Predator or Prey – The PBM Games with Terri Dill

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About this Episode

Terri Dill is an expert in pharmaceutical and Pharmacy Benefit Manager contracts. She is the Principal at Skylight Arcs, a consulting company which focuses solely on employer groups’ PBM contracts.

Despite a good amount of market consolidation taking place in today’s PBM space, competition continues to thrive as many smaller and mid-size options have sprung up for employers to choose from. Nevertheless, there is a confusing array of “games” that these companies play which result in employers losing money without even realizing it.

Pharmaceuticals are almost 50% of the cost of what employers spend towards healthcare, and that number continues to grow rapidly. Pharmacies are being merged with health insurance companies resulting in consolidated and hidden fees. Terri concurs, admitting that the industry “is 100% rigged,” and that “PBMs continue to change the games all the time.”

Because of this, working with many Pharmaceutical Benefit Managers (PBM’s) can be seen as dealing with the Mafia or stepping into a casino, where the odds are stacked against you and everywhere you turn you are charged a “vig.”

Listen in as Terri discusses all the hidden tricks PBMs use to take as much money as they can from you as an employer. She explains how you can save between 8% to 27% a year on that 50% of your healthcare spend. This can result in savings ranging from 4% to 13.5% a year on your total healthcare spend and potentially lower your healthcare costs by almost 100% in the next few years.

Key Takeaways from this Episode

  • It’s rigged. It is 100% rigged. You really have to have somebody who eats, lives, and breathes this industry to keep up with all the games. Because I will tell you that PBMs continue to change the games all the time.
  • What I find often is that employer groups believe they have these guarantees written in agreements based on what they were either told by the PBM; or, trusting their broker or consultant who they believe know and understand this industry. But, what I found after reviewing these contracts is that there are no minimum guarantees in place, and the agreement typically has offset language included in the agreement.
  • When referring to a true market check, it’s really an evaluation of PBM services and scorecarding multiple vendor options to produce a set percentage of savings using certain agreed-upon criteria.
  • When it comes to a true benefit audit on a PBM, just know that it’s going to take, at minimum, six months to achieve.

Show Breakdown

  • [00:35] Terri’s background and what mergers mean for the PBM space
  • [06:11] How PBMs play games with employers and how to navigate them  
  • [12:32] How much money employers are potentially sinking without doing their due diligence
  • [21:54] Recommended PBM terms for employer groups
  • [25:17] What employers should know about market checks
  • [29:07] How to make sure your PBM is meeting contractual requirements via audits
  • [39:27] The costs of bringing in a consultant to protect your interests
  • [44:25] Recommended clinical programs to help organizations reduce waste
  • [51:09] Why most employer groups aren’t getting the medical rebates owed to them


Terri Dill

Terri Dill has been in the pharmacy space for over 17 years. She is a life and health licensed agent since 2015 and continues to bring a wealth of pharmacy benefit knowledge and expertise to her clients.

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