As Vice President of Product at ClearPoint Health – an organization providing solutions that empower small and medium sized businesses (SMBs) to manage their healthcare spend – it’s encouraging to see employers’ increased awareness of predatory PBM tactics. The knowledge that there is manipulation of pricing that is impacting their spending might convince them they need a different solution and type of partner.
While I welcome the criticism and increased spotlight on how the Big 3 are operating, I fear such awareness might contribute to the growth of a troubling trend. We have seen the rise of PBMs positioning themselves as transparent and pass-through – the antithesis to the strategies the Big 3 are built upon. Fundamentally, being transparent and pass-through should be synonymous with the employer having assurance that the pricing they see on a member to member, drug to drug level has not been artificially adjusted due to spread. This should not be a differentiator but rather a baseline requirement for any PBM.
It’s important for benefit advisors, consultants, and employers to recognize that a PBM not being one of the Big 3 does not mean they are actually adding value or being an effective partner in managing drug spend. With drug spend now averaging more than 25% of all healthcare expenditures and the significant increase in specialty drug spend and utilization, I hope that the recent focus is only the beginning of the scrutiny being applied to every PBM. I say that because of a deep-seated belief that a good PBM – one that is truly focused on helping to improve clinical outcomes, deploys a range of financial solutions to meet and stay ahead of the growing supply chain complexities, and be a catalyst for elevating other cost containment vendors across the continuum of patient care – can be one of the most valuable partners in managing healthcare spend.
Many PBMs fall short in their investment and fundamental belief in the importance of clinical management and the role they play in helping to augment care. Considering the current state of specialty drugs and the pipeline of new approvals we will see over the next couple of years, it seems the spectrum of patients taking specialty drugs will continue to grow – each patient with personalized and nuanced care needs. The clinical interventions a PBM can deploy have arguably a larger impact on cost than the drug specific pricing, especially when thinking about mitigating future, avoidable costs. Unfortunately, many of these PBMs are negating any investment in their clinical strategy or even hiring pharmacists to help manage patients. Patients deserve better. A PBM should be, first and foremost, a clinician-led solution that understands pharmaceuticals and holds patient care at the forefront of its approach.
Another issue is how transparent PBMs are contracting with clients. In an industry where everyone wants to talk about aligning incentives, I question how aligned any PBM can be without offering any guarantees on cost or outcomes. Employers need a partner invested in managing costs and one that has invested in their capabilities to do so – both from a financial and clinical perspective – and translate the complexities of all that to a predictable cost or trend guarantee for employers. This is not a push to the typical effective rate or AWP based pricing we see from the Big 3 – but rather a clear guarantee devoid of the typical predatory tactics. Unfortunately, too many of the transparent PBMs have offered clients no level of predictability or assurance beyond a handshake promise.
At ClearPoint, we recognize that the PBM pricing models of the Big 3 are just another iteration of a larger issue related to taking advantage of employers across health plan products. Indeed, the issues with PBMs go beyond just those PBMs under fire.
A PBM can be and should be a critical piece of managing not only drug spend but total cost of care. When done correctly, with a clinician at the helm, and with a partner that is truly aligned strategically and financially, you have a solution that you can place full trust in.
Fortunately, such a solution does exist. (And we're excited to share more about that soon!)
In the interim, I would advise any benefit advisor, consultant, or employer to ask PBMs how they are adapting their model from a clinical and cost containment perspective to stay proactive on managing costs. What steps are they taking to ensure they can continue to serve their patients and clients, specifically those we expect to be prescribed a specialty drug for the first time over the next few years? How are they evolving their financial models to give clients predictable insight into trend impacts?
Unfortunately, I’d wager most would give an answer along the lines of “well…at least we aren’t one of the Big 3”.
By: Sean Burke, Vice President of Product