The Challenge
The cost of prescription drug benefits (i.e., Pharmacy Benefit Management or PBM) spend represented one of its most significant spend categories. The competitive market demanded significant cost reduction.
The Solution
We implemented a structured and strategic RFP process to help our client secure a more cost-effective and transparent PBM partnership. Our first step was to establish clear objectives with the client, prioritizing cost reduction, improved member experience, and enhanced reporting capabilities. We assembled a cross-functional team that included key stakeholders from finance, HR, compliance, and pharmacy leadership to ensure collaboration and alignment throughout the process. By conducting a detailed analysis of the client’s existing PBM arrangement, we identified inefficiencies and opportunities for improvement, which shaped the development of comprehensive RFP requirements. These requirements outlined critical expectations for services such as claims processing, cost management strategies, clinical programs, and member support.
We distributed the RFP to a carefully selected group of qualified PBMs, ensuring they had sufficient time to prepare detailed responses. Using a scoring matrix, we evaluated proposals to objectively compare financial terms, clinical program offerings, and technology capabilities. We facilitated finalist presentations, guiding our client in asking targeted questions and assessing each vendor’s ability to meet their unique needs. During the negotiation phase, we secured favorable terms, including transparent pricing models, service level agreements (SLAs), and performance guarantees. Finally, we worked with the client to finalize a contract with the PBM that best aligned with their goals, incorporating mechanisms for ongoing performance reviews to ensure sustained success.
Through this hands-on, data-driven approach, we helped our client establish a PBM partnership that delivered measurable cost savings, improved member services, and long-term accountability.
Our team negotiated first year cash savings of $25 million and $85 million of annual savings under the agreement.
The Results
Through our strategic approach, we helped the client achieve significant cost savings by securing improved pricing models and rebate structures. We enhanced the client’s pharmacy benefit program by ensuring better member support and greater transparency in how benefits were managed. By negotiating robust performance guarantees and incorporating regular review mechanisms, we strengthened accountability and established a framework for sustained success. Our work aligned the new PBM partnership with the client’s broader goals, providing both immediate financial benefits and long-term value for their organization.
