New Model Aims To Improve PBM-Employer Alignment

A new pharmacy benefit contracting model for members of the National Drug Purchasing Coalition (NDPC), a group of 18 large employers — including PepsiCo, Inc. and ExxonMobil — is especially noteworthy as the industry rethinks the role played by PBMs and rebates in the supply chain.

The model is a comprehensive, pay-for-performance approach to driving clinical quality and affordability, according to Jennifer Luddy, Express Scripts spokesperson.  “It aligns the PBM compensation to employer goals — improving the health of employees while keeping costs sustainable for employees and the employer.”

The new model from Express Scripts has two area of focus:

  • Pay-for-performance for clinical and administrative plan management that improves patient and plan outcomes.   “Express Scripts’ ability to deliver clinical and financial outcomes is directly tied to its compensation.  Pay-for-performance means Express Scripts will take on more risk from clients, and be rewarded only when it delivers on agree-to-commitment,” said Luddy.
  • Clients pay what Express Scripts pays for prescription drugs plus administrative fees ensuring clients has the transparency they want.  “By adding clarity to costs, our clients will have a more direct line of sight to the true cost of drugs net of all manufacturer discounts, rebates and incentives,” Luddy says.

In lieu of rebates, Express Scripts will earn fixed management fees plus additional at-risk compensation tied to outcomes.

According to Express Scripts, the model will focus initially n five key therapeutic areas that matter most to payers: Diabetes, Cardiovascular, Pulmonary, Autoimmune inflammatory treatment and Pain/opioids.