Pharmacy Benefits Management Services

The City of Long Beach is soliciting proposals for Pharmacy Benefits Management services for its self-insured Preferred Provider Organization and Health Maintenance Organization plans covering approximately 13,200 members with an annual drug spend of $19 million, with proposals due June 4, 2024. The contract is for an initial two-year term with options to renew for three additional one-year periods, not to exceed five years total.

The scope encompasses account management, network and formulary management, utilization management, clinical programs, customer service, eligibility and claims administration, reporting, and specialty pharmacy services. The City is self-insured and excludes Medicare Advantage Plan populations. Specialty drugs include Transplant, Hepatitis B, and Oral Oncology medications. The awarded contractor must facilitate seamless transition at no cost, including loading 24 months of claims history and assuming transition costs without termination fees or rebate withholding. Readiness for a January 1, 2025 go-live date is required if final decision is made within 90 days of the effective date.

Proposals must address four key goals: reducing annual drug spend by 10 percent while maintaining or improving pharmacy quality and coverage; achieving 90 percent member satisfaction; maintaining 90 percent or higher account management satisfaction; and continuously offering quality member services. The City requires pricing guarantees with floor or minimum guarantees and excess value pass-throughs, including maximum allowable cost performance passed to the City. Pricing should be unbundled with clinical program costs itemized separately. Rebates must account for WAC reductions on medications such as insulin and inhalers.

Evaluation criteria weight organizational capacity and experience at 30 percent, method of approach at 40 percent, communications and reporting at 20 percent, and reasonableness of cost at 10 percent. Contractors must certify compliance with the City of Long Beach Equal Benefits Ordinance for contracts valued at $100,000 or more. An optional pre-proposal meeting was held May 14, 2024; questions were due May 16 at 5:00 PM Pacific Time, with responses posted May 23. Addendum No. 1 was issued May 23, 2024, clarifying scope, pricing structure, and contract terms; proposers must acknowledge receipt and submit it with their proposals or face potential disqualification. The current PBM provider is CVS/Caremark.