3 Tips For Evaluating Pharmacy Benefit Programs Effectively

Ed note: Posts published on From the Workplace are written by outside contributors and do not necessarily reflect the view or opinion of SHRM.

Requests for Proposals – RFPs – can help employers streamline their procurement process and compare solutions. But evaluating RFPs for complex services like Pharmacy Benefit Management (PBM) can be overwhelming. With so many details, RFP responses often start to blur together, making it difficult to assess each bid effectively.

It is important not to get bogged down in unclear pricing, complex details, and confusing acronyms. The real focus should be on what matters most. Will the PBM prioritize your employees and the needs of your organization?

To simplify the RFP process, start by identifying your key PBM requirements in the context of your total rewards strategy, a practice that sometimes allows you to evaluate options before you even get to the cumbersome RFP process. Here are three big-picture questions to help evaluate RFP responses.

Is There True Price Transparency?

Do you know if your PBM is marking up medications? You might think every PBM has the same pricing tactics, or you hear the word “transparency” in conversations, and think you’re covered. However, there are two key details to look for when it comes to exploring price transparency:

Spread pricing: To keep the RFP short and sweet and quickly assess which PBMs put people before profits, perhaps the first question to your PBM should be: Will you charge employers only what you pay the pharmacy?

PBMs will often charge employers more than they pay a pharmacy for a medication. The difference or “spread” is kept by the PBM as profit. Traditional PBMs make an estimated $7 billion annually using spread pricing techniques. This controversial tactic has garnered attention and the Pharmacy Benefit Manager Reform Act, proposed in the U.S. Senate, would ban this practice if it were to pass.

However, employers who value price transparency shouldn’t have to wait for regulation to pass to require your PBM to act in your best interest. Instead, seek out PBMs that utilize a pass-through pricing model with a transparent administrative fee.

Formularies and misleading rebates: If a PBM is profiting from rebate fees, they have an incentive to select brand-name drugs that offer attractive rebates for formularies. The result is that employers and plan members often end up with expensive medications instead of less expensive alternatives such as generics.

If driving to the lowest net cost is important to you, you need to look outside the traditional PBM ecosystem to a transparent PBM model where rebates are passed-back to the employer, 100% of the time, no exceptions.

Who Will Care for Your Employees?

What are your expectations for employee care and experience? If quality of care is critical to your total rewards strategy, include RFP questions about access to clinical support. For example, how involved will clinical pharmacists be in your PBM’s plan design? Will your employees have access to a pharmacist for decisions and support as part of their standard care? Are clinical programs managed by in-house experts such as registered dietitians and infusion nurses?

If employee satisfaction is an important part of your total rewards strategy, include questions on your RFP that address Key Performance Indicators like member satisfaction, speed to answer and first call resolution.

Will You Have Visibility into Data to Make Informed Decisions?

To make informed decisions that balance cost savings with patient outcomes, employers need timely access and visibility into data. Once a pharmacy benefits plan is set up, your PBM should never have an “autopilot” attitude. Plan monitoring and reporting and ongoing PBM consultation help employers enhance plan performance.

When evaluating RFPs, it’s easy to get caught up in the details and lose sight of the bigger picture. Remember, don’t miss the forest through the trees. Focus on the key factors that will truly impact your organization – price transparency, quality care for your employees, and access to the data you need to make informed decisions. By stepping back, you can ensure your PBM choice aligns with your goals and delivers lasting value.

Eric Barker is chief health strategist officer of True Rx Health Strategists, a pharmacist-owned, patient-first PBM focused on improving health outcomes, offering high-touch clinician support and transparent pharmacy benefits, and empowering patients and employers to thrive with forward-thinking, personalized solutions that change the world of health care.