Get to Know the PBM Pass-through Model

In the world of pharmacy benefit management (PBM), there are multiple models a company can follow, including the pass-through, hybrid and traditional models. While all PBMs negotiate discounts and rebates with manufacturers on behalf of their clients, pass-through PBMs, like Navitus, offer the most transparency. And in such an opaque industry, that transparency is key. 

Key Pass-through Features

Pass-through means exactly what it says: these PBMs pass all rebates and discounts back to the plan sponsor. This clarity into what is paid and rebated means every dollar is accounted for. Instead of making money on drug costs like a traditional PBM, their main source of revenue is a flat administrative fee.  

Pass-through Versus Traditional Model

Diving deeper into those differences, you’ll find that traditional PBMs rely on spread pricing (when a PBM charges clients more for drugs than what they reimburse the pharmacy for), rebate retention and opaque cost structures. By concealing the actual amounts involved from the beginning, traditional PBMs can retain a higher percentage without having to explain it. Pass-through PBMs eliminate these practices, ensuring clarity and fairness. In fact, pass-through PBMs typically provide full financial and operational disclosures and offer comprehensive audit rights down to the individual claim and invoice level, so plan sponsors can verify their savings. 

You can gain more insight on these differences in the blog post: PBM 101: How to Evaluate Your PBM. 

More Benefits for Plan Sponsors and Consultants

By knowing exactly how much everything costs up front, plan sponsors and consultants can ensure cost predictability better than with a traditional PBM. That offers the ability to make better decisions without worrying about unexpected costs or uncertain returns. 

Moreover, because pass-through PBMs are focused on a client’s satisfaction instead of the best deal for themselves, there’s a much stronger alignment of interests. They focus on lowering overall drug spend with the right drug mix and selective rebates, helping plans achieve better drug trend and a low per member per month (PMPM) cost. 

Ready to explore how a pass-through PBM can transform your benefit strategy? 

Reach out to us at [email protected].