The ROI of Modern PBMs

Healthcare is complicated and managing prescription benefits can feel overwhelming at times. Pharmacy benefit managers (PBMs) have historically focused on discounts, often prioritizing their bottom line over their clients’ best interests. With opaque pricing models, sneaky hidden fees and overly complex rebate structures, these legacy PBMs leave employers and health plan sponsors with limited visibility and unexpected costs. But there is another way!

Enter SmithRx, a modern PBM that puts transparency, trust, and real savings at the forefront. By prioritizing cost savings over discounts and keeping fiduciary alignment top of mind, we’re transforming the way pharmacy benefits are managed. 

Let’s explore how working with a modern PBM like us can deliver significant ROI.

How the Modern PBM Approach Drives Savings

Choosing the right PBM is crucial for controlling healthcare costs and maximizing your return on investment. Legacy PBMs often rely on opaque pricing models, promoting discounts off inflated list prices while burying hidden fees and complex rebates.

This can leave employers with unexpected costs and limited visibility, hindering their ability to effectively manage pharmacy benefits. SmithRx offers a different approach: transparent, fiduciary-aligned pharmacy benefit management that prioritizes real savings, improved health outcomes, and member satisfaction. Collectively, this translates to a higher ROI and better outcomes.

We achieve this through several key strategies

Cost-Based vs. Discount-Based

Imagine you're buying groceries.  A discount-based PBM is like a store that advertises huge "50% off!" sales. Sounds great, right? But what if the original prices were artificially inflated? The store could mark up a $5 item to $10, then offer a 50% discount, making it seem like a great deal. You still pay $5, but you think you got a bargain. Legacy PBMs often operate similarly. They negotiate big discounts off "Average Wholesale Price" (AWP), which can be inflated, so the discounts aren't always what they seem. Hidden fees and rebates further complicate the picture, making it hard to see the real cost.

A cost-based PBM, on the other hand, is like a store that focuses on offering the lowest actual prices upfront. They might not have flashy "50% off" signs, but their prices are consistently lower. Cost-based PBMs use a "pass-through" pricing model. They show you the real cost of the drugs, without markups or hidden fees. Think of it as true transparency: you see what they pay for the drugs, and you pay a small, clearly defined fee for their services. No smoke and mirrors, just straightforward pricing and real savings.

In short:  Discount-based PBMs focus on the percentage of the discount, which can be misleading. Cost-based PBMs focus on the actual dollar amount you pay, ensuring you get the best value.  

Learn more here: Choosing the Right PBM: Cost Savings vs Discounts

Fiduciary-Aligned Considerations

As a health plan sponsor, you have a legal and ethical obligation to act in the best interests of your employees when it comes to their health benefits. This is where fiduciary alignment becomes critical. While PBMs themselves cannot currently be fiduciaries, they can adopt a fiduciary mindset.

SmithRx is built on this principle. We prioritize your best interests, ensuring our success is directly tied to your savings. Unlike legacy PBMs that profit from inflated prices and hidden fees, we operate with transparency and integrity. We don't accept kickbacks or engage in hidden agreements. Our model focuses on delivering value and cutting costs, so you can rest assured that we're always working on your behalf.

Choosing a fiduciary-aligned PBM like SmithRx means:

• Lower Costs: Eliminate hidden markups and ensure all rebates are passed through to you.
• Smarter Decision-Making: Transparent pricing empowers you to make informed choices about your pharmacy benefits.
• A Better Employee Experience: Access to affordable, clinically effective medications without unnecessary barriers.
• Regulatory Readiness: Stay ahead of compliance requirements and industry changes.

By partnering with a fiduciary-aligned PBM, you not only gain a trusted partner committed to your success but also demonstrate your commitment to fulfilling your legal obligations as a plan sponsor. This translates to a stronger ROI through reduced costs, improved efficiency, and a more positive, legally sound benefits experience for everyone.

Connect 360

Prescription drug costs are a major pain point for employers and employees. SmithRx's Connect 360 is a powerful solution. Complementing our core services, Connect 360 a comprehensive suite of cost-saving programs designed to proactively find the lowest possible price for medications. Think of it as a smart shopping assistant for prescriptions. Connect 360 automatically identifies lower-cost alternatives like generics and biosimilars to ensure members get the best deal. This isn't just about discounts; it's about finding the real lowest cost. Whether it's GLP-1 demand, or a high-cost specialty medication for a complex condition like Multiple Sclerosis, or even an everyday prescription, Connect 360 helps members save money on out-of-pocket expenses while delivering significant savings to employers.

Real-world Savings with SmithRx

Featured in our Milestones and Momentum 2024 report, St. Mary’s School, a small private school in Oregon, faced rising prescription costs from their legacy PBM that jeopardized employees’ health coverage and access to vital care. SmithRx’s pass-through pricing model eliminated hidden costs, offering transparency and accountability. With Connect 360 programs, St. Mary’s School accessed cost-saving options like generics and rebates while maintaining high-quality coverage.

This resulted in:

• 14x return on fixed Rx costs‍
• 43%: reduction in PMPM costs
• 60%: overall reduction in prescription costs.

Check out our Milestones and Momentum 2024 report for more real-world stories like this one.

Elevating Member Satisfaction and Improving Health Outcomes

At SmithRx, we understand that a truly successful pharmacy benefit plan requires more than just cost savings; it requires a positive member experience that drives a strong return on investment. That's why we focus on making pharmacy benefits as seamless as possible, offering superior customer service and personalized support to ensure members have everything they need to manage their prescriptions. We're committed to member satisfaction, and our metrics reflect that: a 4.4/5 member satisfaction score and a <7 second average call wait time. Our user-friendly member portal provides easy access to information, prescription management tools, and timely reminders, empowering members to take control of their health.

Engaged and supported members are more likely to adhere to their medication regimens, leading to improved health outcomes, reduced hospital visits, and lower healthcare costs overall. In fact, a study published in The American Journal of Managed Care found that improving medication adherence could save the healthcare system billions annually. By prioritizing member satisfaction and providing the tools and support they need, SmithRx helps your workforce thrive, contributing to a healthier bottom line for your business. It's a win-win: happier, healthier employees and a more cost-effective healthcare plan.

Make a Difference With SmithRx

The ROI of partnering with modern PBM is clear: real cost savings, transparent pricing, and a commitment to your employees' well-being. Unlike traditional PBMs focused on discounts and hidden fees, our fiduciary-aligned approach ensures we're working in your best interest, every step of the way.

Our innovative programs, like Connect 360, combined with real-time data access and a focus on member satisfaction, provide a complete, modern solution for managing pharmacy benefits. We empower you to control costs and improve health outcomes, creating a healthier, happier workforce and a stronger bottom line.

Ready to experience the SmithRx difference? Contact us today for a personalized consultation and discover how we can help you save money and transform your pharmacy benefit experience.