PBMs were designed to control costs. Instead, they've become one of the most profitable and least transparent links in the healthcare supply chain.
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Administers the drug benefit, setting the formulary, negotiating rebates, and processing claims. The largest area of hidden costs.
The brand behind your health plan. Facilitates payments between providers and the plan, and handles member services.
The transparent fees your broker is paid — but this is often only the tip of the iceberg.
The raw costs of healthcare and pharmacy claims for employees and their families.
An IRS fee funding the Patient-Centered Outcomes Research Institute.
Telehealth, wellness programs, and other benefits typically listed as individual line items.
PBMs were founded to manage prescription complexity as health plans began adding drug benefits, focusing on basic claim processing and payments.
As prescription prices rose, PBMs began negotiating rebates and developing formularies, solidifying their role as powerful intermediaries.
Medicare Part D dramatically expanded PBM roles, adding specialty drug management as national prescription spending soared.
Three major PBMs now control roughly 80% of the market, managing benefits for over 250 million Americans. Specialty drugs account for approximately half of all spending.
Charge plans more than they reimburse pharmacies, pocketing the spread. Retain a significant portion of manufacturer rebates or use intermediaries to create the illusion of 100% pass-through.
PBMs own specialty pharmacies and steer patients to them, capturing high-margin dispensing revenue on the most expensive drugs in the system.
Manufacturing and selling their own generic drugs and biosimilars, then using that leverage to negotiate better rebate terms with branded manufacturers.
Integration into clinics and care delivery allows PBMs to influence prescribing patterns and capture revenue at every step of the healthcare chain.
Squeezing reimbursements to independent pharmacies to unsustainable levels, driving them out of business and increasing PBM market control.
Employing aggressive tax strategies and financial structures that minimize obligations and maximize retained profits.
Brokers receive commissions from PBMs. This creates a fundamental conflict of interest that doesn't prioritize cost reduction.
PBMs may mark up generic drug prices and retain the spread. Employers believe they're getting full rebates, but PBMs keep a significant portion.
Brokers discourage evaluating alternatives, citing transition risk. Employers may believe their data belongs to the PBM, making it harder to explore options.
The disclosed fee on your contract is often just the visible tip. Here are the layers brokers rarely disclose:
The disclosed fee you see on your contract — often the only compensation you know about.
Bonus payments tied to placing specific carriers or products, regardless of employer fit.
Carriers pay brokers to be included on their recommended vendor lists, narrowing the competitive field.
Escalating bonuses for hitting enrollment or premium thresholds with a single carrier.
Bonuses for keeping clients with incumbent carriers — even while rates increase year over year.
Drug-to-drug benchmark analysis to confirm a real savings opportunity exists before moving forward.
RFP to a wide vendor group or focused diligence on an approved short list, followed by presentations and negotiation.
Full implementation support with education and change management to ensure a smooth transition.
Verified pricing matches contracted rates, gap-off-AWP audits, and ongoing customer satisfaction tracking.
We evaluate both transparent and non-transparent PBM options, asking direct questions about savings programs, service models, patient authorization processes, contract exclusions, and references — with answers provided directly to you.
We assess whether vendors are integrated with your payer and feasible for your plan. No panel fees, no overrides, no hidden compensation. Every vendor participates on a level playing field.
Most self-insured employers are overpaying on pharmacy by 15–30%. An assessment takes just one conversation and your current claims data to identify the opportunity.