Source Rx Pharmacy Benefits Management
The pharmacy benefit management (PBM) world is incredibly difficult to decipher it s like trying to solve a ten-sided Rubik s cube. Should I use a coalition, or should I go to market on my own? How much control do I have in the ongoing management of the formulary and the classification of drugs (what drugs are specialty vs. brand name)? Why do the PBMs make their s so difficult to understand? How do I know that the terms of the proposal I accepted are accurately reflected in the terms of the I m being asked to sign? And what is my recourse when I figure out that the terms of the are different than the terms of the proposal? Really, the PBM assigned us a new account manager yet again? Is consistent, high-quality customer service too much to ask for? Where are the savings we were promised? Our Commitment to Establish a Better Alternative for Our Members Sourcing Alliance invested eight exhaustive years in our search for a better solution. We came to one incontrovertible conclusion: commanding better pricing and terms requires massive buying power. Hundreds upon hundreds of millions of dollars in annual spend. We concluded that partnering with an existing coalition was the only way to create a PBM program that would increase transparency, control, and the quality of customer service for our members. Sourcing Alliance initiated a search to identify the best coalition partner, and ultimately selected Health Action Council (HAC) as the coalition best suited to achieve our PBM program objectives. More than 20 years ago, HAC created what is now the longest standing, non-profit PBM coalition in the country. This coalition is one of nation s largest, with more than $700 million in annual spend, and delivers pharmacy benefits to more than 2.5 million employees and family members. The timing couldn t have been better. HAC s existing PBM was going to expire. HAC was preparing to initiate its next request for proposals (RFP) process and wanted to establish a publicly procured, competitively solicited PBM for its public sector members. HAC and Sourcing Alliance (HAC/SA) partnered to publicly procure a cooperative PBM that would be available to both organization s members. SourceRx: The Only Nationwide Publicly Procured PBM Contract SourceRx is a revolutionary PBM coalition that offers self-insured employers a more cost-effective way to procure and deliver pharmacy benefits to their employees. SourceRx is a publicly procured with aggressive terms designed to provide greater prescription drug price stability, extensive flexibility, and budget certainty, while also delivering an average of 25% savings to new participants in the program. HAC/SA sought a PBM subject matter expert to lead the development of the RFP specifications and negotiations. After evaluating several leading consultants, we selected Quest Analytics based on its actuarial background, pharmacy benefits management experience, industry knowledge, and demonstrated commitment to develop a revolutionary PBM program. HAC/SA, Quest, and more than 50 members jointly identified a list of 40 concessions that would provide us with the transparency, control, and quality of customer service we wanted. Each of these concessions required a yes or no answer from the responding supplier to eliminate any gray areas. The 40 concessions addressed long-standing member frustrations and pain points, such as: Plan Design Flexibility empower employers to choose the best plan design to meet their unique needs including the following options: Transparent PBM receives revenue from margin pricing and retains a portion of the manufacturer rebates. Traditional PBM discloses all revenue streams (e.g. margin pricing, rebates, formulary management fees, data sales, etc.). Average Script Price negotiated cost guarantee per script on non-specialty drugs. Claims-Level Pricing Guarantees applies coalition pricing on a per claim, per employer basis not in the aggregate across all claims. Consistent Pricing Regardless of Size all participating employers receive the same prescription pricing, regardless of the number of employees. Built-in Price Decreases as the size of the coalition increases, pricing for all participating groups decreases. Three-Year Pricing Guarantee protects against future prescription drug price increases. Transparency clarity regarding the classification of brand name, generic, and specialty drugs, with stable discount rates. Easy Adoption easy implementation process for public sector employers in all fifty states.
How Sourcing Alliance and Health Action Council Procured SourceRx Conducting your own PBM RFP can cost $50,000 - $150,000 and exhaust months of your valuable time. Sourcing Alliance and Health Action Council invested more than $500,000 and thousands of man hours to create SourceRx, with CVS/ Caremark and OptumRx selected as the PBM providers. Leveraged $700 million annual spend and 2.5 million covered lives Engaged foremost PBM consultant in the country Developed specifications seeking 40 concessions Involved more than 50 participating groups in RFP process Received proposals from the nation s leading PBM providers Secured aggressive pricing and significant concessions Awarded to two of the three largest PBMs in the country Established the nation s only publicly procured PBM The program includes innovative stop loss policies, quarterly reviews, annual audits for each participating group, and annual market checks. SourceRx is delivering an average savings of 25%. Buying power combined with procurement expertise gets results. We did the procurement work so that you don t have to, and our program specifications are purposely flexible, enabling us (you and Sourcing Alliance) to develop and implement the precise PBM solution that works best for you. Why Did Sourcing Alliance and Health Action Council Select CVS and OptumRx? Our coalition s $700 million in annual spend commanded the attention of the nation s leading PBM providers, most of whom aggressively competed for our members business. We invested thousands of man hours in soliciting member input, developing specifications, conducting the public procurement process, reviewing thousands of pricing line items, negotiating directly with multiple suppliers, scoring multiple rounds of proposals, and finalizing s terms. We issued a dual award to CVS/Caremark and OptumRx, two of the three largest PBMs in the country, as the lowest responsive and responsible bidders. Both agreed to 31 out of the 40 concessions detailed in the RFP, the most significant concessions ever achieved by a PBM coalition. SourceRx Delivers Qualitative Improvements and Measurable Savings The coalition achieved its objectives to increase control, transparency, and the quality of customer service for all participating employers, regardless of size. As importantly, SourceRx is delivering significant savings. The existing coalition members, who had already achieved below-market pricing through their participation in the coalition, are realizing additional savings of a staggering 14%. Employers/participating groups who are new to the coalition are achieving cost savings ranging from 19.7% to 27%. Who participates in the coalition? Here are some names you may recognize: HAC/SA provide the following additional services to SourceRx participating groups at no additional cost: Initial Pricing Analysis a detailed evaluation of the projected savings when transitioning to SourceRx. Quarterly Reviews regular reviews of program performance. Annual Audits individual audits to verify master agreement terms and pricing are properly applied to each participant; participants receive full refunds of any identified overcharges. Annual Market Checks an intensive process of securing pricing from competing PBM providers each year to ensure the most competitive pricing is available to SourceRx participants. Ongoing Education education about changes within PBM industry and how those changes may affect each participating group.
Sourcing Alliance The continued commitment of Sourcing Alliance is to help you, our member, fulfill your mission efficiently and costeffectively. We are a public sector group purchasing organization that develops and administers a select portfolio of cooperative purchasing programs that cover a wide range of products and services. Each of our programs provides ing compliance and the ability to configure the solution that best meets your individual needs while achieving the lowest Total Cost of Ownership. info@sourcingalliance.org 844.289.6728 At Sourcing Alliance, we assign each member a single point of contact. Their job? To support you while keeping your organization in full compliance with applicable public sector procurement laws. You also have complete access to our procurement team and customer service experts. We work tirelessly to help you manage the complexities of designing and implementing the right solutions for your organization, increase efficiencies, and drive down both your direct and indirect costs. What Can You Do in Five Minutes? If you are not already a member, you can join Sourcing Alliance in just minutes and immediately access our portfolio of programs. There are no dues, fees, or obligations. Complete the membership form online at: www.sourcingalliance.org/join. To complete the membership form, you will need your organization s EIN (Employer Identification Number).
SourceRx s Stop Loss Policy Options Health Action Council and Sourcing Alliance (HAC/SA) partnered with RxReins, an underwriter for A-rated carriers of stop loss coverage and the only underwriter in the country to provide a prescription-only guaranteed cost stop loss policy. SourceRx offers three stop loss options: Aggregate Aggregate & Specific Guaranteed Cost Description Protects employer from Rx claims in excess of the deductible for the entire group. Aggregate plus protects employers from prescription claims in excess of a deductible for each individual. Fixed monthly Rx costs; excess claims reimbursed by stop loss carrier. Employer Size 1,000 + 500 + 200 + Deductible / Attachment Point 110% - 125% of expected claims $100,000 + /individual 100% of expected claims Premium 3% of Rx cost 10-15% of Rx cost 20% of Rx cost Claim Settlement Reimbursement at the end of policy year Reimbursement once individual exceeds deductible Reimbursement at the end of month and at the end of policy year Participant Risk Tolerance High Medium Low info@sourcingalliance.org 844.289.6728