When you think about purchasing pharmacy, it’s really a scale business. Employers can benefit by purchasing in an aggregate arrangement by pooling themselves with other lives. Depending on the arrangement, they’re able to negotiate a much better deal in that aggregate setting than they would be on their own – and it’s not different than a lot of other types of purchasing arrangements out there.
Aggregate purchasing is especially important in the smaller to mid-size market on the employer side – where you have a purchasing power that gives you the ability to not only negotiate the best price, but the best contractual terms too. We always have to remember that, in pharmacy, it’s one thing to know what the discounts, guarantees, and rebates are. Those are numbers, but those numbers are backed up by contractual terms. Size and scale matters on how you negotiate those terms in the contract, and that has a direct effect on the performance of those discounts, those guarantees, and those rebates.
For the employer side that’s looking at how to get an arrangement that suits their economic situation the best, if you’re a smaller or mid-size group, you’re going to be looking for some kind of aggregate solution – where you’re in an arrangement where lives are being pooled together. You’re basically in a pool of other employers, and that gives you much more leverage when you’re negotiating a contract.
For brokers that are looking to help their clients make sure they have the most competitive pricing and pharmacy arrangement, the first thing to do is to do something. A lot of times when speaking to consultants, the system is not going to fix itself. It’s going to take action on your part as a consultant. The first step is to become part of the process. Now, where are you going to go? You have different choices. One way to look at it is your current arrangement likely needs to be marketed.
For us, at RxBenefits, we’re going to say that we can provide a full pharmacy benefits analysis for you if you provide us with a claims file. That will both give you an idea of exactly where you are currently and what your current arrangement’s performing at, and secondarily it will give you an idea of where you could be at the top of the market. You can use that to push your current arrangement to where you need them to be and also give options to your clients, to put them in a situation that’s most likely much more beneficial to them.
To learn more about how to harness the power of aggregate purchasing and analytics to elevate your clients’ pharmacy benefit plans, check out our Definitive Guide to Optimizing Pharmacy Benefits e-book.