PBM Impact from COVID-19

By Justine Wiebusch
Thu, Apr, 30, 2020

Most PBM contracts allow for guarantee adjustments for certain circumstances. The COVID-19 pandemic has created a situation where these circumstances are more likely to occur. The Burchfield Group has hosted discussions with several health plans and evaluated contracts and recent claims data to understand potential PBM impacts. We wanted to communicate what we have learned as we continue to monitor this fluid situation.

Possible triggers for renegotiation related to the COVID-19 pandemic:

  1. Membership changes
  2. Change in channel mix
  3. Change in drug mix
  4. Benefit design changes
  5. Force Majeure

Key observations of claims trends through April 1, 2020:

Screen Shot 2020-04-30 at 10.41.48 AM

We recognize this pandemic is more of a marathon than a sprint. Although initial results have shown PBMs might be unlikely to attempt to lower guarantees, the continuation of emerging trends could quickly reverse this assessment. We continue to monitor for trends, including:

  1. Shortages driving reductions in discounts
  2. Shifts in drug mix and channel utilization patterns
  3. Membership changes across lines of business

As we continue monitoring PBM impacts, we will keep you informed if we find macro trends that might become a point of negotiation within your PBM contract. If your PBM does opt to exercise a clause to re-open negotiations, we encourage you to reach out to Burchfield to validate that any adjustments are equitable and proportional to the impact of COVID-19 claims shifts. We will be happy to set up a call with you to discuss options, if you are interested in monitoring your book(s) of business.