PBM Negotiation to Manage Drug Benefits: Why You Need PBM Consultancy

PBM ConsultancyAccording to the United States Society for Human Resource Management, in 2014, over 70 percent of employers spend more than 16 percent of their health care budget to cover health care benefits with pharmacy benefit plans. This represents around 18 percent of health benefit costs against 3 percent 40 years ago when fee-to-service plans where common.

Nevertheless, as these health care services increasingly move to managed care arrangements from fee-to-service plans, drug prescribing is tending toward more centralized management; PBM (Pharmacy Benefit Management) activities are being implemented by provider organizations, managed care organizations (MCOs) and self-funded employers in a bid to control drug costs and improve health care quality.

Why PBMs?

In today’s health care system, PBMs provide drug-related services to administrate pharmacy costs. Managing pharmacy costs is of great importance as employers — MCOs as well — press for minimal premium costs. PBMs accomplish this cost containment through drug management strategies such as the implementation and management of restrictive positive lists and pharmacy networks, processing of drug claims, and negotiating with pharmaceutical manufacturers for rebates while promoting generic drug usage.

Nonetheless, countervailing forces such as negative reactions of the public and elected officials to the positive lists, and concerns about patient confidentiality are on the rise, which necessitates PBM consulting to always in check.

PBM Negotiation

PBM negotiation helps guide PBM financial arrangements within federal and state regulations and compliance. These negotiations demand you utilize specialized pharmacy benefit consultancy in advising your staff to negotiate the best deal. It is, however, imperative that, from time to time, as you review your PBM contract to control PBM costs, you confirm your consultant’s pharmacy benefit capabilities against the market trends.

READ  Get Your Pre-Baby Weight Back with These Smart, Safe Methods

PBM auditing is also important in monitoring and verifying the performance of your company’s PBM architecture.

The whole world over, the pressure to contain the cost of drugs stem from the increase in drug costs; however, PBMs help third-party payers design, administer and implement outpatient drug benefit programs. So, why not get the best possible value from your PBM plan?