Summary
Quest partnered with a private liberal arts college in Georgia (3,500 members; $5 million in pharmacy spend) to optimize its benefits program. Through a comprehensive analysis and competitive RFP process, we delivered $3.1 million in first-year savings—a 62% reduction that far exceeded our initial RFP projection of $1.2 million in savings.
Problem
The college was facing disproportionately high pharmacy benefit costs for its 3,500 members—including teaching staff, service staff, and both active and retired employees. With prescription activity across multiple states, the plan required a national pharmacy network to serve members in locations like Georgia (4,000 scripts) and Texas (over 2,000 scripts).
Our no-fee benchmarking assessment uncovered multiple serious issues:
- Open formulary with minimal clinical controls
- Inconsistent drug categorization leading to pricing and rebate volatility
- Brand medications filled as generics, but charged higher than generic pricing to inflate cost
- Clinical oversight failures resulting in prescriptions for brand-name drugs when identical generics were available
- Rebate disqualification clauses for multi-source and limited distribution drugs
- Hidden administrative fees embedded in the contract and unknown to the broker
- Tightly integrated pharmacy and medical benefits limiting plan transparency and flexibility
Our analysis projected potential savings of $770,000 annually through plan redesign and improved oversight.
Solution
Quest led a formal RFP process, soliciting proposals from five PBMs: two large national providers and three mid-market competitors.
We structured the RFP to include essential ongoing oversight mechanisms:
- Annual audits to validate performance and ensure contractual compliance
- Quarterly monitoring to catch and correct pricing issues in real time
- Speciality drug oversight on the medical side of the benefit
- Member outreach to support transitions to lower-cost, clinically appropriate therapies
- Absorption of all consultant and broker fees by the selected PBM
Throughout the process, both the broker and the college maintained joint decision-making authority. Ultimately, the college chose to stay with its incumbent PBM, but under a restructured contract featuring enhanced controls, accurate drug classification, and improved clinical oversight.
Success
Quest’s intervention delivered exceptional results for the college:
- Delivered $3.1 million in actual first-year savings—more than double the initial $1.2 million projection
- Reduced pharmacy costs by 62%
- Shifted all consultant and broker fees to the PBM, eliminating direct out-of-pocket expenses
- Improved formulary management through proper drug categorization
- Strengthened clinical management to ensure appropriate medication utilization
- Implemented speciality drug oversight on the medical side of the benefit
- Established quarterly monitoring to proactively address pricing irregularities
- Launched a member outreach program to transition participants to lower cost therapies
- Moved from a large national PBM consortium to a mid-market PBM
This case highlights Quest’s ability to uncover inefficiencies, structure smarter plans, and deliver transformational value to educational institutions—without compromising care quality or member experience.