The familiarity of a traditional PBM contracting can create the sense that you know what you are actually getting when, in fact, many PBMs work hard to make sure that you don't. (Photo: Shutterstock)
Today, pharmacy benefits managers offer two distinct types of contracting as they vie for your client's business: traditional and pass-through. When working on behalf of clients to evaluate PBMs, it is important to understand how these two types of contracting compare − not just in terms of the numbers calculated for things like discounts and rebates, but also in terms of how they function and align (or fail to align) with your client's interests.
Unexpected differences
For years, the vast majority of PBMs have used a traditional contracting approach. This "status quo" approach often includes hidden revenue streams and complex caveats designed to take advantage of fee-for-service health care business models. This increases profits for the PBM without regard for the best interests of plan sponsors−or their members.
Often, clever language makes the offer sound advantageous. This wording disguises the true cost to clients in terms of [higher] overall spending. Traditional contracting is based on "lowest unit cost," which sounds great, but doesn't actually look at the whole prescription spending picture. Simply reducing how much a client pays per unit of a drug does nothing to manage the volume of spending. In a traditional contract, the PBM profits every time a claim is processed.
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