AH084 – Solving Pharmacy Benefits: Inside the RFP Process, with Josh Golden & Nic Bolitho

Transcript

Lightly edited for clarity.‍

[00:27] Justin Venneri: Hello and thank you for listening to another episode of Astonishing Healthcare. This is Justin Venneri, your host and Senior Director of Communications at Capital Rx. And today I'm welcoming Josh Golden back to the show. For new listeners, Josh was our guest way back in the first 10 episodes on questions to ask your PBM to future proof your plan (AH008). That was a good one. He also joined us for a news update a little over a year ago now.  

And then Nic Bolitho is here with us too, and Nic is on our proposals team. He's responsible for managing literally all the content in our RFPs, which are requests for proposals, and that's kind of how we get in the mix in the sales process and prospects, whether they're plan sponsors or health plans, can figure out if they want to contract with us.  

So we're here to talk about those questions and improving the overall process and experience to get more out of it. So it's a good one for all the benefits leaders and our channel partners, or at least I hope it will be. Josh and Nic, thanks for joining me today for this discussion.

[01:18] Josh Golden: Yeah, great to be here.

[01:19] Nic Bolitho: Thank you.

[01:20] Justin Venneri: So, quick backgrounds. We'll go with Nic first since it's your first time on the show. Tell us a bit about your background and spend a minute on your role here for frame of reference.

[01:28] Nic Bolitho: Yeah, so I have been in RFPs in one form or another for more than 20 years, about 15 of that in the healthcare industry. Been an individual contributor writing responses and also leading proposal teams. And as you mentioned, my key role here at Capital Rx is to write, edit and organize all of the content that our proposal team uses to answer RFP requests. And a key part of that is working with our subject matter experts and making sure that our content is always up to date and telling our value story so that we're addressing customer needs in our RPs and hopefully convincing them to work with us.

[02:03] Justin Venneri: And Josh, Senior Vice President of Strategy here, spend a minute on your background, please.

[02:07] Josh Golden: Yeah, sure. So, you know, I like to say that to some extent my role here is kind of reading the tea leaves of the market that we serve. So understanding how employers, labor unions, health plans, how they are navigating the space of pharmacy benefits and how we can help them potentially do that much better and then bring that information back and disseminate it into the organization and really help us create solutions that are going to exactly meet those needs.  

I've been with the organization now coming up on six years, believe it or not. Prior to that, I spent about two decades as a consultant in healthcare, really narrow and deep in the area of pharmacy benefits, helping some of the largest employers, labor unions and other plans out there, helping them navigate this space through contracting procurement. I ran more RFPs that I can count, negotiated more contracts with big PBMs that I could possibly enumerate, and learned a lot from that process. That wisdom I gained there, I brought to this organization. And that's part of how we're trying to help do things meaningfully different here.

[03:05] Justin Venneri: Okay, There are probably 20 different places we could start this conversation, but maybe just higher level. Josh, sticking with you, overall activity out there, it's hot. Everybody's interested in transparent PBM models. You've been present at a couple of big conferences recently, you know, presenting on various topics, and it seems like the overall understanding of what's been going on with pharmacy benefits and what needs to be addressed to improve things has improved fairly dramatically recently. Is that transitioning into the market checks and RFPs you're seeing? Is that the right read? What's going on there?

[03:37] Josh Golden: Yeah, it's spot on. So the easiest barometer that I have around RFP activity and just the sheer volume that's going on out there and how it has increased is the number of bids that we get invited to. And I can tell you that that has gone up about 2x year over year since 2024. So 2025 was very accelerated growth in RFP activity across the industry, employers and other groups. And we are, from what we're hearing, sort of boots on the ground, we're anticipating additional increase for 2026 as well.  

A couple patterns, a couple of trends we're seeing here is employers are starting their RFPs earlier. And I think that's an important trend because it suggests to me that these are not just market checks to renegotiate pricing, that employers are building time into their RFP process for a possible transition to another PBM, which, whether you plan to move or not, it's a smart move because it conveys to the market that you're serious about potentially considering other options. And that frankly gets your bidders more involved in a request for proposal process, more engaged. So, yeah, I mean, in terms of what's driving it, Justin, there are really powerful forces at work here that I think are driving plans to really critically reassess their pharmacy arrangements. It might be that their PBM is being investigated by the Federal Trade Commission. It might be that they're hearing about class action lawsuits against other ERISA plan sponsors, you know, associated with management of the PBM contract. So there are really all of these forces at work that I think are driving employers to really start to take this area of benefits very, very seriously and make sure that they're fulfilling their due diligence as a fiduciary.

[05:07] Justin Venneri: Got it. And Nic, questions - and you being responsible for the library, quick one - about how many answers do you think you provide annually to RFPs, if you had to guess?

[05:17] Nic Bolitho: RFPs can be from a hundred questions to sometimes thousands of questions. And we do hundreds of RFPs, so I would say hundreds of thousands of questions answered. We try and get ahead of that and keep a library. But yeah, it's a lot of questions answered.

[05:31] Justin Venneri: Okay. If someone's going to put their pharmacy business out to bid and if they're doing it earlier, as Josh said -- and it's funny, Tracy alluded to this on the last episode on implementations that people seem to be getting started earlier. We've definitely been hearing that. What should a plan sponsor or a benefits team be thinking about? I know we and everyone say start early but are there any other boxes you've got to check on data or resources you need, et cetera, to put the best foot forward to find a partner that'll help meet your needs?

PBM Procurement-Related Content

• 5 ways to improve PBM procurement (EBN)

• Replay: PBM Procurement Decoded: Insights from a Pharmacist and an Actuary

• Why Savings Don't Materialize: The Truth About Pharmacy Benefit Procurement eBook

• AH082 - Pharmacy Benefit Implementations: Have No Fear, Alignment & Process are Here

[05:58] Nic Bolitho: Time, obviously, is very important. The more time that we have to work with our sales partners, with subject matter experts, the more time we have to develop really tailored response that hits on the customer's needs and pain points. Along with that, you know, data. Be specific. If you're asking about a specific topic, make sure that that data is included in your RFP so that we can do an analysis, and make sure you quality check your data so we get it right the first time, hopefully. Along with the details being important, you know, if you have specific groups that you want us to work with, Point Solutions or other third party vendors, name those so we can really speak to what it's like to work with them. So those are really important.  

And then, you know, going along with kind of the change in the marketplace, flexibility in the response, you know, we do things a little bit differently. Our model's different in being a transparent PBM, but just open up your templates. If we have questions where we can provide our value story more than just confirm, non-confirm where those kind of box us into a corner or maybe don't allow a respondent to paint the full picture of what we can offer the client. I think that's a really important part of an RFP response as well.

[07:05] Justin Venneri: And Josh, I'm curious how the process or questions, how's that changed over time? I mean, you've been at this, you know, running RFPs and involved in the contracting process for 25+ years now, right? What would you say are the key three or four areas that plan fiduciaries must focus on to set up a benefits program? Anything you'd build on from what Nic was describing?

[07:24] Josh Golden: Yeah, I mean, I'll piggyback on Nic's comment. I'm seeing a trend now that -- you know, in the old days you would, during an RFP, the employer, the consultant would share just the bare minimum amount of information necessary to solicit a response. And now we're seeing more info flow through these RFP processes, information about how the current clinical programs are set up, what bells and whistles are attached to the program that allow us to get a more comprehensive picture of how the plan is currently running, and how they may want to run in the future. And that's really, really important.

From a fiduciary standpoint, this is info that is helpful in terms of charting the course with a potential new vendor and making sure that vendor gets a good proposal in front of them. I am seeing even bigger, I would say, tectonic shifts around where the focus of the RFP is for large employers and other large plan sponsors out there. You know, I would say that the old-world RFPs focus very, very heavily on unit cost. That is to say, give me the best average rebate per claim or the best, you know, discount per claim, and for these different price points, these different categories of claims, and let's just focus on that and end up with a spreadsheet result. That kind of tells me the answer where I'm supposed to go. It was almost singularly for some employers focused on that unit cost math, that unit cost spreadsheet.  

There are major shifts now towards more of a holistic view of the PBM and using that RFP to understand bigger, even potentially more important questions. Three that I want to give you examples of here. One, how does my PBM make money? And could that influence their behavior? We're seeing a lot of questions around that. How are you going to derive profit off of me as a client? And help me understand how that's going to influence your behavior. Case in point, if you're retaining a portion of rebates, are you going to steer my patients, my plan members, towards higher cost drugs that may generate more rebates, which are, you know, obviously improves your profitability as a PBM?  

So that's one important area that I see employers focusing on. Number two is does your business model give me the freedom I need as a fiduciary? That is to say, if I want to pursue a unique strategy down the road, let's say I want to add a new mail order vendor to the mix or carve out a certain subset of drugs to let some third party vendor manage them in a unique way, does the house of cards of your proposal fall apart or does the core economics remain intact? In other words, were you relying on that for hidden profitability? That's another area of deep scrutiny we're seeing in RFPs.  

And then the third, and I say almost the linchpin that supports all that other stuff is can your tech handle me, right? Are you running on a platform that's 20, 30 years old, where if I want to start customizing, if I want to do something creative and unique, a carve out or a custom program, that your answer is going to be, we just can't do that. I don't have enough coders to figure that out on my 30-year-old platform. Or are you on more modern technology, a cloud-based platform that's more agile, that can adapt, that can handle carve outs, handle customizations easily?  

So those are three areas where I'm seeing a huge shift in focus towards as employers embark on these RFPs?

[10:17] Justin Venneri: Nic, building on what Josh just explained, are there any pitfalls or kind of bland questions that don't really help get at those key areas that a plan sponsor would need to evaluate for a PBM-to-PBM comparison? And are there one or two emerging or new top questions that you've seen?

[10:35] Nic Bolitho: Yeah. So every RFP is going to have some bland questions, some of those standard questions just to document who you are as a company and how your operations work. But I think it's really important for clients or consultants not to overdo it, you know, to really be specific and focus in on those areas that they're interested in learning and again providing that detail. So for example, we get asked a lot about customizations. Do you allow clients to customize XYZ? And that's a really hard question to answer. You know, what are you looking to customize? What are you looking to gain from customization. If they're more specific, we can really work with our subject matter experts, you know, Judi® is very flexible. Our teams are very flexible in the way they work, and we can accommodate a lot of things, but you can't really answer that question directly and effectively without knowing what they're looking at looking for. So that's one way.  

And then I think those bland questions, working with the consultants and our channel partners, who utilize RFIs - requests for information - to gather that information ahead of the RFP really helps, so that when we do come to the actual RFP, again, we can focus in on the specific client needs and really spend our time in words on that rather than checking the box on a lot of standard questions.  

And then as far as the hot topic, I think RFPs really reflect the market and the things that are going on. So we get asked in every RFP these days about GLP-1s and our strategies for working with those, whether it's, you know, rebate implications or formulary strategies. Same with biosimilars, you know, different tiering strategies and how we're working with those in terms of increasing utilization, steerage to biosimilars. And then IT security remains a big one. We get a lot of questions around our system security and accreditations with breaches and different concerns about that in the market. And we work with our RIT security team to make sure that our content's always up to date on what we're doing to protect our clients and our members from data breaches and other risks.

[12:27] Justin Venneri: And let me guess, AI too.

[12:29] Nic Bolitho: AI, of course, yes. Lots of questions around AI.

[12:32] Justin Venneri: Josh, this is where I think your insight as a former longtime consultant can be really helpful. My understanding is there's sort of a scoring process and obviously, you know, there's some bland questions, there's some more interesting, timely questions. There's things that may or may not be weighed heavily enough or highlighted for the actual buyer just based on how the whole process works. Is that correct?

[12:50] Josh Golden: Yeah. This is really where I think it's important to understand sort of that evolution from old world RFPs to new world RFPs. I can tell you candidly and bluntly that in an old-world RFP process, that unit cost spreadsheet was such a core driver of decision making. And folks like Nic would have to fill out 100, 200 other qualitative questions about the PBM's capabilities, and those would be usually scored in some methodology, but the focus would always revert back to that unit cost spreadsheet. Who's giving me the best minimum rebate guarantees, for example. And that was such an outsized influencer of the decision, that one factor.  

And what I'm seeing in new world RFPs, is a shift away from just focusing on unit cost and an increased focus on the way that a PBM's behavior influences drug mix and total cost. So beyond the unit cost, beyond the qualitative differences and the platforms and all the technical differences, there's a really renewed focus now on PBM behavior. What I call the “M” in PBM, the most important letter in the acronym. How is this PBM going to manage my utilization, my plan's cost? By moving patients, steering patients, guiding them from one prescription to another on their healthcare journey?  

And I'm seeing a very, very expanded interest right now in letting PBMs tell their story there and helping the client understand how those cost factors can have an even bigger impact on the financial bottom line than maybe the slight tweaks that we often see in those unit costs that the minimum guarantee.  

And so it's really expanding the philosophy of that cost spreadsheet to include a more holistic look at total cost. And I'm seeing, frankly, consultants that have taken that challenge on and are doing a really great job of it. But also I've seen some consultants that have struggled in that area as well. So I do think we're seeing a varied mix of capability out there in the market right now.

[14:40] Justin Venneri: And I know, you know, we've spent a bunch of time already talking about cost. That's obviously extremely important. What's the price? Do I understand the price I'm paying? Nic, member service, how often or what types of questions pop up most frequently around customer care or member service in the RFPs? And then, Josh, if you can piggyback on that, can you talk a little bit about how you walk people through what's important there for them to consider for member service?

[15:03] Nic Bolitho: We get a lot of questions around that day-to-day member experience, from calling in and asking questions, to using our portal and mobile app to check on prescriptions or check on prior authorization status. And then there's a lot of tie into working with our specialty pharmacy and mail order pharmacy partners as well, making sure that they have a smooth handoff and a smooth integration with those partners. So it's really important for us to have more of the storytelling aspect of RFP response there in terms of making sure that the client understands that their members are going to have a smooth experience and not get stuck on hold or have to chase a million dead ends before they get an answer to their questions.

[15:42] Josh Golden: You know, I would say employers and other plan sponsors are getting a lot more sophisticated in how they're asking about the member experience, and I think that that's a good thing. Back in the early days of the RFPs that I managed, employers were asking open ended questions. Tell me about the member experience within your organization, tell me about how you address member needs. And frankly, that's just an invitation for a lot of marketing fluff. If you ask me, any PBM is going to make that sound great and flowery with their creative poetry. But what I'm seeing now is more precise and specific questions that get at the things that matter. Questions like what is your net promoter score? And by the way, if you're not measuring that as a PBM, why the heck aren't you? Right? That's concerning too. Binary questions that get at discrete answers, like do you outsource any of your call center? Do you offshore any of your call center? What is your average turnaround time for your book of business for moving a prior authorization through your system? Again, small number of members affected by PA, but huge friction point potentially for members.  

And so I love seeing employers and consultants now starting to get more precise around gathering very real information and data that tells a more honest story about the member experience without all that marketing fluff. And so, I'm really pleased to see that RFP is moving in that direction.

🎧 AH034 - Customer Care in Healthcare: Setting a Higher Bar, with Will Tafoya

📰 Pharmacy Benefits 101: Building an Award-Winning Call Center from Scratch

[17:05] Justin Venneri: And Nic, we get asked about clinical programs all the time, and like Josh was just saying, with prior authorization, you know, customer care, member care, they end up working with the clinical care team pretty closely for those handoffs to make. Whenever there are questions, of course, hopefully they just go smoothly and they don't have to worry about it. But that's not always the case. But regarding the clinical program, some are table stakes, others are unique. How do you approach sharing information when asked about the clinical programs?

[17:27] Nic Bolitho: So this is a really interesting area and it's an area that really varies from client to client depending on their situation, what they're looking for. Like you said, there are some clinical programs that are table stakes, and we respond as such that, that you know, our formularies, they're a core piece of what we offer as a company and as a partner. But they have lots of options for disease management, maternity management, weight management, solutions, things like that.  

So you try and be flexible if the client is really looking for us to work with them. We have a lot of great programs and we can describe the member experience and we have our clinical SMEs are really great at providing outcomes associated with that. So we can say here's what the member is going to experience and here's what it's going to mean for them in terms of weight loss or medication adherence as an outcome. But at the same time, we don't want to paint ourselves into a corner. So Judi and the way we work is very flexible so we can integrate with third party clinical programs.  

And so we try to paint our value story but also remain open to working with other solution providers if that's the way that the client wants to go.

🎧 AH035 - Pharmacy Benefits 101: Clinical Programs, with Bonnie Hui-Callahan, PharmD

[18:30] Justin Venneri: All right. And just like that, here we are at the last question. We'll start with you, Nic. What is the most astonishing thing that you've seen related to the RFP process that's safe and compliant to share? Of course have to have our compliance hats on. Send us off with a good story.

[18:43] Nic Bolitho: Something astonishing that we see all the time are crazy deadlines. So we've had RFPs due on Christmas Day. I had an RFP once that was released on Christmas Eve and due on New Year's Eve, not here at Capital Rx, but in a previous life. So that was pretty astonishing. It really, I think right now, it's all about the volume. Like Josh mentioned, our volumes doubled and so we're just trying to constantly make sure that we are working more efficiently, using new tools and new technology to make sure that we're working efficiently so that we can focus our time and energy on those strategic questions and really hitting the client's needs in our RFP responses while still working through the volume.

[19:20] Justin Venneri: Did that RFP get done?

[19:21] Nic Bolitho: It did. We got it done. We never miss a deadline.

[19:24] Josh Golden: You and your team are tireless. It's so impressive from my standpoint.  

I mentioned earlier that we are seeing a much better flow of information about incumbent arrangements. That helps us as a bidder really refine our response and make sure that we're crafting something that makes the most sense for the employer or the plan sponsor that's issuing the RFP.  

But I will say I do find it astonishing that not all employers are able to do that. There are some employers that are still embroiled in contracts with their PBM, that some cases even prevent them from sharing the data necessary for them to fairly assess their own arrangement. There could be data embargoes, there could be data constraints around sharing data with third parties. To me, this is astonishing in the current context of the world because this is the fiduciary's responsibility to have access to the data that allows them to fulfill that responsibility to market plan, issue an RFP, make sure that their plan is in a competitive stance in the market, and that they're fulfilling that fiduciary duty.  

The fact that there are PBM contracts out there that prevent an employer from doing that in some cases is, to me, really astonishing. And I would encourage employers that find themselves in that circumstance to really push hard on getting access to that data, because that data is yours and that data is what powers the RFP process.

[20:39] Justin Venneri: All right, Nic and Josh, thank you so much for taking the time today. Really enjoyed this discussion and I look forward to having you both back on.

[20:45] Josh Golden: All right.

[20:45] Nic Bolitho: All right, thanks Justin.

‍

‍

‍

Want to stay apprised of the latest Judi Health / Capital Rx news? Sign up for our monthly newsletter!

‍

Interested in transitioning to an aligned and transparent pharmacy benefit partner? Click here to get in touch with our team!

‍