When we ask employers to describe the PBM industry, we hear “predatory,” “shell game,” “secretive,” and “opaque.”
We rarely hear “trust” or “integrity.”
How We Got Here
The top three PBMs created the supply chain and wrote the rules to benefit themselves. These companies are fiduciaries to their shareholders, meaning they’re contractually required to maximize profits any way they legally can. What they do may be legal, but that doesn’t mean it’s in your best interest.
Common Practices You Should Know About
Spread Pricing: If a drug costs $10, some PBMs add $2 or more as markup.
Rebate Manipulation: Many PBMs keep portions of rebates rather than passing them through.
Vertical Conflicts of Interest: When your PBM owns pharmacies or other supply chain parts, they’re making money at multiple points.
Data Ownership: Some PBMs claim ownership of your employee health data and profit from selling it.
Your Contract Tells the Truth
Marketing terms sound appealing, but your contract reveals what’s actually happening. Look for:
- Is 100% of drug pricing passed through, or is there markup?
- Who owns the data? (It should be you.)
- Can you audit the PBM? If they resist, ask why.
- Are there fees beyond the stated admin fee?
- Does the PBM or anyone connected to them own pharmacies?
The Fiduciary Difference
Most PBMs are fiduciaries to their shareholders, required to maximize profits for those shareholders.
A true Fiduciary PBM is contractually and ethically bound to act in YOUR best interests. The obligation runs to you, not to shareholders.
One of our team members put it well: “A fiduciary does what’s right when no one’s looking.”
What You Can Do
Start asking harder questions:
- How exactly do you make money?
- Can I see the complete picture of my drug spend?
- Who owns my data?
- Will you submit to independent audits?
- What conflicts of interest exist in your structure?
If a PBM dodges these questions or gets defensive, that tells you something important.
Moving Forward
The PBM industry needs to change. There are PBMs operating as fiduciaries with Full Disclosure, and they’re gaining ground because employers are recognizing better options exist.
At DisclosedRx, we operate as The Fiduciary and Fully Disclosed PBM®. We’re contractually bound to act in your best interests, with complete visibility into how we make money and how your pharmacy benefits are managed.