Performance Guarantees from PBMs

This article appeared a few months ago, but I’m finally digging out. (Drug Benefit News – 12/4/09) It’s an interesting article about how some PBMs are using performance guarantees in their sales efforts. I would expect this to be a growing trend as the PBMs focus on outcomes and have a need to commit to those.

The article mentions that CVS Caremark offers performance guarantees in five areas – adherence, generic-drug utilization, preferred pharmacy choice, specialty drugs, and utilization management. The results are aggregated into one guarantee. There is apparently no charge to the client, but there is a penalty paid if the goal isn’t met. Seems like a good deal if the guarantees are aggressive enough to account for any pricing differences.

A consultant says that Medco also offers performance guarantees (but doesn’t offer any details). The consultant also says payouts range from $800 to $1,300 per patient who have the targeted condition, receive interventions, and don’t achieve the compliance target. That seems like a great incentive for participation to the plan and for the PBM to develop an effective program.

Some of the keys for good performance guarantees are:

  • Good data (baseline and going forward)
  • Clear metrics
  • Comparisons to a control group and/or national metric (so you don’t just ride the curve of generic conversions for example)
  • Long-term contracts

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