Carving In or Carving Out Pharmacy Benefits: Analyzing Your Options

When thinking about carving out your pharmacy benefits, it’s first important to talk about the differences between the two arrangements. The carved-in arrangement is simply where the pharmacy benefits plan is baked into the medical plan, typically run by large carriers or third-party administrators (TPAs). In this type of model, you don’t see a lot of transparency. There’s no pharmacy benefits contract for you to audit, no client-level guarantees on drug pricing or rebates, and really no way to hold that medical carrier or vendor accountable for their performance.

In a carved-out arrangement, there’s a lot more freedom. Simply put, in the carved-out arrangement, the pharmacy benefit is pulled away from the medical vendor and managed outside of their influence. You will have access to a pharmacy contract for you to audit and guarantees to hold that vendor accountable for their performance, including rebates. Most importantly, in a carved-out arrangement, you will have more options clinically, which really is the only way to tackle high-cost drugs today, whether those are specialty or non-specialty.

When I speak with brokers that I work with about their clients taking that next step, the first one is to get full visibility into how that plan is running today. What that entails is a pharmacy claims file and some additional detail about their current plan set up. Then we’ll do a full pharmacy benefits financial analysis, where we look at everything from their guarantees (if they have any), their actual plan performance based on the claims file, and our script-by-script analysis.

We’ll bump it up against our three arrangements that we have with OptumRx, Express Scripts, and CVS/caremark to identify first and foremost if there’s any savings available. The most important part of the financial analysis is the clinical solutions that we provide outside of PBM influence. We’ll do a full return on investment evaluation to see if there’s any improvements we can do clinically as well.

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