pharmacy benefit managers 101
Post on 28-Dec-2021
5 Views
Preview:
TRANSCRIPT
Presented by
Pharmacy Executive Forum
What health system leaders need to know
Pharmacy Benefit Managers 101
Regina Lohr
Senior Consultant
lohrr@advisory.com
202-568-7895
© 2019 Advisory Board • All rights reserved • advisory.com
‹#›
Road mapRoadmap6
What is a PBM?1
2 How do PBMs make money?
3 What is the controversy surrounding PBMs?
4What unique opportunities do health systems
have to work with their PBM?
© 2019 Advisory Board • All rights reserved • advisory.com
7
Despite high-profile coverage, pharmacy benefit managers (PBMs) still cloaked in mystery
The Washington Post
“CVS’s $69 billion merger with Aetna is
approved in deal that could transform health-
care industry”
Forbes
“UnitedHealth And OptumRx To Pass Drug
Maker Rebates To More Clients”1
Rep. Earl L. Carter, PharmD (R-Geo.)
“The most immediate and significant impact
we can have on prescription-drug pricing is to
have transparency and expose the
middleman.”
Sen. Ron Wyden (D-Ore.)
“What PBMs do to earn all those profits is a
mystery.”
New York Times
“Express Scripts Offers Diabetes Patients a
$25 Cap for Monthly Insulin”
Director of Benefits
“It’s hard to know if you are maximizing the
value of your PBM contract. It’s very
conflicting and confusing.”
Source: Bluth, R., “Can Someone Tell Me What A PBM Does?” KNH, https://khn.org/news/senate-hearing-drug-pricing-lesson-on-pharmacy-benef it-managers/; Carter, E., “PBM Practices Drive
Up Costs for Rx Drugs,” WSJ, https://www.wsj.com/articles/pbm-practices-driv e-up-costs-for-rx-drugs-11551039255; Fung, B., “CVS’s $69 billion merger with Aetna is approved in deal that could
transform health-care industry,” The Washington Post, https://www.washingtonpost.com/technology /2018/10/10/justice-department-approv es-cvss-billion-merger-with-insurance-giant-aetna/;
Japsen, B., “UnitedHealth And OptumRx To Pass Drug Maker Rebates To More Clients,” Forbes, https://www.f orbes.com/sites/brucejapsen/2019/03/12/unitedhealth-and-optumrx-to-pass-drug-
maker-rebates-to-more-clients/; National Pharmaceutical Council, “Toward Better Value,” NPC, https://www.npcnow.org/system/files/research/download/npc-employer-pbm-survey-final.pdf;
Thomas, K., “Express Scripts Offers Diabetes Patients a $25 Cap for Monthly Insulin,” The New York Times, https://www.ny times.com/2019/04/03/health/drug-prices-insulin-express-scripts.html;
Pharmacy Executive Forum Interviews and Analyses
1. Advisory Board is a subsidiary of UnitedHealth Group,
the parent company of UnitedHealthcare, and Optum.
All Advisory Board research, expert perspectives, and
recommendations remain independent.
© 2019 Advisory Board • All rights reserved • advisory.com
8
Health plans hire PBMs to manage pharmacy benefits
Pharmacy
Manufacturers
Pharmacy
Benefit
Manager
Health Plan
Sponsor
• Negotiate discounts and rebates
• Determine formulary placement
• Manage prescription drug claims
• Maintain a list of drugs covered by the
plan (formulary) and any restrictions to
their use
• Set reimbursement rates
• Create networks of preferred
pharmacies
• Facilitate transactions at point of sale
PBMs work across industry stakeholders
Pharmacy Executive Forum Interviews and Analyses
© 2019 Advisory Board • All rights reserved • advisory.com
9
PBMs’ core value proposition is lowering drug costs
DATA SPOTLIGHT
Annual drug
and related
medical cost
savings
reported by
PBMs
40-50%
Three strategies PBMs claim drive plan savings
Price
Negotiate manufacturer
rebates and pharmacy
reimbursement rates
Drug mix
Promote generics and
preferred brands through
substitutions, step
therapies, and co-pay tiers
Reduce inappropriate use
through prior authorization,
dispensing limits, and
clinical programs
Volume
21 3
Source: Visante, “The Return on Investment (ROI) on PBM Services,” pcmanet, https://www.pcmanet.org/wp-content/uploads/2016/11/ROI-on-PBM-Services-FINAL.pdf
Pharmacy Executive Forum Interviews and Analyses
© 2019 Advisory Board • All rights reserved • advisory.com
10
1. Market share figures for the largest companies also include some claims from smaller, regional
PBMs who contract with the larger entities as rebate aggregators or claims processors.
Source: Fein, AJ, The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers, Drug Channels
Institute, 2019. Roehrig, C., “The Impact of Prescription Drug Rebates on Health Plans and Consumers,” Altarum,
https://altarum.org/sites/default/files/Altarum-Prescription-Drug-Rebate-Report_April-2018.pdf
Consolidation gives PBMs strong negotiation position, leads to questions about transparency
Three largest PBMs manage majority
of U.S. prescriptions1
Share of pharmacy
claims processed
PBMs’ size leads to questions about
hidden profits
76%
Large market share allows
PBMs to extract large
rebates from manufacturers
Complex contracts
obscure actual charges
for their services
Pharmacy Executive Forum Interviews and Analyses
CVS Caremark30% market share
Express Scripts23% market share
Optum Rx23% market share
Vertical integration with insurers likely
to increase PBM market dominance
© 2019 Advisory Board • All rights reserved • advisory.com
‹#›
Road mapRoadmap11
1
2
3
4
What is the controversy surrounding PBMs?
What unique opportunities do health systems
have to work with their PBM?
What is a PBM?
How do PBMs make money?
© 2019 Advisory Board • All rights reserved • advisory.com
12
Contract with plan sponsors dictates PBMs’ potential revenue sources
Manufacturers
Patients
Plan sponsors
Pharmacies
• Spread pricing
• Specialty pharmacy
• Prior authorizations
• Opt-in programs
• Administrative fee
• Rebates
• Administrative and
consulting fees
Copays and
co-insurance
Pharmacy fees and
concessions
Pharmacy Executive Forum Interviews and Analyses
PBMs commonly generate revenue from multiple stakeholders
© 2019 Advisory Board • All rights reserved • advisory.com
13
Source: Langreth, R., et al., “Big Pharma’s Secret Drug Pricing Practices,” Bloomburg, https://www.bloomberg.com/graphics/2016-drug-prices/; The Pew Charitable Trusts, March 2019, https://www.pewtrusts.org/en/research-
and-analysis/reports/2019/03/08/the-prescription-drug-landscape-explored; . Pharmacy Benefit Management Institute, ”2018 Trends in Drug Benefit Design,” PBMI, www.pbmi.com/benefitdesignrpts
Hypothetical Rebate Example
Rebates provide price discounts, passed to plan sponsor
Manufacturer rebates
passed through to plan
sponsors in 2016
$89B
Plan sponsors with 100%
rebate pass-through
49%
Revenue source: Manufacturers
DATA SPOTLIGHT
Pharmacy Executive Forum Interviews and Analyses
Plan sponsors with 0%
rebate pass-through
17%Net price after
rebates
Rebate passed
through to
health plan
Rebate retained
by PBM
List price before
rebates
$1,728
$361$36
$1,331
Negotiated rebate:
23% of list price
$397
Humira 40-ml injection
© 2019 Advisory Board • All rights reserved • advisory.com
14
Source: Lopez, L, “The Feds just asked ahuge healthcare company who their real slients are and the answer is totally unsatisfying,” Business Insider, https://www.businessinsider.com/sec-looks-into-express-
scripts-rebates-from-pharmaceutical-firms-2017-12; Breimhorst, M, “What You Need to Know about The Drug Rebate Economy,” PSG Consultants, https://www.psgconsults.com/blog/the-drug-rebate-economy
Administrative and consulting fees typically retained by PBM
37%
DATA SPOTLIGHT
Percentage of
Express Scripts
gross revenue
in 2017 came
from pharma
receivables,
including
rebates
Revenue source: Manufacturers
PBM
Manufacturers pay fees to PBMs for a variety of services
PBMs demand compensation when drug
price inflation exceeds negotiated rates
Price protection
PBMs administer rebate transactions
Administrative services
PBMs provide data to manufacturers, such as
reported side-effects
Utilization data
PBMs are tying risk-sharing agreements to
value and outcomes for drugs with
supporting metrics
Guaranteed outcomes
Pharmacy Executive Forum Interviews and Analyses
© 2019 Advisory Board • All rights reserved • advisory.com
15
PBM revenue from spread pricing hidden from plan sponsors
Revenue source: Plan sponsors
Per pill price
billed to
health plan
$0.57Per pill price
paid by
pharmacy
$0.26 $27.90Spread kept
as PBM profit
EXAMPLE2Spread pricing
on re-packaged
medications in
PBM-owned
pharmacies
Two common sources of spread pricing
Amount PBM
billed to
health plan
$26.87Amount PBM
paid retail
pharmacy
$5.19 $21.68Spread kept
as PBM profit
EXAMPLE1Different, proprietary
price lists for plan
sponsors and retail
pharmacies
90Pills
dispensed
Pharmacy Executive Forum Interviews and Analyses
© 2019 Advisory Board • All rights reserved • advisory.com
16
Source: Business Wire, “UnitedHealth Group Reports 2018 Results Highlighted by Continued Strong and Diversified Growth,” businesswire,
https://www.businesswire.com/news/home/20190115005285/en/UnitedHealth-Group-Reports-2018-Results-Highlighted-Continued; Business Wire, “UnitedHealth
Group Reports 2015 Results Highlighted by Continued Strong and Diversified Growth,” businesswire,
https://www.businesswire.com/news/home/20160119005765/en/UnitedHealth-Group-Reports-2015-Results-Highlighted-Continued; CVS Health, “2018 Annual
Report,” Annual Reports, http://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_CVS_2018.pdf; CVS Health “2015 Annual Report,” Annual
Reports, http://www.annualreports.com/HostedData/AnnualReportArchive/c/NYSE_CVS_2015.pdf; Fein, AJ, “Pharmacy Revenues and Market Share from
Specialty Pharmaceuticals, by Company, 2015,” Drug Channels, https://www.drugchannels.net/2016/03/the-top-10-specialty-pharmacies-of-2015.html; Fein, AJ,
“Specialty Pharmacies and PBMs Hop On the 340B Money Train,” Drug Channels, https://www.drugchannels.net/2019/08/specialty-pharmacies-and-pbms-hop-
on.html; Fein, AJ. “The Top 15 Specialty Pharmacies of 2018: PBMs Keep Winning,” Drug Channels, https://www.drugchannels.net/2019/04/the-top-15-specialty-
pharmacies-of-2018.html; MacroTrends, “ESRX/revenue,” macrotrends, https://www.macrotrends.net/stocks/charts/ESRX//revenue
1. 2018 annual revenue based on average from Q1-Q3.
2. Previously Briova Specialty Pharmacy
PBM-owned specialty pharmacies a growing profit engine
Revenue source: Plan sponsors
17% 17%
30%
24%
Percent revenue from specialty pharmacy in
2015 vs. 2018
Optum Rx:
Optum Specialty
Pharmacy2
Express Scripts:
Accredo1
$37BCVS Caremark revenue from
CVS Specialty pharmacy in
2018
340B contract pharmacy revenue
contributes to growing profits
DATA SPOTLIGHT
2015 2018 2015 2018
43%Increase in CVS Specialty’s
340B contracts between
2018 and 2019
Pharmacy Executive Forum Interviews and Analyses
© 2019 Advisory Board • All rights reserved • advisory.com
17
PBMs charge fees for utilization management services
$500KAnnual fees from
PA for a health
system with 51,000
covered lives
DATA SPOTLIGHT
Physician prescribed Drug A
and submitted PA: Rejected,
incomplete information
PA resubmitted for Drug A:
Rejected, step therapy
requires Drug B
PA submitted for Drug B:
Approved
Revenue source: Plan sponsors
Prior authorization (PA) charges
accumulate on one prescription
Total PA charges
accumulated
$30-50Average PA fee
$150
$50
$50
$50
Pharmacy Executive Forum Interviews and Analyses
© 2019 Advisory Board • All rights reserved • advisory.com
18
Fee-based programs support plan value and outcomes
$11KSavings documented by a
PBM-led MTM program,
for which the system paid
$160K annually.
Revenue source: Plan sponsors
$500KOne-year savings from an in-house
MTM program started when the health
system repurposed the funds they had
been paying for the PBM program.
Mountain Maple Health System saw improved ROI by bringing
medication therapy management (MTM) program in house
…But health systems should evaluate the ROI against internal capabilitiesPBM-led programs
can improve patient
outcomes…
480,000Diabetic patients for
whom heart failure was
prevented annually by
PBM clinical programs
that improved care
management and
medication adherence
Source: “The Return on Investment (ROI) on PBM Services,” Visante, https://www.pcmanet.org/wp-content/uploads/2016/11/ROI-on-PBM-Services-FINAL.pdf
Pharmacy Executive Forum Interviews and Analyses
Common fee-based PBM programs
• Copay accumulators
• Adherence support
• Protection from fraud or cost increases
• Taking on outcomes risk for high-cost drugs
© 2019 Advisory Board • All rights reserved • advisory.com
19
Administrative fees often touted as “transparent” revenue
Pharmacy Executive Forum interviews and analysis.]
Claims processing
Prior authorizations
Rebate aggregation
Formulary management
Clinical programs
Data access
Revenue source: Plan sponsors
Even when a PBM says it’s
transparent, a strong contract
and audit rights are essential in
ensuring the PBM isn’t
retaining hidden rebates or
capturing any spread.”
Susan Hayes, Principal
PHARMACY INVESTIGATORS AND
CONSULTANTS
OTHER FEATURES
100% rebate pass-through
Single pricing list/pass-through pricing
(no spread)
No PBM-owned specialty pharmacy
For some PBMs, administrative fees are the only
source of revenue
INCLUDED SERVICESVerification is still essential.
DATA SPOTLIGHT
$1 - $15Range of administrative fees,
typically charged per-member,
per-month
© 2019 Advisory Board • All rights reserved • advisory.com
20
Source: Fein, AJ, CMS Considers Point-of-Sale Pharmacy DIR: Another Prelude to a World Without Rebates,”
Drug Channels, https://www.drugchannels.net/2018/12/cms-considers-point-of-sale-pharmacy.html
PBMs withhold money from pharmacies through retroactive price concessions
$0.2B2013
DATA SPOTLIGHT
Revenue source: Pharmacies
$4.0B2017
Reconciliation between negotiated rate and
price charged in the claim
Types of pharmacy fees and price concessions1
Fees to participate in a preferred
pharmacy network
Performance penalties, such as for
formulary compliance rates or patient
medication adherence rates
2,000%
Dramatic growth in estimated Medicare Part D
pharmacy price concessions
Increase in estimated
pharmacy price concessions
over a 4-year period
1. Often referred to as DIR fees
Pharmacy Executive Forum Interviews and Analyses
Claims transmission fees (per claim
processed)
© 2019 Advisory Board • All rights reserved • advisory.com
21
Amoxicillin
Penicillin antibiotic used to treat infections and stomach ulcers
1. PBM clawback refers to the PBM taking back money that has already been paid to the
pharmacy. In the case of copay clawbacks, the PBM demands that the pharmacy pay
them any copay amount in excess of their negotiated reimbursement rate.
Source: Van Nuys, K., et al., “Overpaying for Prescription Drugs: The Copay Clawback Phenomenon,” USC Schaeffer,
https://healthpolicy.usc.edu/wp-content/uploads/2018/03/2018.03_Overpaying20for20Prescription20Drugs_White20Paper_v.1-2.pdf
PBMs profit when copay exceeds prescription cost
$7.69Average copay
overpayment
DATA SPOTLIGHT
23%Of the time a copay
is higher than the
cost of the drug
Revenue source: Patients
Typical copay
for Tier 1 drug
$10.00Cash price for
30-day supply
of 500mg
Amoxicillin
$3.98 $6.02Overpayment that
is typically
“clawed back” by
the PBM as profit
University of Southern California found 35.7% of claims for amoxicillin
involve copay overpayment and PBM clawback.1
CASE EXAMPLE
Pharmacy Executive Forum Interviews and Analyses
© 2019 Advisory Board • All rights reserved • advisory.com
‹#›
Road mapRoadmap22
What is a PBM?1
2 How do PBMs make money?
3 What is the controversy surrounding PBMs?
4 What unique opportunities do health systems
have to work with their PBM?
© 2019 Advisory Board • All rights reserved • advisory.com
23
PBMs can’t be singled out in drug-spend blame game
Prescribers
Prescribers don’t factor cost
into prescribing decisions
25%increase in U.S. per-
capita spend for retail
prescription drugs
from 2010-2019
Many parties criticized for contributing to rising drug spend
Drug manufacturers
Set high list prices for
new drugs, raise prices
for established drugs
Patients
Use copay coupons, don’t
seek lower-cost alternatives
PBMs and plan sponsors
Pursue higher rebates and
hidden profits
Pharmacy Executive Forum Interviews and Analyses
Source: Bluth, R., “Can Someone Tell Me What A PBM Does?”, KNH, https://khn.org/news/senate-hearing-drug-pricing-lesson-on-pharmacy-benefit-managers/
© 2019 Advisory Board • All rights reserved • advisory.com
24
1. Net prices represent an estimate of the average manufacturer realized price, reflecting any reductions in net revenues due to off-invoice discounts, rebates,
copay assistance or other price concessions, Data exclude new brands marketed less than 24 months in each year as price growth cannot be calculated.
PBMs have a complicated relationship with drug spend
Pharmacy Executive Forum Interviews and Analyses
PBMs likely help limit drug price growth However, some PBM practices generate public and
political concern
4.3%
2.4%3.2%
1.9%1.5%
2014 2015 2016 2017 2018
decrease in drug spending in
2018 for Express Scripts’ U.S.
commercial plan customers
0.4%
1Rebates: Opaque rebate
system may inflate drug prices
2Spread pricing: Hidden spread
means health plans don’t know if
they are getting a good deal
3PBM-led prior authorization (PA):
PBMs may be motivated to approve
PAs for specialty drugs rather than
actively managing utilization
U.S. net drug price growth, 2014-20181
© 2019 Advisory Board • All rights reserved • advisory.com
25
Source: IQVIA, “Medicine Use and Spending in the U.S.,” IQVIA, https://www.iqvia.com/insights/the-iqvia-institute/reports/medicine-use-and-spending-in-the-us-a-review-of-2018-and-outlook-to-2023; United States Government Accountability Office, “Medicare Part D: Use of
Pharmacy Benefit Managers and Efforts to Manage Drug Expenditures and Utilization,” GAO, https://www.gao.gov/assets/710/700259.pdf
Push for higher rebates may inflate drug spending
Pharmacy Executive Forum Interviews and Analyses
This may incentivize PBMs to negotiate with
manufacturers for higher rebates rather than lower costs
Health plans typically evaluate PBMs based on
rebate guarantees, rather than net drug spend
$252
$344
$38
$135
2009 2018
Net spend ($B)
Invoice-to-netdifference ($B)
Rebates and
other discounts
totaled 28% of
invoice drug
spend in 2018
U.S. net drug price growth, 2014-2018
Factors that health plans
use to select a PBM
• Brand and specialty
rebate guarantees
• Rebate pass-
through rate
• Generic discount
guarantees
• Guaranteed generic
fill rate
Missing from a typical
PBM evaluation
• Net drug spend
• Brand and specialty
drug lists
© 2019 Advisory Board • All rights reserved • advisory.com
26
Source: 3 Axis Advisors, “Analysis of PBM Spread Pricing in Michigan Medicaid Managed Care,” Michigan Pharmacists, https://www.michiganpharmacists.org/Portals/0/resources/3AA%20MI%20Medicaid%20managed%20care%20analysis%20-
%20Final%2004.10.19.pdf; Anderson, M., “Michigan’s Medicaid program may fire it’s PBMs,” Becker’s Hospital Review, https://www.beckershospitalreview.com/pharmacy/michigan-s-medicaid-program-may-fire-its-pbms.html; Yost, D., “Ohio’s
Medicaid Managed Care Pharmacy Services Auditor of State Report,” Ohio Auditor, https://audits.ohioauditor.gov/Reports/AuditReports/2018/Medicaid_Pharmacy_Services_2018_Franklin.pdf
Audits find excessive spread in state Medicaid programs
Pharmacy Executive Forum Interviews and Analyses
$5.71
Average spread onMedicaid prescriptions
(4/1/17 - 3/31/18)
Market rate per-prescription fees
PBM spread in Ohio Medicaid
program found to be 3x the market
rate for equivalent fees
“Excessive”
spread per
prescription in
Ohio Medicaid
Spread on oral solid generic drugs, as a percent
of Michigan Medicaid managed care’s cost
2% 34%
PBM spread in Michigan’s Medicaid program
grew dramatically, leading to proposed
program changes
Q1 2018
Michigan’s Medicaid program may fire its PBMs.”
Becker’s Hospital ReviewOctober 8, 2019
$0.90-
$1.90
$3.81+Q1 2016
© 2019 Advisory Board • All rights reserved • advisory.com
27
1. Includes PA requests submitted by Northwestern Medicine’s Dermatology
and Rheumatology clinics from 6/1/2015 to 6/12/2017.
PAs are an imperfect tool for utilization management
Pharmacy Executive Forum Interviews and Analyses
Source: Alendry S et. al., “What Is the Value of the Prior Authorization Process in Specialty Drug Therapy? [abstract]”. Arthritis Rheumatol. 2017;
69 (suppl 10). https://acrabstracts.org/abstract/what-is-the-value-of-the-prior-authorization-process-in-specialty-drug-therapy/.
93% Approval rate for all specialty pharmacy PAs from two clinics,
according to research conducted by Northwestern University1
Ideally, PAs ensure high-value,
appropriate medication use
Plan sponsors are concerned that
PBMs do not use the PA process to
suggest alternative therapies because of
potential PBM profits from manufacturer
rebates and PBM-owned pharmacies
Provide an opportunity to suggest lower-
cost or clinically superior alternatives
Protect against inappropriate or
unnecessarily costly therapies
Providers bear a substantial burden
from PA paperwork and dispute PAs’
necessity given high approval rates
Patients are frustrated about
delayed treatment starts and the
need to monitor PA processes
In reality,
stakeholder
concerns are
amplified by
high PBM-led
PA approval
rates
© 2019 Advisory Board • All rights reserved • advisory.com
28
PBMs respond to concerns, but impact still uncertain
Guaranteed Net Cost
pricing model
• Pricing model provides plan
sponsor a guaranteed net cost
per claim
• Improves predictability to help
clients manage drug costs
• Promises 100% rebate pass
through
• Savings program brings
discounts to consumers at the
point of sale
• Early results showed that
consumers saved an average of
$130 per eligible prescription
• Required for all new employer-
sponsored plans beginning
in 2020
Point-of-Sale
Discount Program
Pharmacy Executive Forum Interviews and Analyses
OptumRx addresses pricing
visibility and drug cost for
consumers
CVS Caremark offers to
simplify financial arrangements
for plan sponsors
National Preferred
Flex Formulary
• Formulary prioritizes products
with lower list prices, such as
authorized generics
• Reduces brand product
utilization and reliance on
rebates
• Includes 3,800+ brand and
generic medications
Express Scripts offers to
increase coverage for lower
cost prescription drugs
Source: “CVS Health Introduces New Approach to Pricing of Pharmacy Benefit Management Services,” CVS Health, Dec 5, 2018, https://cvshealth.com/newsroom/press-releases/cvs-health-introduces-new-approach-pricing-pharmacy-
benefit-management; Miller S, “National Preferred Flex Formulary: Built for the Evolution of Drug Pricing,” Express Scripts, Nov 13, 2018, https://www.express-scripts.com/corporate/articles/national-preferred-flex-formulary-built-evolution-
drug-pricing; “Successful Prescription Drug Discount Program Expands to Benefit More Consumers at Point-of-Sale,” Optum, Mar 12, 2019, https://www.optum.com/about/news/successful-prescription-drug-discount-program.html.
© 2019 Advisory Board • All rights reserved • advisory.com
‹#›
Road mapRoadmap29
1
2
3
4
What is a PBM?
How do PBMs make money?
What unique opportunities do health
systems have to work with their PBM?
What is the controversy surrounding PBMs?
© 2019 Advisory Board • All rights reserved • advisory.com
30
Pharmacy expertise helps health systems lower benefit costs
System-owned Pharmacies
Pharmacy Executive Forum interviews and analysis.
• Lower drug prices by leveraging
participation in a group purchasing
organization (GPO) or the 340B
program
• Eliminate “spread” when the right
billing model is in place
• Reduce waste by working with
patients to appropriately time refills
• Improve adherence and eliminate
unnecessary prescriptions
through medication therapy
management
• Reduce high-cost prescriptions
by educating physicians about
lower-cost alternatives
Clinical Pharmacists
• Optimize PBM services and
contract by collaborating with
benefits leaders
• Identify contract discrepancies
through claims and invoice reviews
• Improve formulary value by
removing high-cost drugs and
aligning formularies across settings
Pharmacy leaders
© 2019 Advisory Board • All rights reserved • advisory.com
‹#›
Road mapRoadmap31
1
2
3
4
What is a PBM?
How do PBMs make money?
What unique opportunities do health
systems have to work with their PBM?
What is the controversy surrounding PBMs?
© 2019 Advisory Board • All rights reserved • advisory.com
32
Additional resources on managing the employee drug benefit
Pharmacy Executive Forum interviews and analysis.]
Forthcoming: Cheat sheets
• Two-pagers explaining why and how to
deploy pharmacy expertise in lowering
employee pharmacy costs
• Brief case studies to illustrate opportunity
• Topics include:
– Supporting benefits conversations with
brokers and PBMs
– Reviewing pharmacy claims data
– Encouraging use of in-house pharmacy
– Establishing cost-plus reimbursement for
employee prescriptions
Available now on advisory.com
Research Report
How pharmacy leaders can help reduce
employee health benefit costs
Benchmarking Data
Results from the 2019 Pharmacy
Benefits Management Quick Poll
Case Study | UNC Health Care System
Establishing a Health System-Owned
PBM: From Idea to Impact
© 2019 Advisory Board • All rights reserved • advisory.com
Credits
34
Advisors to our workSusan HayesPharmacy Investigators
& Consultants
Lake Zurich, IL
LG HanzelRxResults
Little Rock, AR
Chuck Gamsu R.Ph., MBA SkySail Rx
Pepper Pike, OH
LeAnn BoydSouthern Scripts
Natchitoches, LA
Pramod JohnVivio Health
San Leandro, CA
Binita PatelMemorial Hermann
Health System
Houston, TX
Brad MyersMU Health Care
Columbus, MO
Kelley CurtisSt. Luke’s Health System
Boise, ID
Robert SchenkHackensack Meridian Health
Edison, NJ
Robert SchmidtUnited Health Services
Binghamton, NY
Laurie WhalinNew Hanover Regional
Medical Center
Wilmington, NC
Matt WolfAmerisourceBergen
Chesterbrook, PA
Carl SchuesslerMitigate Partners
Atlanta, GA
Colleen MahoneyIndependent pharmacist
Springfield, VA
Michael MedelPharmaceutical Strategies
Group
Plano, TX
David ContornoE Powered Benefits
Mooresville, NC
Michael HurleyUPMC
Pittsburg, PA
Charlene RossbackCatholic Health Services
of Long Island
Rockville Center, NY
© 2019 Advisory Board • All rights reserved • advisory.com
Credits
35
Lindsay Conway
Rebecca Tyrrell
Program Leadership
Elle Choi
Contributing Consultants
202-568-7895
LohrR@advisory.com
Regina Lohr, MPP
Project Director
Pharmacy Executive Forum
LEGAL CAVEAT
Advisory Board has made efforts to verify the accuracy of the information it provides to members. This report relies on data obtained from many sources, however, and
Advisory Board cannot guarantee the accuracy of the information provided or any analysis based thereon. In addition, Advisory Board is not in the business of giving legal,
medical, accounting, or other professional advice, and its reports should not be construed as professional advice. In particular, members should not rely on any legal
commentary in this report as a basis for action, or assume that any tactics described herein would be permitted by applicable law or appropriate for a given member’s situation.
Members are advised to consult with appropriate professionals concerning legal, medical, tax, or accounting issues, before implementing any of these tactics. Neither Advisory
Board nor its officers, directors, trustees, employees, and agents shall be liable for any claims, liabilities, or expenses relating to (a) any errors or omissions in this report,
whether caused by Advisory Board or any of its employees or agents, or sources or other third parties, (b) any recommendation or graded ranking by Advisory Board, or (c)
failure of member and its employees and agents to abide by the terms set forth herein.
Advisory Board and the “A” logo are registered trademarks of The Advisory Board Company in the United States and other countries. Members are not permitted to use these
trademarks, or any other trademark, product name, service name, trade name, and logo of Advisory Board without prior written consent of Advisory Board. All other
trademarks, product names, service names, trade names, and logos used within these pages are the property of their respective holders. Use of other company trademarks,
product names, service names, trade names, and logos or images of the same does not necessarily constitute (a) an endorsement by such company of Advisory Board and its
products and services, or (b) an endorsement of the company or its products or services by Advisory Board. Advisory Board is not affiliated with any such company.
IMPORTANT: Please read the following.
Advisory Board has prepared this report for the exclusive use of its members. Each member acknowledges and agrees that this report and the information contained herein
(collectively, the “Report”) are confidential and proprietary to Advisory Board. By accepting delivery of this Report, each member agrees to abide by the terms as stated herein,
including the following:
1. Advisory Board owns all right, title, and interest in and to this Report. Except as stated herein, no right, license, permission, or interest of any kind in this Report is intended
to be given, transferred to, or acquired by a member. Each member is authorized to use this Report only to the extent expressly authorized herein.
2. Each member shall not sell, license, republish, or post online or otherwise this Report, in part or in whole. Each member shall not disseminate or permit the use of, and shall
take reasonable precautions to prevent such dissemination or use of, this Report by (a) any of its employees and agents (except as stated below), or (b) any third party.
3. Each member may make this Report available solely to those of its employees and agents who (a) are registered for the workshop or membership program of which this
Report is a part, (b) require access to this Report in order to learn from the information described herein, and (c) agree not to disclose this Report to other employees or
agents or any third party. Each member shall use, and shall ensure that its employees and agents use, this Report for its internal use only. Each member may make a
limited number of copies, solely as adequate for use by its employees and agents in accordance with the terms herein.
4. Each member shall not remove from this Report any confidential markings, copyright notices, and/or other similar indicia herein.
5. Each member is responsible for any breach of its obligations as stated herein by any of its employees or agents.
6. If a member is unwilling to abide by any of the foregoing obligations, then such member shall promptly return this Report and all copies thereof to Advisory Board.
36© 2019 Advisory Board • All rights reserved • advisory.com
top related