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PBM bids show large estimated rebates; staff warns plan-design changes will reduce rebates
Summary
Seven pharmacy benefit managers responded to the district's repricing file; staff presented an example estimate of about $7.1 million in rebates tied to current dispensing and said adopting lower-cost formularies or biosimilar mandates would reduce rebate returns.
Staff told the board the district sent a repricing file of roughly 64,000 prescriptions to PBM bidders and that seven PBMs submitted responses.
"They estimated $7,100,000 of rebates based off the repricing file," Dustin Garz said as he walked trustees through the PBM ranking. Garz cautioned the board that the rebate figures are sensitive to plan design: if the district changes formularies, adopts mandatory biosimilars or pursues international importation, rebate amounts will shrink because the district would capture lower net cost up front.
Garz said the district looks at administration fees, dispensing fees, brand discounts and generic discounts when ranking PBMs, and that higher brand-discount percentages return more funds to the district under the current plan design. He also pointed to Prime Therapeutics (the incumbent PBM) and noted the vendor landscape is changing with several PBMs proposing different formulary approaches.
The board discussed monitoring and next steps; staff said they will return to the Aug. 11 meeting with negotiated language and recommended plan-design changes ahead of open enrollment.
