Case Study - Direct Contracts

How PBD’s Negotiating Power Helped a Union Reduce their Pharmacy Drug Plan by 18 Percent

Problem

As with every large organization, having better overall costs clarity can help improved decision making to reduce costs while providing the proper care to group membership.

As pharmacy costs continue to rise, private employers, individual states and the federal government utilize the services of Pharmacy Benefit Dimensions (PBD) to help with cost containment.

When an 800-life union approached PBD to better understand their drug formulary and if there are efficiencies missing with their current PBM, our clinical team dug in.

Key Points

19.7% costs savings for the union

32.2% savings by switching formularies

8% savings on drug costs by eliminating the middle man

Solution

As an independent pharmacy benefit manager (PBM) not beholden to shareholders with the national scale of servicing members across all 50 states, PBD is in the unique position to own the majority of our direct contracts with drug manufacturers.

These relationships not only allow us to negotiate the best rates and discounts for our clients by working directly with drug manufacturers while maintaining constant dialogue regarding new drug options.

We can eliminate the middleman of rebate aggregators that smaller and less established PBM’s have to use to negotiate drug costs.

By not owning contracts and requiring aggregators, that additional layer can add an additional 8-10 percent to drug costs and cost you missed rebate dollars.

Results

By simply mirroring the current drug formulary for this union with lower negotiated rates, PBD achieved a 17.9% cost savings for this union. In addition, PBD was able to show an increased savings of 32.2% if they moved to our value-based formulary.

While no PBM can go without having to use aggregators to some degree, PBD included, owning more direct drug manufacturer contracts provides better buying power that other PBM’s cannot match up with.

Based on PBD’s founding philosophy of transparency, those lower drug pricing rates and true clarity into rebate dollars are always passed onto our clients.

Questions

For more information on how you can gain greater control and cost savings on your prescription drug program, call (716) 635-3578 or email PBDSales@pbdrx.com

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Our 25 years of experience in prescription drug benefit management provides the edge you and your clients need to manage expenses now and in the future.