PCMA Interview – The Core PBM Skill: Adaptability

Last week, I had a chance to talk with Mark Merritt, President of PCMA, over the phone.  I reached out to Mark as a follow-up to my whitepaper on the future of the PBM to get his thoughts on where the market was going.  It was a great discussion as I appreciate Mark’s perspective.  He spends his days working on behalf of PBMs navigating the changing tides of Washington.  He also previously worked with the health plans so he has an appreciation for their perspective as well.

My first question to Mark was about how the PBM model will change in the next 5-10 years.

He reinforced for me that the PBM will continue to drive value.  While some had forecasted PBMs becoming commoditized 5-6 years ago, they have continued to grow and demonstrate value time after time.  But, he admitted that the exact model they hold in the future is unknown.  PBMs have focused on affordability and access and with that mantra, they have continuously changed and adjusted.  They’ve evolved from claims processes to trend managers.  They’ve moved from mail order companies to add specialty pharmacies.  They’ve moved from focusing on rebates to focusing on generics.  And, at the same time, they’ve launched new technologies such as electronic prescribing and been critical to the Medicare Part D solution. 

He went on to talk about how the relationship with payers has evolved and how PBM clients have become more educated about how to partner with the PBM and not simply look at them as a transactional service where the lowest price is all that matters.  [I felt like his comments reinforced a lot of my thoughts about how the PBM needs to be more focused on patient engagement and condition management.  Drug trend is not the only answer…outcomes matter.]

We then went on to talk about how PBMs are developing a consumer brand. 

Mark talked about consumer branding as a company by company decision since there are a variety of factors to consider.  [In my experience, some clients don’t want the PBM to be a “brand” in the consumer’s mind.]  We talked about how historically pharmacy has been an after-thought to medical, but that specialty drugs may change that paradigm.  We also talked about how an increased focus in preventative medicine would push pharmacy to the forefront where prescription drugs are often first-line therapy for most diagnoses. 

We also then talked a little about the difference between the claims processing business of the PBM and the mail or specialty pharmacy.  Where the PBM has a pharmacy – patient relationship, their “brand” and awareness to the consumer is [and needs to be] different.  They have to be able to engage the consumer to provide them with information and help them understand their drugs, their condition, and help them stay adherent.  We wrapped up this section talking about how patient engagement improves savings whether it is on generics, mail order, or overall medical costs.

Finally, we discussed Medicaid growth and some of the research that PCMA has been disseminating around the potential savings with more managed Medicaid and greater use of pharmacy management tools.

My Summary

The summary for me was a reinforcement of why the PBMs have survived.  They focus on the patient [while making money].  They evolve to the place where the market needs a solution.  They leverage technology.  They invest in understanding consumer behavior.  And, there are enough of them that clients can find a PBM that fits their needs whether it’s claims processing, mail order, trend management, transparency, limited networks, retail connectivity or some other point of differentiation. 

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2 Responses to “PCMA Interview – The Core PBM Skill: Adaptability”

  1. What I think is there is no transparency with a PBM. That is there biggest problem and there greatest asset. They make all the rules. Until corporations realize that these PBM’s are stealing money from there employees, they will thrive. Hopefully they will get smart and realize PBM’s are unnecessary and this whole process can be done by a computer pass through. All a PBM does is set rules and charge OUTRAGEOUS prices to approve a prescription. Why else would they be so profitable? They really are not doing anything for the money they charge. Mark Merritt is nothing but a SHILL.

  2. Mark raises an interesting point — some (most?) PBMs may be better off branding themselves. Currently most don’t want to be a “brand” in the consumer’s mind (hence, concern about PBM transparency) — preferring instead to be invisible until they are brought to the fore (at least from the public’s point of view) when they have to deny or delay a claim. However, PBMs might be better off in the long run showing their “human face” rather than just being a “monster” that comes out to deliver “bad” news. True, this may be more relevant for specialty. Would love to hear how others think on this issue.

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