Pharmacy Benefits Uncut

Read time: 4 min

​Read this newsletter online​

You, like many employers, might feel that tackling your pharmacy benefits plan is a mountain you can’t scale. It’s probably complicated by a convoluted PBM contract designed to keep you in the dark about what’s really going on with your plan, a broker or advisor who may have little interest in toppling the applecart, and few resources within your organization to help you on this journey.

But it’s not as hard as it seems if you begin by focusing on these four steps:

#1. Make a list

You need a concrete list of things in your pharmacy benefits plan that need fixing. Take a detailed look under the hood and follow the money. Figure out exactly where your pharmacy dollars are going. What are you paying for drugs and how much of that is going to the PBM? Are misaligned incentives like PBM rebates driving up your drugs costs while providing little to no additional value for you and your plan members? Also, understand your plan members perspective. Are they struggling with out-of-pocket costs for their medications? Are they interested in access to more clinical services provided by pharmacists to help them use their medications more effectively? Use this list as a guide to transform your pharmacy benefits plan.

#2. Prioritize

Exercise #1 will likely yield a lot of information so you’ll need to prioritize. Obviously optimizing your pharmacy benefits plan isn’t going to happen overnight. It’s an ongoing process that will require time and patience. So decide which issues you’ll tackle first. Select two or three things that you’ll focus on fixing immediately. Consider how you can achieve a few quick wins before tackling the more complex problems that require additional resources and effort. Having some successes under your belt will best position you to confront the bigger issues.

#3. Execute

Make a detailed plan of how you’re going to achieve the goals you set out in #2. Establish timelines and the specific steps you need to take. Every single employer I know that's been able to optimize their pharmacy benefits plan has taken an active, hands-on approach to managing it and fulfilling their fiduciary duty. Unfortunately, there’s no short-cut. The typical approach of trying to get your ducks in a row two months before renewal of your PBM contract isn’t going to cut it. But taking small steps every day to move in right direction will. Even just a conversation with your broker or advisor to determine whether their incentives are aligned with yours or arming yourself with information about how the employer-sponsored pharmacy benefits industry really works or understanding the needs of your plan members are all wins that will create momentum to drive you forward. You’d be surprised how much you can achieve simply by closing the information gap with your PBM and asking a few hard questions.

#4. Evaluate

Your pharmacy benefits North Star should be providing your members with access to the most effective drug therapies at the lowest possible cost. Evaluate every step you take to transform your plan in the context of this goal. Develop an objective, quantitative way to measure whether the changes you make are moving the needle in this direction. Needless, to say, you’ll have a few flops along the way. But by having a systematic evaluation program in place you’ll be able to nip these failures in the bud and double down on the strategies that are working for you.

Your pharmacy benefits plan will never be perfect, but odds are it could be much better than it is now. Don’t let the pursuit of perfection prevent you from taking steps to improve it. Also, don’t be paralyzed by fear of its complexity. It’s designed by PBMs and other entities in the industry to be complex and do exactly that – scare you into accepting the status quo. Transforming it is about consistently taking actions that ensure every dollar of your pharmacy spend directly leads to improved health for your plan members and ruthlessly eliminating those that don’t.

If you know someone who would find this newsletter useful please share it. Was this newsletter forwarded to you? Sign up here.

Pharmacy Benefits Uncut is produced by Healthcare Decision Making, a consultancy that helps small and medium sized employers optimize their pharmacy benefits plan. We offer a comprehensive range of services focused on three areas: PBM procurement, ongoing management of your pharmacy benefits plan, and self-policing and oversight of your pharmacy spend. To learn more about how Healthcare Decision Making can help you, email Nina Lathia at nina.lathia@healthcaredecisionmaking.com