What's the bottom line? For many employers, that is the single biggest question they have regarding pharmacy benefit plans. It's not always an easy question to answer. Analysts note that costs are moderating, yet for employers and plan sponsors, pharmacy costs continue to take a huge chunk out of their benefit dollars.

In addition to price within a pharmacy benefit plan, value encompasses:

• Quality (defined by outcomes and employee quality of life)
• Price (how much will this cost?)
• Member satisfaction
• Value-added programs (e.g., care management for patients with diseases such as cancer or multiple sclerosis)
• Innovative approaches to benefit design
• Trust and faith (exemplified by a PBM's willingness to provide appropriate disclosure on pricing and practices)

Many factors go into what employers pay for their pharmacy benefit program — not just the price of the prescription drugs. For example, rebates, discounts, administrative fees and other services a pharmacy benefit plan provides, such as mail service, disease management programs, etc. also contribute to cost - and to value.

The cost of a pharmacy benefit plan’s services should not be measured by how much it charges for prescription drugs, or how much they will charge for filling prescriptions (which are often the top items employers look at). Costs should be measured by total claims and fees (e.g., administrative, network, etc.), minus rebates. Because roughly 97 percent of this benefit’s net cost is incurred claims (how many prescriptions are filled; what those prescriptions cost), the best way to lower costs is to manage claims through strong clinical programs and effective utilization management. Pharmacy benefit programs that provide those capabilities ultimately will provide the best value.