Plan sponsors’ prescription drug costs continue to increase year over year and remain as one of the fastest-growing components of the healthcare dollar. One of the most important ways plan sponsors can lower healthcare costs without significantly changing their benefits is to look for opportunities to improve their pharmacy benefit manager (PBM) contracts.
The success of the plan’s pharmacy benefit depends on effective contracting. PBM negotiations typically involve a number of contractual provisions, which are critical to delivering competitive pharmacy benefits on a cost-effective basis. This paper by Milliman’s Greg Callahan and Brian Anderson explores a few important PBM strategies that can be used to reduce costs and quickly evaluate whether a current or new PBM contract is effectively managed.