Three Things You Must Understand In PBM Contracts

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

As the person in charge of your company’s pharmacy benefits, one thing you are surely held responsible for is understanding the contract between you and your PBM, which means understanding how the “words” in the contract change/effect the “numbers” or financial terms. However, since these can be rather complex, we know it may be difficult for some to fully grasp what the language really means. That is why as your expert pharmacy benefit consultant, we have listed three things you must know below:

Drug classifications and cost: Though generic drugs and brand name drugs are equivalent to one another in their composition and overall purpose, a major difference between the two is the price. It is important to know that PBMs state in the contracts that they often have a “proprietary algorithm”, which allows them to choose which drug they designate as generic and which as a brand drug. Similarly, you should also be aware of not only the pricing of specialty drugs, but also how they differ from Limited Distribution Specialty drugs and how the prices changes on a continuum. Have you been monitoring the discounts applied to existing and new high cost specialty drugs utilized by your plan? Probably not, and the PBMs take great advantage of that lack of monitoring.

Rebates: As there are plenty available, you must make it a point to discuss rebates with your PBM. However, at PBIRx we are fully aware that this is one topic PBMs often fail to comply with, which is why we highly recommend taking advantage of our auditing service AuditRx®. By allowing us to analyze your plan, we can discover any gray areas and generate recoveries for you.

New approvals: What procedures does your PBM follow when new drugs hit the market or when the PBM excludes drugs from the  formulary? Many times the drugs are similar to or more costly than the excluded drugs; however, the PBM receives significant rebates for these drugs. Do you discuss with your PBM what percentage of those rebates you are receiving for those drugs and when you will receive those rebates, especially as pharmacy costs continue to rise with little sign of slowing down? Remember that PBMs disclose that you do NOT receive the interest value of any monies they receive and hold until contractually required to remit to clients, i.e. rebate remittance.

Even after you have gone through topics like these with your PBM and have thoroughly read your pharmacy benefit contract, it would still be in your best interest to connect with a pharmacy benefit consulting firm like PBIRx. Simply put, it is our priority to ensure that all actions taken are in your favor, as opposed to the PBM’s, and PBIRx is dedicated to finding your company any and all cost-saving opportunities that are available to save money in your pharmacy benefit budget.

To learn more about our consulting and auditing services, please visit us at www.pbirx.com or contact us at (888) 797-2479.