Pharmacy Benefits Manager (PBM)

The Commonwealth of Kentucky is seeking a Pharmacy Benefits Manager (PBM) through a competitive Request for Proposal (RFP 758 2500000221) to provide comprehensive pharmacy benefits management services for the Kentucky Employees' Health Plan (KEHP). The procurement aims to secure a vendor to manage prescription drug benefits for approximately 260,000 members, including active employees, retirees, COBRA participants, and dependents, effective January 1, 2026. The selected PBM must provide transparent, pass-through pricing using NADAC methodology, full rebate pass-through, and comprehensive pharmacy network management across retail, mail order, and specialty pharmacy services. Proposers must have a minimum of five years of PBM experience, serving either 450,000+ covered lives with at least one client of 100,000+ lives or 1,000,000+ covered lives with a client of 50,000+ lives. The RFP requires extensive technical capabilities, including complex claims processing, formulary management, clinical programs, and performance guarantees. Key dates include a virtual vendor conference on February 13, 2025, with written questions due on February 14 and February 24, 2025, and proposals due by March 31, 2025, at 3:30 PM ET.

The procurement does not explicitly mention specific set-aside designations or restrictions for disadvantaged enterprises. The current PBM services are provided by Anthem and CVS/Caremark on an integrated basis, suggesting potential incumbents might be interested in responding to the RFP. The contract includes an initial three-year term from January 1, 2026, through December 31, 2028, with four optional two-year renewal periods. In 2023, total employee and employer contributions exceeded $1.58 billion, with prescription drug spending of over $726 million, indicating a substantial potential contract value. The RFP requires the PBM to maintain an operational license as a third-party administrator with the Kentucky Department of Insurance and provide both a Kentucky-based and nationwide pharmacy provider network. The contract includes a Pharmacy Management Fund of $350,000 per contract year and implementation credits of $2M (Year 1), $1.5M (Year 2), and $1M (Year 3), further demonstrating the financial scope of the procurement.