Why employers switch PBMs
Most employers do not change PBMs because they want a different vendor. They change because the current arrangement is hard to understand, costs more than expected, or gives them too little control over their own pharmacy benefit.
- Limited visibility into claims and pharmacy pricing
- Rebate arrangements that are hard to follow
- Spread pricing or markups that are not disclosed
- Fees that are difficult to identify
- Limited access to the underlying pharmacy data
- Poor visibility into specialty-drug costs
- Formulary decisions that cannot be evaluated
Before making a change, it is worth establishing exactly what you have today and what would be different afterwards. A switch made without that baseline replaces one arrangement you cannot evaluate with another one you cannot evaluate.
Start with your current PBM
A successful transition starts well before a new PBM is selected. Reviewing the existing arrangement first is what makes the comparison meaningful, and it is useful work even if you decide to stay.
Review your current contract
Look at termination provisions, renewal dates, notice requirements, guarantees, fees, rebate terms, and anything else that could constrain a transition.
Notice periods in particular decide your timeline before any other consideration does.
What this tells you
Do you know the date by which a decision has to be made?
Understand your current costs
Review claims pricing, administrative fees, dispensing fees, rebates, specialty spending, and every other charge in the arrangement.
The goal is a baseline. Without one, a comparison against another PBM is a comparison between a known proposal and an unknown status quo.
What this tells you
Can you state what your pharmacy benefit costs today, net of everything?
Request your underlying data
Do not rely only on a summary report. Claims and utilization data show where the current benefit is working and where cost or visibility could improve.
Asking for it also tells you something in its own right: how readily your PBM hands over the records is information about the relationship.
What this tells you
Can you obtain your own claims data, and how long did it take to get it?
Identify member-impacting programs
Review formulary rules, prior authorization, specialty pharmacy, mail order, clinical programs, and anything else members currently rely on.
These are the parts of a transition that people actually feel, and the parts that generate calls to HR if they are missed.
What this tells you
Do you know which members depend on a program that a transition could interrupt?
Compare the new PBM on net cost
A lower administrative fee or a larger rebate guarantee does not automatically mean a lower-cost benefit. Both can coexist with higher drug prices.
Compare the complete economics of the arrangement before committing to a change.
What this tells you
Are you comparing net cost, or comparing two headline numbers?
What a PBM transition involves
Switching is more than signing a new contract. A transition has several moving parts that have to be coordinated before the benefit goes live, and most of them are invisible to members if they are done properly.
- Finalize the agreement, the implementation timeline, responsibilities, and the data required from each party
- Run a disruption analysis against the current population before anything moves
- Transfer eligibility information and confirm members are loaded correctly
- Issue ID cards and send member communications ahead of the effective date
- Carry over open prior authorizations so approved therapy is not interrupted
- Arrange continuity for specialty and GLP-1 therapies specifically
- Confirm formulary and plan-design setup matches what the employer approved
- Agree how claims data will be delivered once the benefit is live
Kanurra does not require a network change as part of its model, so for most groups the pharmacy a member already uses stays the pharmacy they use.
What to look for in an implementation
An implementation should be measured by more than whether the new benefit went live on time. A good transition protects two different sets of interests at once.
For employers
Control of the process
- Clear implementation milestones
- Defined responsibilities between vendors
- Access to the data needed for validation
- Visibility into pricing and fees
- A stated process for resolving issues
For members
Continuity of care
- Continued access to needed medications
- Clear communication about any pharmacy change
- Minimal disruption to prior authorizations
- Appropriate handling of specialty prescriptions
- Support through the transition period
The objective is straightforward: change the PBM without creating unnecessary disruption for the people using the benefit.
Questions to ask before switching
These should be answered and documented before implementation begins, rather than discovered after the new benefit is already live.
- 01Why are we switching, and what will actually change for our members?
- 02What happens to existing prior authorizations?
- 03How will specialty medications be handled?
- 04Will members need to change pharmacies?
- 05How will eligibility and claims data be transferred?
- 06What happens to our current rebate arrangements?
- 07What fees will we pay under the new PBM?
How Kanurra approaches switching
The goal is not to switch for the sake of switching. It is to move to a pharmacy benefit that is easier to understand, evaluate, and audit, which means the first step is understanding the one you already have.
With Kanurra, claims can be reviewed at the line-item level, there is no spread or markup on claims, 100% of rebates received are credited back to the plan, and the fee is one flat per-employee-per-month administrative charge. A transition can then be evaluated against the economics of the existing arrangement rather than against a projection.
To understand the pricing you would be comparing against, start with PBM pricing and PBM rebates. To build the baseline itself, work through the PBM audit checklist.
Switching PBMs FAQ
Does switching PBMs mean members have to change pharmacies?
Not necessarily. Kanurra's model is built around keeping the existing pharmacy network rather than requiring members to move. Members keep their pharmacies, and the transition work happens behind that.
What happens to open prior authorizations during a PBM transition?
They should carry over rather than restart. Continuity on open prior authorizations, specialty, and GLP-1 therapies is part of the implementation, and it is worth confirming explicitly with any PBM before signing, because a member whose approved therapy lapses will find out before the benefits team does.
When should an employer start planning a PBM switch?
Start with the contract. Termination provisions, notice requirements, and renewal dates set the timeline, and they are frequently the constraint employers discover last. Everything else, including the analysis of current costs, can run in parallel once those dates are known.
Do we need to switch PBMs to find out what our pharmacy benefit costs?
No. Reviewing the current arrangement is a separate exercise from replacing it, and it is the one that should come first. Kanurra runs a no-cost audit against existing claims so the comparison is made against a real baseline rather than a projection.
What is a disruption analysis?
A review of the current member population against the incoming arrangement, run before implementation, to identify who would be affected by a change and how. It is what turns a transition plan from a schedule into something that accounts for the specific people on the plan.
How does Kanurra charge for the pharmacy benefit?
One flat per-employee-per-month administrative fee, disclosed in the contract. There is no spread or markup on claims, and 100% of the manufacturer rebates Kanurra receives are credited back to the plan.
Start by understanding what you have
You do not need to commit to a switch to find out what your pharmacy benefit costs. Send us your claims and we will reprice them line by line against your current arrangement.
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