Value for a Health System
How an In-House Pharmacy & Strategic
Support Led to Significant Savings
(PLUS Bonus Content)
A health system with 13,400 member lives had an annual pharmacy spend of $18 million, which equated to a net spend of $89.28 per member per month (PMPM). The organization endeavored to optimize its capturing retail and specialty prescription drug spending by capturing those claims in an on-site pharmacy. However, the health system was experiencing a lack of strategic support from its PBM. The health system needed a new, conflict-free pharmacy benefit partner who would support its objectives to keep pharmacy dollars in house.
Annual Pharmacy Spend
RxBenefits provided a comprehensive, best-in-class solution to the health system, which involved leveraging its resources, creating a channel-agnostic benefit design, and establishing an on-site pharmacy. With the on-site pharmacy, the health system was able to drive retail and specialty pharmacy claims to its own location and save money on the employee benefit program. RxBenefits also conducted a Comprehensive Pharmacy Analysis of the plan’s previous arrangement to identify contract red flags and pinpoint the major trend drivers impacting costs.
By partnering with RxBenefits, the health system was able to implement a tailored clinical solution, independent of the PBM, to address its identified risk areas. The solution included three components of our Clinical Advantage Program (CAP):
- Formulary optimization with low clinical value drug exclusions – Preventing unnecessary drug spend by removing non-essential, high-cost, low clinical value drugs from the formulary.
Our clinical team continually monitored drugs in the market and updated the low clinical value drug list throughout the year, which produced additional value.
- High-dollar claim review – Providing umbrella protection by guarding against unnecessary spending on high-cost brand and specialty medications that had clinically appropriate, lower cost alternatives.
Our clinical team provided additional oversight through prior authorization reviews for certain high-cost prescription drug claims. The organization gained insight into the specific drugs contributing to its monthly plan cost and was able to limit its exposure.
- Client-driven manufacturer assistance program – Providing the health system with the flexibility to access manufacturer assistance dollars for certain medications to offset costs.
RxBenefits’ conflict-free contract afforded the health system the flexibility to insource specialty and maintenance medications for its employees and dependent members. With a channel agnostic contract, the health system utilized a hospital-first benefit design with incentives to drive utilization to its in-house pharmacy. The new pharmacy benefits contract also included updated component-level guarantees for retail, mail-order, and specialty pharmacy channels and updated manufacturer rebate guarantees.
On-Site Pharmacy Strategic Support
RxBenefits partnered with the health system’s on-site pharmacy to drive incremental maintenance and specialty medications in-house. A mandatory maintenance program was implemented, and a series of new member communications helped facilitate the transition.
Through a more competitive contract and the strategic support of a true pharmacy benefits partner, the health system gained greater insight and independence over its employee benefit program. As a result, the health system was able to realize $2 million in net savings (12%) in one year on its prescription drug spending within one year.
- -13.1% trend compared to the previous calendar year
- Average PMPM for the calendar year: $77.55
- Annual Pharmacy Net Plan Cost: $12.4M
- Client-Driven Manufacturer Assistance Program Savings: $358K
- Savings from the Additional Rx Volume Captured In-House: $1.5M
- Formulary Optimization: $64K
- High Dollar Claim Review: $755K
- PMPM Savings Over 12 Months: $5.09
- Estimated Annualized Plan Saving: $819K
- Contract Improvement over the previous year: 7%
two major changes in the same benefit year.”
– Health System Pharmacy Manager
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