Rx Plan Rebuild for 2000 Life Group

The prescription drug benefit is one of the most frequently utilized benefits that employers offer. From maintenance medications to specialty drugs designed to treat extremely specific indications, employers have to decide how to cover the thousands of prescription drugs available.


Identifying the Problem

In working with this client and looking to more efficiently provide a Rx plan to their more than 2000 employees, we had to first understand their PBM contract (pharmacy benefits manager). For employers who have looked under the hood of their PBM contracts, this acronym may feel more like a 4-letter word. After detailed claims analysis going back several years, review of contract language, comparison of pricing methodology, and formulary review, we were able to highlight many mis-aligned incentives in our client’s arrangement with their PBM.


Creating the Solution

After highlighting specific issues in the arrangement that were wasteful for both our client and their employees our first step was to request a major contract overhaul with the incumbent PBM. The incumbent was not interested in making any changes to the arrangement that clearly was a lucrative one for them. We then facilitated meetings with several independent PBMs that were agreeable to a contract with aligned incentives. This change along with a few other additions to help address the highest cost medications resulted in a greater than 20% savings for the employer and a greater than 25% reduction in employees out of pocket expenses for their medications.