Dealing with Pharmacy Benefits Managers (PBM) can be one of the most technically confusing deals anyone can attempt to enter. A single contract typically cover issues regarding medicine, health care law, and even the economic state of the pharmaceutical industry. This is too much information for anyone to absorb and execute effectively.
Taking PBMs Apart
The inherently complex nature of these contracts are what makes it necessary for PBM consultants like CrystalClearRx.com to help people with their plans. The most common advice these companies give clients is to take contracts apart and examine it piece by piece. This allows them to understand the terms of the agreement at their own pace.
One of the most important things that a client should do when dissecting their PBM plan is to understand the agreement’s cost of particular drugs. Every PBM plan includes a definition of how much it plans to pay the PBM for every prescription filled. But, because of the thousands of prescription drugs on the market, it’s impractical to list prices for each individual drug.
In order to streamline the listing process, most contracts use a discount from the published ingredient cost or the average wholesale price (AWP) as the definition of cost. The discount typically varies depending on the plan. For example, one PBM defines the cost of drug A to be the AWP minus fifteen percent, while another deducts eighteen percent.
A variation of this that clients might also see on their contracts is a general discount for several drugs. PBMs with this definition could say something like “Annual drug brand discount is equal to AWP minus fifteen percent guaranteed”. It’s actually quite simple, but only after the clients take the time to absorb just this part of the contract.
PBM contracts are the product of several fields of expertise coming together to give people the most complete and comprehensive plan possible. This, of course becomes the convoluted and confusing documents that reaches end clients. Do not get intimidated by the jargon and work through the contract one part at a time.