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Three traditional pharmacy benefit managers (PBMs), often referred to as the “Big 3”, control over 80% of the prescriptions across the US, while the majority of employers struggle to keep healthcare affordable for their employees and covered members. The oligopoly that has developed in pharmacy benefits works against what most would consider is the purpose of a PBM, which is to lower prescription costs and administer pharmacy benefit plans on behalf of a plan sponsor. In fact, the opposite has occurred, as drug prices are at an all-time high and conflicts-of-interest create an environment that puts PBM profits over patient wellbeing. These conflicts include PBM control over which pharmacies are considered in-network, specific mail-order requirements and pharmacy utilization, which medications are covered on a formulary, and even how much is earned back in rebates. As you can guess, this amount of control of the market has led to higher costs, not lower. There are no incentives for the “Big 3” to contain costs, provide rebate structures, or recommend lower cost alternative medications that most assuredly will impact the PBM’s bottom line.
All of this can sound daunting. How do you effectively administer a benefits plan for your employees that covers their needs without falling victim to money grab situations? Who can you trust when you find out that the PBM that was supposed to be working for you, has actually been working against you?
RxPreferred is a pharmacy benefits administrator that is transforming healthcare by offering transparent and customizable pharmacy benefits plan options with an emphasis on cost-containment strategies, plan design collaboration, and data-driven decision making.
Jeff Malone, Founder & CEO of RxPreferred, says, “If an employer doesn’t have the ability to see exactly what the PBM is paying the pharmacy on their behalf, they have absolutely no way of knowing whether they’ve been overcharged. It’s these conflicts-of-interest, primarily from the traditional PBMs, that have caused higher costs and negatively impacted plans and their members. Our company doesn’t own any pharmacies, more specifically mail-order or specialty pharmacies; we don’t own patient assistant programs, we have neutral third-party relationships to take those conflicts-of-interest out of the equation. RxPreferred charges a flat per claim fee for all PBM services without any spread pricing, so we’re able to say to an employer, client, whomever, ‘Tell us exactly what you’re looking for, and we’ll customize the plan to meet your needs, instead of the traditional PBM requiring a cookie-cutter option to an employer that may or not be close to what you’re looking for in your pharmacy benefit.’”
RxPreferred tailors its’ custom pharmacy solutions for their clients that addresses core needs without money grabs, without complexity, and with an emphasis on a fully transparent exchange. Clients, employers, hospitals, and other third-party plan beneficiaries can take back control of their pharmacy benefits plan, leading to lower overall costs and improved medication access.
There are huge concerns with rising costs and effective pharmacy prescription fulfilment in the traditional PBM structure. Not only is RxPreferred transforming the way of expenditure controls to deliver actual savings for employers, but, due to the company’s data monitoring, RxPreferred is able to identify and offer more cost-effective alternatives prescription options. The fiduciary component of sponsoring a plan is a foremost responsibility for employers and supporting employers in fulfilling that duty is a high priority for RxPreferred.
Customizable Plans and Visible Results
RxPreferred is able to cut waste within a plan, which is currently another problem for most employers that may not have any idea where their money is going for prescriptions. “We’ve seen incredible instances of waste and inefficiencies within plans that have transitioned their plan to us. For instance, certain higher-cost drugs may be recommended with a lower-cost option excluded, then require it be filled at the PBM-owned pharmacy for an extended length of time. What traditional PBMs do instead of adhering to a drug’s authorization of 3 or 6 months, they give prior authorizations for 12 months while this specialty medication has to be filled at their pharmacies, so they make more money each time that medication is filled. Traditional PBM pharmacies continuously fill these scripts, members receive it in the mail without thinking twice about it, and it can cost the plan 5 or 6 figures.,” Malone explains. This is a spend problem centered around gimmicks that accrue more waste without providing appropriate alternatives or visibility.
For the hospital and healthcare clients that RxPreferred serves, they empower these customers to use their own assets and resources, meaning their own pharmacists, pharmacies, clinical programs, prescribers, and more. This saves hospitals and healthcare providers substantially by operating in a collaborative fashion, using the resources that healthcare organizations have access to on their health plans while also leveraging direct contracting relationships.
RxPreferred’s customizable plan structure can be evaluated in other ways, too. “Customization is from a neutrality standpoint,” says Malone. “We just want to help employers save on costs” and that might come in the form of a plan that prioritizes a local pharmacy network, decides between a copay or out-of-pocket structure, or even customizes prior authorization so that members can have access to specific drugs that make sense for them on an individual level. “Every one of our solutions is customized and tailored to fit that specific employer’s needs,” Malone says. This saves RxPreferred’s clients anywhere from 20-50% on their benefits plans, no matter the size of the organization. This savings is the first step in improved patient care with better accessibility and more cost-effective medication options, which in turn leads to healthier individuals and families, and more money that can go back in the pockets of hard-working members instead of annual premium increases.
For example, one self-funded employer responsible for 350 covered lives on their plan was spending over $500,000 annually with a traditional PBM. In one year with RxPreferred, the employer spent less than $300,000, while also receiving over $30,000 in rebates, which the employer had previously never received. RxPreferred created a customized plan based on the client’s needs and delivered completely transparent pharmacy benefits plan administration; which included access to 67,000 pharmacies nationwide without a mandated mail-order or speciality pharmacy requirement, cost-containment strategies that helped the plan and members choose the most appropriate medication at the best possible cost, and best-in-class customer support. In this case, RxPreferred’s client recognized over $200,000 in plan savings as part of their company’s bottom line and are position for long-term success with better utilization of local pharmacies and continued data access to make more informed decisions about their plan.
This example highlights how that employers can work with a transparent PBM to transform their benefits plan and make it a strategic endeavor for all parties involved. “People don’t really know what they’re pain points are, they just know it’s costing them a lot of money. For instance, you could have 10,000 members on a plan, but a few members may be driving 60-70% of that plan cost alone,” says Malone. “Everything we do is very proactive instead of waiting and being reactive. We put in specific triggers to ensure there is no waste or abuse in the system.” A prudent example in today’s world is GLP-1 drug offerings. Weight loss drugs can be some of the most highly-inflated prescription costs that traditional PBMs push without investigating or offering cost-effective alternatives. “It’s our job to protect the employers and their members,” says Malone. “For instance, a person can be prescribed metformin for 30 days, say that nothing happens, and immediately get prescribed Ozempic from the traditional PBM with little to no evaluation on if the change is clinically appropriate or necessary. Metformin may need to be taken for a longer period or the provider could have additional insight into their healthcare journey and why that medication was prescribed in the first place. It’s having proactive, cost-controlled measures set in place that will protect the plan, not abuse it.”
Delivering a Transparent Ecosystem
By offering a model of transparency to clients, RxPreferred promises a new way forward for their benefits plan management. Malone’s team actively meets with clients on a quarterly basis to run predictive modeling projections and analyze plan options, ensuring accessibility and continued monitoring that empowers their clients.
Right now, RxPreferred is fighting back against the vertical integration taking place in the PBM market where healthcare offerings are entrenched in conflicts of interest that don’t benefit employers, members, and their communities. RxPreferred is also a founding member of Transparency-Rx, an organization made up of other pass-through pharmacy benefits administrators that steer away from traditional PBMs by advocating for transparency. “We’re trying to instill a more transparent ecosystem overall. The big three have avenues in all these different spaces and the further they push to verticalize the market, the more companies are going to need us,” Malone explains.
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