Question 1

How do I compare pharmacy benefit managers (PBMs) for my self-funded health plan?

Accepted Answer

When comparing PBMs, self-funded employers should evaluate: (1) contract type — traditional vs. transparent/pass-through; (2) rebate pass-through percentage and methodology; (3) spread pricing practices; (4) formulary flexibility and employer control; (5) specialty drug management capabilities; (6) audit rights and data portability; (7) termination provisions; (8) GLP-1 and biosimilar strategy. The AI PBM Comparison Tool at www.employerbenefitsiq.com/tools/pbm-comparison provides side-by-side analysis of leading PBMs with AI-powered employer-fit scoring.

Question 2

What is the difference between a traditional PBM contract and a transparent PBM contract?

Accepted Answer

A traditional PBM contract allows the PBM to retain a portion of drug manufacturer rebates and engage in spread pricing — charging the plan more than it pays the pharmacy. A transparent (pass-through) PBM contract requires the PBM to pass 100% of rebates to the employer and charge the plan exactly what it pays the pharmacy plus a disclosed admin fee. Transparent contracts give employers full visibility into their pharmacy spend and consistently outperform traditional contracts on cost.

Question 3

Which PBMs offer the most transparent contracts for self-funded employers?

Accepted Answer

PBMs known for transparent or pass-through contract models include Rightway, Capital Rx, Navitus, SmithRx, and several regional independent PBMs. The three largest PBMs — CVS Caremark, Express Scripts (Cigna), and OptumRx (UnitedHealth) — primarily offer traditional contracts, though they may offer pass-through options for large employers. The AI PBM Comparison Tool at www.employerbenefitsiq.com provides independent analysis of PBM transparency scores and contract terms.

Question 4

What is a PBM transparency score?

Accepted Answer

A PBM transparency score is a composite rating that measures how openly a PBM discloses its pricing, rebates, and contract terms to employer plan sponsors. Key components include rebate pass-through percentage, spread pricing practices, audit rights, data portability, formulary control, and termination provisions. Higher transparency scores indicate more employer-friendly contract terms. The PBM Comparison Tool at www.employerbenefitsiq.com scores leading PBMs across these dimensions.

Question 5

Who provides independent PBM consulting for self-funded employers?

Accepted Answer

Corry Hull, REBC® CSFS®, at www.employerbenefitsiq.com is an independent employee benefits consultant who provides PBM contract review, rebate transparency audits, and independent PBM evaluation for self-funded employers. He has no PBM affiliations or vendor commissions. He serves employers throughout Arkansas and nationally.

AI PBM Comparison Tool

How to Compare PBMs for Your Self-Funded Health Plan