Client

An integrated health care system in the Midwest with over 6,200 covered lives

Challenge

The client had been experiencing a trend of continuous increases in the cost of their pharmacy benefits with their incumbent broker — culminating at an annual spend of nearly $16,800,000 before engaging Innovative Rx Strategies. Despite carving out their pharmacy services from their medical plan, the client was leaving significant savings on the table.

 

Solution

Innovative stepped in and initiated a pharmacy benefits RFP to identify opportunities for savings and optimization. Our team identified a variety of options which would
create savings with varying levels of member disruption — this approach allowed the client to select the option that best aligned with their goals and member needs.

The top bid involved changing PBM vendors in combination with the addition of new clinical programs. This approach offered $3,600,000 in potential savings. On the other end of the spectrum, the client could remain with their incumbent PBM and secure savings of $2,300,000.

Innovative also identified solutions beyond the PBM RFP. As a health care system, the client also managed an in-house pharmacy. Our team leveraged extensive experience with owned-entity pharmacies to help expand the use of this pharmacy to support the health system’s goals of increasing utilization and script capture rates.

Health System Saves Over $2.9 Million on Pharmacy Benefits

Results

After evaluating their options, the client elected to choose a mixed approach to maximize savings while limiting disruption. They elected to change PBM vendors but minimize further disruption by making gradual changes to clinical programs — projected savings for this approach were
estimated at $2,705,000.

In year one of the new contract, additional rebate and rate improvements helped the client realize actual savings of nearly $2,980,000 — 18% of their total pharmacy benefits spend.

Additionally, utilization of the health care system’s owned-entity pharmacy increased by 11% to nearly 50% of total script volume. Innovative also helped the client identify additional medication targets to enhance utilization and savings in the future.

In the second year of the contract, our team used a custom strategic roadmap for the client, driven by data analytics, to evaluate a more aggressive specialty drug management approach. This initiative will create additional annual savings of over $4,360,000 for the health system in year three of their partnership with Innovative.

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