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Potential cost savings generated by PBMs include a 40 to 50 percent annual savings on health plan drug costs, a $941 reduction on costs per patient annually, and savings of $6 on every $1 spent for PBM services.
PBMs can also improve medication adherence for a payer’s beneficiaries, according to PCMA.
Higher adherence rates help payers determine if the drugs they are purchasing are being used to successfully treat medical conditions, and are linked to the improvement of costly chronic diseases the National Institutes of Health determined.
PBMs regularly work with specialty pharmacies to help beneficiaries that struggle with adherence, and provide educational resources on the individual benefits of adherence.
PBMs also have extensive expertise and relationships with pharmaceutical companies that can be an advantage when establishing value-based drug contracts.
While payers often struggle with pharmaceutical companies in establishing value-based contracts, according to analysts from PricewaterhouseCoopers, PBMs advertise themselves as competitive negotiators. PBMs also tend to receive significant discounts on drugs, as well as rebates from manufacturers.
Payers can also integrate their pharmacy benefits with medical benefits to save on costs, and can improve medication adherence by implementing new strategies internally.
According to research from Cigna, integrated medical and pharmacy benefits can help employers sponsoring their own health plans save annually, reduce overprescribing of opioids, and improve medication adherence rates.
The Cigna study found that integrated benefits helped employer-sponsored health plans to achieve annual savings of $2816 for diabetic patients. Leaders at Cigna added that these integrated benefits allowed health plans to increase member engagement with health improvement programs.
“Even the best doctors and most effective medicines can only do so much if patients are not also actively involved in improving their health,” said Jon Maesner, PharmD, Cigna chief pharmacy officer.
“Under the plans we administer, pharmacy is the most frequently used benefit, and we use those touchpoints to encourage customers to participate in programs available across their benefits. The study helps confirm the added value we can provide to customers and clients when we are able to use this connected approach.”
Tackling prescription spending without the help of a PBM can also help payers avoid the fact that PBM contracts are often difficult to comprehend, and financially benefit PBMs at a payer’s expense.
The National Pharmaceutical Council (NPC) found that only 30 percent of employers understood the clauses of their PBM contracts, and 63 percent did not find these contracts to be transparent about their performance guarantees.
“Fifty-eight percent of employers also believe that contracts are too complex, ambiguously worded, and often benefit PBMs at the expense of employers,” NPC added.
Experts from the Midwest Business Group on Health (MBGH) also argued that if employers don’t effectively hold PBMs accountable, then they could lose out on earnable revenues.
MBGH believes that employers/payers should make sure that dollar-amount rebates on prescription drugs “roll back” into the health plan, so that those dollars can be used to increase plan/benefit quality.
MBGH also found that PBMs can purchase a drug for an employer, and keep the profits if the co-pay for the medication is higher than the price of the drug.
Payers that have the populations and resources to contract PBMs may be able to curb unnecessary prescription drug spending, and payers should always review the details of PBM compensation before entering into agreements. But payers that may require an expert partner to help save prescription drug costs stand to benefit from a PBM contract.