Pharmacy Benefits Manager (PBM)

The Commonwealth of Kentucky's Personnel Cabinet, Department of Employee Insurance (DEI) is seeking a comprehensive Pharmacy Benefits Manager (PBM) through a competitive Request for Proposal (RFP) process to manage pharmacy benefits for the Kentucky Employees' Health Plan (KEHP). The procurement targets a vendor to provide pharmacy benefits management and claims administration services for approximately 290,000 lives, including state employees, board of education employees, public pension system retirees, and other governmental agency employees. The selected PBM must offer a transparent financial arrangement with full pass-through of discounts and rebates, a comprehensive pharmacy network, and innovative services to drive healthier member outcomes while minimizing healthcare costs. Key deliverables include real-time claims monitoring, weekly data feeds, clinical programs for chronic conditions, and support for telemedicine services. The RFP evaluation will utilize a 12,000-point scoring system, with 4,500 points for the technical proposal, 5,500 for the cost proposal, and potentially 2,000 for oral presentations. The solicitation was released on February 10, 2025, with proposals due on April 11, 2025, at 3:30 PM ET. The initial contract term is three years, from January 1, 2026, through December 31, 2028, with options for four additional two-year renewal periods.

The RFP does not explicitly mention specific set-aside designations or restrictions for disadvantaged enterprises. The current PBM services are provided by Anthem and CVS/Caremark, suggesting potential incumbent vendors. The pharmaceutical infrastructure requires integration with existing systems, including medical Third-Party Administrators (TPAs), Flexible Spending Account (FSA)/Health Reimbursement Arrangement (HRA) vendors, medication therapy management providers, and claims auditors. In the 2023 plan year, employee and employer contributions totaled over $1.58 billion, with prescription drug spending exceeding $726 million, indicating a substantial budget for the PBM contract. The Commonwealth seeks a vendor with significant administrative experience, requiring either 450,000 covered lives nationwide with at least one client of 100,000 lives, or 1,000,000 covered lives with a client of 50,000 lives. The procurement emphasizes a NADAC (National Average Drug Acquisition Cost) methodology, an open specialty pharmacy network, and comprehensive clinical programs with performance guarantees. Vendors must provide a dedicated US-based customer service team and comply with specific Kentucky Revised Statutes and healthcare regulations.