Navigating the Drug Supply Chain: What You Need to Know

Key Players in the Supply Chain

Each stakeholder plays a specific role, and together they shape drug costs, access and member experiences. Here’s an overview of who’s involved in the drug supply chain and what they do: 

Drug manufacturers – They research, develop and produce medications. They also set the list price for each drug, which becomes a starting point for rebate negotiations and pricing strategies across the supply chain. 

Group purchasing organizations (GPOs) – These entities help healthcare providers and pharmacies negotiate lower medication pricing by pooling their purchasing power. 

Wholesalers – They buy medications in bulk from manufacturers and distribute them to pharmacies and health systems.  

Pharmacy services administrative organizations (PSAOs) – These organizations support independent pharmacies by handling administrative tasks and negotiating with PBMs and payers on their behalf, helping them stay competitive. 

Pharmacy benefit managers (PBMs) – PBMs act as coordinators between manufacturers, plan sponsors, pharmacies and patients. They negotiate drug prices and rebates, manage formularies, build pharmacy networks and work with plan sponsors to structure benefits that balance cost, access and quality of care. 

Health plans/Payers – They partner with PBMs to define which drugs are covered on formulary and how much members will ultimately pay.  

Pharmacies – They dispense medications, educate patients and ensure safe, timely access to treatments. PBMs work closely with pharmacies to build strong networks that support both patient access and plan performance.   

Patients – They are the reason the entire drug supply chain exists. Yet their experience – how much they pay, how quickly they get their medications and what options they have – is shaped by decisions made long before they reach the pharmacy counter. As a PBM, we never lose sight of that. Every decision we make is to lower drug costs and improve outcomes for people who rely on their medications every day. 

100% of rebates and discounts go back to plan sponsors – All rebates and discounts secured from manufacturers are passed entirely to the plan sponsors. Navitus does not retain any portion. 

Full transparency across the chain – Plan sponsors receive complete visibility into contract terms, rebate arrangements and claim-level data – enabling better oversight and accountability. 

No spread pricing – We do not profit from the difference between what is paid to the pharmacy and what is billed to the plan sponsor. Pricing is clear and consistent.  

Aligned incentives – Our model is built on lowering drug costs and improving access. With no financial gain tied to inflated drug prices or hidden rebates, our interests are aligned with plan performance and member well-being.