In the world of pharmacy benefit management programs things are about to get narrower, possibly a lot narrower. Henry Loubet is chief strategy officer at Keenan, a large brokerage in California and one of the biggest in the nation, who says there are two trends at the forefront for PBMs: narrower networks and narrower drug options.

Loubet's firm already has a narrow network option, as many PBMs do, where clients are offered the opportunity to have fewer retail pharmacies for their employees.

"To not have some of the high-cost chains ... we get some savings," he says. "We've seen savings somewhere between about half a percent to as high as one-and-a-half percent, and depending on your drug spend, that can be pretty meaningful."

So far, client reaction to Keenan's narrower network has been "mixed" because, "you're going to get some push back from employees." He says employees are usually worried at first, but realize the "geographical shift" isn't that big in the end.

Loubet also says clients really see value in the savings and appreciate Keenan's employee communication materials framing the change as a way to combat the rising cost of health care.

Jim Relyea, client executive at Chicago-based The Horton Group, echoes Loubet's second observation that drug options are also shrinking in PBMs. Nodding to UnitedHealthcare dropping Nexium several years ago, he says, "Typically when one starts it, others follow." But, he adds that advisers should walk on eggshells with clients in this realm because, in many cases, it's the employer decision makers who are taking the expensive drugs.

Loubet also has a tip for advisers on this matter: have direct talks with the PBM to make sure your clients get the full financial benefit of the dropped drug. From a clinical standpoint, he likes to see at least three therapeutic alternatives where a drug is removed. He adds that while his company is "concerned" about this trend, it remains to be seen how it will play out.

 

Spotlight

Dr. Brian Solow, chief medical officer for OptumHealth, UnitedHealthcare's PBM, says that these trends are nothing new, but they are becoming more prevalent.

"Now that the pharmacy world is more in the limelight and prices are skyrocketing, and the generic cliff is dropping, I think the employers are looking for ways to cut down cost for the drug insurance side," he says. "I do think they need to come up with new, novel ways, and they're turning to the PBMs and consultants to help them with that."

Coming from an experienced perspective on the drug exclusion option, he reminds advisers that "by definition a formulary is already an exclusion of a list because otherwise, everything would be on and you wouldn't need a formulary."

Solow adds that there's one place in PBMs where narrower might not be better: the specialty drug market. While prices have exploded in the realm of niche, orphan or unique cancer drugs, "you can't just exclude them because they can be lifesaving."

Relyea agrees and says so far PBMs are trying to set aside separate copays and determine ways to monitor that these incredibly expensive drugs are actually being used. Solow says it will remain an issue as the trend to narrow continues to play out in this field.

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