PBM 101: How to Evaluate Your PBM
Is Your PBM Aligned with Your Goals?
Choosing a pharmacy benefit manager (PBM) isn’t just about managing prescription drug costs – it’s about ensuring your PBM operates in a way that aligns with your financial, operational and philosophical goals. A truly aligned PBM works toward the same objectives as you: lowering costs, improving member experiences and delivering better health outcomes.
When incentives are aligned, everything – from formulary management and network contracting to contract terms and clinical programs – is designed to serve your needs, not the PBM’s.
So how can you tell if your PBM is truly working in your best interest?
A well-structured PBM can help plan sponsors optimize drug spending over time, protect employee well-being and ensure seamless execution of their benefits plan. However, not all PBMs operate with the same priorities.
Some emphasize transparency and cost savings for clients, while others maximize their own revenue through hidden fees, retained rebates and upsell strategies. If your PBM isn’t fully transparent about pricing structures, contract terms or revenue streams, it may not be as aligned with your goals as you think.
Consider these key differences:
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A PBM Aligned with Their Own Goals |
A PBM Aligned with Client Goals |
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Retains price improvements as additional PBM revenue |
Passes all price improvements and rebates directly to the plan sponsors |
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Structures formularies to maximize rebate revenue |
Structures formularies based on lowest net cost |
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Prioritizes high-rebate drugs, even when lower cost options are available |
Leverages rebates to offset client costs, not as a driver for decision-making |
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Focuses on generating more PBM revenue through upselling programs |
Focuses on achieving the lowest net cost without upselling |
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Account teams receive bonuses for upselling services |
Account teams prioritize client needs, not sales quotas |
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Bases programs on their bottom line instead of member outcomes |
Reinforces member therapy adherence through clinical engagement programs |
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Uses vague clinical criteria for claims processing |
Adheres to documented audit and clinical guidelines for clear claims processing |
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Uses complex contract language, often lacking transparency |
Uses clear, concise and transparent contract terms |
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Minimizes access to drug claim level data to obscure actual costs |
Provides access to drug claim level data for full visibility to how the benefit is being used |
The Navitus Difference: A PBM That Puts Clients First
At Navitus, we believe true goal alignment means putting clients first – not just in words, but in action. Unlike traditional PBMs that profit from hidden fees and rebate retention, we operate with 100% pass-through and financial transparency. That means we make decisions that align with your organization’s goals, regardless of the potential impact to spread, margins or rebate dollars. Our focus remains on reducing costs, controlling trend over time, improving health outcomes and delivering real value to plan sponsors, health plans and members.
If your PBM isn’t fully transparent or aligned with your goals, it’s time to explore a better alternative
Contact [email protected] to learn how Navitus can be that solution.
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