Like most company managers, you are probably wondering how to cut costs. Chances are, you noticed a large portion of the money you spent was on drugs for your employees. But, unfortunately, it is not easy to manage your drug costs.
Fortunately, a pharmacy benefit management company or PBM can help you with this task, but you need to be sure you find the right match for your company. Since transparency is the key to this relationship, you should be able to ask potential PBMs a few questions before hiring one. Here are the eight most important questions to ask a PBM as you search for the best match for your business.
1. Is the Pricing Transparent?
Pass-through models are becoming more common because they supposedly take all of the funds PBMs receive from manufacturers and pass them through to you. While you probably want a pass-through pricing model, that doesn’t necessarily mean it will be transparent.
Some alternative pricing models can be more revealing when all revenue sources are disclosed. You want to know precisely how the PBM makes money from your claims.
2. Are Your Contract Terms Transparent?
Just as important is transparency regarding your contract terms. For example, ensure that no complex formulas are used to determine if a generic drug is appropriate. Instead, generic drugs should be determined by an outside source.
Additionally, make sure that pass-through pricing guarantees in your contract are minimum. These guarantees should only include your contracted rate.
3. How Much Revenue Do You Keep Per Claim Basis?
You need to know how your PBM will be compensated. First, ensure you understand how much revenue they keep from your claims. Some companies will pass back the payment they receive from manufacturers to you.
Others will hold a certain percentage to make money from your arrangement further. Knowing this information will help you understand how your PBM makes money and whether they benefit directly from orders or if they have undisclosed incentives.
4. Will You Provide Access to Independent Pharmacies?
If your pharmacy benefit management company owns a pharmacy, that can create a conflict of interest. That is because they can benefit from filing specific prescriptions and should not be able to determine what brand of drugs people receive.
If you choose to go with a PBM that owns a pharmacy, make sure you request a report each month showing which medications were prescribed and ensure they ask for your authorization for certain drugs.
5. Will Your Programs Promote Generic Medications?
Ensure that your PBM is not part of a brand-name incentive program. Brand-name incentive programs reward PBMs for more name-brand prescriptions and discourage them from using generic options.
Those can cause them to steer you towards more costly, brand-name drugs. Instead, you want a PBM that promotes cost-effective, generic medications. That can save you money by guiding you towards cheaper alternatives.
6. Are You Using Acquisition-Based Pricing?
Traditionally, specialty claims were made through a discount-off pricing structure. The traditional pricing structure results in high revenue gains for PBMs offering specialty drugs and only results in them receiving more money as the price of these drugs rises.
Therefore, if specialty claims are something you foresee, seek a PBM that offers an acquisition-based structure for these medications. That can save you money in the long run.
7. Do You Allow 90-Day Maintenance Networks?
Mail-order pharmacies tend to offer better adherence rates and more significant discounts. However, auto-refill programs can cause people to stockpile drugs they don’t need, and higher out-of-pocket medication costs often negate the values.
Meanwhile, a 90-day maintenance network from a retail provider in place of a mail-order pharmacy can eliminate these issues and allow patients to speak directly with pharmacists.
8. What Education Can You Offer Employees?
Your PBM should offer education programs to help employees understand which pharmacies provide the highest value for the company. For example, Costco and Walmart pharmacies provide cheaper options for employees than chain drug stores.
They can offer more value by giving the same medications for lower costs. By educating your employees, you can further save your company money.
Finding a PBM you can trust is critical for lowering your pharmacy costs. That means finding one who fits your needs and offers you true transparency. Take the time to find the answers to these questions when looking at your PBM options.
Then, pick the company that best fits your needs and can offer you the best arrangement. That will ensure you are happy with the work they provide and can save money.