Eliminating Waste in PBM Contracts
When was the last time you took a close look at your PBM contract?
Between vague contract definitions and unclear pricing and fee structures, it can be difficult to pinpoint waste contributors within pharmacy contracts. We’re here to help you identify common contract pitfalls so you can reap the benefits of increased savings.
The “Big 3” PBMs
You’ve likely heard references to the “Big 3” if you’re familiar with the healthcare industry. This refers to the three PBMs that represent a combined total of nearly 80% of the entire pharmacy benefit management market. Here’s a breakdown by market share:?
CVS Health/Caremark: 33%
Express Scripts/Cigna: 24%
OptumRx/UnitedHealth: 22%
Since the driver of revenue for these companies is tied directly to the volume of pharmacy claims and dispensing of medications, you can see where there can be a high potential for higher costs and waste.
PBM Contract Watch List
There are certain things you can look out for when reviewing PBM contracts. Common strategies implemented by the Big 3 to drive additional revenue include:
-?????? Contract tactics which include spread pricing, vague definitions, multi-year agreements, and more.
-?????? Audit manipulation in the form of channel off-setting to ‘hide’ underperformance in a certain category.
-?????? Encouraging Over Utilization through auto-refill mail order programs or high prior authorization approval rates.?
Let The Learning Continue
Want more details on how to get the best PBM contract and grow your savings? Download our free whitepaper: https://leafhealth.net/wp-content/uploads/2024/03/Eliminating-Waste-in-PBM-Contracts.pdf