For many HR managers the world of pharmacy benefit managers, the third party administrators of prescription drug programs, is understandably confusing.
But with more than 200 million Americans receiving drug coverage from a PBM, there are few decisions for benefits managers more important than choosing and managing a PBM that will ensure reliable coverage and good prices for employers and consumers.
But where to start? PBM contracts are often riddled with language that makes fee structures confusing and jargon that makes it difficult to discern what you’re actually paying for. But just like with any other contractor, you should know exactly where your money is going.
In part, the PBM model relies on HR managers not asking the tough questions. But for starters, you can ensure transparency between your company and your PBM by making sure you have written, understandable answers to these three questions:
Can you provide a detailed, itemized explanation of your fee structure and schedule?
This question will help you understand exactly what you’re paying for and help you make sure you aren’t being charged mark-ups on drug prices that will go straight to the PBM’s profits.
Do you use the same benchmarks in calculating price to clients and payments to pharmacies?
PBMs have been known to charge employers a higher price for some drugs than they reimburse the pharmacies. When they do, the “spread price” difference is money from your company’s bottom line going straight to the PBM.
Can I review a copy of your contract with network pharmacies?
Make sure you know what the pharmacies are hearing from the PBM too. This will help ensure responsibility and transparency and discourage the PBM from marking-up drug costs. If the PBM won’t agree to show you a copy of network pharmacy contracts, there’s a good chance there’s something the PBM is trying to hide.
By demanding complete transparency from your PBM, you’re holding them to their end of the bargain. To do otherwise is simply asking for the PBM to take your money and run. For more important questions to ask, click here.