Who made PBMs out to be the bad guy? Oh, PBMs did!
Pharmacy Benefit Managers (PBMs) have been cast as the villain of the insurance world. And for good reason. Historically, the whole business is shady at best: rebates have “mysteriously” not been passed through to clients, PBM profits have soared with charging clients “$0 admin fees”, and employers wonder if certain medications have been pushed because of closed-door deals happening far away from the pharmacy counter.
It’s no wonder that in the world of health insurance, PBMs are an easy entity to distrust.
But that makes it all the harder for honest PBMs to stand out. Because aren’t these just words that they all use to sound trustworthy: “transparent” and “pass-through”?
So, to help you overcome those trust issues, here are five key requirements to unlocking the mystery and to help choose your future partner. If they can’t answer these with a resounding yes, or don’t have the proof to back it up, you can brand them as “a bad guy PBM”.
Otherwise, here’s to giving the good guys a chance!
The Good-Guy PBM test:
- No-Spread Pricing: spread pricing is a tactic used by PBMs to bake their profit into the drug cost, leaving plans clueless of how much the PBM is profiting. As you can imagine, this sort of arrangement allows PBMs to be extremely greedy. Sure, $0 admin fees look great, but when you pull back the curtains, the cost of spread pricing isn’t pretty. Be sure your PBM looks you in the eye and tells you, with words and a contract, how they make money.
- Independent: one of the major problems with PBMs is many have partial ownership or investments from major carriers. This creates a conflict of interest—what’s best for clients may not always be what’s best for shareholders. When selecting a Pharmacy Benefit Manager, ask about ownership. Who benefits most for them: clients or owners? The answer to that question tells you what you need to know.
- A Contractual Rebate Policy: rebates are a hot-button issue when it comes to PBMs. As the plan sponsor, contractually require 100% of rebates to be passed back to you.
- Clinical Expertise: It seems like a no-brainer, but there are PBMs that don’t actually have a pharmacist looking over claims, Rx plan designs, or prior authorizations. Clinical pharmacists should have a seat at the table when developing your pharmacy plan. If that isn’t something your Pharmacy Benefit Manager can do, then you need to look elsewhere.
- The “Real Person” test: Who are your employees going to talk to? Medications are personal and when your employees have questions, you want them to have someone real to talk to, and most importantly, someone who really cares. Call their helpline: if a real person doesn’t pick up, keep looking.