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8 Things to Consider During Annual PBM Reviews

March 30, 2021 by Brooke Knollman, MBA, CEBS

Each year, the client solutions team at Employers Health and our pharmacy benefit management suppliers meet with clients to provide strategic insight on how the plan performed and discuss the trends in the marketplace. As these annual reviews have now begun, we’ve developed a list of eight things for plan sponsors to consider to make the most of these annual meetings.

1. Put trend in context. Understand your per member per month (PMPM) starting and ending points and how they compare to relevant benchmarks. Percentages can be misleading!

2. Understand your denominator! We’ve seen an uptick during the pandemic of 90-day prescriptions, which means that the total number of prescriptions might go down but your cost per prescription may go up. Check the cost per days’ supply for a more reliable measure that adjusts for this change in behavior.

3. The COVID-19 pandemic may have depressed your overall utilization. Health insurance carriers have reported in their earnings calls that utilization of outpatient care was down significantly for much of 2020. New starts for prescriptions were also down. Find out your plan’s utilization patterns and if you should expect an increase as states reopen.

4. Programs that utilize manufacturer copay coupons to offset specialty medication costs are gaining in popularity. For plan participants, these programs typically set a zero-dollar cost share for qualifying specialty medications. For plan sponsors, these programs may save up to 15%-20% of specialty spend.

5. Be aware of opportunities to switch formularies, switch networks or implement clinical programs with little disruption. Each PBM has varying degrees of restrictions when it comes to formularies, where a switch can either lead to lower upfront drug costs or larger rebates. Clinical management strategies, including Employers Health’s custom clinical edits, aim to eliminate high price, low-value drugs from plans. Network tightening, including removing a single large chain, can result in more aggressive discounts off of medications without a significant loss in access.

6. Each year, Employers Health renegotiates its contracts with its pharmacy benefit managers to ensure each client is receiving the most aggressive contractual and financial terms possible. These improvements are a great way to take advantage of market opportunities and offset inflating brand drug prices.

7. Rebates are a significant part of the pharmacy cost equation. Be sure you understand whether rebates are included or not included when looking at key metrics and evaluating plan performance.

8. Human immunodeficiency virus (HIV) medications have recently become a hot topic in the pharmacy space with the recent addition of the HIV pre-prophylaxis (PrEP) medications to help protect those susceptible to HIV. Across our book of business, we saw an increase in the usage of these medications. This caused the HIV class to jump up for many employers’ top therapeutic classes. Now that there are data available, plans should budget for this area to grow with these new treatments.

For further discussion, please reach feel free to email me at [email protected] or reach out to your client solutions executive.


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