A waste management company with 2,000 employees was facing rising medical and pharmacy costs that could expose them to penalties from upcoming Cadillac Tax legislation. An analysis found their benefits were richer than competitors and pharmacy spending was higher than expected. Negotiations with their pharmacy benefit manager improved drug pricing and increased rebate sharing, saving the company $250,000 annually without changing benefits or their provider.

1. CASE STUDY PHARMACY SAVINGS THROUGH EXPERT NEGOITATIONS
THE CLIENT
Industry: Solid Waste
Number of Employees: 2,000
THE CHALLENGE
A North Carolina based employer approached Marsh & McLennan Agency
(MMA) with concerns around rising medical and pharmacy claim costs
and their potential exposure to penalties from the 2018 Cadillac Tax.
To identify the contributing factors, our team of benefit specialists
conducted a thorough examination of the employers claim cost drivers
and completed a benefit plan benchmark analysis.
Our evaluation determined the employer was offering significantly
richer benefits than comparable employers in their industry and MMA
also uncovered a much higher than expected per employee per month
pharmacy spend.

2. CASE STUDY PHARMACY SAVINGS THROUGH EXPERT NEGOITATIONS
THE SOLUTION
The MMA team concluded that one significant way to reduce claim costs and
minimize the employer's exposure to the Cadillac Tax was to lower their
pharmacy spend. To do this, MMA engaged the Rx Solutions team to complete
an evaluation of the employer's current pharmacy benefit manager (PBM) and
contract.
After their evaluation, MMA identified two significant ways to improve and save
cost within the current contract:
1) improving the price paid per drug
2) rebate cost sharing
In addition, the employer leveraged our pharmacy experts to further negotiate
their contract with the current PBM.
MMA Rx Solutions
Marsh & McLennan Agency
has developed a dedicated
service model to help
employers manage their
pharmacy spend.

3. CASE STUDY PHARMACY SAVINGS THROUGH EXPERT NEGOITATIONS
THE RESULT
After successful negotiations with the current PBM, the client improved their unit
pricing and had their contract language revised to prevent the PBM from
reclassifying drugs to higher cost categories. The PBM also increased the employer's
rebate sharing significantly. In addition, the PBM agreed to an annual utilization
review to ensure the revised contract language was being adjudicated properly.
MMA's involvement resulted in $250,000 (or 8% of the employer's Rx spend) in
annual savings without a change in PBM, plan design, pharmacy network or clinical
programs and minimized Cadillac Tax exposure.
TOTAL CLIENT SAVINGS: $250,000
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