Pharmacy Benefits Uncut

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In this edition of the Pharmacy Benefits Uncut newsletter I’d like to share a resource guide for HR professionals. You folks play a critical role in the employer-sponsored pharmacy benefits world but you probably don’t learn a lot about this topic in school.

And it’s likely your lack of knowledge in this area is contributing to exponential increases in your drug spend with no commensurate improvements in your plan members’ health.

You’re charged with figuring out a pharmacy benefits plan for your members, but in many cases you’re probably deferring that decision to a broker or advisor who may or may not be acting in your best interest.

The good news is that arming yourself with a few critical pieces of information can cut your drug spend by 20% or more while improving the health of your members.

So today I’m going to provide you with a guide that’ll change your approach to purchasing pharmacy benefits. Here are the four areas in which you need to develop some expertise so that you can give your plan members access to the most effective medications at the lowest possible cost.

#1 Understand How the System Works

The employer-sponsored pharmacy benefits system is set up to keep drug prices high and push them higher and higher every year. This industry is loaded with misaligned incentives and intermediaries that are driving up your drug spend while providing nothing in return for those extra dollars. If you’re going to have any hope of breaking their stranglehold you need to understand the game they’re playing. Here are the issues you need to learn about:

a) How PBM rebates really work

b) How to take charge of your relationship with your PBM​

c) The information gap that costing you a boatload of money

d) How your drug formulary really works

#2 Develop Some Basic Clinical Knowledge

No you absolutely don’t need to go back to school and become a pharmacist or get a PhD in drug development or some other related field. But having some basic clinical knowledge will give you a leg up in navigating the pharmacy benefits world and perhaps more importantly give you the leverage to ask a few hard questions of your PBM and other vendors. Here’s what you need to know:

a) How biosimilars can save you money

b) The basics of cell and gene therapies, precision medicine, and GLP-1’s

c) Why it’s important to have a healthy scepticism towards innovative new drugs

#3 Making Your Plan Members Full Partners in Their Pharmacy Benefits Plan

You can spend oodles of money on your pharmacy benefits plan implementing cutting edge technologies, purchasing a multitude of point solutions, providing access to every new drug under the sun, but if these things aren’t meeting the needs of your members, they’re useless. Understanding the values, priorities, and challenges of your members’ as it relates to their pharmacy benefits is imperative. Here’s what you can do to ensure you’re looking out for your members:

a) Develop a plan member engagement strategy

b) Design a member-centric pharmacy benefits plan

#4 Practical Strategies for Optimizing your Pharmacy Benefits Plan

All the knowledge in the world isn’t going to fix your pharmacy benefits plan. You’ve got to take the concrete steps required to generate real savings on your drug spend and see tangible improvement in your members’ health. Here are some practical things you can do to begin the process of transforming your pharmacy benefits:

a) Understand your fiduciary duty as it relates to pharmacy benefits

b) Take simple actions to optimize your pharmacy benefits plan

c) Understand the factors driving up your pharmacy spend and how you can address them

d) Ask important questions about your pharmacy benefits plan

e) Ensure your pharmacy benefits plan is financially sustainable

The Bottom Line

As an HR professional, you’re primarily responsible for your organization’s pharmacy benefits, yet you receive little to no formal training in this area. Use these resources to help optimize your pharmacy benefits plan and watch it transition from a bottomless money pit into a financially sustainable scheme focused on the health of your plan members.

That’s all for today.

See you in two weeks,

Nina

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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