What is a Drug Acquisition Platform, and how is it different from a traditional PBM?
Pharmacy benefit managers (PBMs) were established in the 1980’s as a solution to facilitate the electronic transaction between pharmacies and plan sponsors (employers). Over time their role has evolved into not only managing the transactional aspects of the process but also controlling costs. As they gained increasing control of the market, they were able to generate new revenue streams and remove transparency from the process. The result has been a continued rise in drug spend for employers and patients, with the profits going to the entrenched traditional pharmacy benefits managers.
Enter the concept of a Drug Acquisition Platform (DAP). The Drug Acquisition Platform is designed to bring back transparency to pharmacy benefits in a new way. Leveraging technology, transparency, and innovate savings solutions the end result of the DAP is maximum savings and transparency, with minimum patient disruption.
Transparency serves as the foundation in setting the baseline for the actual cost of medications. Did you know that PBMs contract with different pharmacies for different pricing and that pricing can vary down to the drug level? Did you know that rebates are actually a percentage discount off the cost of the medication and therefore are different for every medication? Not every branded medication has a rebate and not every rebate is the same percentage discount. Under traditional PBM models this level of detail is purposefully left undisclosed leaving both the plan sponsor and patient in the dark. However, in the DAP model, it is transparency into this level of detail that drives decision making based on lowest cost.
Technology is fundamental to building a Drug Acquisition Platform. The early PBMs leveraged 1980s-era technology to facilitate communication between the pharmacy and the payer. The DAP builds upon claims adjudication by directing claims to the lowest possible drug, site, or route of dispensing, using modern 21st century software. This technology-driven approach allows a DAP like SmithRx to direct patients down the best path to save money for both their plan sponsor and themselves.
Drug Connect is a suite of solutions designed to identify pricing opportunities in the pharmacy ecosystem due to market inefficiencies. These programs are deployed at the drug level and are customized to the patient based on their individual circumstance. The end result can derive from high touch patient interaction from the SmithRx team or backend technology interfaces that route the prescription claim through the healthcare system. Regardless of the pathway, the patient and plan sponsor always come out winners. The same cannot be said for the results seen by traditional PBMs.
We are at an inflection point as plan sponsors continue to push for more transparency, lower costs, and consumerism in healthcare. As it relates specifically to pharmacy the DAP provides the solution. However, not ever PBM can evolve into a Drug Acquisition Platform. There must be complete alignment of incentives which can not occur when a PBM owns pharmacies, utilizes ambiguous contracts, or collects any form of revenue that is not a disclosed fixed fee (i.e. per claim fee). SmithRx was built on the foundation of aligning incentives and providing a better solution for plan sponsors. The Drug Acquisition Platform is the future for managing pharmacy benefits and SmithRx is the example of how it can be done.
A new type of pharmacy benefits manager, SmithRx is working to reduce pharmacy costs by reimagining the traditional PBM as a Drug Acquisition Platform built on transparent modern technology that aligns with the needs of our customers.