1. Pharmacy Benefit Managers (PBMs)
Dimitry Gotlinsky
Western University
Managed Care Clerkship
ProPharma Pharmaceuticals Consultants, Inc.
5/2/2006

2. What are PBMs?
Rising health care costs have forced employers and health plans to develop methods to manage costs
PBMs-are private companies hired by employers and health plans to help administer drug benefits

3. PBM’s function Purchase and dispense medications Pay claims
Financial intermediary between pharmacies and plan sponsor
Manage prescribing choices
Maintain pharmacy networks

4. PBM’s added services Real-time medication check
PBMs conduct electronic clinical reviews before medications are dispensed
Prescription is checked for:
●Drug-drug interaction
●Drug-age interaction
●Appropriate dosage
●Excessive utilization
■ Pharmacists at point-of-sale receives a real time alert

5. Why is there a rise in PBMs
3 main reasons:
1)Number of RXs per person increases
2)Newer, higher costs RXs are replacing older, less costly medications
3)The prices of RX drugs are increasing

6. Most Dominant PBMs
Caremark, Inc. (merged with Advance PCS)-90 million covered lives
Medco Health Solutions, Inc.-60 million covered lives
Express Scripts, Inc-40 million covered lives

7. Focus of PBMs ■ Negotiate the customer’s ultimate cost
a) reimbursement to retail pharmacy
b)payment to manufacturer of the drug
■ Establish network of participating pharmacies
■ Negotiate rebates with drug manufacturers

8. Who is in charge? Ultimately, the health plan is in charge
PBMs are not wholesalers and do not generally purchase and sell RX drugs
But, many PBMs own a mail order pharmacy

9. Problems with PBMs
PBMs are paid for services which are not considered rebates
Use of call centers to actively encourage doctors to switch individual patients to preferred drug
Refusal to disclose information on the prices they pay for drugs, as well as the rebates amounts

10. Problems with PBMs continued
Collection and sale of PBM data on patients
Pharmacy spread-the difference between the price charged health plans and the price paid pharmacies
Mail-order pharmacy

11. Pharmacist’s Role in PBMs
3 Clinical Interventions
A)Therapeutic Interchange
B)Medication Adherence
C)Therapy Management

12. Pharmacists Role Goals
Increase quality of care to members
Promote appropriate drug therapy
Enhances medication compliance
Improves preferred drug compliance
Increases utilization of cost-effective pharmaceuticals

13. Things to ask for when selecting a PBM
Does the PBM uses the same AWP in calculating price to clients and payments to pharmacies?
Are there any other payments a PBM gets from drug manufacturers besides rebates?
How often a PBM changes their formulary?

14. More questions to ask How are co-payments set?
Ask for detailed disclosure and explanation of a PBMs fee schedule
What is PBM’s policy on selling pharmacy data?

15. Duties to be performed by the client in the contract
Must provide a PBM with :
● Eligible member list
● Benefit plan information
●Notification requirements
● Provision of Eligibility Info
● Business development

16. In Summary
PBMs manage the majority of prescriptions that flow through health care system
PBM industry has evolved from small claims processing firms to more concentrated industry with comprehensive service offerings
Keep in mind that PBMs are a for-profit business
Not always looking out for the best interest of the client or patient