Delivering Comprehensive Value for a Health System:
How an In-House Pharmacy & Strategic Support Led to Significant Savings
The Situation
A health system with 13,400 member lives had an annual pharmacy spend of $18 million, which equated to a net spend of $89.28 per member per month (PMPM).
The organization endeavored to optimize its retail and specialty prescription drug spending by capturing those claims in an on-site pharmacy. However, the health system was experiencing a lack of strategic support from its PBM. The health system needed a new, conflict-free pharmacy benefit partner who would support its objectives to keep pharmacy dollars in house
The Solution
The health system partnered with RxBenefits for a best-in-class solution which involved leveraging its resources, creating a channel agnostic benefit design, and establishing an on-site pharmacy. With the on-site pharmacy, the health system was able to drive retail and specialty pharmacy claims to its own location and save money on the employee benefit program.
RxBenefits also conducted a comprehensive Financial Analysis of the plan’s previous arrangement to identify contract red flags and pinpoint the major trend drivers impacting costs.
The Solution
The health system, with guidance from RxBenefits, was able to implement a tailoredclinical solution, independent of the PBM, to address its identified risk areas. The solution included three components of RxBenefits’ Protect™ program:
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Low Clinical Value (LCV) Formulary Exclusions – Preventing unnecessary drug spend by removing non-essential, high-cost, low clinical value drugs from the formulary.
RxBenefits’ clinical team continually monitored drugs in the market and updated the low clinical value drug list throughout the year, which produced additional value.
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High Dollar Claim Review – Providing umbrella protection by guarding against unnecessary spending on high-cost brand and specialty medications via independent reviews.
RxBenefits’ clinical team provided additional oversight through prior authorization reviews for certain high-cost prescription drug claims. The organization gained insight into the specific drugs contributing to its monthly plan cost and was able to limit its exposure.
- Client-driven manufacturer assistance program – Providing the health system with the flexibility to access manufacturer assistance dollars for certain medications to offset costs.
Contract
The health system gained the flexibility to insource specialty and maintenance medications for its employees and dependent members with a conflict-free RxBenefits contract.
With a channel-agnostic contract, the health system utilized a hospital-first benefit design with incentives to drive utilization to its in-house pharmacy. The new pharmacy benefits contract also included updated component-level guarantees for retail, mail order, and specialty pharmacy channels and updated manufacturer rebate guarantees.
On-Site Pharmacy Strategic Support
The health system’s on-site pharmacy was able to drive incremental maintenance and specialty medications in house with the strategic support of RxBenefits. A mandatory maintenance program was implemented, and a series of new member communications helped facilitate the transition.
The Impact
The health system gained greater insight and independence over its employee benefit program through a more competitive contract and the strategic support of a true pharmacy benefits partner. As a result,the health system was able to realize $2 million in net savings (12%) on its prescription drug spending within one year
Clinical
- Formulary Optimization: $64K
- High Dollar Claim Review: $755K
- PMPM savings over 12 months: $5.09
- Estimated annualized plan saving: $819K
Contract
- Contract improvement over the previous year: 7%
Strategic Support
- Client-driven Manufacturer Assistance Program savings: $358K
- Savings from the additional Rx volume captured in-house: $1.5MK
“RxBenefits has provided an exemplary level of customer service. While implementing cost savings
strategies to mitigate the impact of rising drug costs on an employer-sponsored medical plan is always difficult, RxBenefits provided the partnership necessary for our organization to successfully initiate two major changes in the same benefit year.”
– Health System Pharmacy Manager
