A pharmacy benefits manager, often known as a PBM, serves as a mediator between each player in the pharmaceutical benefits mercantile establishment. Many people believe that pharmacy profits are provided directly by health insurance companies, but in truth, PBMs handle the majority of the work in linking individuals to medications for more than 80% of businesses in the United States.
Corporate employers, health plans, labour unions, and other organisations engage PBMs to communicate with medication makers and handle prescription-related claims. In a nutshell, PBMs serve as intermediaries between employers, plan participants, drug wholesalers, pharmacies, and pharmaceutical corporations. Their goal is to provide the greatest possible health results at the lowest feasible expense. Having an efficient pharmacy benefits strategy and choosing the correct PBM to match an employer’s objectives is crucial to ensuring the success of a benefits plan, optimising cost, and protecting workers’ well-being.
What precisely is the role of a pharmaceutical benefits manager?
PBMs have two primary goals: to curate pharmacy benefit plan alternatives and to assist patients (or “plan members”) in accessing and affording drugs that they need.
1st Objective: Cut Spending
PBMs collaborate with a vast network of retail and mail-order pharmacies to negotiate price. PBMs may also acquire pharmaceuticals from manufacturers at a discount because of their scale and hence power. This allows them to provide patients and employers with better access to pharmaceuticals at competitive prices across numerous retail chains.
Second Objective: Increase Medication Availability
Pharmacy benefits managers make prescriptions more accessible to patients by negotiating directly with drug makers or wholesalers. PBMs negotiate wholesale acquisition cost (WAC) concessions for quantity savings that they may pass on to their customers. This implies that patients may get coverage for a necessary medicine at a cheaper cost to the plan and the plan member.
Furthermore, a pharmacy benefit manager may often function as a counsellor to employers by making suggestions on various pharmacy plan designs, clinical programmes, and other topics.
It’s reasonable to compare the interaction between the PBM, the pharmaceutical producer, and the employer to a tug-of-war. The pharmacy benefits manager sits in the centre, tied to both the manufacturer and the employer, and is tugged in both ways — with the objective of securing a fair bargain for both sides and giving alternatives to reduce prescription benefit costs.
How does a pharmacy benefits manager collaborate with pharmaceutical companies?
PBMs and pharmaceutical makers have a delicate relationship. A variety of financial issues make relationships between pharmaceutical firms and PBMs difficult to handle and comprehend. PBMs are responsible for analysing the cost of a prescription and putting programmes in place to assist patients obtain drugs and employ the most effective treatments as a middleman between pharmaceutical firms and patients. Among these programmes are:
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Rebate schemes
PBMs bargain with pharmaceutical firms to establish the amount of rebates the manufacturer will pay the PBM for certain medications. Depending on the terms of the PBM contract, the PBM may pass on all, part, or none of the manufacturer’s rebate to the employer.
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Formulary protection
A formulary is a list of branded and generic pharmaceuticals that are covered under a certain plan. PBMs develop the list (with the help of doctors and other clinical specialists) to include the most effective and cheap pharmaceuticals. Given the number of prescriptions processed by a PBM, when a drug is on the formulary, it is far more likely to be recommended by a physician. A pharmaceutical producer would want that their products be included in the formulary in order for them to reach the people who need them.
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Prior authorisation schemes
Prior authorization is a pharmacy benefit plan cost-cutting tool that helps guarantee the proper use of prescription medications. Prior authorizations are intended to prevent inappropriate prescribing or usage of certain medications. PBMs designate particular medication classes that need prior permission. When a prior authorization is required, the patient must get clearance from their insurance company before the insurer will cover the prescription and enable the patient to begin treatment.
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Programs for Step Therapy
Step treatment programmes are a form of prior authorization programme that covers both regular and specialised medications. Step therapy programmes are meant to ensure that patients have taken a less costly treatment that has been shown to be beneficial for a particular ailment before progressing to a more expensive drug. As a result, PBMs often develop step treatment regimens for patients on their plans to follow, with the purpose of saving the employer money.
PBMs are also in charge of executing other critical initiatives aimed at reducing waste and increasing adherence, managing high-cost specialty pharmaceuticals, and managing clinical drugs.
What is the role of a pharmaceutical benefits manager in the workplace?
When an organisation contracts with a PBM to develop and manage a pharmacy benefits plan, they generally sign a three-year agreement. During the discovery process, both parties collaborate, and in some circumstances, with brokers and industry experts, to create their perfect pharmacy benefits plan. This includes the ability to choose from a variety of deductibles, co-payments, co-insurances, and therapeutic programmes.
Following the construction of the plan, the employer depends on the PBM to properly manage their prescription benefits and educate their workers about their coverage. PBMs often provide member help via call centres that may answer queries regarding in-network pharmacies or varying co-payments for different medicines. Most PBMs also provide websites or apps with information on eligibility, refills, cost, and coverage regulations.
PBMs are accountable for four major components of the agreement during the contract:
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Processing of claims
PBMs are in charge of processing and stipendiary prescription medication claims within the context of a prescription benefits plan.
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Reimbursement of rebates
As previously stated, PBMs work with pharmaceutical firms to negotiate rebate schemes. There are several sophisticated rebate schemes, however the PBM is in charge of managing these rebates. Depending on the terms of the PBM-employer contract, all, part, or none of the rebate money is returned to the employer.
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Clinical trials
Clinical programmes are intended to promote the greatest clinical results for pharmacy benefit plan participants. PBMs continuously evaluate data and monitor medication consumption to decide what changes should be made to meet the ultimate aim of preserving or enhancing health benefits while lowering costs.
Prior authorization, quantity limitations, and step treatment are all clinical programmes used to guarantee the greatest quality of care is provided to the patient in the most suitable environment.
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Drug usage evaluation
PBMs also play a significant role in pharmacy benefit programmes’ safety. A drug usage review is a life-saving programme that requires a medication to be reviewed to assess its efficacy, possible risks, potential drug interactions, and other safety issues. Because PBMs manage their own pharmacy networks, they have access to a patient’s prescription history and may notify patients or doctors to possible unfavourable medication interactions caused by combining medicines.
The PBM also establishes precise conditions that must be met before particular medications may be delivered. Criteria might include validating the diagnosis, establishing whether a genetic component is present, ensuring appropriate testing is performed, and including a professional throughout therapy. All of this is done to ensure that a patient is following the right treatment procedures, is not exceeding the required amount or dose, and is reacting effectively to the drug.
Employers depend largely on PBMs to provide them with trends and information on the performance of their plan and how to improve it. Employers must have an ongoing discussion with their PBMs to ensure that their members get the best possible care at the lowest possible cost.
How to Find the Right Pharmacy Benefits Manager for Your Company?
To handle your pharmacy benefits plan, you may select from hundreds of PBMs and innovative suppliers. However, comparing offers from different PBMs to find a provider that meets the requirements of your population while saving your business money might be tough. As a result, it is vital to employ an innovative procurement platform that provides more insight into what PBMs are giving you in order to get the most competitive PBM contract. Buyer beware: you must guarantee that your procurement marketplace is completely transparent and not associated with favourite PBMs or suppliers. A transparent procurement marketplace is the only way to guarantee that you are receiving the best possible price for your PBM. For more information visit our website.
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