Knowing how much something costs allows you to make an informed decision. For example, take consumer shopping at the grocery store.
To ‘make it into the shopping cart’ an item needs to be the right price and provide the right value, compared to other items in the same category. For your pharmacy benefits, the same thing applies. To make key plan decisions, you need complete visibility into not only drug cost, but the programs and services needed to manage your plan. If your PBM doesn’t offer transparency on these costs, it’s like putting something in your shopping cart without knowing the total price. When you get to the cash register, you’ll be surprised with a cost you weren’t expecting to pay.
Here are some examples:
100% visibility into all pharmacy benefit costs.
Many areas exist where a PBM may earn revenue and if not fully disclosed, it could make it difficult to make informed ‘purchasing’ decisions for your benefit plan. For example, if the PBM reimburses a pharmacy $1 for a medication, then you should be billed $1 for the transaction. If it’s not a one to-one relationship, then there may be spread and other unnecessary costs ‘baked’ into your plan claims. In a pass-through arrangement the PBM can offer a clean and easily validated solution that gives you cost visibility at the claim and invoice level.
100% pass through of drug manufacturer dollars.
Some PBMs may only pass through 80-90% of total rebate dollars. And, it’s not just about rebates. Many other forms of manufacturer incentives exist (like rebate administration, market share or educational program fees) that are paid to the PBM. Transparency is needed to see all the potential savings, or you may be missing out. In a pass-through arrangement, as the name implies all rebate dollars and manufacturer incentives are given back to the plan sponsor.
An immediate benefit of 100% from all network and pharma contract improvements.
PBMs are constantly working to achieve better discounts from pharmacy networks and improved rebates with pharma. Without a transparent PBM, you may not know if you are receiving your full savings potential and you may have to wait to get any improvements or additional savings.
Unrestricted access to a PBM’s contractual agreements throughout the pharmacy supply chain.
When you have access to a PBM’s contracts, nothing is hidden. That’s because you have access to all manufacturer, pharmacy network and other contracts to give you full disclosure. This allows for a clean and easily validated audit, and removes all mystery from your relationship with the PBM. This ultimately lowers your all-in costs because you’ll be able to see if your PBM is charging you more than it should.
Shopping for a PBM? Try applying a consumerism mindset to evaluate what each PBM brings to the table. To make an informed decision look at your all-in costs versus the value the PBMs delivers in the programs and services needed to maximize your pharmacy benefit plan. Learn more in our e-book: Finding True PBM Transparency