By: Umair Malik
The United States healthcare system is famously complex, and one element of that complexity lies in how patients across the country get their medications. There are a number of different institutions that play key roles in the pharmaceutical supply chain, but one in particular is of note: the pharmacy benefit manager (PBM). These companies handle the details and management of prescription drugs, from pricing and claim adjudication to pharmacy network management and formulary design. However, with costs rising and patient needs evolving, PBMs are in need of reform if they’re to continue operating.
AffirmedRx is a next-generation Pharmacy Benefit Manager driving transparent PBM reform in the United States, and is the only one in the country structured as a Public Benefit Corporation (PBC). The company was founded with the mission to deliver simplified pharmacy benefits powered by proactive advocacy, empathy and trust.
AffirmedRx partners with employers, health plans, hospital systems, and other payers to provide a fully transparent, clinically driven, and member-first approach to pharmacy benefits. That transparency, full data access, and financial clarity demonstrates AffirmedRx’s commitment to prioritizing patients over profits.
As a Public Benefit Corporation, AffirmedRx was created on a foundation of long-term mission alignment and value creation, and is obligated to have an expanded purpose beyond maximizing shareholder value. Structured as a PBC, the company can prioritize member and client needs and health outcomes before pursuing traditional profit generation goals, an example that might just set the standard for pharmacy benefit managers moving forward.
“AffirmedRx’s patient-centric model reflects a re-focusing of what truly matters, the health of the plan members and their experience in achieving and sustaining healthy lives,” says Sarah. “For AffirmedRx, ‘patient-centric’ means putting the experience and needs of the plan member at the heart of every business decision.”
What Is A PBM?
So what is a pharmacy benefit manager? Pharmacy Benefit Managers are companies that manage prescription drug programs set by commercial health plans, self-insured employer plans, government employee plans, and more, and operate closely with healthcare systems, insurance companies, and retail pharmacies. Their role involves managing formularies, maintaining a pharmacy network, setting up rebate payments, processing prescription drug claims, providing mail order services, and more. Put simply, PBMs coordinate between the various entities in the prescription ecosystem. Today, PBMs manage pharmacy benefits for hundreds of millions of Americans, with some notable examples being CVS Caremark and Express Scripts.
Pharmacy benefit managers have become somewhat controversial elements of the American healthcare system, with some serving as examples of how broken that system really is. The PBM industry has become known for hidden revenue streams, poor transparency in both costs and communication, and misaligned incentives that sacrifice patient well-being for increased profits. PBMs generate revenue through administrative and service fees, manufacturer rebates, and most controversially, spread pricing (the practice of charging clients more for a claim than what is reimbursed to the pharmacy that dispenses the medication). The lack of transparency in spread pricing is a major concern, and nobody knows how much money these plans lose due to spread pricing practices.
Between spread pricing, rebate retention, hidden revenue and fees like clawbacks, it’s no surprise traditional PBMs are increasingly, and rightly, the target of legal and public scrutiny. Multiple outlets and institutions have argued that these companies raise drug prices for consumers, and obscure the true cost of a prescription through “gag clauses” that prevent pharmacies from disclosing actual drug pricing structures. The perverse incentives of traditional PBM models result in patients’ access to drugs being impacted in the name of increased profits, and it’s clear something needs to change.
A New Frontier Of Transparent Reform
It’s this troubled and complicated environment that AffirmedRx seeks to change. The system is broken, but through transparency, integrity, and a clean business model, AffirmedRx seeks to earn back the trust traditional PBMs squandered. The mission of AffirmedRx is to bring clarity, integrity, and trust to pharmacy benefits by aligning company incentives with clients and their members, instead of profiting off of them. The combination of the company’s Public Benefit Corporation structure and its Patient Care Advocate (PCA) model serves as a strong indicator of what good can come from this new frontier of reform.
Given that most of the problems inherent to traditional PBMs stem from their incentive structures, there’s no better place for AffirmedRx to start differentiating itself than incentives. AffirmedRx rejects spread pricing, rebate retention, and other such practices, choosing instead to operate entirely on a simple, flat, administrative fee model. The company offers pricing simplicity, radical data transparency, and unbiased clinical decisions not influenced by rebate profits.
“As the only PBM that is also a public benefits corporation (PBC), AffirmedRx has elevated our offerings to create a member-first approach to pharmacy benefits,” Sarah explains. “By operating on a simple, flat administrative fee model, AffirmedRx ensures every dollar is accounted for and employer groups have complete visibility and access to their data. We simplify the complexities of filling prescriptions so patients can confidently access the best care to get and stay healthy.”
Like traditional PBMs, AffirmedRx provides the services that allow employer groups to offer prescription coverage to their employees. Its commitment to transparency and patient-centered care makes a difference at every step. The company negotiates drug prices with manufacturers, maintains a network of over 67,000 retail pharmacies, runs a network of specialty and mail-order pharmacies for specific needs, and offers a formulary list of covered prescriptions complete with outlines of patient copays per tier. As part of its patient-centric philosophy, the company also monitors prescription fills, proactively identifies medication interactions, dosage errors, and abuses, and educates patients about their coverage, copay tiers, and savings opportunities.
AffirmedRx’s Patient Care Advocate team represents the company’s commitment to guiding members through the complex pharmaceutical ecosystem. The PCA team ensures AffirmedRx can engage in high-touch customer service to identify savings opportunities, streamline prior authorizations, and problem-solve on behalf of its members. The company’s PCAs have real-time access to claims and denials, which allows them to resolve issues through coordination with providers and pharmacies before patients arrive at the pharmacy counter.
“As the healthcare industry shifts and our business grows, the expansion of the Patient Care Advocacy team is paramount,” Sarah says. “The goal is to shield patients from complexity by proactively identifying and resolving issues before members are even aware.”
