Summary
Quest Analytics Group partnered with a southeastern firefighters association (6,700 members; $8.2 million in pharmacy spend) to optimize its benefits program. Through a detailed analysis and strategic RFP process, we delivered $2.8 million in first-year savings—a 34% reduction and nearly triple the initial $1.2 million projection—all while experiencing less than 1% member disruption.
Problem
The firefighters association was dealing with rising pharmacy costs for its geographically dispersed membership—including active firefighters, retirees, and dependents nationwide. The plan needed to accommodate this diversity while keeping costs under control.
Our no-fee benchmarking assessment, recommended by the association’s national benefits broker, uncovered several critical issues:
- Open formulary with no low-value drug rejection
- Drug reclassification tactics used to manipulate discounts
- Lack of clinical protocols to manage high-cost therapies
- Rebate disqualification terms for multi-source and limited distribution drugs
- Hidden administrative fees, including consultant and rebate processing charges
Our analysis estimated the association was overspending by at least $800,000 per year.
Solution
To address these issues, Quest led a competitive RFP process, soliciting bids from five PBMs: the incumbent, two large PBMs, and two mid-market providers.
We structured the RFP to include essential ongoing oversight mechanisms:
- Conduct annual audits to ensure compliance and validate savings
- Perform quarterly monitoring to detect and prevent pricing discrepancies
- Provide specialty drug oversight on the medical side of the program
- Launch member outreach programs to guide participants toward more cost-effective therapies
- Require the selected PBM to absorb all consultant and broker fees
Throughout the process, both the broker and the association shared decision-making responsibility. Ultimately, the association chose to stay with its incumbent PBM, but under a significantly improved contract—with formalized audits, clinical oversight, low-value drug rejection, and stronger rebate protection.
Success
Our work delivered outstanding results for the firefighters association:
- Moved from a large national to a mid-market PBM
- Delivered $2.8 million in actual first-year savings—nearly triple the $1.2 million initially projected
- Reduced pharmacy costs by 34%
- Maintained near zero member disruption despite behind-the-scenes changes
- Reduced member service complaints
- Shifted all consultant and broker fees to the PBM, eliminating direct costs to the client
- Implemented formulary controls with low-value drug rejection
- Established enhanced audit and monitoring protocols to maintain ongoing compliance and savings
This case demonstrates the power of wise plan design, collaborative broker-client strategy, and disciplined oversight. With the right structure and support, Quest Analytics Group helped the union transform modest expectations into a multi-million-dollar win.