Health plans that implement a long-term PBM contracting strategy are very successful at maximizing leverage and securing favorable pricing throughout the entire term of a PBM contract life cycle. PBMs negotiate every day. PBMs know when they have leverage and maximize this knowledge to their advantage. Therefore, it is very important to be proactive and manage a PBM contract strategythat maximizes your leverage and keeps you in control.
Health plans that are not prepared are at a disadvantage when it comes to securing PBM pricing. Whether it is timing or resources or any number of reasons, health plans that do not follow a multi-phased plan will lose leverage against a PBM that can exert control over the negotiations.
With a well thought out PBM contract strategy over the next 3-5 years, health plans are positioned to maximize leverage to secure the best pricing and level of services now and in the future. The strategy should cover your next two contracting initiatives and include an RFP, interim year market checks and/or renewal negotiations with your PBM.
Here are some best practices to consider as you develop and implement an effective PBMcontracting strategy:
Given today’s rapid market pricing fluctuations, taking a strategic approach to your PBM relationship to obtain the best overall pricing and levels of service is your best offensive move.
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