Contract renewals are critical junctures for pharmacy benefit manager (PBM) Account teams, offering both a challenge and an opportunity to solidify client relationships and showcase value. While preventing a client from going out to bid is ideal, certain clients may be required to explore other options. In these cases, proactive preparation is key to ensuring that your PBM – and the value of your existing partnership – stands out above the rest.
This blog outlines essential steps PBM Account teams should take to prepare for contract renewals.
1. Proactively Identify Clients Up for Renewal
Start by keeping track of which clients have contracts ending soon and when renewals are coming up. Use a solid system, such as a Customer Relationship Management (CRM) system or spreadsheet, to ensure all renewal dates are clear and up to date.
Take a close look at each client’s contract to understand the termination language and how much notice they need to give if they wish to terminate – usually between 90 and 120 days before the end of the contract year. Knowing these details helps you develop a clear timeline to manage preparation, gain internal support, and navigate client conversations to ensure a successful renewal.
2. Start the Renewal Process 12 to 18 Months in Advance
To give yourself plenty of time for discussion and negotiation, kick off the renewal process 12 to 18 months before the contract ends.
Starting early lets you thoroughly review your client’s goals, develop a renewal strategy that meets your client’s needs, and work with internal partners to get necessary approvals, make adjustments, and tackle any potential issues well before the key decision-making time. It also helps position your PBM as a proactive partner committed to your client’s long-term success.
Bonus Tip: Engage Consultants Early
Consultants are key players in the renewal process and can heavily impact a client’s decision. By talking with consultants upfront and proactively, you’ll get a better sense of the client’s changing needs and how your PBM can meet them. Starting early also shows your PBM is a proactive partner, which boosts your chances of a positive outcome – even if the client decides to explore other options.
3. Align Your Renewal Strategy with Client Goals
To make your PBM stand out, align your renewal strategy with your client’s specific goals. You already know their objectives well, so customize your offerings to show how you’ll keep helping them achieve those goals—and suggest future solutions to keep them ahead. Emphasize where your PBM can add value, like cost savings, better service, or innovative solutions.
Use automated reporting tools, such as Xevant’s ScripLogic, to easily show your client how much they could save by implementing your recommended solutions.
4. Leverage Automated Plan and Contract Management Tools for Insight
Analytics and reporting automation tools provide real-time access to invaluable data that can make prepping for contract renewals easier than ever. Not only do they remove the manual, time-consuming process of reviewing client data and creating reports, but these tools also make it easier to illustrate your ability to deliver on cost savings and other key client priorities (and how you will continue to do so in the future).
For example, tools like Xevant’s FinanceLogic can help you illustrate your PBM’s discount performance relative to the client’s contract. Xevant’s RebateLogic can help you highlight opportunities to improve rebate management.
These insights help you present a data-driven case for why your PBM is the best choice.
5. Collaborate with Underwriting and Set Your Plan
After gathering insights and aligning your strategy, work with your underwriting team to create a clear and competitive plan. Make sure your renewal proposal is financially sound and meets the client’s needs. This teamwork helps ensure your offer is both appealing and sustainable, strengthening your reputation as a reliable and valuable partner.
Bonus Tip: Build C-Level Relationships
Connecting your PBM’s top leaders with those at the client organization helps build trust and keeps communication clear and direct. These connections give you better insight into the client’s strategy, allowing you to shape your renewal approach to match their long-term goals more effectively.
Looking Ahead
Contract renewals are a pivotal opportunity for PBM account teams to demonstrate value and strengthen client relationships. Whether the goal is to prevent clients from going out to bid or to ensure your PBM stands out if they do, you must prepare well in advance. By understanding the client’s goals, engaging early, utilizing data-driven insights, and building strong executive relationships, your PBM can secure successful renewals and reinforce its reputation as a trusted partner.
Want to see how automated analytics can help you prepare for your next client renewal? Ask us.
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