As healthcare costs rise, employing pharmacy analytics is a very effective strategy to realize savings within your self-insured employee benefit plan. Many pharmacy contracts go unchecked by plan sponsors and their consultants. These contracts may not be written to benefit you, the client. They may be geared instead to provide a false perceived value, accomplished through ambiguous terms and definitions. It can, therefore, be very beneficial to have the Lockton Pharmacy Analytics Practice evaluate your pharmacy contract.
Below are five strategies that could be practiced by pharmacy benefit managers (PBMs) to increase their margins while eroding the savings for you as a plan sponsor.
The patent cliff for brand drugs going generic during the next several years is significant. This means there will be billions of dollars of brand drugs losing patent protection, which could increase the generic fill rate to more than 80 percent. Considering the projected trend in generics, it is critical that your contracts are written in such a way that will allow you to realize all the future value from new generics coming to the marketplace. PBMs will often include single-source generics in the brand bucket, which will artificially inflate both the generic and brand discounts. This strategy could lead you to believe that you are receiving a high generic discount guarantee, which is far from the truth.