PBMs: Contracts & Rebates

RFP (Request for Proposal)

A type of bidding solicitation in which a company or organization announces that funding is available for a particular project or program, and companies can place bids for the project's completion

benefits

Copays and/or coinsurance by tier & day supply; phase - deductible, initial coverage limit (ICL), gap, & catastrophic

UM tools

Formulary versus Non-Formulary (NF); PA, ST, & QLs

Parties to the Agreement Term - standard is 3 years Scope of Services Compliance with rules, regulations, law Financial Exhibit Reporting Performance Guarantees Audit Terms

MAJOR SECTIONS OF A PBM CONTRACT?

HEALTH PLAN/PLAN SPONSOR/INSURANCE COMPANY

PARAMOUNT IS A ______________-

Traditional or "lock-in" or "spread"

PBM pays the pharmacy for a submitted brand or generic drug claim and that is different, often lower than the price paid by the plan sponsor to the PBM

tier model

Range from 1-Tier to 5-Tier plans; The higher the tier, the more enrollees pay

rebate

Retrospective discount off the cost of brand drugs; Paid by pharma manufacturer for preferential placement of a brand drug on plan sponsor formulary; these guarantees are usually based on amount per brand drug claim metric

Pharmacy network contracting (retail, mail, LTC, HI, specialty) Formulary management Administer the pharmacy benefit & plan design Pharma rebate contracting

WHAT DO PBMs DO FOR PLAN SPONSORS/HEALTH PLANS/PAYERS?

pass-through

What the PBM pays the pharmacy is passed through as the price paid by the plan sponsor to the PBM; Said to be "transparent pricing"

Health plan/payer/plan sponsor

What type of company enters into a contract with a PBM for clinical and operational support such as formulary management, pharmacy network contracting, rebate contracting, and benefits administration?

CVS Caremark express scripts optum Rx

examples of PBMs?

consultant, RFP, pick winning bid

how to shop for a PBM?

CVS Caremark

paramount's PBM is _____

intro & client overview delegation of scope of services terms & definitions RFP questions pricing conditions performance guarentees

what're the components of a RFP?

1

which tier?: Preferred Generic

2

which tier?: generic

4

which tier?: non preferred drug

3

which tier?: preferred brand

5

which tier?: specialty tier