Three reasons a self-funded group under 10,000 lives should use a mid-sized Pharmacy Benefit Manager
It is worth evaluating the benefit of using a mid-sized PBM for self-funded entities providing pharmacy benefits to 10,000 or fewer.
The three largest PBMs, who hold over 80% of the industry market primarily focus on larger life group sizes. For smaller groups under 10,000 lives using a large PBM means having to work with a pharmacy benefit coalition.
A coalition is a group of purchasers of pharmacy benefit management services, who facilitate a channel for these large PBMs to aggregate pricing to the small group marketplace. Many coalitions enter into arrangements with their PBM vendors that restrict a plan or consultants’ access to crucial financial data and provide limited formulary and network options. This pre-negotiated offer may benefit a PBM financials and satisfy Wall Street, but often an employer ultimately ends up having limited transparency and restrictions to beneficial features. A small self-funded entity is not positioned for maximum benefit in this environment and can fare significantly better results marketing their plan independent of these aggregation approaches.
Here are some points to consider when evaluating a mid-sized PBM for your self-funded pharmacy plan.
1. Small groups (under 10,000 lives) are important to a mid-size PBM.
Independent mid-sized PBMs are focused on providing top-tier service regardless of a smaller plan size and are more accountable to an increase in a plan's pharmacy trend. A coalition amassing lives for pricing leverage with a large PBM will not be as invested in accommodating the unique needs of a small group with lives that do not significantly move the needle towards their financial advantage. A large PBM plans for client turnover and anticipates loss each year. Bottom line, they will not fight to keep your business when there are no incentives.
2. Mid-size PBMs allow a business more flexibility with their plan. Many small companies run like a large family. Owners and managers are sensitive to how their pharmacy benefit decisions may impact coverage of essential drugs. A mid-sized PBM and a well managed customized contract can provide an organization's unique needs and drug utilization a lot more flexibility.
3. Increased transparency, competitive pricing, and better contract terms with little disruption to your members.
A mid-sized PBM does not mean smaller pharmacy networks or limited formularies. Implementation is generally no more than just switching out a drug card.
APC helps you take control of your pharmacy plan spend with competitive pricing and trend management for groups under 10,000 lives. We leverage industry relationships to secure discount guarantees and ensure your PBM consistently meets or exceeds them. Contact us today to learn how we can optimize your pharmacy plan and deliver lasting savings.