With health care – and pharmacy – continuing to rise being able to offer a robust, sustainable, pharmacy benefit can be a challenge for employers. However, it is also one of the most used benefits and critical to ensuring employees have access to the medications they need to ensure good health outcomes. For benefits advisors – now more than ever – this means trying to find alternative solutions that meet their clients’ goals of driving to the lowest net cost while still delivering superior service and high-quality member experience.

While the “Big Three” pharmacy benefits managers (PBMs) offer many advantages, their lack of transparency can be a source of frustration, their incentives are not always aligned with those of clients and benefits advisors, and often, they don’t deliver on promised savings.

Understanding the Differences: Transparent PBM vs. RxBenefits’ PBO Model

As clients and benefits advisors look for a better pharmacy benefits partner, amidst shifting industry dynamics, it has led to the growth of so-called transparent PBMs, which promise to deliver greater savings, and more transparent terms and business practices than the “Big Three.” But do your clients know if transparent PBMs are truly what they seem? If you’re exploring alternatives to the big PBMs, it’s important to clearly understand the differences between transparent PBMs and a pharmacy benefit optimizer (PBO), like RxBenefits. The differences between the two could be what determines whether your client’s pharmacy benefit plan is truly being managed to lowest net cost.

Scale and Buying Power

Transparent PBM: So-called transparent PBMs are typically not price competitive. First and foremost, they don’t have the size, scale, and negotiating power to be able to deliver the best rates and rebates. This is clearly not in the client’s best interest and impacts their ability to lower plan costs and offer a sustainable benefit.

RxBenefits’ PBO Model: Our three million members mean we have the scale and size to negotiate with the largest PBMs on behalf of clients thereby leveraging the purchasing power of a Fortune 100 company. And we offer transparent, guaranteed contracts that deliver lowest net cost. When clients move from a PBM contract to RxBenefits, on average, they save 28% in pharmacy costs in their first year.

Plan Design Flexibility

Transparent PBM: Transparent PBMs are typically smaller companies and, to compensate for their lack of scale, often propose significant changes in plan design or stringent formulary restrictions to achieve savings. While these measures may enhance cost-efficiency, they can cause severe member disruption and risk negative health outcomes by limiting access. In addition, because a transparent PBM model cannot deliver savings without making such large changes they are less consultative and not always in alignment with a client’s goals.

RxBenefits’ PBO Model: Our disruptive model is based on optimization through a client-aligned pharmacy plan tailored to each plan’s unique needs and goals. We also focus on lowering plan costs while delivering superior member service and minimizing disruption. Our experience shows that just 2% of members taking high-cost specialty medications are responsible for roughly 50% of plan costs. Our carefully designed, human-led clinical programs lower plan costs for clients by primarily focusing on that small proportion of members. Our prior authorization (PA) and utilization management (UM) efforts are focused on making sure the right member is receiving the right drug at the right price to ensure appropriate use. Our independent clinical management saves clients an additional 7%-10%, on average.

Financial Guarantees

Transparent PBM: Transparent PBMs often do not – or are unable to – offer contractual guarantees. While their proposals may look great on paper, the terms of a contract can significantly impact overall costs and savings opportunities. Pricing offers can be manipulated to make a PBM’s proposal appear better on a spreadsheet than it really is, and this could mean higher costs. In addition, transparent PBMs typically require three-year contracts, which means if clients don’t realize promised savings, they do not have the option seek alternative solutions during that period.

RxBenefits’ PBO Model: Our contracts are not only transparent, but the savings we promise are based on a comprehensive financial analysis of the client’s own claims data, and our contracts are fully guaranteed. As part of the analysis, we conduct an apples-to-apples comparison with the incumbent’s current – or renewal – pricing. We also provide insight into current plan performance, including a retrospective review of the impact of existing clinical inefficiencies on spend. In addition, our analysis highlights actionable risks and identifies potential opportunities for savings. In 2023, clients with RxBenefits Protect^TM, our clinical management program, realized an 8.9-to-one return on their investment as validated by an independent third party. From 2021 to 2023, clients with the full suite of clinical management saved between 13%-15% pre-rebate. In fact, we guarantee that our clinical management will save clients at least as much as they pay. If not, we promise to make them whole.

Conclusion

As a benefits advisor, your focus is on delivering the best solution for your client’s pharmacy benefit needs. We hope this article helps explain why not all solutions are created equal. With RxBenefits as a partner, you can be confident you are offering your clients a robust pharmacy benefit plan with superior member services and effective clinical management programs at the lowest net cost.