PBM Best Practices Series:What toexpect fromyourPBMaccountteam Gregory O. Callahan, MBA As business partners,pharmacy benefit managers(PBMs)playa significant roletohelp plan sponsors manage theirpharmacy benefit,and the PBM account team plays acritical role is this process. We have amassed years of experience and have seensome fundamental account management practices that lead tosuccessful relationshipsbetween plan sponsors and their PBMs. Weare aware there are many different ethosesandphilosophiesinrunningasuccessfulaccount managementprogram.Thispaper does not presume there is only one way to properlyachievethis success,butrather itdiscusses how PBM accountteams can create relationship longevity—including insight into theplan sponsor/PBM trust dynamic and PBM account team bestpractices that deliver high financial value and operationalexcellence,whichwillequate to a strong relationshipover time.Plan sponsors can determine the level of involvement they wouldlike from their PBMsin accomplishingtheirown internal orstrategic goals.PBMs might also take notice in reviewing theircurrent account management modelsto assess whethercurrentmodelscan achieve this levelofrelationship,both scalable andapplicable across all lines of business. The sale.The PBMwinsnew businessas a result ofarequestfor proposal (RFP), a brokerrelationship,a new entrepreneurialmarketentrant, or othermeans.The sale ismost oftenled byaPBM sales team. The implementation.The plan sponsor’s transition from theincumbent PBM toanew PBM, or a new entrant’s first year,iscalledthe implementation. This transition takes a minimum of 90days tocomplete butcan take longer depending on the line ofbusiness and the complexity of the plan. The transitionisledbytheimplementation team, often with the account team involvedas they will be responsible for the ongoing management of therelationship.A smooth implementationis criticalstep to gettingthe PBM/plan sponsor relationshipoff on the right foot. Relationshipmanagement.After the implementation, the plansponsor is fully transitioned from the implementation team to theaccount management team for ongoing services.PBMs havediffering language or words for thisstage(e.g., relationshipvalidation phase, the decision confirmation stage,maintenance ofbusiness,etc.), but they allsimilarlymeanthe relationshipandculturebetween plan sponsor and thePBM.In the followingsections of thisarticle,we will discuss in depth best-in-classrelationship management practices. The PBMrelationshipcycle The PBMrelationshipcycleincludes fourstages:the sale, theimplementation, relationship management,andtherenewal. Therenewal.Renewals can take many shapes including anauto-renewal,evergreen status,market check, or RFP. Theindustry standard for a PBM contract term is three years.Typically, duringthe secondyear of the agreement,plansponsors decidewhetherthey will renew with the PBM or issuean RFP. In either case, the account team works withsupportingdepartmentsto provide a renewaloffer or RFP response. The remainder of this paperfocuseson theroles andresponsibilities of thePBM account team andhowrelationshiplongevity can bemaintainedwith a plan sponsor during therelationship management stage of the PBMrelationship. Relationshipmanagement:The roletrustplaysbetweenthePBMand plan sponsor Let’s discusswhy plan sponsorsstay with theirPBMs. In a word,trust. Trustis the most fundamental component of the relationshipbetweenaplan sponsor and the PBM. A plan sponsorthattrustsitsPBM ismore apt to stay with thePBM versussituations wheretrust is lowor nonexistent.We have brokentrustinto twomaincomponents: perceivedcostand perceivedeffectiveness. Perceivedcost.To build trust with the plan sponsor the PBMcontract(including all pricing, guarantees, rebates, exclusions,programs, and services)must be transparent andfinanciallycompetitive in the marketplace.Being transparentincludescleardefinitions,auditand market checkrights, effective reporting,andsharing datawiththe partners of the plan sponsor. Perceived effectiveness.To build trust with theplan sponsor,thePBMmustconsistentlydeliverahighlevel ofservice.Theaccount team needs to be: 1.Master communicators2.Proactive and responsive3.Cognizant oftheplan sponsor’sfears,risks, andmarket dynamics4.Ableto consult and makeeffective recommendations5.Working towardnoongoing operational issuesor,whenissuespop up,eradicating themwith little or nolong-termeffectsonthe relationship6.An advocate to help achieve plan sponsor’s goal7.Able to maintain a good relationship with the plansponsor’sprofessionaladvisors High-effectiveness/low-cost(quadrant A).Plansponsors inthis quadrantscorethehighestin value. Theseplansponsorslikelyhave a consistentaccount teamthatis effective at planning,partnering, communicating, and executingall aspects of the PBMrelationship,includingexecuting onhigh-valuemilestonesthatsupporttheplansponsor’spharmacy benefit or organization.Inaddition, these plan sponsorsare receiving competitive ra