12 PBM Contracting Pitfalls Health Plans Should Avoid

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Includes material adapted from an AIS Webinar presented by:

Publication Details

  • Pub Code: GC6P03-11WEB
  • Pages: 86
  • PDF version: 2,189 KB
  • ISBN: 978-1-939721-24-2
  • Copyright 2016

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12 PBM Contracting Pitfalls Health Plans Should Avoid

Provides health plans and employers with a “checklist” of items to guard against when negotiating pharmacy arrangements. Also includes a comprehensive listing of PBMs and their insurer clients, plus a collection of articles about PBM contracting strategies.

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AIS’s Management Insight Series: Providing practical solutions to complex business challenges with the help of the industry’s most insightful advisors and managers

12 PBM Contracting Pitfalls Health Plans Should Avoid examines the loopholes some PBMs build into contracting language with health plans — and how to avoid them. From tightening up pricing logic and contractual definitions to building in suitable audit rights and market checks, the report provides a “checklist” of items to guard against when negotiating pharmacy arrangements.

Health plans and employers will get reliable, strategic answers to big-dollar questions surrounding:

  • How PBMs’ indirect revenue streams work, and how PBMs are likely to make money off of a health plan contract vs. an employer contract.
  • The key loopholes consultants have found when negotiating new PBM agreements on behalf of their payer clients.
  • How to incorporate suitable audit rights into an agreement to ensure that the PBM is delivering on pricing and service levels in line with the contract terms.
  • How a well-crafted market check provision can help a PBM deal remain competitive over time.

12 PBM Contracting Pitfalls Health Plans Should Avoid also includes a comprehensive listing of more than 60 PBMs and their 2016 insurer clients, from AIS’s Directory of Health Plans, and a collection of articles about PBM contracting strategies, from AIS’s Drug Benefit News.

Order 12 PBM Contracting Pitfalls Health Plans Should Avoid today and find out how to identify the most common contracting mistakes plan sponsors and health plans make when negotiating a service agreement with their PBM. Your order includes a PDF version available immediately and a print version mailed to you within 5-7 business days.

Table of Contents


The PBM Contracting Process

Question and Answer Session

Appendix A: Pharmacy Benefit Managers’ Insurer Clients

  • Pharmacy Benefit Managers (PBMs) and Their Insurer Clients, 2016

Appendix B: AIS Coverage of PBM Developments

  • As Generic Prices Rise, PBM Plans Include Tiers, MAC Tweaks
  • Delayed Generic Nexium Launch May Mean More Brand Rebates for Plans
  • Big PBMs Bank on High Service, Specialty Products for Retention
  • As Uncertainties About Biosimilars Abound, Payers Cautiously Hail Zarxio Approval
  • New Surveys Suggest PBM Clients Are Content, Willing to Stay Put
  • Express Scripts Makes a Splash With ‘Indication-Specific’ Drug Pricing Model
  • Pending Catamaran-Optum Deal Causes Anxiety as 2016 Sales Season Heats Up
  • Regional PBM Player Seeks to Show ‘Value Beyond the Spreadsheet’
  • Proposed Aetna-Humana Combo Raises Questions About Existing PBM Operations
  • With Anthem-Cigna Deal, Insurer M&A May Have Long-Term Implications for PBMs
  • Employers Test Specialty Rx Solutions Through Pilot Projects
  • Independent Health Sees Big Savings via Integrated, Varied Approach to Coupons
  • What’s (Still) Bugging Payers in 2016? Consolidation, Inflation and Innovation
  • Fast-Growing PBA Touts ‘Boutique Service Model’ With Big Benefits
  • Anthem Price Dispute Continues to Loom Over Express Scripts
  • Changing Insurer, PBM Landscape Makes ‘Unstable’ Rx Plan Purchasing Environment
  • Anthem-Express Scripts Standoff Intensifies With $15B Lawsuit
  • Express Scripts Denies Breach-of-Contract Claims From Anthem, Seeks Restitution
  • Industry Opinion Wavers on Outcome of Anthem-ESI Dispute
  • PBMs Report Bright 2016 Earnings Outlook As 2017 Selling Season Goes as Planned
  • Distinct PBM Models Emerge as Optum Outbids CVS on CalPERS, Texas ERS Pacts
  • Specialty Pharmacy Is Gateway for Docs, Hospitals Into Drug Benefit Management
  • PBMs Can Partner With Pharmacies to Become More Consumer Facing
  • Plans Inking New PBM Deals Must Watch for Loose Contract Terms
  • OptumRx and Express Scripts Report Positive Selling Season

Written By

This report was adapted from a June 2016 AIS webinar presented by Helen Sherman, vice president, and Josh Golden, an area senior vice president, at Solid Benefit Guidance. It has been updated to include relevant background coverage of industry developments and other resources that give insight into the evolving world of PBM contracting.

Written For

Pharmacy, clinical services and medical directors; human resources executives; strategic planners; product development, contracting and marketing executives; and financial and operations executives at

  • Health plans
  • Employers
  • PBMs and pharmacy benefit administrators
  • Specialty pharmacies
  • Group-purchasing organizations
  • Pharmaceutical manufacturers
  • Employee Benefits Consultants
  • Third-party administrators

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12 PBM Contracting Pitfalls Health Plans Should Avoid

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