Business Group Launches a New PBM

The Purchaser Business Group on Health (PBGH) has launched Emsana Health and its first business unit, EmsanaRx, a new pharmacy benefit manager. The new PBM aims to offer large employers with a different type of pharmacy solution that is focused on transparency and flexibility, Greg Baker, R.Ph., CEO of EmsanaRx, said in an interview with Formulary Watch.

Greg Baker, R.Ph.

“There are too many people in the middle are taking too much money and not being transparent. We need to create a different solution. Large, self-funded employers are asking for something different,” he said.

PBMs, he said, have leveraged their solutions to weave interdependent revenue streams that are built into the price of drugs paid for by employers and employees.

Instead of an account manager, EmsanaRx will provide clients a team of clinical pharmacists to help assess a company’s drug spend and the goals of the organization. “Pharmacy is about driving clinical benefit to the patient to drive down overall costs. We are bringing in clinical decision making with the technology and the people to implement decisions for these large employers,” Baker said.

Additionally, customers will own their own data and have the information and tools and clinical resources dedicated exclusively to their unique needs and patient populations. The back-end technology, Baker said, allows EmsanaRx to provide employers with flexibility to implement changes to the clinical pharmacy program quickly.

EmsanaRx is working with academic medical institutions to develop formularies based on clinical data. The company is also partnering with pharmaceutical company, but is being thoughtful about who they do business with, Baker said. For example, rebates are important, but won’t be the only determination for formulary inclusion, he said.

“Employers are finally asking ‘why are my costs going up when my rebates and discounts get better every year.’ A more expensive, brand product will cost employees and ultimately employers more money even after you net those rebate dollars.”

Although EmsanaRx is for-profit, it is not profit driven, Baker said. EmsanaRx is majority owned by PBGH, which is a nonprofit coalition representing 40 private employers. Collectively, they spend about $100 annually purchasing health care services. Some of PBGH members include Microsoft, Walmart, Chevron, and American Airlines.

Being owned by PBGH provides some advantages, Baker said. EmsanaRx has not had to take any private equity or venture capital funding, for example. “Once an organization is bloated with costs that I can't imagine how they could drive better patient care and drive down costs. They also have to pay back investors,” he said.

PBGH has been working to address high pharmacy costs for several years, supporting what they call a “waste-free pharmacy.” The organization has published a guidebook for employers helping them to identify which high-cost therapies do not provide clinical value.

In an analysis done by PBGH in 2019, the organization determined that 6% of all drug claims were for “wasteful” drugs, and these claims represent between 3% and 24% of companies’ total spend on drug benefits. Among the top “wasteful” therapies PBGH identified in this review are the anticancer therapy Gleevec (imatinib), Auvi-Q (epinephrine auto injector) for allergic reactions, Penlac External (ciclopirox) for toenail fungus, Carafate (sucralfate) for the short-term treatment of duodenal ulcer, and Vanos Extended (fluocinonide) to treat itching of the skin. All of these have generic alternatives available.

This report also provides an example of how even with rebates and discounts, branded therapies can be significantly higher cost. Oracea (doxycycline) treats rosacea has a wholesale price for 30 pills of 40 mg of $886.80. The price with a 42% discount/rebate is $561.45. This represents average price concessions across 12 therapeutic categories in Medicare part D. But the price for 60 pills of generic doxycycline 20 mg is $26.54.