Pharmacy benefit managers (PBMs) have been under fire the last few years both in the press and at the federal and state levels of government for non-transparent pricing and contracting, as well as overall business practices related to highly rebated drugs receiving preferred formulary tier status. Moreover, the "spread pricing" models used by most legacy PBMs make it nearly impossible for the average plan sponsor to run an audit without spending additional dollars, further escalating the cost of providing pharmacy benefits to plan members and their dependents.

Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spend continues to compound at an eye-popping rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the "games" PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won't guarantee an all-in per member per month (PMPM) cost for the year.

Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies. In my experience, benefits brokers and consultants don't always evaluate PBMs on an "apples to apples" basis, and most PBMs rely heavily on average wholesale price (AWP) and maximum allowable cost (MAC) lists in the contracts. It's no wonder that plan sponsors are confused about the true price of medication.