SmithRx Introduces New PBM Evaluation Methodology Optimized for Drug Cost Savings
June 27 2024 - 5:41PM
Business Wire
Company’s new annualized savings from Connect
360 programs total $113.7M Year-to-Date
SmithRx, a transparent and 100% pass-through pharmacy benefits
manager (PBM), today introduced a new PBM evaluation methodology –
cost-based evaluation – optimized for lowering pharmacy benefits
costs. Cost-based evaluation is detailed in SmithRx’s PBM
Evaluation Guide, a comprehensive industry analysis unveiled today
that offers an alternative path forward for pharmacy benefits
management. Alongside the guide, the company also released new
cost-savings data, which underscores how SmithRx’s cost-focused
strategy results in a meaningful reduction in drug spend for
employers – setting a new standard in the PBM industry.
SmithRx’s strategy is focused on finding the lowest net cost of
prescription medications for its employer clients, rather than the
common industry tactic of optimizing for higher discounts. While
both may seem like viable paths to cost reduction, SmithRx’s data
demonstrates how optimizing for lower net cost over discounts
guarantees results in significantly lower spend on pharmacy
benefits. Paired with the company’s 100% pass-through and
transparent business model, employers see significant cost savings,
helping them lower healthcare costs for themselves and their
employees.
SmithRx’s proprietary data shows the following impact:
- $113.7M in new annualized savings year-to-date from
Connect 360 programs across the SmithRx customer base, equating to
an average $24 cost savings per member per month
(PMPM);
- 20-40% lower average PMPM compared to other pass-through
and traditional PBMs;
- $31M in new annualized savings year-to-date across
customers that have elected to save on autoimmune drugs, some of
the costliest medications on the market today.
Since their creation in the 1960s, three primary PBMs have come
to dominate the industry – supported by large-scale vertical
integration within the healthcare system. Now, CVS Caremark (owned
by CVS Health), OptumRx (owned by UnitedHealthcare Group), and
Express Scripts (owned by Cigna) control over 80% of the market
share, and leverage opaque pricing structures, restricted access to
information, and preferred pricing at their owned pharmacies to
maximize profits. For small businesses and their employees, this
escalation has led to rising drug costs, inaccessible medications,
and severe ramifications for healthcare spending.
The benefits of a modern PBM that offers a radically
transparent, pass-through approach are outlined in SmithRx’s new
PBM Evaluation Guide, designed to educate and support benefits
brokers, HR professionals, and consultants as they determine
pharmacy benefits for their clients or employees. The guide
introduces the use of a cost-based evaluation method in making a
PBM selection to ensure a proper review of PBM options, and is the
first in a series of resources created to showcase the fundamental
disadvantages of the legacy PBM business model and how pass-through
structures methods can improve drug spending for small businesses
in America.
“The PBM industry is at a crossroads today, as light is finally
being shed on the lack of transparency and fairness in traditional
business models,” said Jake Frenz, founder and CEO of SmithRx. “At
SmithRx, our data shows how removing tactics like spread pricing
and rebate take – and focusing instead on connecting patients to
the lowest cost source of supply – leads to widespread cost savings
for our customers and their employees. It’s clear that it is
possible to create an ethical PBM industry, one that has the best
interest of patients at heart. But it’s critical that we empower
those willing to divest from the status quo with the information,
context, and support they need to make informed decisions.”
SmithRx’s PBM Evaluation Guide is available to download here. To
learn more about the company’s transparent, pass-through business
model and cost-based evaluation, visit www.smithrx.com.
About SmithRx
SmithRx is working to reduce the complexity and cost of pharmacy
benefits by building a new type of pharmacy benefits manager (PBM)
committed to transparency that’s aligned with employers and
patients. By combining advanced technology, a member-centric
approach, and innovative cost savings programs, we're making
prescriptions more affordable and delivering valuable transparency
and savings to main street businesses.
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Media Contact claire.schillings@smithrx.com