PBM 101: Understanding Transparency for Better Pharmacy Benefits

When it comes to pharmacy benefit managers (PBMs), the word “transparency” gets thrown around a lot. It’s frequently promised, widely discussed and inconsistently delivered.  

Consultants are expected to cut through the noise and help clients understand which PBMs truly deliver value and which simply claim to. That’s not always easy when definitions of transparency vary across the industry, and even small gaps in clarity can impact the effective administration of the plan. 

In this blog, we take a closer look at what transparency should mean in practice and how Navitus puts it into action every day.

Defining transparency in the PBM landscape 

Within the PBM industry, transparency refers to the level of visibility plan sponsors have into pricing structures, rebate flows, administrative fees and contract terms. A truly transparent PBM shares these financial, contractual and operational details openly and consistently. 

But while the term is widely used, it’s not always applied in full. Some PBMs claim to be transparent, but continue to retain revenue through spread pricing, manufacturer rebates or unclear administrative fees. These practices create confusion, limit accountability, introduce hidden costs and leave clients with more questions than answers. 

So how can you tell whether a PBM is truly transparent or just using the language of transparency? Start by asking the right questions. 

Five ways to evaluate your PBM’s transparency 

If you’re reviewing your current PBM contract or comparing new options, these five questions can help reveal whether transparency is built into the model or simply used as a marketing term. 

1. Do you know exactly how your PBM earns revenue? 

A transparent PBM discloses all revenue streams, including any retained rebates, spread pricing or administrative fees. If compensation isn’t clearly outlined, there may be financial incentives that conflict with the plan sponsor’s best interests. 

2. Are your contract terms fixed, measurable and clearly documented? 

Transparency should show up in your agreement, not just in conversation. Contracts should clearly outline all administrative costs, rebate arrangements and performance guarantees, without relying on vague language. 

3. Are definitions like “rebate”, “discount” and “pass-through” consistent across documents?

When core financial terms vary between contracts, reports or vendor materials, it becomes difficult to compare PBMs or verify financial outcomes. Consistency in language supports transparency, accountability and trust. 

4. Do you have complete access to your claims data in real time? 

True transparency goes beyond basic reports. It includes real-time access to claims data – including NDC-11 and MAC list details – so you can audit, view and analyze your plan’s information without limitations. 

5. Are audit rights clearly built into your contract? 

A transparent PBM welcomes accountability. Full audit rights should be built into every agreement, including access to pharmacy network terms, rebate arrangements and manufacturer contracts to ensure everything aligns with what was promised.  

If you answered “no” or “not sure” to any of these questions, it may be time to take a closer look at how your PBM operates and whether it’s truly acting in your best interest.  

How Navitus delivers transparency 

At Navitus, transparency has never been an add-on or a response to market pressure. It has been our foundation since day one.   

For more than 20 years, we’ve operated under a 100% transparent, pass-through model, offering a clear line of sight into how our decisions are made, how rebates flow and where incentives are aligned.  

Here’s how that commitment shows up in our day-to-day operations: 

Why it matters 

For consultants, transparency is a critical tool for evaluating partner performance, identifying opportunities for improvement and delivering long-term value to clients. Without a clear view into the financial and operational details of a plan, it becomes difficult to assess whether it is truly working in the client’s best interest. 

Asking the right questions and demanding clear answers can reveal opportunities to reduce costs, improve outcomes and align pharmacy benefits with organizational values.  

Take the next step 

If your PBM isn’t clearly disclosing how it operates, it may be time for a change. Contact us at [email protected] to learn how a transparent model can drive better results. 

Looking for more PBM fundamentals? 

Check out our previous blog: PBM 101: Why the Model Matters – Navitus