AIS Newsletter Identifies PBM Contracting Issues to Avoid

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The July 8 issue of Atlantic Information Services’ Drug Benefit News details some strategies health plans and employers can use for avoiding loose contract terms, as explained by PBM experts in a recent AIS webinar.

Specificity is key for health plans and employers in negotiating pharmacy benefit arrangements, according to two experts who spoke at a recent Atlantic Information Services (AIS) webinar. The July 8 issue AIS’s Drug Benefit News highlights a few of the contracting areas that can be strengthened, as identified by two executives from Solid Benefit Guidance: Josh Golden, an area senior vice president, and Vice President Helen Sherman, Pharm.D., R.Ph. These areas include:

  • Rebate guarantee loopholes and exceptions — “In order to really get all the monies that are coming from pharma for a particular set of utilization for a client, it’s best to list out all the types of revenue and have an agreement upfront for both parties as to what’s going to go to the payer vs. what the PBM is going to retain,” Sherman said.
  • Price modification rights — Sherman advised putting parameters around areas such as changes in laws or regulations, average wholesale or other reference price, or actions taken by drugmakers, and “really defining when a PBM is due more money.” Golden also suggested having an independent third party brought in when such situations arise.
  • Market check provisions — Pricing reviews should happen at most once a year, Golden said, and clients should negotiate the right to do their own benchmarking and involve a third party.
  • Specialty drug nuances — Specialty formularies can have anywhere from 25 to 100 drugs on them, Sherman noted, and advised plans and employers to play a part in the decision-making process for what new products to include.

Visit https://aishealth.com/archive/ndbn070816-03 to read the article in its entirety. To order a recording of the webinar, visit https://aishealth.com/marketplace/c6p16_063016.

About Drug Benefit News
Published biweekly, Drug Benefit News delivers timely news and in-depth accounts of cost management strategies being employed by purchasers. Coverage includes news of the continually evolving PBM landscape, soaring specialty pharmacy costs, the emerging biosimilars market, generic inflation, exclusionary formularies, new adherence strategies, pharmacy network innovation, changing reimbursement methodology and more. Visit http://aishealth.com/marketplace/drug-benefit-news for more information.

About AIS
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for nearly 30 years. It develops highly targeted news, data and strategic information for managers in hospitals and health systems, health insurance companies, medical group practices, purchasers of health insurance, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, databases, websites, looseleafs, strategic reports, directories, webinars, virtual conferences and training programs. Learn more at http://AISHealth.com.

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Jill Brown, Executive Editor
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