Prescription benefits: 3 things you should be discussing with your PBM consultant

The demand for more accountability and transparency in the pharmacy benefits industry is gaining traction with calls for stronger legislation, more favorable terms for employers, and enhanced visibility into PBM business practices. While these are positive trends, government-led changes can take time to implement. Thankfully, there are alternative paths for creating plan and member transparency that are actionable today.  

What does transparency mean?

Transparency is one of those buzzwords, but what does it have to do with managing prescription benefits? In a nutshell, a transparent pharmacy benefit gives plan sponsors line of sight into their costs and utilization: easy access to their data; clear understanding of why they are paying what they are paying; what rebates they are receiving; and the information necessary to understand what can be done to improve their plan performance. 

There is no better time for employers to have greater visibility and control over their benefits program. Plan sponsors are under tremendous pressure to deliver meaningful prescription benefits to employees while keeping costs down. With new regulations pending, there’s even more to consider. Your PBM consultant is a good place to start for visibility into your prescription drug benefits, which can be a real driver of benefits costs.  

Here are three key discussions plan sponsors should have when looking for a broker or consultant on prescription benefits. But above all, the first question should be: Are the broker’s interests aligned with those of the plan? The answer is at the root of a strong, mutually beneficial relationship.  

1. Data ownership and analytics: The key to understanding it all

Most plan sponsors do not understand their plan data, and many do not even have access to it.  Without transparency to plan data, employers are left in the dark about the true cost drivers of medication for the plan and for members, utilization of the plan, and more. Transparency is impossible without plan data, and if the plan sponsor doesn’t own their data, it is a red flag.  

A pharmacy benefits consultant should be an advocate to make sure plan sponsors have access – and even more importantly – the analytics power to understand the data. Good data analysis can illuminate opportunities for cost savings, utilization improvements, and other ways to shift trends positively for the plan and its members. 

Be prepared: This isn’t a 10-minute conversation. But it is a worthy one. 

Questions to ask:  

• How does the PBM ensure that I’ll have access to our plan data?
• Will I have to pay to have access to plan data?
• How is the plan data analyzed, and how often will I see the reports?
• How will the data be managed and protected?
• What does the PBM do to help identify additional plan and member savings opportunities?

2. More than rebate guarantees: Consider net plan cost

Rebate guarantees usually get all the attention when evaluating a PBM—so much so that the  Federal Trade Commission (FTC) is looking at them. But it’s net plan cost—the cost of the  medications —that really matters. 

Believe it or not, driving rebates can increase the overall plan cost, because rebate guarantees  often rely on driving the utilization of certain high-cost drugs instead of highly effective low-cost alternatives. That’s bad, and it’s hard to see without considering the net plan cost. 

Think of it this way: Higher rebates don’t always mean greater plan savings, just like higher prices don’t always mean higher quality, particularly with prescription medications. A better understanding of net plan costs can lead to opportunities to improve benefit design, like spotting a medication that has a big rebate but its net cost to the plan is more than an inexpensive drug that offers the same or better clinical outcomes. 

That’s not possible without understanding net plan costs, which a broker can and should advocate for, because that understanding can open a new world to plan sponsors. This doesn’t mean leaving rebates behind—it’s just a richer way to look at the plan’s performance. 

Questions to ask: 

• How do I know which drugs are being rebated, and whether those rebates are the best way to lower net plan costs?
• How do I know whether I am receiving 100% of the rebates offered?
• How do our plan costs compare to other, similar employers (i.e., what are our benchmarks?)
• If net costs are higher, why are they higher?
• If net costs are going up, is there something we can do to impact that? • Would a slight change to the plan benefit design change the cost equation in a meaningful way without impacting the quality of the coverage?

3. Using good benefit design to align incentives

Closely related to net plan cost is a good benefit design—and a good one should consider health care consumer trends. Until the early 2000s, plan designs attempted to simplify member costs, with a simple co-pay structure because it was difficult for members to anticipate their expenses. Now with a shift toward high-deductible health plans and healthcare consumerism, integrated tools can help members know their out of pocket costs while they are with their provider and new benefit designs can be implemented to help guide selection of more cos effective medications while still supporting a positive member experience.  

Consumers are used to comparing prices and alternatives from their mobile devices for a  myriad of purchase decisions such as apparel or electronics, and they should have the same opportunity to evaluate their options for prescription drugs with their clinician at point of care. With a plan that does not obscure drug prices, choice empowers members with their options through price transparency while also conveying the value of their benefit coverage. A broker 

can help determine how the plan will engage members in on-trend ways and advocate for thw right plan design that delivers a quality benefit while guiding utilization choices that helps keep costs down. 

Questions to ask: 

• Is the plan design supporting healthier outcomes and improving medication adherence?
• Are plan members sharing the appropriate amount of the cost burden?
• Are there benefit design changes can I consider that would improve the quality of our benefit and still lower plan costs?
• Under our plan design, how much are members paying for their medications? Are they able to afford their medications?
• What tools are offered by the PBM to help members manage their medication costs? How are members empowered to save money on lower-cost medications?
• Are my members having a positive experience with this benefit?

Productive conversations mean a stronger plan—and happier members

When the broker’s values align with those of the plan, discussions like these lead to a  meaningful, transparent partnership where employers feel advocated for, members feel supported and in control, and everyone saves on prescription costs. 

To that end, it’s important to consider: Does the broker ask good questions on behalf of the plan? I’ll leave you with an example: A few new clients, who have recently transitioned to Prescryptive were previously following PBM-driven designs where high-cost drugs were being filled at the plan’s expense, just to drive rebates. Overall net plan costs were higher, simply because these high-cost drugs had been covered on the formulary- a list of medications thar had not been fully shared with the plans. 

These are the games that PBMs sometimes play. A good broker will be aware of that and monitor closely, ask good questions, and evaluate options for improvements, all in service of the plan sponsor and their members. 

Andrea Pickett is the Chief Customer Officer at Prescryptive, where she oversees all  aspects of customer relationships and operations to ensure every customer achieves  positive benefits from Prescryptive’s products and services. Prior to Prescryptive,  Andrea spent over 20 years working with healthcare technology and pharmaceutical  companies in various customer-facing leadership roles including account management,  product development, sales, and marketing. 

Reference: Section 8: High-Deductible Health Plans with Savings Option – 9540 | KFF