Managing the pharmacy benefit efficiently is no easy task. It requires quite a bit of time, effort and skill to do it right. Anyone with business training can look at a P&L statement and determine whether or not a company made a profit. However, understanding the story behind the numbers requires a certain set of skills only a certified public accountant can provide, for example. The same can be said for pharmacy benefits.
Pick anyone from HR, finance or procurement and they will tell you succinctly the pharmacy cost trend is not sustainable. Ask these same professionals how to bend the trend (without increasing employee cost share, restricting access or reducing benefit levels) and you'll likely get crickets. You're probably thinking, that's why we hire brokers and consultants. I'll let the note Michael Critelli, former CEO at Pitney Bowes, sent to me address that point.
"I am pleased that you wrote the particular essay I downloaded. Many corporate benefits departments do not understand that they are overmatched in negotiating with pharmacy benefit managers, as are the "independent consultants" who routinely advise them. The first step in being wise and insightful is admitting what we do not know, and you have humbled anyone who touches this field."
For those interested in improving their company's pharmacy benefit management results and unafraid of unconventional concepts, here are 10 steps in the right direction.
1. Get better educated
“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” — Alvin Toffler. Education is the most logical and effective foundation for achieving extraordinary results in pharmacy benefit management services.
In order to improve on the job execution and career growth, benefits consultants, finance managers, procurement and HR professionals must expand their PBM knowledge beyond a functional role and understand exactly how each domain works together within the pharmacy distribution and reimbursement system. Don't be a spendthrift
learn the intricacies of managing pharmacy benefits like a pro.
2. Embrace reverse auctions
I liken manual scoring and paper-based RFPs to typewriters and the Startac cell phone. Each served its purpose but their day of usefulness have long passed us. Non-fiduciary PBM companies have learned how to leverage the purchasing power of the
unsophisticated plan sponsor purchaser to their financial advantage. There are several ways to learn about the specific services and fees of those PBMs.
One, the request for information (RFI) is a shorter less-structured instrument compared to RFPs. It asks a handful of PBMs to answer some very targeted questions. The responses to those questions should be scored automatically based upon a set of predetermined criteria. When coupled with an automated
reverse auction, the RFI can be a powerful tool in combating high PBM service fees.
PBMs have gotten so good at RFPs that they've just become a marketing tool for the PBM. The contract [language] is the white elephant purchasers seem to ignore or not pay nearly enough attention.