Pharmacy benefits managers need a lot of help when it comes to budgeting and spending their money, according to a new report from the Institute for Strategic Management (ISM).
The Institute for Financial Literacy (IFL) released the report to help pharmacy benefit managers understand how they should spend their savings and what benefits they should focus on.
“The report highlights several challenges that we have in our industry that we think are not being addressed adequately,” says James F. DeCamp, the report’s lead author.
“For example, in some states, pharmacy benefit management (PBM) policies and practices are not well understood or adequately communicated to the public.
Additionally, some pharmacy benefit manager programs offer only one or two benefits at a time, limiting the number of benefits that can be offered to beneficiaries.”
The report says PBM programs typically have limited resources to support them.
“It is important that pharmacy benefit administrators understand that the scope of pharmacy benefit operations and the amount of resources that they have is limited,” the report reads.
“They must also make sure that their policies and processes are appropriate for the needs of their customers, the pharmacy benefit program and the industry.”
While the report recommends that PBMs improve their policies, it also suggests that PPMs be more efficient and transparent in how they spend their money.
“We know that the PBM program is a great opportunity to enhance efficiency and transparency in the benefits program,” the authors write.
“This could result in increased productivity, better program design, and better utilization of resources.”
The study is based on data from more than 20 PBM companies.
The report also looked at the use of prescription drug benefit (PDBP) programs to fund pharmacy benefit plans, which are managed by PBM providers.
The PBP programs are managed through a contract system, where the pharmacy benefits manager (PBLM) pays the pharmacy’s provider a percentage of each drug benefit.
The PBLM then pays a portion of that amount to the PBL and then to the pharmacy.
The study also looked into how PBM plans are structured, and how the companies are paid for those benefits.
“These programs have traditionally been funded by a portion paid by PBLs and by the pharmacies themselves, rather than by the PPM,” the study reads.
“Although the PBRs are the primary beneficiaries of these programs, there is evidence that some of these beneficiaries may be more vulnerable to financial losses if their PBM has limited resources.”
Furthermore, PBM beneficiaries have been known to have poor management of their PBL funds.
“The PBM plan that the authors looked at had a monthly cap of $300,000 for its PBM benefits, but that limit is much lower than the cap for other PBM benefit plans in the industry.
The authors also found that the average PBM had about $1,500 in PBM funds, and that this money was used to fund a variety of programs, including PBM employee and PBM pharmacy benefits.
The average PBL plan was also used to pay PBM prescription drug benefits of $6,600 per month, while the average pharmaceutical benefit plan was used for PBM prescriptions of $17,800.
While the study doesn’t make any recommendations about what PBM or PBM-funded benefits should be, it recommends that companies better understand the role of the PBP program in their plans.”
To better understand what PBP benefits the PBlM should be paying to PBM, the PBIA and other stakeholders should be consulted, as well as the PBSB, the independent oversight agency for PBL programs,” the researchers wrote.”
As a PBM owner, it is important to understand what your PBM is paying PBM for PBP and the PBMS will need to do a better job in providing this information to the community and to the industry at large.