I was introduced to yet another PBM this week – Benecard. A fellow consultant highly recommended I check them out. So I went to their website.
Wow, this is interesting………….they actually put a listing of specialty drugs available through manufacturer assistance programs and other financial assistance programs on their website. This is the first PBM I’ve looked at that actually publishes a listing like this. That’s neat!
Then I noticed in another section on their site devoted to brokers and consultants. Describing a “Win Win Partnership” it states “With Benecard, employee benefit advisors can take advantage of flexible commission options as well as incentive programs for new and continued business.”
Wow, they don’t hide a thing! We know TPAs, brokers and consultants often get paid commissions through PBMs they place their clients with, but this is the first time we’ve seen it advertised.
There is nothing wrong with anyone earning commissions for work they do. After all they have to eat too just like everyone else. But on this side of the business PBMs typically have this discussion privately within their distribution channels.
We know PBMs paying commissions is a common practice but few plan sponsors are aware. For example a broker we know is earning $2 per script on a 10,000 member group. The plan sponsor is clueless. Estimated annual commissions based on industry average number of scripts per 1000 members exceeds $200,000.
We have been offered commissions in the past in return for recommending PBM services. “Tell us how much you need and we’ll load it in for you Bill!”
We have never asked for, nor have we ever accepted PBM commissions, ever. But once several years ago we placed a small group with a new PBM and lo and behold, several months later we received a check from the PBM for about $2,000. “What’s this for?” I asked. “It’s our standard commission” was the reply.
So I sent the check back and renegotiated the PBM Agreement by reducing their admin fees by the same amount as their standard commission schedule. The admin fee reduced to $2.25 per script.