To decrease their ever-increasing prescription coverage costs, most health plans conduct RFPs (Requests for Proposal) to force PBMs to compete against each other. However, almost all RFPs do little – if anything – to change health plans’ costs. In fact, most who have conducted RFPs execute the same boilerplate PBM contract they would have signed, had they never conducted a RFP.
Pharmacy Benefit Consultants conducts an entirely different form of RFP, resulting in a PBM contract that will reduce your costs.
What’s the Difference Between Other Consulting Firms’ RFPs and Our RFPs? Other firms conduct RFPs as if they are “beauty contests.” These firms issue questionnaires to PBMs, and obtain “representations,” “promises” and “projections” in response, but never require PBM contestants to incorporate any of the above into binding contract terms. Moreover, on the rare occasions when these consulting firms spend any RFP time whatsoever on the PBM/client contract, these consulting firms typically “lift” the structure and contract terms of existing PBM/client contracts. As a result, clients end up with the same boilerplate PBM contracts that they have always had – stuffed with ambiguities and loopholes – meaning nothing of value has been accomplished.
In contrast, our firm realizes that a PBM RFP must be a legal process to extract an entirely different form of contract – that is devoid of ambiguities and loopholes – from the PBM marketplace. Accordingly, we draft an airtight PBM contract tailored to each of our client’s needs at the beginning of the RFP, issue our RFP with our contract attached, and require each PBM contestant to accept our form of contract – or something very similar — or be eliminated from the RFP.
During the RFP, we use the leverage of our RFP to extract better and better pricing terms and guarantees from each PBM contestant, memorialize all such terms in the contract we drafted, and thereafter require all contestants to sign and thereby bind themselves to the terms they have proposed.
As a result, when we analyze PBM contestants’ proposed contract pricing and guarantee terms toward the end of our RFPs, we analyze the actual numbers that your plan will be paying when it selects a PBM — not PBMs’ “promises” and “projections” about what they might – but never do – implement.
Moreover, while most consulting firms conclude their RFPs when a Finalist is selected – without discussing, let alone finalizing the PBM contract – on the day our RFPs are over, our clients are in a position to sign an entirely different form of contract that’s been negotiated extensively – and finalized – during our RFPs.
Analyzing Each Contestant’s Formulary and Programs. In recent years, an increasing number of PBMs have begun promising large amounts of “rebates” during RFPs. But many of these “rebates” are contingent on clients accepting the PBM’s Formulary, as well as its Prior Authorization, Step Therapy and Quantity Limit Programs. Unfortunately, most consulting firms simply “spreadsheet” PBM contestants’ proposed pricing terms – including their promised rebates – and fail to realize that those very rebates are likely to increase clients’ aggregate costs by encouraging greater usage of high-cost brand drugs.
Our firm relies on expert clinicians to analyze each PBM contestant’s Formulary – as well as Programs – to determine the extent to which PBMs may be favoring high-cost brand drugs to increase their rebates. By doing so, we prevent our clients from “chasing rebates” that will only result in higher aggregate costs. And we ensure that our clients select PBMs that are truly acting in their clients’ interests by favoring lower-cost drugs.
Review Our Free Materials. We have created a two-part video – and written and published several articles — to help all health plans better understand how to conduct RFPs. Download our materials – for free – and review them in the privacy of your office – and you will take the first steps toward conducting an effective PBM RFP.
Download: Video – Part I
Download: Video – Part II
Download: Cover Story Article in the IFEBP’s Journal: “How to Conduct A Successful PBM RFP”
If you are considering conducting a RFP – We urge your plan to contact Pharmacy Benefit Consultants to discuss how to do so.
If your plan has already begun its RFP – and you now realize your consulting firm is without the legal skills to draft and negotiate an entirely different form of contract – we urge you to contact our firm. We have salvaged many RFPs, months after entities have retained other consulting firms that are without the skills or knowledge to draft and negotiate an effective PBM contract. We can help your plan as well.