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Creating a Strategic Pharmacy PPN

Greg Caines, CEBSPartnerMorneau Shepell Ltd.Halifax, Nova Scotia

Confidential – Not for Distribution

2D-1

In today’s session we’ll cover…

• Pharmacy PPN landscape• Plan sponsor objectives• Key elements of the RFP• What to include in the SLA• Implementation considerations• Integration with overall HR strategy

2D-2

Pharmacy PPN Landscape

2D-3

Pharmacy PPN Landscape

• Challenges faced by retail pharmacy:- Generic legislation squeezing profit margins- Scope of practice evolving- Fierce retail competition- PBM agreements - Administrative burdens - Counsel patients, monitor adherence, intervene with physicians, & be a benefit plan expert… 

2D-4

Pharmacy PPN Landscape

• Challenges faced by Plan Sponsors:- Low perceived value of benefit plan by employees- Cost management- Employee health and wellness- Drug non‐compliance waste- Rapidly changing drug landscape- Attraction & retention

2D-5

Plan Sponsor Objectives

2D-6

Plan Sponsor Objectives

• Enhance plan/member value• Cost management• Drug formulary design insights• Subject matter expertise for education • Improve health outcomes

2D-7

Pharmacy Objectives

• Increase Rx market share• Drive store traffic…high GM margins• Leverage their expertise to drive new revenue• Improved health outcomes • Customer loyalty

2D-8

Key Elements of the RFP

2D-9

Pre‐work before the RFP

• Mine your data to understand:- Cost & Rx market share by chain in your region(s)- Key Performance Indicators (KPI’s) by pharmacy

› Generic Fill Rates (GFR)› Maintenance Days Supply› Unit costs› Drug mix & therapeutic sub opportunities

- Burden’s of illness/health drivers

2D-10

Key Elements of the RFP

• Financial value• Health management resources/expertise• Reporting capabilities• Internal communication practices• Push strategy versus passive

2D-11

• Consulting pharmacist support• Marketing & implementation support• Distribution network/locations• Other services/programs• Willingness to enter into a SLA

Key Elements of the RFP

2D-12

Financial Value

• Member benefit on prescription costs• Loyalty program details 

- Significant discounts on general merchandise- Linkage with existing retail loyalty program

• Partnerships with other rewards programs

2D-13

Health Management Resources

• Health Risk Assessment tools (HRA’s)• Biometric screening

- Scope - Location(s)

• Medication management reviews• Compliance programs

2D-14

Health Management Resources

• Nutritionist/Dietician• Health Coaching• Lunch ‘n Learns• Web tools for drug/disease information

2D-15

Reporting capabilities

• Tracking financial savings- Prescription benefits- Loyalty program benefits

• KPI’s• Health Management activities

2D-16

Internal Communication Practices

• How do they communicate with their pharmacy staff?

• How often?• How will the staff be made aware of the preferred client arrangement?

2D-17

Push Strategy versus Passive

• Traditional model customer initiated• Proposed model pharmacist driven

- HRA- Biometric Screening- Medication Management Reviews- Dietician/Nutrition Counseling- Health Coaching

2D-18

Push Strategy versus Passive

• Targeted health outreach programs - Diabetes- Mental Health- Heart Health- Digestive Health- Respiratory Health

2D-19

Consulting Pharmacist Support

• Insights on drug formulary design- Optimal tiered approaches

• Education- Generic drugs- Specialty & biologic medications- Counter‐detailing clinics

2D-20

Consulting Pharmacist Support

• Developing pilot initiatives for:- Trial Rx- Adherence management programs- Therapeutic substitution 

2D-21

Marketing & Implementation Support

• Marketing Support:- Member brochures- Wallet id cards - Kitting packages and distribution process- Ability to tailor/brand- On‐site promotion/member information sessions

2D-22

Marketing & Implementation Support

• Established process for implementation- Managing member eligibility

› Initial load› Updates

- Internal coordinator/support

2D-23

Distribution Network

• Market penetration/locations relative to employee/work locations

• Potential for alliances where geographic penetration sub‐optimal

• Mail order services

2D-24

Other Services/Programs

• Medical equipment• Home health care

2D-25

The Service Level Agreement

• Will they enter into an agreement?• Sample of their standard contract• Schedule of performance objectives• Terms & Conditions • Length of agreement 3+3

2D-26

Implementation Considerations

2D-27

Implementation Considerations

• Baseline your KPI’s prior to launch• Full enrollment versus voluntary• Ensure privacy and confidentiality language protects - Sponsor’s data- Member’s will not be mass marketed to- Obtain consent for targeted health management

• Cover letter in kit from Plan Sponsor• Union/affinity groups

2D-28

Integration with Overall HR Strategy

2D-29

Integration with HR & Benefits Strategy

• Incorporate into overall tools inventory• Align services with priority “pain points” from baseline data 

• Ensure PPN team understands your culture/goals/objectives/programs so they can champion your brand

2D-30