PBM Transition Timeline
| Phase | Timeline | Key Activities |
|---|---|---|
| Decision | Months 1–2 | Net cost comparison; contract evaluation; decision to switch |
| RFP and selection | Months 2–4 | RFP process; vendor evaluation; contract negotiation |
| Implementation | Months 4–8 | System setup; formulary development; network configuration |
| Communication | Months 7–9 | Member communication; ID card distribution; pharmacy notification |
| Go-live | Month 10–12 | Plan effective date; member support; issue resolution |
| Post-transition review | Month 12+ | Performance review; issue resolution; optimization |
Transition Risk Management
- Formulary continuity: Allow members to continue current medications during a transition period
- Network continuity: Ensure the new PBM's network includes members' current pharmacies
- Member communication: Communicate the transition clearly and early
- Data migration: Ensure complete claims history is transferred to the new PBM
- Issue resolution: Establish a dedicated transition support team for member issues
- Contingency planning: Have a plan for resolving transition issues quickly
Transition Decision
IQ Insight
The decision to switch PBMs should be based on a net cost comparison and contract term evaluation — not just administrative fee comparison. If a transparent PBM offers 15% lower net costs and better contract terms, the transition is worth the effort. If the net cost difference is less than 5%, the transition risk may not be justified. Model the net cost savings over 3 years to evaluate the transition ROI.