Employers in today’s health care market are faced with thedifficult challenge of balancing access to innovative, life-saving,and preventative medicines for consumers, while keeping costs at asustainable level.

Over the last 20 years, as these new treatments entered the market, creating acost and access dilemma, those providingcoverage – employers, unions, and government programs – realizedthe value in hiring pharmacy benefit managers (PBMs) to meet thehealth needs of their respective enrollees.

PBMs reduce prescription drug costs by promoting generics, andnegotiating with drug manufacturers for rebates and discounts toreduce the net cost of the drug, creating lower-cost pharmacyoptions. This model has lowered drug costs for employers in thecommercial market and is the foundation for the popular andsuccessful Medicare prescription drug benefit.

Today, specialty drugs are dominating the amount of spending inthe pharmacy benefit and payers are demanding PBM contracts thatprovide cost savings while ensuring these medications areaccessible and delivered safely. PBMs commonly provide clientguarantees to support accuracy rates through mail-order andspecialty pharmacies, which are better than retail pharmacyaccuracy rates. This delivery option can improve patient adherence,health, and lower overall costs.

But for all that PBMs do to reduce costs and improve the qualityof pharmacy benefits, it is important to understand that employers,unions and government programs are in the driver’s seat.Ultimately, these payers design benefits, create formularies,decide on the levels of transparency as it pertains to rebates anddiscounts PBMs negotiate with drug manufacturers, and the amount ofrebate dollars they choose to retain. After all, it’s thoseproviding coverage that best understand the unique set of enrolleesas well as its own financial picture.

I know first-hand how the contracting process involves a veryrigorous process entailing financial value as well as operationalacumen, levels of transparency, audit rights, the ability toprovide pharmacy choice and patient satisfaction, capabilities toreduce fraud, waste, and abuse, and improve patient care throughmail and specialty pharmacies.

PBM clients use a “request for proposal” (RFP) process, andoften hire expert benefit consultant firms to provide assistance.These benefit consulting companies are nationally prominententities that utilize high tech resources to evaluate PBM servicesfor clients. This RFP process ensures that each PBM client receivesservices it uniquely needs and desires.

The bottom line is that the system is working for employers. Amultitude of PBMs are lining up to provide these types of servicesto clients. In my experience, if the client wants something, it isprovided – if not a PBM competitor will step in to provide it, it’sthat simple.