Did you know?
If you are a plan sponsor utilizing a pass-through PBM program, independent community pharmacies are (in aggregate) typically your lowest-cost option?
A few market dynamics that have created this counter-intuitive situation:
-One Voice: Chain pharmacies have thousands of locations, but negotiate PBM contracts as a group. Independent pharmacies use multiple contracting options (PSAO’s, directly etc.) that fragment and virtually eliminate negotiating leverage.
-Vertical Integration: PBMs that also own pharmacies have traditionally paid themselves better.
-Smaller Niche PBMs: In order for smaller PBMs to compete, they typically have to pay a premium rate to include the major chains and have “65,000+ pharmacies” in their network.
What can I do?
-Ask your PBM, TPA, or Broker to analyze your PBM data to validate this is the case (sometimes as easy as just asking your PBM…”are independent pharmacies lowest cost?”
-Narrow/exclusive networks are becoming more common. If you have good coverage with independent pharmacies (https://www.ncpanet.org to locate)consider eliminating at least one chain, or incentivizing the lowest cost option through copay design.