Questions to Consider When Choosing a Pharmacy Benefit Manager

Questions to Consider When Choosing a Pharmacy Benefit Manager

Choosing the right Pharmacy Benefit Manager (PBM) involves evaluating numerous options, each influencing plan management, cost-effectiveness, and member welfare. This process demands careful consideration and a strategic approach. Let’s explore essential questions to aid decision-makers in selecting the most suitable PBM partner, thereby transforming the realm of pharmacy benefit management.

Cost Management and Transparency

How transparent are the cost management strategies?

It’s crucial to comprehend the pricing structure and uncover any potential hidden fees to accurately gauge the actual cost of the PBM services. Prioritize PBMs that offer transparent pricing models, facilitating a comprehensive understanding of the mechanisms driving cost savings and where they are achieved.

Revenue Structure and Model

How much does the PBM make to manage your plan, and how is their revenue generated?

Knowing how much the PBM earns and how they generate revenue allows the plan sponsor to assess the fairness of the financial arrangement, ensuring that the PBM’s incentives are aligned with providing cost-effective, high-quality care to the plan’s members. 

As a completely pass-through model, our sole source of revenue is based on plan administration which allows us to manage and minimize the overall pharmacy cost to the plan. Compensation is based solely on plan management and enhanced member support. Our revenue is generated on a per claim basis. We can also convert this to a PMPM (per-member-per-month) fee.

Is their revenue based on any form of spread pricing and partial rebate share?

Spread pricing occurs when the PBM charges the plan sponsor more for medications than what they reimburse the pharmacy, keeping the difference as profit. Additionally, inquiring about partial rebate sharing indicates whether the PBM shares only a portion of the rebates received from pharmaceutical manufacturers with the plan sponsor. This insight is vital as it affects the actual savings passed on to the plan and its members.

At MaxCare, we receive zero revenue from spread pricing, rebates, or hidden revenue streams.

Network Accessibility and Coverage

How extensive and accessible is the PBM’s network?

Are the pharmacies within the network conveniently located for your employees or members? Assess whether the network aligns with their frequented locations. Furthermore, examine the coverage of available locations and any associated limitations or restrictions. A comprehensive network offering a diverse range of pharmacies not only enhances convenience but also ensures uninterrupted care for members.

Lowering Overall Medication Costs

Does the PBM allow an alternate source to fill these high-cost medications?

Allowing alternate funding sources allows plans and members to utilize savings opportunities within the marketplace. At MaxCare, not only do we allow alternate funding, but we encourage it, if upon collaboration with the plan it is determined to be a suitable solution. We are currently assisting multiple client partners to utilize alternate funding with great success.  Saving is on average between 55% and 65% on those specific scripts. 

In-House Coupon Program and Specialty Arrangements

Does the PBM have an in-house coupon program for high-cost specialty medications?

An in-house coupon program can significantly reduce out-of-pocket costs for members, making expensive specialty medications more affordable. Also, an in-house coupon program demonstrates the PBM’s commitment to providing cost-saving options. It reflects their proactive approach in offering financial assistance directly to members, helping manage the financial impact of high-cost specialty drugs on both the plan and individual beneficiaries.

At MaxCare, we provide MaxProtect, our in-house member coupon assistance program. Typical savings from MaxProtect equals 40 percent of overall plan cost for specialty medications and average annual savings to utilizing members is on average $1,000 and can fluctuate depending on plan design and specific member utilization.

Does the PBM require an exclusive specialty arrangement, which means you must purchase specialty medications from their specialty pharmacy?

The issue with some PBM models that enforce exclusive specialty arrangements is the limitation it imposes on members. By inquiring about this practice, one can ensure that the PBM model doesn’t enforce such restrictions, allowing employers the flexibility to choose a pharmacy that can provide the medication at the lowest possible cost. This promotes competition, convenience, continuity of care, and ensures that there is no conflict of interest due to spread pricing of high cost specialty medications. 

At MaxCare, we do not own a specialty pharmacy, meaning that we do not require specialty medications to be purchased from specific pharmacies. Our desire is to utilize the most convenient and cost effective pharmacy on behalf of the employer and the member. 

Rebates and Formulary Design

What is the true impact of Rebates on overall spend?

Asking about the true impact of rebates helps in assessing the overall cost-saving strategies of the PBM, ensuring that the negotiated savings positively influence the plan’s bottom line and ultimately benefit the members in terms of more affordable medications.

At MaxCare, we prioritize formulary design focusing on effective medications with the lowest net cost. Our philosophy as a truly transparent and 100% pass-through Manager of Pharmacy Benefits, is to focus on designing our formularies to drive utilization to the most effective medications with the lowest net cost to the member and the plan instead of structuring our formularies based simply on rebates.

Flexibility and Customization

How flexible and customizable are the PBM’s services?

How would you rate their flexibility in tailoring services to align with your organization’s specific needs? Assess their capability to customize benefit designs, formulary options, and reporting structures. A PBM that prioritizes flexibility and adeptly adapts to the unique requirements of your organization can offer a more personalized and effective solution.

Clinical Programs and Quality of Care

What clinical programs elevate quality of care?

Do they provide disease management programs, strategies to enhance medication adherence, and specialized pharmacy services? These programs not only elevate the quality of care for members but also play a crucial role in containing costs by averting complications and hospitalizations. Seek insights into the PBM’s approach to medication therapy management and its influence on advancing health outcomes.

Customer Service and Support

How reliable is the customer service and support?

Take into account the availability of dedicated account managers or client service representatives. The prompt resolution of inquiries and the provision of personalized support play a pivotal role in ensuring a positive experience for both the employer and its members.

Compliance and Regulatory Adherence

How strong is the PBM’s compliance and regulatory adherence?

How do you assess their commitment to compliance with industry regulations and standards? Specifically, inquire about their adherence to state and federal regulations, including HIPAA regulations and other privacy laws. The level of commitment to compliance reflects the protection of sensitive information and the PBM’s dedication to upholding ethical practices.

Proactive Medication Management

Does the PBM routinely monitor new-to-market, high-cost medications with low clinical value and provide members with lower-cost, equally effective alternatives?

Inquiring about this monitoring process highlights the PBM’s dedication to optimizing healthcare outcomes while managing costs effectively, a crucial aspect of responsible and comprehensive healthcare management.

As all new drugs come to market, our clinical team at MaxCare evaluates cost structure and effectiveness to ensure that we are always providing the most treatment effective medication at the lowest possible cost. We take a proactive approach at MaxCare to monitor new-to-market drugs and don’t wait to review new drugs quarterly or annually, as some Pharmacy Benefit Managers do.

In addition to utilizing SmartBlock to remove high-cost medications with low clinical value, another successful solution we have provided our client partners is MaxChoice. MaxChoice ensures that the member and the plan are utilizing the most effective medication at the lowest possible cost. 

Management of Combination Drugs

Is your plan exposed to any higher-cost, low clinical value combination drugs?

You should inquire about exposure to higher-cost, low clinical value combination drugs because these medications can significantly inflate healthcare spending without providing substantial clinical benefits. 

At MaxCare, we are keenly aware of the significant financial impact that combination drugs can have on a plan’s overall spend. Oftentimes, these medications are simply a combination of two drugs that are significantly cheaper when purchased individually. For example,one combination medication is simply a combination of two over-the-counter products. When purchased separately, the OTC products cost around $25 to $50. However, when purchased as the combination medication, the cost can soar as high as $3,000. To avoid the dramatic financial impact of combination drugs, we at MaxCare utilize SmartBlock, a program that removes combination products, high-cost dermatologics, and kits by substituting them with lower-cost yet equally effective alternatives.

Specialty Medication Utilization and Management

How is the PBM managing high-cost specialty medications?

By inquiring about this, employers or plan sponsors can ensure that the PBM employs comprehensive and cost-effective strategies to handle these expensive medications, aiming to balance financial considerations with quality care for members requiring specialty treatments.

At MaxCare, we utilize a layered approach to manage high-cost brand and specialty medications. Our layered approach includes the following:

  • Clinical Reviews Based Simply on Cost
  • Prior Authorizations
  • MaxProtect (In-House Coupon Program)
  • No Exclusive Specialty Arrangement
  • Partnerships with Industry Leading Alternate Sourcing and Tele Health Solutions

In conclusion, choosing the right PBM involves a meticulous evaluation of various aspects, ensuring transparency, cost-efficiency, and effective management of medications. MaxCare’s commitment to transparency, innovative strategies, and member-centric solutions make it a compelling choice for discerning organizations seeking a reliable pharmacy benefit manager.

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