Summary
Quest Analytics Group partnered with a county government with 2,800 members and $4M in pharmacy spend to help optimize its benefits program and bring growing member costs under control. Our comprehensive RFP process delivered $1.6 million in projected annual savings (a 40% reduction) and after the first year of the new plan, recovered an additional $242,000 after an annual claim level audit.
Problem
The county faced rising pharmacy costs across a broad group of plan members that included active and retired employees from public safety, health services, education, and facility management teams—many of whom were unionized. Pressed for time near year-end, the county and its broker sought our immediate help and bypassed our usual benchmarking step.
Through our detailed pre-RFP intake analysis, we identified several critical issues:
- Open formulary management with minimal restrictions
- Incorrect drug categorization inflating pricing
- Ineffective clinical oversight by the third-party administrator
- Rebate disqualification terms, for specialty drugs sub-categories
- Contract loopholes enabling pricing manipulation
- Lack of internal oversight and year end price and rebate auditing
Solution
We received the county’s claims file, PBM contract, rebate data, and immediately took action.
- Designed and executed a formal RFP process, sending the county’s utilization data to two large and three mid-market PBMs to create competitive pressure.
- Required PBM bidders to enhanced clinical oversight and quarterly monitoring to correct past mismanagement.
- Mandated specialty drug program oversight, management, and auditing of both the pharmacy and medical sides of the benefit.
- Built member outreach into the program to guide members to lower-cost therapies.
- Structured the RFP to require the winning PBM to fund annual audits, quarterly monitoring, specialty drug oversight, and member outreach—while eliminating rebate disqualifications and enforcing proper drug categorization.
Throughout the process, both the broker and the county government sponsor jointly maintained decision-making authority, with our team providing expert guidance and analysis. Based on the results, the client chose to remain with its incumbent PBM but under significantly improved formulary terms, conditions, and clinical programs.
Success
Quest Analytic Group’s intervention delivered strong financial and operational outcomes:
- Delivered $1.6 million in projected annualized pharmacy benefit savings.
- Improved formulary management while minimizing disruption by staying with the incumbent PBM.
- Enhanced specialty drug oversight on the medical side of the program.
- Implemented a member outreach program to transition participants to lower-cost medications.
- Achieved a 40% reduction in pharmacy costs.
- Identified and recovered $242,000 through a detailed annual audit, uncovering issues such as generic drugs being discounted only at brand rates and missed rebate payments.
- The PBM fully absorbed consultant and broker fees, resulting in no out-of-pocket costs for the county.
By combining economic analysis with hands-on support, Quest empowered the county to take control of its pharmacy benefits without sacrificing the member experience. The result: more efficient spending, stronger oversight, and a sustainable path forward.