Disruptions in the PBM industry and health plan markets have left many health plans wondering: “Is my PBM the right partner for me?”
In just the last 18 months, we’ve witnessed major changes in the PBM industry, including the mergers of CVS with Aetna and Cigna with ESI. These mega-mergers mean that some of the largest PBMs are now closely affiliated with some of the largest health plans. These large plans, in turn, often compete for Medicare and commercial lives directly with many of the smaller, mid-sized regional and Blues plans served by these PBMs.
Anthem recently responded to these changes within the PBM industry by launching its own PBM, IngenioRx. Other health plans have recently decided to switch to alternate PBMs, such as OptumRx. Such a switch to a PBM (OptumRx) owned by a health plan (United) would not have happened just two years ago, given the ownership structure. Now that OptumRx is no longer the only PBM affiliated with health plan ownership, this has, in effect, opened up a more level PBM playing field than has been true historical.
All of this recent activity indicates now is a good time for health plans to step back, assess the market, and factor this in when planning a long-term, multi-year, PBM contracting strategy.
It’s not just concerns about helping the competition that’s driving plans to re-evaluate their PBM vendors. Some health plans report declining PBM service levels as a result of the recent mergers, often due to staff turnover.
The following tips are designed for health plans to take advantage of emerging PBM industry opportunities and market changes:
Remember that change in the PBM industry creates new opportunities for health plans to take advantage of favorable pricing and increases your negotiating leverage – if you know how to use these to your advantage. It’s often in health plans’ best interests to work with an experienced, independent PBM consulting and procurement firm that can assist you in interpreting and modifying your PBM contract language -- so you will have maximum negotiating leverage and flexibility in the short- and long-term.
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