’ point of view, Optum prepared the proposal in order to “harm a competitor” and ingratiate itself with Anthem, which was a potential client.

Before making a serious commitment of time and energy, we [TransparentRx] try our best to uncover those companies who are serious about doing business with us. But, sometimes a company falls through the cracks who never had any real intention on doing business with you. Instead, they want to use you as a “fluffer” or a sort of decoy for a different deal. 

These companies can smell blood in the water. They’ll grind down margins to nothing if you let them. They’ll ask you to put a lot of time, money and energy into meeting their rigorous standards and requirements with no intention on ever doing business with you.

In the end, you’re doing all the work and they’re making all the big bank. And operating your business on other people’s terms can become a downward spiral where you never get ahead. I wonder if OptumRx new beforehand that their proposal, or parts of it, might become public information they would’ve done anything differently – perhaps, perhaps not. 

Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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