Pharmacists are experts when it comes to providing medications and advice to their customers, but they may be less familiar with another important aspect of healthcare: negotiating with PBMs (Pharmacy Benefit Managers). Knowing how to engage in successful negotiations isn’t just a smart practice – it’s essential for running a successful pharmacy. In this blog post, we will explore the basics of negotiating with PBMs so you can make sure to get the most out of every single transaction.
What are PBMs and why do pharmacies need to negotiate with them?
Pharmacies have to negotiate with PBMs in order to get the best deals on medications for their customers. PBMs are middlemen that help pharmacies get discounts on the medications they buy. They do this by getting discounts from the drug manufacturers and then passing some of those discounts on to the pharmacies.
There are a few different ways that PBMs can get discounts from drug manufacturers. One way is by using their large size to negotiate better prices. Another way is by offering rebates to the pharmacies that agree to use their PBM services. Rebates are payments from the drug manufacturer to the PBM that are based on how much medication the PBM purchases from the manufacturer.
PBMs also offer other services to pharmacies, such as providing pharmacy benefit management (PBM) services. These services include helping pharmacies manage their patient populations, processing prescription claims, and providing customer service. By offering these services, PBMs can entice pharmacies to sign contracts with them.
What are the key components of successful negotiations?
The key components of successful negotiations are preparation, communication, and flexibility.
Preparation is essential, as it allows you to come into the negotiation with a clear understanding of what you want and what you are willing to give up. Good preparation also includes researching the other party and their interests, as well as understanding their negotiator style.
Communication is critical in negotiations. You need to be clear and concise in your messages, and be sure to listen carefully to the other party. It is also important to be aware of your body language and how it is being interpreted by the other side.
Flexibility is key, as it allows both parties to adapt as the negotiation progresses. You need to be willing to compromise on certain issues, while also remaining firm on others.
How can you get started in negotiations?
In order to get started in negotiations, it is important to understand what they are and the different strategies that can be used. Negotiations are a process of discussion between two or more parties with the aim of reaching an agreement. They can be used in a business setting to negotiate contracts, prices, and terms, or in a personal setting to negotiate things like salary and benefits.
There are a few different strategies that can be used in negotiations. The first is called “hardball.” This strategy is when you adopt a very aggressive attitude and try to intimidate the other party into agreeing to your terms. This strategy can be successful, but it can also backfire if the other party decides to walk away from the negotiation.
A second strategy is called “softball.” This strategy is when you take a more passive approach and try to win the other party over with your charm. This strategy can also be successful, but it may take longer to reach an agreement.
The third strategy is called “compromise.” This strategy is when you meet the other party halfway and agree to some of their terms while keeping some of your own. This strategy is often the most successful, as both parties end up getting something they want.
No matter what strategy you choose, it is important to stay calm and polite throughout the negotiation. You should also be prepared to walk away from the negotiation if necessary. By understanding what negotiations are and using one of these three strategies, you can successfully get started in negotiations.
What are some tips for maintaining successful relationships with PBMs?
There are a few key things to keep in mind when trying to maintain successful relationships with PBMs:
- Keep communication open and honest. If there are any changes or concerns, be sure to communicate them as soon as possible. This will help avoid any misunderstandings or conflicts.
- Understand PBM’s business model and how it works. This will help you better understand their decision-making process and what factors might influence them.
- Be flexible and willing to work with the PBM. If they suggest changes or new arrangements, be willing to consider them. This will help maintain a positive relationship with them.
- Be aware of the PBM’s pricing policies and procedures. This will help you stay within budget and avoid any penalties.
- Cooperate with the PBM’s reporting requirements. This will help ensure that all billing and reimbursement is handled properly.
How can pharmacists make sure they are getting the best deals from PBMs?
Pharmacists need to be aware of how the PBMs work in order to get the best deals for their products. PBMs are middlemen who work with pharmacies and drug companies to negotiate prices and form contracts. They typically receive a rebate from the drug company for every prescription filled. This rebate can be anywhere from a few cents to several dollars.
The problem arises when the PBM does not share this rebate with the pharmacy. In some cases, the PBM will actually charge the pharmacy more than the negotiated price in order to make a profit on the rebate. This can lead to significant losses for the pharmacy.
There are ways for pharmacists to get around this. They can ask for a copy of the contract between the PBM and drug company, so they can see exactly what is being negotiated. They can also contact the drug company directly to see if they can get a better deal. By being proactive, pharmacists can make sure they are getting the best prices possible from PBMs.
Properly negotiating with PBMs can make a big difference for pharmacies. It is important to know the key components of successful negotiations and to maintain good relationships with PBMs in order to get the best deals. pharmacists need to be strategic when it comes to getting the most out of their PBM contracts. For more information on how PBMs work, click here.
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