View More. Virtually all — Press Releases. View More Research. The vast majority of employers say that PBM programs are effective at reducing drug costs for their organization. Full Infographic. Necessary cookies are absolutely essential for the website to function properly.
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It is mandatory to procure user consent prior to running these cookies on your website. PBMs originated more than two decades ago Today, health care plans hire PBMs to secure lower costs for prescription drugs, passing the savings directly to patients.
Related: Value-based formularies take hold. Moving PBM functions in house and relying on a PBA to process claims cuts out the middleman and enables insurers to take full control of the pharmacy benefit. These in-house services, however, might come with a higher price than those charged by a traditional PBM. He anticipates that as plans merge, they could assume more control over spend and would be willing to accept full risk but turn to a PBA to plow through layers of administrative work, such as enrollment, claims processing and billing.
David Calabrese, vice president and chief pharmacy officer, OptumRx , notes that organizations considering moving to a PBA need to exercise extreme due diligence. Related: Specialty pharmaceuticals roundtable: Balancing benefits, costs. McHugh says plans need a positive return on investment and sufficient market share prior to moving PBM functions in house, allowing insurers to more effectively manage both their pharmacy and medical benefits and negotiate better rebate terms with manufacturers.
Most employers, however, lack the size and resources to manage their pharmacy benefit alone, he says. Calabrese also emphasizes that recent PBM industry dynamics have yielded much more sizable and well-resourced organizations. This, in turn, has led to much greater leverage in contracting with drug manufacturers and retail pharmacies, and much greater depth of skill and cost-efficiency with in-house capabilities such as home delivery and specialty pharmacy management.
Consequently, even with traditional models of payer-PBM contracting, most payers will find that the economics will often still lean in favor retaining most functions with the PBM. As previously noted, PBMs negotiate rebate programs with pharmaceutical companies. There are many complicated models for rebate programs but, basically, the PBM is in charge of administering these rebates.
Depending on the contract between the PBM and the employer or plan sponsor, all, some, or none of the rebate amount goes back to the employer.
Clinical programs are designed to encourage the best clinical outcomes for members within a prescription benefits plan. PBMs review data and monitor drug usage on an ongoing basis to determine what adjustments should be made to achieve the overall goal: maintaining, or improving, health benefits while reducing costs. Clinical programs include: prior authorization, quantity limits, and step therapy, and are all instituted to ensure the highest quality of care is delivered to the patient in the most appropriate setting.
Drug Utilization Review is a life-saving program that calls for the review of a drug to determine effectiveness, potential dangers, potential drug interactions, and mitigate other safety concerns. The PBM also sets specific criteria that has to be in place before certain drugs can be administered. On the back end, employers rely heavily on PBMs to bring them trends and information regarding the performance of their plan and how to make improvements.
Contact our team today to take the first step toward optimizing your PBM contract. Connect with a Truveris pharmacy expert and leverage our technology platform to transform your pharmacy strategy. February 17, What exactly do PBMs do? To do this, PBMs work with drug manufacturers, wholesalers, pharmacies, and plan sponsors. Reduce Spend PBMs negotiate pricing with a large network of retail or mail pharmacies and are able to offer patients and employers greater access to medications across multiple retail chains at competitive pricing.
These programs include: Rebate Programs PBMs negotiate with pharmaceutical companies to determine the level of rebates the company will offer for certain drugs — rebates are paid to the PBM. Formulary Coverage A formulary is a list of drugs, both branded and generic, that are covered within a certain plan. Step Therapy Programs Step Therapy programs are a type of prior authorization that applies to both traditional and specialty drugs.
Prior Authorization Programs Prior Authorization is a cost-savings feature that helps ensure the appropriate use of prescription drugs.
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