Tag Archives: Scott McEachern

Optimizing pharmacy benefit manager contracts

Understanding the contract between a plan sponsor and its pharmacy benefit manager (PBM) is the first step toward optimizing your organization’s pharmacy benefit. Typical contracts with PBMs are structured under a three-year master agreement negotiated at the time of implementing the PBM, but the agreement can be updated via addendums and amendments throughout the contract terms. PBM contracts often include a number of definitions and terms that explain how drug claims are adjudicated and priced. Two critical contracting terms are drug definitions and the types of exclusions from the pricing guarantees. These terms play a critical role in the financial reconciliation process involved in PBM pricing and are highly impactful on the financial value of the agreement.

To read more about how to optimize a PBM contract, read this paper by Miliman’s Scott McEachern and Patrick Cambel.