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Wrangling Your PBM Costs

Written by Jennifer Stuart—Employee Benefits Advisor

November 11, 2024 · 2 min minute read

Blog Wrangling Your PBM Costs

If your organization is with one of the Big Three pharmacy benefit managers (PBMs)—Express Scripts/ESI, CVS/Caremark, or OptumRx—you’re likely paying more for your prescription drug coverage than you should. Traditional PBM agreements allow maximum allowable cost lists, spread pricing, and rebate-chasing. These tactics and many others end up costing you, and your employees, a lot of money.

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Switching to a transparent PBM model within these big three PBMs may eliminate some of these issues, but not all of them. Often, they promote a “pass-through” arrangement wherein you get to keep a portion of the rebates generated. But this is not transparency.

To achieve transparency and real cost control, employers must move to a genuinely transparent model with a PBM that is not one of the Big Three.

Transparent PBM pricing accomplishes many things, including:  

  • Elimination of Spread Pricing. Pay only a per-employee, per-month fee and/or a per-transaction fee.
  • Improved Drug List. Your formulary (drug list) can be based on low-cost, high-efficacy medications instead of chasing rebates.
  • Complete Rebates. All rebates are passed through, not just a portion. With a transparent PBM, the medication with the lowest net cost is promoted, whether a non-rebate-generating medicine with a low price point or a higher-cost medicine that, once the rebate is incurred, has a lower overall cost.
  • Capture Manufacturer Coupons. These coupons offset the amount employees pay for the prescription. In traditional models, that information is not captured, so a member could meet their out of pocket max on paper, but not have actually paid it. Transparent PBM contracts allow you to track this information toward member accumulators.
  • Maximize Alternate Funding For High-Dollar Specialty Medications. Specialty medications are one of the biggest cost drivers employers face today, with multiple million dollar drugs on the market. Alternate funding allows a way for employees to obtain their medication free of charge, while also saving the employer money. It's a win-win!

 

Switching to a genuinely transparent PBM can significantly lower prescription drug costs and improve employer cost control. Transparent PBMs eliminate spread pricing, pass through all rebates, and use alternate funding to reduce costs. This ensures that organizations save money while providing employees with life-saving and cost-effective prescription coverage.

Have questions? Contact:

Jennifer Stuart

Jennifer Stuart

Employee Benefits Advisor

Call: (903) 716-5916
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Years of experience

19

Growing up, my mom owned a TPA (third party administrator) that processed health, dental, disability, and workers comp claims for self-funded insurance plans. As a child, I would work there stuffing envelopes and filing papers. So, you could say I grew up in the insurance industry.

I graduated from Hendrix College in Conway, Arkansas with a B.S. in Business and Marketing, and got my life and health insurance license a year later. My first “official” insurance job was with a dental insurance carrier, before I moved to the agency side.

Since then, I've been an account manager, account executive, advisor, and department manager. My area of focus is self-funded accounts and pharmacy benefits. These plans are where you can make the most impact for an employer and their staff.

I love working with our team at Leavitt Risk Services because Leavitt Group offers a powerful combination of a national presence with a local broker's personal touch.

My clients stay with me long-term because I know my stuff and I care. I’m dedicated to making each client’s experience a positive one—from the renewal and open enrollment process to year-round servicing. I go to bat for their employees in difficult situations, and I am constantly gaining new knowledge to communicate more effectively, help plans perform better, and create long-term sustainability. I even have clients who improve their employee-facing benefits because the plans have performed so well. That's a rare occurrence in health insurance.

I was born in Oklahoma City and grew up in Northwest Arkansas—the land of Wal-Mart. My husband and I have two children and we just moved to Georgetown, Texas. We enjoy spending time outdoors, traveling, reading, artwork, and being with family.

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