Choosing a PBM

Selecting a pharmacy benefit manager is one of the highest-impact decisions a benefits team can make. The right PBM partner reduces drug costs, improves member outcomes, and provides actionable data. The wrong one creates hidden costs, misaligned incentives, and contractual lock-in that is difficult to unwind.

Beyond the Unit Price

Most PBM evaluations begin with pricing: discount guarantees on brand and generic drugs, rebate projections, and administrative fees. These metrics matter, but they do not capture the full picture. Two PBMs offering identical discount guarantees can deliver significantly different total costs depending on formulary design, utilization management programs, network composition, and operational execution.

Key Evaluation Criteria

Transparency commitments. Does the PBM offer pass-through pricing? Are all revenue sources disclosed? What audit rights are included? Can you access pharmacy-level reimbursement data? A PBM that resists transparency is likely generating revenue from sources it does not want you to examine.

Clinical programs. Evaluate the PBM's formulary management process, utilization management criteria, specialty drug management capabilities, and medication therapy management programs. Request clinical outcomes data from existing clients of similar size and industry.

Network design. Assess retail and specialty pharmacy network adequacy for your member population. Understand whether the PBM steers members to owned pharmacies and what the cost implications are. Evaluate mail-order and home delivery options.

Technology and reporting. Review the member-facing digital experience, prescriber portal, and plan sponsor reporting capabilities. Real-time claims analytics, trend reporting, and benchmarking tools enable ongoing performance management.

Implementation and service. PBM transitions involve significant operational complexity. Evaluate the PBM's implementation track record, dedicated account management structure, and escalation processes.