Pharmacy benefit costs have been sharply rising in the United States. This has caused much pain to the users of these services, and a major issue has been how to reduce the costs associated with pharmacy benefit management. The role of a PBM in today’s US healthcare system is to provide drug-related administrative services and to manage pharmacy costs for clients. Such clients include employers and managed care organizations.
The problem with pharmacy benefit management is that negotiating a contract with a service provider is difficult because of the lack of transparency, accountability, and information on the part of the employers and users of the services. Employers are unable to tell whether the use of PBM services is saving them any money at all.
Recently, PBMs have been accused and sued in court for kickbacks, secret rebates and fraud, which raises further suspicions of these middlemen in the pharmaceutical industry. The fundamental question for an employer and managed care organizations (MCO) is how to obtain value for money in an industry shrouded in secrecy. Below are some strategies users of these critical services can consider.
Hiring a consultant
A consultant PBM will assist you in finding the best PBM out there. A consultant is more likely to understand the usually secretive industry and offer advice on selecting a PBM, auditing the services and providing advisory on any other issue the client might have.
Most employees always take audits after the PBM bill has come in to determine discrepancies, incorrect billings and possibly duplicate billing. Firms are encouraged to analyze the data from PBMs, health care analytics so as to steer their employees from PBMs that overcharge or are involved in fraudulent activities.
Most PBM contracts specifically state that PBM does not owe the employer any fiduciary duty to the employee. This means that the PBM has no obligation to act in the best interests of the employees in performing the services contracted. Employers are highly advised to renegotiate such contracts so that a PBM will have a fiduciary duty to the employer so that if anything arises the PBM will be responsible. Such a move will encourage PBM to work for the best interests of the parties contracting them.
Pharmacy benefits management is a tricky area but also extremely sensitive. Because of the high and lucrative returns in the pharmaceutical industry, these middlemen who were once a convenience are becoming increasingly unscrupulous and untrustworthy. Users of PBM services are therefore advised to adopt the strategies listed above so as to get the best from PBMs.