[Executive Briefing] The Average Self-Insured Organization Is Paying 67 Percent More Than Needed

The primary reason an organization retains a PBM is to contain its pharmacy costs. PBMs do this in a variety of ways, including negotiating pharmacy discounts, pharmaceutical manufacturer contracting, drug utilization management, and automating administrative services. Because PBMs offer varying degrees of transparency, some contain costs better than others.

The PBM works with the client to decide the pharmacy benefit that it will offer, including the drugs that will be covered, the beneficiary’s cost-sharing requirements, and the pharmacy network. The client then retains the PBM to administer the pharmacy benefit for its members or employees. How much cash the PBM generates for itself, on a per-client basis, is information that is overlooked in far too many PBM contracts.

Is it unreasonable to know exactly how much revenue your PBM is keeping for itself on the services it provides to your organization? Traditional and pass-through pharmacy benefit managers alike will bark at this notion. The reality is clear: non-fiduciary pharmacy benefit managers intentionally make it difficult to ascertain their management fees. They know what you’ll learn will not allow them to maintain the status quo.