Employer health care spending is expected to increase by 8% in 2025, the highest rate in a decade, and nearly a third of each dollar spent will go toward pharmacy costs. These, too, will continue to rise. According to a recent report from the Federal Trade Commission (FTC) on traditional pharmacy benefits managers’ (PBMs) role in generic drug price increases, pharmacy costs for both plan sponsors and patients grew by 21% for commercial claims and about 15% for Medicare Part D claims between 2017 and 2021.

This inflationary cost trend has unfortunately become the status quo for plan sponsors, who are reaching a breaking point. Despite traditional PBMs’ lack of transparency, which leaves employers in the dark about their drug spend while generating billions in revenue for the PBMs, most plan sponsors continually renew their contracts. Meanwhile, alternative solutions exist today that align better with plan sponsors’ interests and will partner with them to ensure the best pharmacy offerings at the best price for their members. With such options available and many plan sponsors unhappy with the service they receive from PBMs, why haven’t more plan sponsors moved away from the traditional PBM model? Why is there a hesitancy to deviate from the familiar approach?