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How Transparent Is PBM Pass Through Pricing?

When considering a PBM, self-funded insurance plans should be aware that they are unregulated and are not required to disclose deals taking a cut of potential Rx savings.

With the spotlight focused on high drug prices, it is easy to understand the appeal to carve out the Rx benefits to a pass-through model where the PBM will transfer their network discounts, rebates, and general PBM services for one simple administrative fee, typically calculated as Per Member Per Month (PMPM).

When considering a PBM, self-funded insurance plans should be aware that they are unregulated and are not required to disclose deals taking a cut of potential Rx savings.
How Transparent is PBM Pass Through Pricing?

When contracts are passed-thru multiple PBMs and pharmacy benefit resellers, there are hidden revenue streams cut from the spread of each network claim, percentage taken from rebates, and formulary management fees. Potential savings diminish when processed through this funnel.

Retail networks are pre-negotiated and subject to variable and potentially less aggressive discounts at smaller or more poorly negotiated pharmacies. Your PBM may not reliably deliver on promised savings when network discounts are “passed-thru” as they are, with no adjustments.

APC believes a pharmacy benefit plan will achieve goals of optimal savings when they negotiate for a guaranteed AWP discount across the entire network. When a PBM is obligated to deliver on their negotiated AWP discounts, they assume more risk, which subsequently compels them to renegotiate low-performing network contracts actively.

APC breaks you out of the world of restrictive canned PBM contracts. We believe all payers, no matter the size, deserve PBMs who fight for their business. APC works with a network of mid-market PBMs who remain accountable to their guarantees. Our PBM expertise can help craft a contract and plan design that delivers the best savings and outcomes. We offer an alternative to the smoke, mirrors, and the long, costly RFP process to help the payor efficiently underwrite their policy and provide budgeting forecasts. After the contract is signed, APC stays to provide PBM management to ensure the PBM delivers on promised savings.

APC Insights