As they look to win over employer clients this year, PBMs should be prepared to face stiff competition and embrace emerging trends such as value-based formularies and rebate-free models, benefits consultants tell AIS Health.
"I've heard more interest about RFPs and going out, looking for or market-checking vendors than I have in a while — particularly on the PBM side," says Suzanne Taranto, a principal and consulting actuary for Milliman, Inc.
Companies are also considering how the vertical integration in the PBM space is "reshaping the landscape," says Renya Spak, who leads Mercer’s Center for Health Innovation.
"The main players in the pharmacy and medical space are all going to start operating a little bit differently," Spak says. "We thought we knew how they operated and their business model, but now that they're vertically integrated, I think we need to apply a whole new lens to understanding how they will operate and what will drive their business forward in the future."
That said, many of the same themes that employers are focused on will apply, including greater transparency around drug pricing and rebates, and even rebate-free models, she says. Presumably in response to that demand, CVS in early December unveiled a Guaranteed Net Cost PBM model, under which it will pass 100% of rebates to plan sponsors.
Along similar lines, Spak says she's seeing renewed interest in formularies that are based on the value that certain drugs deliver versus how rebates flow.
Another trend that Taranto is seeing involves "more care management programs, more interest in the specialty space and looking at alternative ways to procure those drugs," she says.
Specialty drug spending is always a high-attention area, Taranto explains, but now there more tools and different options available — not only from the "usual suspects," PBMs — but also from other vendors that are offering to help manage these pricey medications.
For employers that are large enough, that may mean they consider a different contract, she says. But "if you’re smaller, you may be looking at a number of specialty pharmacy providers outside of the standard PBM, on a carve-out basis, who promise better pricing, better deals."