TAKE FIVE – Investigate: A Cliff Note Series on Pharmacy Benefit Management

Last week, I covered Part One of my TAKE FIVE series, which focused on educating you on the importance of staying on top of your Rx benefits. This week, I'll continue this series by sharing with you my thoughts on how to “investigate” your pharmacy benefit plans. So, without further ado, let's take a look at what you should be looking for:

Week Two - TAKE FIVE to Investigate:

First of all, it's important to understand what I mean when I use the term 'investigate'. So, let's take a look at the definition: "carry out a systematic or formal inquiry to discover and examine the facts of (an incident, allegation, etc.) so as to establish the truth." (Synonyms - inquire into, look into, probe, explore, scrutinize.) This is an essential part of effectively managing your pharmacy benefits, and shouldn't be disregarded.

Components of Your Pharmacy Benefit Plan
The world of the pharmacy ecosystem is complex and constructing a pharmacy benefit plan suitable for self-funded employers includes many parts. Each part is important, and stands alone in its importance. Here is a list of critical components, each needing to be investigated:
  • The Contract
  • The Definitions within the contract 
  • Exclusions
  • Guarantees
  • The length of the contract and termination provisions
  • Market check provisions during the contract
  • Contractual audits
  • Discounts, dispensing fees, rebates and pricing optics
  • Clinical programs - prior authorizations, step therapy, dose optimization, ability to block certain drugs and switch to appropriate and less costly alternatives
  • Therapy Management programs 
  • Specialty drug management and assistance programs
  • Reporting
  • Benchmarking
  • Analysis
  • Copay plan design
  • Opportunities to eliminate waste
  • Carving in vs carving out
According to Milliman, “Pharmacy drug costs are growing at a higher rate than other medical expenses”. There is no magic bullet to manage this accelerating trend. That said, it is imperative to scrutinize and negotiate your PBM contracts to avoid costly surprises. Hidden and silent provisions in complex pharmacy contracts do significantly impact total pharmacy net costs. Investigate!

Investigation is Critical
In the world of pharmacy benefit management, one must begin with the contract. To ensure a contract is protecting you, the employer, you must investigate all details of your contract first. It matters what is NOT stated in the contract as well! Investigate your definitions - of all drugs, how Rx claims will be processed, what types of claims will be excluded from guarantees and rebates, clinical programs, rebate guarantee details and timing, contractual and claims auditing, market check timing to ensure pricing is still the best it can be for you, current drug utilization patterns and programs to reduce waste.

Your investigation continues with reviewing your reports received over the past twelve months, as well as utilization patterns of specialty vs. non-specialty drugs. In your investigation, perhaps you'll find that there are drugs with significantly less expensive alternatives that could save tens of thousands dollars a month. Perhaps there are opportunities for a diabetes management program to ensure patients are compliant, and leading a healthy lifestyle, thereby reducing medical costs. Should a stop loss program be implemented to protect you from very expensive drug therapies, like Hep C, costing at least $90,000 annually? Investigating clinical and drug utilization patterns can show opportunities to save, without compromising quality.

In your investigation, analyzing your plan design is critical. Are you paying a higher percentage for brand drugs than your counterparts? Same question for specialty drugs? If so, investigate why that is. Perhaps revising copayments and clinical edits to encourage use of generics whenever possible is necessary. Perhaps implementing specialty copay assistance programs is an option. Investigate all clinical management tools and benefit copay modeling opportunities.

Investigate the proper channel through which specialty and non-specialty maintenance drugs are being dispensed. Low adherence can be causing higher medical costs due to increased office visits to doctors and specialists, the ER, urgent care and even hospitalization. Investigate opportunities for mandatory use of a maintenance network - either 90 days through a designated retail network, a home delivery facility or a specialty medications facility.

Investigate your rebate revenue received - from both your pharmacy benefit as well as your medical benefit. Investigate the percentage of rebates you are receiving from your drug utilization. Since about 50% of all specialty medications are dispensed through the medical benefit, and some of those specialty drugs are generating rebates, investigate where they are going.

Let Synergy Help YOU Investigate Your Pharmacy Benefit Plan!
When was the last time you investigated your pharmacy benefit contract? Pharmacy benefits are complicated, but services are available to help employers understand the complex prescription drug ecosystem. These services give employers and brokers the confidence that they can secure competitively priced PBM contracts, and maintain affordable, high-quality prescription drug coverage for their employees. So, for employers with mid year medical and pharmacy contracts expiring who are troubled by benefit costs and increasing trends, why not schedule a 30 minute conversation with me to discuss your concerns and needs!

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Synergy Pharmacy Benefit Consultants, LLC
2111 Bagnell Dam Blvd #37
Lake Ozark, MO 65049


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