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Reevaluating Pharmacy Benefit Managers: Insights from SHARx

As employers reassess their pharmacy benefit manager (PBM) arrangements, many are tempted to explore new contracts to reduce healthcare expenses. However, SHARx warns that not all proposals lead to meaningful improvements. In fact, they can create a false sense of competition without addressing the fundamental drivers of high costs and access issues. According to the National Alliance of Healthcare Purchaser Coalitions, 61% of employers have either switched or are considering switching their PBM in the past year, showing a significant shift in the landscape of pharmacy benefits.

The Illusion of Competition

Employers seeking better pharmacy benefits often receive various proposals featuring discounts, rebate guarantees, and administrative fees. While these metrics may assist in comparing contracts, they don't guarantee cost-effectiveness or accessibility for members. For instance, a significant discount might still lead to a high end price stemming from inflated initial costs. Paul Pruitt, Chief Growth Officer at SHARx, stresses that the true measure of a contract’s value lies in what employers actually pay for the medications utilized by their employees.

This concern is echoed in reports that state an increase in pharmacies' share of employer healthcare costs—from 21% in 2021 to 27% in 2023. Employers are realizing that simply running another request for proposal (RFP) will not be enough to alleviate long-term costs. Instead, they need to look at vendor performance, outcomes that can be measured, and the transparency of contracts, aligning these with broader workforce goals.

The Need for a Fundamental Shift

It’s important for employers and brokers to scrutinize how each bidder generates revenue. Key details include the involvement of affiliated organizations and the determination of where members can access specialty medications. Pruitt emphasizes that the review must not just focus on the PBM stated in the proposal but should encompass the entire network involved, including specialty pharmacies and rebate aggregators. The PBM's accountability in providing transparent and verifiable arrangements post-implementation is crucial.

“Many claims in proposals can look good on paper,” notes Pruitt. “However, employers must have the visibility to check if those promises materialize in real-world applications.” The bid proposals need to reflect a commitment to not only lower costs but also enhance access and member experience, moving beyond mere fee disclosures.

Rethinking Implementation and Member Experience

Financial terms represent just one segment of the pharmacy contracts. Employers also need to evaluate the implementation processes, member support services, and the overall experience employees will encounter with the new agreement. Brokers often hesitate to switch partners due to the additional workload associated with transitions. Yet, the emphasis should be on enhancing member experiences rather than sticking with underperforming structures.

Proposals should clearly address how potential implementation glitches will be managed, the type of assistance provided to members, and what specific accountability measures are in place regarding cost control and service delivery.

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• - How will you prevent implementation problems?
• - What support will members receive?
• - What measurable outcomes will you be held accountable for?

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These essential questions progress the RFP discussion from mere numbers towards actionable outcomes that could affect employees promptly.

Conclusion: A Call for New Perspectives

In today’s rapidly evolving healthcare landscape, it is critical that employers choose partners who understand these complex dynamics. The strongest brokers and employers are not only negotiating better terms but are also working towards redefining what a pharmacy benefit arrangement should look like. It’s not merely about changing the vendor but about shifting the entire approach to reduce costs, improve access, and foster a better member experience.

At SHARx, the focus remains on combating the counterproductive practices of overpriced medications through an ethical sourcing model. The organization aims to deliver affordable, reliable prescriptions without hidden costs, to ensure that people come first.

For more details, visit SHARXplan.com.