Recently, for our Benefit Plan Clients, we have been asked to review contracts with Pharmacy Benefit Managers. Use of Pharmacy Benefit Managers is a growing trend. Standard & Poor's recently reported that the three major Pharmacy Benefit Managers are "flush with cash and are expected to be strong cash flow generators." "The industry... is benefiting from long term trends of increasing need for pharmaceutical cost-control services, rising demand for pharmaceuticals in the U.S., growing mail-order usage, and greater generic drug penatration."
As a Benefit Fund Administrator the use of Benefit Managers is an attractive option, but go into such arrangements with your eyes wide open and having read the "fine print." Our review of several "form agreements" has caused us to explain to our clients that they are taking on certain exposures that they were not aware of and would be, without modification of their insurance program, uninsured.
Our company is working with a major carrier to try to cover these gaps for our Benefit Plan Clients. We are happy to review any proposed Pharmacy Benefit Management Contract and assist you in understanding the 'hidden" risks and address them.
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