PBMs play a pivotal role as third-party administrators of health plan drug benefits programs, managing and optimizing drug pricing, through negotiations with pharmacies and drug manufacturers, to ensure efficient and affordable prescriptions for patients. As the healthcare and pharmaceutical sectors evolve, they are faced with increasing pressure to keep up with challenging demands.

However, a potential solution lies ahead that can prove a cornerstone to address them. This blog will shed light on the challenges faced by PBMs, and how cutting-edge IT solutions can enhance operational efficiency, and foster improved patient outcomes.

Navigating PBM Challenges with Advanced Tech Solutions

While PBMs' challenges can range from intricate rebate negotiations with drug manufacturers to the strategic handling of high-cost specialty medications, leveraging systems driven by advanced algorithms, and other software tools to manage drug benefit programs, can help PBMs provide consumers with more efficient and affordable access to medications.

PBMs work under contract with health insurance plan sponsors, providing prescription drug benefits for millions of Americans, with health insurance. Whether managing drug benefit programs, conducting negotiations, or payments throughout the supply chain, to keep up with the dynamic nature of their operations, PBMs leverage advanced tools to maintain efficiency in management and optimization of prescription drug benefits to consumers.

In PBMs, technology has primarily served as a conduit, strengthening communication links among stakeholders and ensuring fluid interactions with pharmacies, healthcare providers, and beneficiaries. Yet, the potential of technology in PBMs surpasses mere communication enhancements. It offers avenues to address and augment traditional limitations in areas such as:

1) Drug Pricing and Rebate Negotiations:
The lack of transparency in drug pricing and rebate negotiations is a cause for mistrust among stakeholders, making it challenging for patients to understand the actual cost of their medications. By harnessing digital platforms, PBMs can enhance transparency by providing patients with real-time access to cost information for prescription medication, explaining formulary choices, and disclosing financial relationships with pharmaceutical manufacturers. Additionally, interactive dashboards can present drug pricing data visually, simplifying understanding and decision-making.

2) Formulary Management:
Formularies are strategic blueprints that dictate which medications are covered by a health plan and determine the cost-sharing tiers associated with them. Developing them requires a careful decision-making process balancing factors like clinical effectiveness, cost efficiency, and patient access. Integrating formulary management tools can help streamline the evaluation process of drug attributes, cost data, and utilization patterns, to reduce uncertainties, and aid in establishing which drugs are covered by a plan and determining their cost-sharing tiers. By harnessing data analytics and data engineering capabilities, we can simulate 'what-if' scenarios and pinpoint alternatives to non-formulary drugs, leading to potential cost savings.

3) Specialty Medication Management:
Factors like rising costs and the complexity of the administration of specialty medications, given their potential for abuse or dependence, make it challenging to ensure appropriate access, coordinate care, and manage costs for PBMs and patients. By integrating custom software, specialty pharmacy management tools, or measures like Drug Utilization Review (DUR) programs, PBMs can ensure that patients receive their medications and also adhere to their prescribed regimens.

4) Fraud, Waste, and Abuse Detection:
Given the highly addictive and illegal nature of specialty drugs, there’s a greater incentive for misuse and entering fraudulent data. Detecting instances of fraud, waste, and abuse requires sophisticated data analysis and investigative processes to safeguard plan sponsors and beneficiaries. Here, deploying advanced data analytics can help streamline investigative procedures, allowing PBMs to swiftly pinpoint anomalies and ensure the integrity of prescription benefit programs.

5) Utilization Management:
PBMs rely on utilization management, which refers to regulating and controlling the use of prescription drugs, to improve patient outcomes, control healthcare costs, and prevent unnecessary or inappropriate medication use. Traditional processes can be complex, as PBMs need to ensure appropriate access while avoiding unnecessary barriers to treatment, but, integrating tech, and implementing strategies like prior authorization and step therapy to control medication utilization, can facilitate clinical decision support systems, enabling PBMs to strike a balance between efficient utilization and seamless patient access optimizing both clinical outcomes and cost-effectiveness in real-time.

6) Data Privacy and Security:
As PBMs handle electronic health records and other medical information, privacy breaches, and cyber attacks have the potential to cause financial penalties or loss of reputation and goodwill. Integrating advanced encryption methods, stringent access controls, and continuous monitoring can help PBMs improve data protection, adhere to data privacy regulations, improve trustworthiness, and safeguard confidential healthcare information, allowing PBMs to carry out their operations uninterrupted, with ease.

Conclusion  

Understanding the overarching needs of the healthcare industry, and introducing software platforms to streamline operations and enhance efficiency, is merely the stepping stone to success, but its true essence lies in understanding that each PBM has its own organizational concerns and building tech that meaningfully aligns precisely with its unique requirements and challenges.

With a strong foothold in the tech industry and a proven track record of collaboration with prominent players in the US healthcare sector, along with our team's extensive expertise in the healthcare industry spanning over two decades, Propel comprehends the challenges PBMs encounter as they embrace technology in uncharted territories.
Empowering PBMs to operate seamlessly, enhances the efficiency of the entire healthcare ecosystem, as a whole. Connect with Propel today to fully realize the power of technology to fuel innovation and drive change. Your path toward redefining healthcare management begins right here.