The primary purpose of the pharmacy benefit managers (PBM) is to serve as an intermediary among pharmacies, drug manufacturers, and payers. PBMs manage formularies, negotiate discounts and rebates, and process and pay prescription drug claims through a web of electronic transactions.
Blockchain could potentially transform the relationship between payers, pharmaceutical manufacturers, wholesalers, and pharmacies by offering an alternative, transparent mechanism for processing, pricing, and validating prescription transactions. This approach could lead to less waste, reduced pricing variations between pharmacies, and a better app-based purchasing experience for consumers, through transparency of the true cost of prescription drugs.
Milliman consultants Brian Anderson, Gregory Callahan, and Michael DiPrima provide more perspective in their article “How blockchain technology will disrupt the PBM-payer-pharmacy relationship.”
The United Arab Emirates (UAE) aims to be the first blockchain-powered government by 2020. Programs are already being piloted for migrating key government processes, including healthcare records, to the blockchain.
Dubai has invested significantly in transforming its healthcare infrastructure. Blockchain technology is the catalyst set to overhaul the current healthcare system and improve upon its current limitations. The blockchain has the potential to control medical costs, improve quality of care, and enhance the overall health and happiness of Dubai’s residents.
Lessons from Dubai’s blockchain initiative may have far-reaching implications on the work of health actuaries in the UAE and across the world. Actuaries and stakeholders need to consider the downstream effects of a blockchain-powered government and healthcare system.
Milliman’s Julia Kong explains the key features of the blockchain, which could enable stakeholders to overcome existing healthcare challenges, in her paper “Blockchain UAE: Global healthcare implications.”