Josh Canavan, PharmD, RazorMetrics, and Chris O'Dell, Turquoise Health, predict pharmacy benefit managers (PBMs) will evolve toward value-based care, mirroring the broader shift toward open-cost structures.
Josh Canavan, PharmD, head of pharmacy at RazorMetrics, and Chris O'Dell, senior vice president of market solutions at Turquoise Health, foresee pharmacy benefit managers (PBMs) transitioning to value-based care, prioritizing patient outcomes and transparency.
Canavan highlights a shift from cost-centric models to those emphasizing patient health, while O'Dell predicts PBMs will eventually disclose contract rates, similar to health care price transparency, fostering informed discussions and potentially optimizing biosimilar adoption based on cost-effectiveness.
This transcript was lightly edited for clarity; captions were auto-generated.
Transcript
How do you anticipate the role of PBMs will evolve, and do you foresee a significant shift towards more transparent and value-based contracting models?
Canavan: I think PBMs are going to start to really look at long-term patient outcomes. Previously, PBMs have looked at the bottom line, the lowest cost medication, the lowest net cost that they can get. With the evolving landscape, we'll start to see more patient-centric medicine, and it focuses more on what the provider looks at.
Quality measures are becoming more important to PBMs. For example, with diabetic patients, the PBM may look at the patient on metformin; they're getting prescribed a medication that covers their disease, but with the focus on patient outcomes, now the PBM can start to look at if their A1C is under control. Has the patient received an eye exam? Is their blood pressure controlled?
There are more outcomes that they can look at that are focused on the patient and focused on how the provider can help the patient than simply, "Is the patient on a low-cost medication?"
The third one is PBM strategies aligning better with health professionals' goals. The way that the provider works is better aligned with how the PBM will measure this. The provider looks at the A1C, the provider wants the patient to have an eye exam, the provider wants the patient's blood pressure under control. If the PBM is aligned with what the provider wants, we're all on the same page here.
One of the things that might impact this at first is it's harder to measure these. At first, you may not be able to see the benefit of some of these longer-term goals, and so that might change the key performance metrics for some of these. But eventually, over time, we'll see major improvements in patient outcomes, which saves everybody money.
O’Dell: I see PBMs having a lot of the same reactions that hospitals and payers did when the first price transparency data came out back in 2021. The first reaction that they had was, "I'm going to drag my feet; I'm not going to publish this data; I'm going to hide it. This is my secret sauce; these contracts are my secret sauce, and I'm not going to put them out there." Slowly, everyone started publishing their contracts, and now it's all visible.
I think that this idea that someone would be caught getting paid too much really didn't turn out to be true. It just is that now we have a really good understanding of who's making what along the way.
The first thing is, I think you're going to see a slow move toward it where there will be a lot of feet dragging, but at some point, you're going to see all of the PBMs begin to publish their contract rates with the pharmacies and with the payers. Things like spread pricing or rebates, which used to be fought over but probably fought over anecdotally, are now going to be highly transparent so that we can have a really good discussion about it.
There won't just be this mentality of "PBM bad"; it'll be like, "Well, it's complex; let's see what they're making." It'll be different by product, and it'll be different by marketing, and it'll be different by PBM, but we'll get to see all of that.
Around whether and how that will impact biosimilar adoption, I think that transparency will dictate where on the formulary you're seeing these biosimilars show up. There's a little bit of this model of "provide a big rebate and try to get the best position with the payer so that you're favorable on the formulary." I think that will probably be the model that gets most questioned.
At the end of the day, if these are all clinically efficacious and you can see exactly what the rebate and discount model is along the way, now you don't have these weird back door arbitrage where it's the biggest kickback that means that the product is getting the best utilization. You can just get the lowest manufacturing cost equals the highest adoption. Hopefully, this is what we're all shooting for because it results in less out-of-pocket [costs] for the patient, or at least more transparency into what you'll pay before you get the [drug].
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