Top 3 Things You’ll Learn
- What you need to know about working with a pharmacy benefits optimizer
- How self-funded employers can leverage components of the PBO model
- Three questions to ask your clients about their current PBM arrangement
The prescription benefits landscape has changed a lot over the last 20 years. Today, the three largest pharmacy benefits management (PBM) companies – CVS/Caremark, Express Scripts, and Optum – predominantly manage prescription drug benefits for roughly 75% of the U.S. population. Those large entities serve diverse populations of Medicare, Medicaid, and self-funded employers. It can be quite challenging for a small employer to navigate and make sure they are getting the best value out of the PBM. For those groups, the pharmacy benefits optimizer (PBO) model provides an alternative to give them access to the same contract, clinical, and service experience.
Control Over Their Experience
A primary reason that employers choose to self-fund is to have choice and control over the benefits experience they provide to their employees. As a small fish in the big pond, smaller employers lack the attention they expected to receive when they decided to self-fund and carve-out their pharmacy benefits with a PBM. They tend to fall into the PBM’s one-size-fits-all approach to benefit design and cost-containment strategies, which limits the choice and control that comes with being a self-funded employer. They may be restricted to certain programs because of their smaller size, or they may miss out on performance guarantees because their employees did not use a required pharmacy or medication the PBM preferred.
The PBO infrastructure focuses on supporting self-funded employer groups by giving them back the choice and control to balance their costs and medication utilization so that they can deliver the employee experience they want. With a PBO, self-funded employers can rely on the expertise of pharmacy benefits experts to help them navigate the challenges in the market. Services, such as managing eligibility, account management, clinical programs, and reporting, are a core part of the PBO experience. What sets the PBO apart is its ability to focus on customer service while at the same time tapping into aggregate purchasing that leads to a competitive pharmacy benefits contract – on the scale of the terms enjoyed by the largest employers – for groups of any size.
Solutions to Balance Costs & Utilization
What used to be the 80/20 rule two decades ago, is now a 98/2 rule. Roughly 2% of members account for about 60% of the costs incurred by the pharmacy benefits plan, specifically driven by specialty drugs. It no longer makes sense to focus on pharmacy benefits management strategies that address the greater 30%-40% of the member population. In today’s market, it’s not uncommon for a brand drug to cost $400 and a specialty medication to cost $5,000. Self-funded employers need to feel certain their pharmacy benefits provider can deliver on new, innovative strategies to match the new challenges they face with managing these costly prescription drugs.
Roughly 2% of members account for about 60% of pharmacy benefits costs, driven primarily by specialty drugs. Look beyond general PBM strategies to independent solutions that will deliver lasting affordability.
Generalizations made from a PBM’s book of business analysis will not cut it. Instead, employers need data-driven strategies that will zero in with a laser-like focus on the things that will have the most significant impact on their benefits program. Doing that requires an independent pharmacist review of the plan’s claims utilization data to find the specific opportunities and trends emerging in their data. Working in collaboration with the employer, the PBO will pair their data analysis with the plan’s goals and objectives to determine the optimal strategies to ensure employees have access to medications and the employer is not spending more than is necessary on prescription drugs.
Questions to Ask Yourself
Customizing and tailoring the pharmacy benefits management strategy to what matters most for each employer is what ultimately will deliver the savings and utilization management balance they want. Consider these questions as you evaluate your clients’ current pharmacy benefits arrangement and determine whether the PBO model would be better suited to address their concerns:
- Is an independent reviewer analyzing your pharmacy claims data in real-time to find and address emerging trends?
- Does your current PBM arrangement allow for your clients to achieve both their clinical and financial goals – not one or the other?
- What strategies are being used to balance high costs and member access to specialty drugs?
Download the free e-book, Definitive Guide to Optimizing Pharmacy Benefits, to learn more about how to determine the best approach for solving the challenges facing your employer clients.