An employer approached Marsh & McLennan Agency (MMA) concerned about rising medical and pharmacy costs and potential penalties from the Cadillac Tax. MMA conducted an analysis and found the employer's benefits were richer than competitors and pharmacy spending was higher than expected. MMA engaged their pharmacy experts to evaluate the employer's pharmacy benefit manager contract. Experts identified opportunities to improve drug pricing and rebate sharing. After negotiations, the employer achieved $250,000 in annual pharmacy savings through a revised contract without changing their PBM or plan design.

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.

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.