More employers are dropping the largest PBMs
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More corporations are cutting ties with the three biggest pharmacy benefit managers and striking deals with smaller rivals to help manage their drug costs, a new survey from the National Alliance of Healthcare Purchaser Coalitions found.
Why it matters: The findings are the latest sign of a shift underway in employer-sponsored health care as companies grapple with soaring health costs and a threat of worker lawsuits tied to how well they manage plans.
What they found: The survey of 408 employers conducted in May and June found nearly half (46%) were using a PBM other than the big three — CVS Caremark, Optum Rx and Express Scripts — up from 37% last year.
- 56% of those still using one of the big three indicated they were considering making a change in the next three years.
- 31% of companies using alternatives to the larger PBMs are considering a change.
- Employers project a 7.7% increase in their health costs next year.
Between the lines: Prior surveys indicated employers were increasingly casting a more critical eye on the middlemen that help manage drug benefits and considering a switch.
- Beyond costs, employers are looking for added transparency like more access to claims data and a commitment not to engage in "spread pricing" — the practice of charging health plans or employers more for a drug than they pay the dispensing pharmacy, said Shawn Gremminger, president and CEO of the alliance.
- "Those things really matter, and they are enough to get employers to shift," he said.
Catch up quick: The largest PBMs have already responded to increasing scrutiny by embracing simpler cost-plus pricing models and by returning manufacturer rebates to the plan sponsor.
- Congress earlier this year passed new transparency requirements and changes to how PBMs are compensated.
The survey found employers with full access to medical and pharmacy claims data were, on average, using nearly four more high-value purchasing strategies than those with limited access.
- The same couldn't be said about employers most concerned about rising costs and high-value changes, Gremminger noted.
- "If I was reading this report as an executive at one of the big three, I would hopefully see this as a continued eye-opener," Gremminger said.
