Employers Favor Greater PBM Transparency

January 1, 2008
Drug Benefit Trends, Drug Benefit Trends Vol 20 No 1, Volume 20, Issue 1

Employers in general are highly satisfied with their PBMs. Employers gave PBMs an average overall service and performance rating of 7.9 on a 10-point scale compared with 7.8 in 2006.

Employers in general are highly satisfied with their PBMs. Employers gave PBMs an average overall service and performance rating of 7.9 on a 10-point scale compared with 7.8 in 2006. Employers gave their highest ratings to PBMs that provided the greatest degree of financial transparency.

Findings are from the 2007 Pharmacy Benefit Manager Customer Satisfaction Report released by the Pharmacy Benefit Management Institute (PBMI). This 13th annual report includes findings from 442 employers, representing 15.4 million benefit plan members.

Transparency continues to be an issue of concern for employers. For the second consecutive year, the PBMI report documents the correlation of employers' level of satisfaction concerning financial transparency with their PBM performance ratings. Despite the growing interest of employers for greater transparency, the proportion who describe the business practices of their PBMs as transparent has remained stable. In the 2007 survey, 29% of respondents characterized their PBM's practices as completely transparent compared with 28% in the 2006 survey. The completely transparent PBMs also received the highest ratings from employers: 8.3 on overall service and performance, 8.4 on delivering promised savings, and 8.3 on delivering promised services (Cover Figure).

More than half of employers (55%) described their PBM as somewhat transparent compared with 56% in 2006, and 16% described their PBM as not transparent and gave them lower ratings. However, fewer employers were extremely satisfied with the transparency of the financial relationship with their PBM-22.1% versus 26% in 2006. There was little change in the percentage of employers describing themselves as somewhat satisfied-56.4% versus 57% in 2006.

Not surprisingly, the 85% of employers who perceive their PBMs' goals to be aligned with their own rated their PBMs significantly higher, averaging 8.2 on overall service and performance compared with 6.3 for those PBMs whose goals were seen as not aligned.

As a sign that employers are seeking greater control, more employers are contracting directly with PBMs. Two thirds did so in 2007, up from 59% in 2006. Employers with direct contracting arrangements and employers reporting a very aggressive level of intervention in benefit management rated their PBMs higher (both with an average rating of 8.1) than did those with indirect contracting arrangements or employers reporting a minimal level of intervention (average rating of 7.6).

Among individual PBMs, Catalyst Rx was the clear winner for the second year in a row, with the highest ratings for overall service and performance (8.6, up from 8.4 in 2006), delivering promised services (8.6), and delivering promised savings (8.5) (Figure 1).

 

 

Figure 1. Catalyst Rx tops all PBMs in overall service and performance, delivering promised service and delivering promised savings for the second year in a row. (NMHC, National Medical Health Card Systems.)

 

Survey respondents also rated their satisfaction with 18 PBM services (Figure 2). This year, employers were also asked to rate their PBM's Web site for usefulness to members; ratings averaged 7.8.

 

 

Figure 2. Average rating for formulary management and rebates showed the greatest change from 2006, increasing to 7.6 from 7.3.

 

The services whose level of satisfaction seemed to be most affected by level of satisfaction with financial transparency were disease management programs and formulary management and rebates. Average rating for disease management programs by those extremely satisfied with their PBM's financial transparency was 8.5 compared with 4.3 for those extremely dissatisfied. Average rating for formulary management and rebates by those extremely satisfied with their PBM's transparency was 9.0 compared with 5.0 for those extremely dissatisfied.

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