Objection Handler Playbook
Exact scripts for when the PBM pushes back during negotiations.
"Your rebate isn't competitive with the incumbent brand."
"We recognize our rebate is 10% lower. However, our drug has a 0% Step Therapy failure rate compared to their 35%. When a patient fails on their drug, your health plan absorbs the $15,000 ER visit. Our net cost of care is actually lower."
Play: Pivot from Gross-to-Net price to Total Cost of Care (HEOR).
"We are going to put a Prior Authorization (PA) on this."
"If you must implement a PA, we request the criteria match the FDA label exactly—no 'fail first' requirements on generics, and no specialist-only prescribing restrictions."
Play: You rarely win "No PA". You win by negotiating *lenient* PA criteria.
"Your WAC (List Price) is too high for Tier 2."
"We can offer a Value-Based Agreement (VBA). Put us on Tier 2. If the patient discontinues the drug within 90 days due to lack of efficacy, we will refund 100% of the drug cost to the plan."
Play: Shift the risk back to the pharma company. PBMs love guaranteed outcomes.
The Pharma Cost Flow
Follow the product vs. follow the money.
1. Pharma Manufacturer (You)
Goal: Maximize volume/Rx, maintain Gross-to-Net margin.
↓ Product flows to ↓
2. Wholesaler / Distributor
Goal: Take a 1-3% fee for logistics (McKesson, Amerisource).
↓ Product flows to ↓
3. Pharmacy (Retail/Specialty)
Goal: Dispense drug, collect dispensing fee + patient copay.
↑ Pharmacy bills the PBM ↑
4. PBM (The Gatekeeper)
Goal: Extract massive rebates from Pharma in exchange for formulary placement. Keep a "spread".
↑ PBM passes *some* rebate to Plan ↑
5. Health Plan / Employer
Goal: Keep insurance premiums low. Avoid hospitalizations. They hire the PBM to manage drug costs.
Therapeutic Portfolios
Market dynamics for your specific focus areas.
Medical vs. Pharmacy Benefit: IV infusions (chemo) are billed under the Medical benefit ("Buy and Bill" by the oncologist). Oral oncolytics are billed under Pharmacy benefit (managed by PBMs).
Payer Dynamic: High sensitivity. Payers rarely deny cancer drugs, but they enforce strict Clinical Pathways to ensure doctors use preferred regimens first.
Buy-and-Bill Clinical Pathways Part B vs Part D
Volume Game: Preventive care. Under the ACA, most vaccines must have a $0 copay for the patient.
Payer Dynamic: Less about PBM rebates, more about negotiating with Group Purchasing Organizations (GPOs), IDNs (hospital networks), and government contracts (CDC).
Zero Copay GPO Contracting Population Health
Orphan Drugs: Very few patients (low N), extremely high WAC price (often $300k - $2M+).
Payer Dynamic: "Rebate" doesn't matter here. It's all about Value-Based Agreements (VBAs). The plan will pay the $1M, but you must guarantee the drug works, or refund them. Prior Authorization is incredibly strict.
Orphan Drug VBA / Outcomes-based Stop-loss insurance
PBM Contacts
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GTN Math
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