The Kaiser Family Foundation reports in their Prescription Drug Tends fact sheet that drug expenditures are among the fastest-rising factors in healthcare. In 2006, Americans spent more than $216.7 billion for prescription drugs alone. They project that by 2018, drug expenditures might go up to $453.7 billion. This has made it difficult for healthcare plan sponsors to keep their costs at lower rates, while providing effective coverage for their clients. Here’s where Pharmacy Benefit Management (PBMs) come in.
CrystalClearRX.com noted that pharmacy benefit managers play an important role in processing prescription claims quickly and accurately for customers covered by insurance, worker’s compensation, Medicaid, Medicare, and many more. Before signing any contract, however, you should have a deeper knowledge about it. Here are some examples:
#1 – You can only renegotiate your contract every three years.
The goal of PBMs is to keep their clients for the longest term, so many of them are willing to renegotiate their contract for a more competitive term. PBM contracts may be three years in length, but there’s no rule that says frequent market check provisions are not possible. This is to help you align with the most suitable pharmacy terms and pricing in today’s market.
#2 – Your contract is 100% transparent.
PBMs make money by spreading prices between their contracted pharmacies and the pricing they pass on to their clients like mail order, rebates, and contract definitions. Transparency in contracts may be an inviting term for clients, but many think it’s similar to pass-through pricing. A pass-through contract, however, may have no savings attained. It’s best to choose a PBM that’s willing to disclose and verify everything you need to know about your contract.
It’s better to be safe than sorry. Know everything there is you need to know about PBM, so you won’t regret signing the contract. Asking for help won’t hurt either if you want to make sure.