The Problem-

A group of 34,000 lives looking to change PBMs asked for help with the selection decision. PBM selection goes beyond a spreadsheet of Rate, Rebate and Administration Fee. The PBM’s Formulary and MAC pricing have an enormous financial impact on your plan, but cannot fit into the spreadsheet. The goal is to always look for the best and lowest net cost provider for our clients.

Our Method (Step 1)-

Sent was a standard set of claims to 13 top PBMs with instructions to price at a set rate of discount and dispensing fee, assigning their Formulary status and the MAC pricing for a group of that size. A report was created that compared the dollar results of Gross Cost, Copay (as a collection due to Formulary/Non-Formulary with the assigned 3 tier plan), and a final report of the Net Cost. Surprisingly, even with the standard data, there was a rather large difference in results of this first step. The difference was mainly due to the MAC pricing, but also due to the varying assignment of Brand or Generic.

Step 2-

To get a comparison for our client, it was requested to each PBM to give their actual quote for this group of 34,000. Using a unique rate models, forecast the resulting claims totals, including administration fee and subtracting rebate (if audit able) and  produce a new updated set of reports for the next comparison.