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Pharmacy Benefits Managers (PBMs) have long gotten a bad rap, taking heat for lack of transparency in their dealings with pharmaceutical manufacturers. Some agreements leave health plans in the dark about the true value of their PBMs. Touting benefits, from clinical-based formularies and lower drug costs and to specialty pharmacy benefits and retail networks, may not be enough today to attract business in a competitive marketplace.
While there are many independent PBMs of various sizes, others are owned by plans and marketed to other payers or employer clients. Some plans that previously contracted with independent PBMs created their own and brought the function in-house.
NOT A SLAM DUNK PROPOSITION
"We serve a niche market-Blue Cross Blue Shield plans," says Jim Hartert, MD, chief medical officer and senior vice president. "We're aligned with these plans who own Prime Therapeutics, and we understand that constituency and their philosophies. Our services complement their medical management, and because we are owned by our clients, we offer an unprecedented degree of transparency."
Being Blue friendly does not instantly make the PBM a slam-dunk sale. Most of the Blue Cross and Blue Shield clients make a very deliberate decision when choosing a PBM, Dr. Hartert says.
"For any company as large as the BCBS plans, this is a very big decision, which is made at the highest levels of the organization," he says.
Although he says building personal relationships is essential to the sales process, Prime Therapeutics also markets itself by frequently sharing its story through multiple vehicles, including case studies, press releases, newsletters and conference presentations.
USING A CONSULTATIVE APPROACH
Navitus Health Solutions, a PBM based in Madison, Wisc., and owned by Dean Health Plan, relies on narrow distribution channels of brokers and third-party administrators to target employers, but the PBM's approach is different with health insurers.
"Plans are a more sophisticated purchaser so the liaison is a pharmacy or medical director or chief financial officer, and the approach is relationship-based," says Byron Mickle, senior vice president, sales, marketing and client services for Navitus. "The focus for plans is utilization trend management since they are at risk for pharmacy."
He says the PBM takes a consultative approach to marketing itself to ensure that Navitus' programs and services are aligned with a client's needs, in terms of savings and outcomes.
Navitus offers a pay-for-performance clinical program model-the PBM will not accept any fees for developing a disease management program until the program demonstrates savings.
As for transparency, "you either do it or you don't," he says, "and we do it financially and operationally. We have no problem sharing our contracts with manufacturers and making them available for review and audit. We pass through to clients 100% of the discounts we negotiate with retail pharmacies and manufacturers. I'd call us more 'transparent' than 'translucent.' To maintain the integrity of our model, we need to show transparency."
CIGNA Pharmacy Management, like Navitus, takes a consultative approach to selling its services, which starts when the PBM first meets with a client at the proposal stage and continues through the entire relationship.
For example, rather than giving a client national averages of savings for all clients, CIGNA works with each client to evaluate its actual employee population and determine which of CIGNA's many programs will achieve the maximum benefit for that specific employee population-both in improving health and in reducing overall costs, says Claire Marie Burchill, MD, chief medical officer for the PBM based in Hartford, Conn.