Consultants from around the country recently joined Employers Health at its exclusive PBM Advisor Summit in Chicago, IL. Attendees networked and shared ideas about how to provide clients with the most effective PBM advice. Key takeaways from the discussion included:
- Industry consolidation – what does it mean? With numerous mergers and acquisitions in the PBM and health care space, do plan sponsors lose leverage in the volume-based business of PBM? Working collaboratively through employer-led business coalitions allow plan sponsors to maintain or gain market leverage that they otherwise wouldn’t have on their own.
- Strong PBM contracts make all the difference! Gone are the days of the four-page contract. Today’s PBM contracts are long, complicated and, if not managed tightly, may leave gaps for interpretation down the road which rarely go in the plan sponsor’s favor. Don’t leave any definition, pricing term or performance guarantee undefined. Items such as AWP, MAC lists, SSGs, LDDs, Brands, Generics, Specialty and Biosimilars all need to be precisely defined according to what was presented and evaluated during the RFP. Ambiguous language could allow the PBM to decide for the plan sponsor later.
- Specialty continues to challenge plan sponsors as roughly 40%+ of spend is being driven by 1-2% of the population. As these expensive treatments continue to become more specific and efficacious, employers need to work with the PBM to implement appropriate days’ supply, prior authorizations and genetic testing to ensure members receive the best treatment for managing their conditions. The specialty pipeline is robust, so be prepared with step therapies, prior authorizations, site of care steerage, copay incentives and formulary strategies to include biosimilars, where appropriate.
- Evaluations of PBMs need to move beyond the spreadsheet to take a deeper look into the total value of a contract and services offered. The full value of employer-led coalition solutions is often minimized by spreadsheet evaluations. Spreadsheets don’t always accurately capture variances in definitions or claim exclusions which can greatly impact the final outcome. Some of the most valuable components such as an annual market check and audit provisions are challenging to value since they are unknowns. However, advisors and clients should look at historical performance and the structure of the market check process and the team behind the negotiations.
- Leave no stone unturned when it comes to identifying opportunities to achieve the lowest cost and best outcomes for participants. There are plenty of levers to pull to narrow the path to the right drug, at the right place and the right time for each member. Don’t dismiss various formulary and network options simply to avoid disruption. Run the analysis to see what the impact will truly be. Exclusionary policies have become a PBM industry standard and can be a useful tool for maximizing rebates on clinically-appropriate brands, managing trend and avoiding disproportionate price inflation.
Employers Health helps consultants and plan sponsors by creating market leading contracts and solutions, staying ahead of industry curves while making sure employees and their families across the country get the resources they need to live their healthiest lives. Contact EH to learn how you can take advantage of these services for your clients or plan.