The pharmacy benefits management industry has a problem. Even PBMs that claim to be “transparent” continue to exploit loopholes that enrich themselves at the expense of plan sponsors and their members. DisclosedRx was founded to eliminate these deceptive practices entirely and create a truly conflict-free, aligned, and fiduciary-minded pharmacy benefit model.
The “Transparent” PBM Loophole Problem
Consider this all-too-common scenario: A PBM proudly declares, “We’re 100% transparent and we don’t own a pharmacy.” Technically true. But the spouse of the person running that PBM operates a pharmacy in the adjacent suite of the same building, and somehow all the high-cost specialty scripts end up there. Convenient, isn’t it?
These arrangements are negotiated behind closed doors, creating financial relationships that directly conflict with plan sponsors’ interests while maintaining plausible deniability.
At DisclosedRx, we put a contractual provision explicitly prohibiting any ownership or familial connection to pharmacies. No one at DisclosedRx can have any ownership in any pharmacy, nor can immediate family members. We shouldn’t have to do this, but the industry’s creative workarounds made it necessary.
Contractual Fiduciary Alignment
While PBMs cannot technically serve as fiduciaries under ERISA, DisclosedRx contracts a fiduciary duty to every client we serve. This means every pricing decision, formulary inclusion, and rebate process is contractually bound to serve the best interests of the plan sponsor, not DisclosedRx’s bottom line.
This contractual commitment provides plan sponsors with crucial protection. When DisclosedRx makes decisions about formulary design, rebate structures, or drug pricing negotiations, 100% of those decisions must align with what serves the plan best, not what generates the most revenue for us.
Industry Lawsuits Signal a Broken System
Major employers including Johnson & Johnson, Chase, and Wells Fargo are facing lawsuits from their own employees for breach of fiduciary duty, often stemming from PBM practices. Many of these cases involve the same PBM and the same brokerage relationships, revealing systemic problems in how pharmacy benefits are managed.
In these lawsuits, evidence shows brokers deliberately concealing rebate information to fund executive bonuses, with internal communications instructing staff to “be opaque as hell” about rebates because they were retaining millions of dollars that should have benefited plan sponsors and members.
These legal actions represent just the beginning. Once successful precedents are established, attorneys will pursue similar cases against smaller employers who used vendors that failed to act as proper fiduciaries.
DisclosedRx: Built to Fix This Broken System
The name says it all: everything is disclosed. Rebates, fees, relationships, and decisions. No backroom deals. No influence from drug manufacturers. No conflicts of interest that compromise our ability to design formularies based purely on clinical value and cost-effectiveness for members.
Our model eliminates the perverse incentives that plague traditional PBM relationships. We don’t benefit from higher drug costs, hidden fees, or manufacturer relationships that compromise formulary decisions. Instead, our success is measured by how well we serve our clients’ interests.
A New Standard for the Industry
DisclosedRx exists because the bar in this industry is unacceptably low. Even “transparent” PBMs exploit loopholes that compromise their ability to serve client interests. We set a new standard by removing all conflicts, eliminating hidden profit streams, and contractually committing to act in the best interest of every plan we serve.
As The Fiduciary and The Fully Disclosed PBM®, we don’t just promise Full Disclosure, we deliver it through contractual accountability and genuine partnership. When you’re ready to work with a PBM that puts your interests first, we’re ready to show you how pharmacy benefits should really work.