Free Internet Video Explains Why PBMs - Not Health Plans - Are Benefiting From Generic Drug Sales, and Tells Health Plans How To Ensure 100 Percent Generic Drug Savings
Pharmacy Benefit Consultants is distributing a free internet video to ensure that health plans - not PBMs - obtain the financial benefits that result from generic drug sales. The video provides extensive evidence that PBMs retain a large portion of the financial savings that should result from generic drug sales. The video also explains how most PBMs draft their contracts with health plans to do so. And the video describes what every corporate and union and government health plan must do to ensure it obtains 100% of generic drug savings.
Morristown, NJ (PRWEB) April 8, 2008
Pharmacy Benefit Consultants, a nationwide consulting firm, today urged all corporate and union and government health plans to radically change their prescription coverage contracts to ensure that the health plans - not PBMs - obtain the financial benefits of generic drug use.
"Generic Drugs can provide enormous savings to health plans and their covered employees. But health plans must entirely change their PBM contracts if health plans wish to obtain the savings that generic drugs can provide," says Linda Cahn, president of the nationwide consulting firm.
To assist health plans in doing so, Pharmacy Benefit Consultants is distributing a free internet video, captioned: "How to Ensure Your Health Plan - Not Your PBM - Benefits From Generic Drug Use." The video identifies the contract terms that are present in almost every PBM/client contract that rob health plans of generic drug savings, and describes the contract changes that must be made to ensure that health plans obtain 100% of generic drug savings. The video can be viewed at: http://www. youtube. com/watch? v=bEcQ35W1NrI.
"PBMs are thrilled when generic drug sales increase," says Cahn, "because PBMs reap enormous profits from all such generic drug sales." Demonstrating PBMs' extensive generic drug profits, Cahn points in the video to PBMs' own SEC filings, and to the difference between the discounts PBMs obtain when purchasing generic drugs for their mail order pharmacies, and the discounts PBMs pass through when invoicing their clients for generic drugs.
"Unbeknownst to health plans, PBMs are retaining a large portion of the financial savings that health plans could be realizing from generic drug use. PBMs are able to do so, because they manipulate ambiguous contract terms that are found in virtually all PBM/client contracts," says Cahn.
"Thus, it's time for health plans to demand airtight contract terms that will ensure that 100% of generic drug savings are passed through by PBMs to plans. Only then will health plans be able to obtain dramatically lower prescription coverage costs," says Cahn.
Cahn urges all plan administrators and trustees to watch the video, gain an understanding of the PBM contract terms that are robbing their plans of generic drug savings, and verify that all such contract terms are present in their own PBM contracts. After doing so, plan administrators and trustees should formulate a plan of action to capture all generic drug savings.
"If a PBM contract is due to expire within 12 to 18 months - or it contains a 'with or without cause' termination provision - plan administrators and trustees should immediately conduct a PBM RFP," says Cahn. "Why? Because it's unlikely that PBMs will agree to the necessary generic drug contract terms unless PBMs are forced to do so while competing for a plan's business during a PBM RFP."
Cahn urges health plans to watch another Pharmacy Benefit Consultants' video before launching a RFP. The video explains the fatal flaws made by most health plans and consulting firms in conducting PBM RFPs, and describes how health plans must conduct their PBM RFPs to obtain the contract terms needed to decrease their prescription coverage costs. The two-part video can be found on Pharmacy Benefit Consultants' website or at : (i) http://www. youtube. com/watch? v=H-4LJeyjR6E and (ii) http://www. youtube. com/watch? v=LpW3u5Tn4PE.
"If a PBM contract was recently signed, and the termination provision precludes termination until the contract term has expired, plan administrators and trustees should still do what they can to obtain 100% of generic drug savings," says Cahn. "With the help of a consulting firm like ours - staffed with lawyers, not salesmen - plans can draft and demand contract amendments, making clear to PBMs that if PBMs don't 'play ball' and accept the plans' proposed amendments, PBMs will lose the plans' business when contracts expire," says Cahn.
Pharmacy Benefit Consultants has released another video identifying other core contract terms that health plans must change to ensure lower prescription coverage costs. The video -- captioned: "How to Obtain an Airtight PBM Contract" -- can also be found at the firm's website or at: http://www. youtube. com/watch? v=VvnT9hz9k2g.
Pharmacy Benefit Consultants has helped numerous entities dramatically decrease their prescription coverage costs by redrafting their PBM contracts and conducting entirely different PBM RFPs. The consulting firm's clients include: Fortune 500 and smaller corporations, international and local unions, and business and union consortiums, as well as insurance companies.
For more information on Pharmacy Benefit Consultants' services, visit the firm website at: http://www. PharmacyBenefitConsultants. com, or contact Pharmacy Benefit Consultants' President, Linda Cahn, at: 973 975-0900.