Elevating the Value of the Employer-PBM Relationship

To achieve a more affordable, higher quality future for our health care system, the policy debate cannot ignore the critical perspective of the employers who collectively sponsor health insurance benefits for 86 percent of employees working in the private sector.

That’s why The Pharmaceutical Care Management Association (PCMA) is launching a new campaign, “How PBMs Work,” to elevate the collective understanding of the value that PBMs provide by lowering prescription drug costs and enabling employers, unions, and other plan sponsors to provide healthcare benefits to patients.

The mission of the campaign is simple: educate policymakers, health care stakeholders and the public about the critical role of PBMs and highlight that value from the employer perspective by giving business leaders and experts a platform to share their story and experience in their own voice.

The vast majority of employers voluntarily choose to hire pharmacy benefit companies to help them provide competitive, affordable health benefits. Why? Because it saves them and their hardworking employees money when it comes to their prescription drug and health care costs.

Contrary to the narrative that some pharmaceutical companies want policymakers to believe, employers and health plan sponsors hire PBMs because they provide a wide range of pharmacy benefit options that help payers offer high-quality, cost-effective prescription drug benefits. The work of PBMs leads to an average of $1,040 in savings per covered person per year.

Employers need and value flexibility when it comes to the design of their health care benefits. In fact, a national survey of over 700 employers found that 89 percent of employers say their PBM is valuable in helping their organization offer affordable benefits to employees, with 97 percent of those who contract with a PBM saying they are satisfied with their service.

Regardless of the need, there’s a PBM for them, with 73 full-service companies in the marketplace, there to evolve and serve the health plan sponsor that chooses to hire them.

A large business with 1,000 or more employees may not have the same health care needs as a small business with five employees, but equally important to both is their ability to offer competitive benefits. That’s why it’s critical to have every kind of PBM at their disposal with different offerings. And that’s why, even today, PBMs are innovating to provide new offerings, responding to employer needs for additional data, new ways to reimburse pharmacies, and new ways to contract for services.

For example, one business owner, Joseph, highlighted in our new campaign, explains why his startup chooses spread pricing, because of the price predictability that is crucial for a new business to know upfront what they need to pay.

Another employer, Eric, whose company employs over 600 people, credits rebate savings secured from his PBM with allowing his business to lower cost-sharing for his employees and establish a wellness program.

Without hearing these types of stories and understanding and acknowledging the value of the employer-PBM relationship, policymakers could end up following a misguided, pharma-backed path that leads toward increasing health care costs, to the benefit of big drug companies’ bottom line.

Congress cannot risk leaving employers to fend for themselves against pharmaceutical giants or restrict flexibility, options and savings that help businesses design benefits that work best for their unique needs, achieve savings that supports their ability to sponsor, and invest in high-quality benefits and unlock better health outcomes for their employees.

By working together, PBMs and employers are strengthening the future of health care. Policymakers must hear more from America’s employers on the critical value of this partnership, and PCMA is committed to making that happen.

JC Scott is the president and CEO of the Pharmaceutical Care Management Association.