How is the PBM model evolving and what does it mean for employers, payors and operators?

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Target audience

Senior executives of PBM operators, executives from payor and employer groups and other healthcare company operators interested in learning about trends in the PBM market and how they affect healthcare services and costs. Consultants, partners and suppliers serving the PBM and related healthcare industry. Investors seeking to understand the events and trends shaping the evolution of the PBM market and new solutions that may be developing in the market.

Insight description

This Insight is a one-hour conversation on the evolution of the PBM market and the opportunities and risks the market presents in the near and long term for employers, payors and operators. We will discuss trends in healthcare and PBM that is driving this evolution and new models and solutions that have been introduced in the market to address the need as well as types of companies and solutions that may be in development. More specific details on the the questions this discussion will cover is outlined below.

This discussion is a one hour fireside chat with market commentary and Q&A between a healthcare investor, an operator and a subject-matter expert in the space.


The first expert, Irem Mertol is an Investor & entrepreneur across healthcare services & technology companies who currently serves as a director at McKesson Ventures. Irem has held operating & investment roles focused on early and growth stage healthcare companies such as Omada Health, a16z and Madison Dearborn.

The second expert, Michael Peteroy is a Healthcare operations and strategic initiatives executive with over 20 years experience with companies such as OptumRx, United Health Group, and Medco. Michael specializes in executing complex and strategically important projects across multi-site operational environments including creating new products and revenue streams, business transformation and operational improvements.

The third expert, Tery Baskin is CEO of RxResults, an evidence based risk management company that provides formulary management, Medication Therapy Management, prescriber profiling and rules based analytics that facilitates clinical decision support. Prior, Tery has served as the Chief Operating Officer and Chief Marketing Officer for NMHC, a publicly traded PBM headquartered in Port Washington, NY. His responsibilities as COO included the performance of Clinical Services, Operations, Account Services, and Operational Services. As CMO he was responsible for managing the organic growth of the company across all four divisions: PBM, Mail, Specialty and Health Information Management.

Irem will facilitate the discussion and will ensure that the dialogue answers key questions, help professionals understand important changes and trends in the market with a goal to produces actionable insights that professionals can use to build their respective businesses. Attendees can participate by submitting their specific questions online prior, during or after the call for the experts to come prepared on areas important to the audience and to engage more interactively for better learning. Particular areas the experts will cover include:

1. Discuss the size of the PBM market, the types of PBMs, the range of services they provide, and market trends/ dynamics leading to the potential evolution of the PBM business model. (e.g. Transparent pricing, point-of-sale rebates, PBM carve outs such as specialty pharmacy & mail order, Value-based contracting, consolidation of medical & pharmacy benefits)

2. What are most employers and payors focused on when it comes to selecting their PBMs? How does this fit into the overall medical cost and benefits for them?

3. What are the market pressures requiring disruption and how big and / or urgent are these pressures?

4. What can cause a delay or acceleration of such disruption? E.g. How entrenched are the dominant PBMs and what does this mean for a potential evolution and timing of disruption?

5. Could a sufficiently strong value-based play (i.e, equal or better health outcomes at dramatically lower cost) in the market shift purchaser loyalties in ways that change the power structure? Realistically, what does "sufficiently strong value-based play" mean that would be powerful enough to catalyze a sustainable shift in purchasing patterns? What's the definition of "an offer purchasers can't refuse?"

6. What tools and resources are available and which would you recommend for operators to better understand their PBM contracts as well as the value they are receiving through such contracts? Are there any companies and services with such tools you can discuss more specifically?

7. What would a potential new PBM model look like? If you could start from scratch in the PBM space what type of solution would you look to create? (E.g. Disaggregate parts of the PBM? Change the formulary management piece? Remove rebates? )

8. How do you view the Amazon / Berkshire / JPM initiative along these lines?

9. What are some of the biggest challenges that employers and traditional PBMs will face over the next 3-5 years?

10. Are there any good examples or case studies of new models that have worked well or new initiatives companies have implemented in the PBM space?

11. What actionable advice would you provide to employers, unions, benefits consultants or next generation PBMs?

12. Closing comments

All attendees are identified by first name, project name, or pseudonym to ensure confidentiality and enable an open, bias-free dialog. Sanitized bios of attendees are available for those who join to facilitate a productive and quality experience for everyone.

If you have questions you would like answered, we encourage you to begin asking online at any point after you join. Not only will you be presented with answers to questions that are important to you, but you will also be afforded the opportunity to glean knowledge from the experiences of others in the industry in a learning-friendly environment.

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