Many healthcare stakeholders are concerned that pharmacy benefit managers use perverse incentives that work against healthcare goals, such as improved outcomes and lower costs.
More than 56% of US employers offer healthcare insurance for their employees, providing a vital link to important care through the design of their healthcare benefits. How employers design benefits, select their vendors, and manage their contracts affects the breadth and costs of health coverage offered to employees. Employers rely heavily on their consultants for these important tasks, particularly when it comes to pharmacy benefits management.
Yet the roles of pharmacy benefit managers (PBMs) and their business models have been under increased scrutiny in recent months. The prevailing PBM approach is perceived by many healthcare stakeholders as overly complex and opaque, setting up perverse incentives that work against healthcare goals such as improving outcomes and lowering costs. These perceptions have attracted attention in the press, where PBMs, biopharmaceutical companies, and other stakeholders are engaging in finger-pointing about which group is responsible for high drug prices.
We wanted to better understand some of the underlying challenges that employers are facing to encourage a constructive dialogue among healthcare stakeholders. To do so, we engaged Benfield, a division of Gallagher Benefit Services, to conduct research that assesses employer experiences and perspectives on PBMs so that we can move toward a more fully value-focused approach to pharmacy benefits management.
As part of this research, Benfield surveyed 88 jumbo employers—those with more than 5000 employees—and learned that there is often a disconnect between the important role employers believe their PBMs play in helping to manage prescription drug benefits and their perceptions of PBM vendor goal alignment, trust, and service satisfaction. The findings indicated that this disconnect is rooted in employer concerns about transparency, contract complexity, rebates, and focus on value.
In particular, employers who participated in pre- and post-survey interviews noted that they have several important objectives for alleviating these concerns and improving the value of their prescription drug benefits on behalf of their employees. They want to:
In the future, employers are expecting to have more transparency in how rebates or transactions are handled by PBMs and will need to develop a strong mix of in-house and/or external consulting expertise in pharmacy benefits and contracting.
To have a sustainable marketplace that rewards value and innovation, employers need to get strong value in return for the money they spend on prescription drug benefits. Starting a dialogue and becoming more engaged in their management of the prescription drug benefits are important steps employers can take in meeting those goals.
Toward that end, we have developed tools that employers can use to perform self-assessments, recognize the ambiguous terminology used in contracts, and engage more effectively with consultants or advisers on pharmacy benefit issues. These tools, available on our website at npcnow.org, can provide employers with actionable steps they can take to become more engaged and actively drive toward the goal of better value for money spent on prescription drug benefits.