SAN FRANCISCO--(BUSINESS WIRE)--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.
