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Exploring PBM Models: The Truth Behind Transparency

Are you concerned whether you have a truly transparent PBM contract?

You’re not alone. Only 35% of employers rate their PBM as “very trustworthy,” and are skeptical about their business practices. Health plans, government agencies and employers are demanding greater transparency, accountability and overall plan performance. Yet, 63% feel that PBMs aren’t transparent, especially when it comes to revenue streams. Although transparency is a widely used term across PBMs, very few are truly transparent — and if your PBM isn’t, chances are you’re paying too much. 

What Can You Do?
Transparency is not just insight into the financials but also visibility into the operational way of doing business. And this component of transparency is often overlooked by some consultants and plan sponsors alike.

To ensure financial transparency, you should have access to view audit documents, data, network pharmacy arrangements, claims data and pharma contracts. You will know if you have operational visibility because you have a seat at the table to provide input and challenge decisions regarding your drug benefit. Furthermore, the PBM should be aligned with your goals and want to work collaboratively.

Understanding your PBM contract is also essential for transparency. If the language is not clear, ask for clarification. Some PBM contracts may have specific requirements for plan design and contract details, and therefore, are less flexible. Examine all definitions and caveats so that you are not surprised by hidden costs.
In Conclusion

As a plan sponsor, you are responsible for providing a cost-effective and valuable drug benefit for your plan members. To help make informed decisions, make sure you understand how your PBM contract influences your plan costs. To do that, a fully transparent PBM can get you visibility into both financial and operational costs. 

Members can view a related webinar recording in the Member Center. If you need your login and password information, please send us an email

Toward Better Value: Employer Perspectives on What’s Wrong with the Management of Prescription Drug Benefits and How to Fix it. National Pharmaceutical Council. Published October 25, 2017.

Patty Starr bio image

About the author

Patty Starr

Patty Starr is president and CEO of Health Action Council and is responsible for driving the strategic direction of the organization--build stronger, healthier communities where business can thrive. 

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