In case you missed it, a new PCMA Rx Research Corner blog highlighted the value employers find in their pharmacy benefit company relationships. As Congress considers passing misguided proposals in the new year that will undermine the critical flexibility and choice employers have when it comes to offering coverage, it is important to remind lawmakers of the unintended consequences facing business owners and their ability to provide quality, affordable benefits to their employees. The blog explains how all plan sponsors have the final say in how their coverage looks:
“How does the employer-PBM relationship function? A common misconception about this relationship centers around decision making. To be clear, PBMs are the recommender, and the employer is the decider.
“As they do with any other health plan sponsor, pharmacy benefit companies make pharmacy benefit recommendations based on the client’s initial Request for Proposal and before signing a contract, the employer decides whether to accept those recommendations or to make changes and customize their benefits. In describing this PBM-employer relationship, three words come to mind: choice, flexibility, and final say.”
Plan sponsors voluntarily hire pharmacy benefit companies because of the flexibility and savings secured. Further, they design the benefit that works best for their unique needs:
“When it comes to the design of those benefits, there are many choices that employers make. One of the choices made by employers that is most visible and impactful to the employees and their families is prescription drug formulary design. Only 72 percent of employers surveyed by Pharmaceutical Strategies Group (PSG), an industry research firm, reported using their pharmacy benefit company’s recommended basic formulary (including the recommended drug exclusions) – and that number drops to 45 percent for health insurance company respondents. And 19 percent of large employers chose to customize their formulary. Pharmacy benefit companies do not force a single benefit design onto employers. Rather, they present a set of choices, from which employers decide what works best for their budget and their employees.
“The pharmacy benefit company market also offers employers flexibility to find a company and a model that works for them. There are 73 full-service pharmacy benefit companies in the market in 2023, up from 66 in 2019. These companies differentiate themselves through different services, contract terms, and product offerings.”
Limiting the number of choices at a plan sponsor’s disposal and undermining the savings pharmacy benefit companies are able to negotiate from drug companies will only hurt hardworking Americans and their families. Ultimately, “When it comes to their PBM contracts and pharmacy benefits, employers make the final decisions.”
Read the full Rx Research Corner blog HERE
See the infographic focused on the employer-PBM relationship HERE.
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Learn how legislation targeting pharmacy benefit companies would take away choice and flexibility employers say they value HERE.
See how one proposal being considered, “delinking,” would increase premiums and help Big Pharma earn a multi-million dollar financial bailout HERE.
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PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients. Learn more at www.pcmanet.org
