To get the most of your PBM contract, you should first know that you can always negotiate. Your PBM wouldn’t want to lose you as a client, so they will do their best to offer you a competitive contract. Second, know the items that you should negotiate about. Make sure that you focus on the things that give the best value in your contract.
Here are the top three best practices to maximize your PBM contract.
1. Always Seek the Best Rate
Before extending your contract after the three-year period, ask for better rates even if you only plan to extend a year. Better rates mean the use of less expensive but equally effective medication or lowering the administration fee or “spread” in the plan. Once you get a different rate, review the contract through a PBM audit, suggests crystalclearrx.com, even before implementation. This way you can avoid any changes that can negate the improved rate.
2. Negotiate Your Termination Clause
Most PBM contracts require that you submit a notice 120 to 180 days before terminating the contract. Overlooking this clause can force you to extend your contract for another year. To get more flexibility, you can negotiate a 90-day termination “without cause”, to which most PBM agree on. This allows you to take advantage of market trends and a quicker transition for vendor changes.
3. Take Time Before Renewing Your Contract
When you are nearing renewal, you are in a better position to negotiate contract rates and terms. This is also the perfect time to do an audit or conduct RFP if needed. Reviewing your PBM performance in terms of overall savings, utilization rate and adherence to contract arrangements opens opportunity for improving current contract. Allow at least 9 months before renewal to do an audit or request an RFP every two years.
Sticking to these best practices will always bring about a better contract for your members. Take advantage of the market trends, industry changes and your negotiating skill to get the best value from your PBM agreement.