The world of pharmacy benefit management (PBM) will change dramatically over the next five years and much of the change is coming from within, according to Perry Cohen, CEO of The Pharmacy Group. The “old guard” PBMs are reinventing through mergers & acquisitions, while newer PBMs are bringing forth innovative business models, technologies and transparency. Novel entrants include Costco Health Solutions, EmpiRX, Flipt, RxSense, and WithMe have emerged and are introducing new technology, and alternative pricing strategies and medication delivery systems.
Alternative pricing strategies
Because of the high-cost of new drug therapies, especially specialty drugs, an alternative is value-based contracting (or, ). Pricing is based upon predetermined patient measures or patient outcomes rather than a set cost. Placing a level of risk on the drug manufacturer. Drugs utilized to treat hematological disorders and cancer are currently the primary therapeutic areas where value-based contracts are in place.
Staggered-payment plans and pay-for-performance contracts are two other strategies used between pharmaceutical companies and the PBM. These will be especially important as more cell and gene therapies come to market due to the high cost of these therapies.
Essential to the success of these new pricing strategies are stakeholder collaboration, data access, and analytics to evaluate effectiveness of the payment plan or the value-based contract.
Digital health solutions
Digital health solutions such as mobile apps, patient portals, and care team dashboards are flourishing. PBMs are implementing a number of innovative solutions. CVS Health has rolled out vendor benefit management (VBM) as a new service that enables payors to easily onboard and manage third-party vendors that provide both digital and non-digital solutions. Express Scripts released a digital formulary with the goal of providing 15 digital health programs to its members, starting in January 2020.
Alternative medication delivery systems
Compliance with medication regimens, notoriously low at around 50% for chronic conditions (and lower for acute), is an area of focus for PBMs. Pillpack (an Amazon company) and multiple other competitors are proliferating to address compliance.
A relatively new company that was founded to improve compliance is PillPack. Since PillPack was founded in 2013 several other companies have entered this specific marketplace. Pillpack was acquired by Amazon in 2018 and is now the cornerstone of “Amazon pharmacy”.
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