Ever wonder how a health plan ends up spending $35,000 every month on just three prescriptions?
That’s not a typo—and it’s not uncommon.
Behind numbers like these is a rigged system of rebate games, formulary manipulation, and middlemen profiting every time you overpay.
If you’re spending $500K or more on health insurance annually, this blind spot could be costing you six figures.
Let’s pull back the curtain on how pharmacy pricing really works—and what employers can do to take control.
The Real Problem: You’re Not Managing Your Pharmacy Spend—Your PBM Is
The dirty secret in group health insurance? Your prescription benefits are likely being managed by a carrier-owned PBM—which means the fox is guarding the henhouse.
And here’s the kicker:
Most PBMs don’t manage your pharmacy spend. They manage their margins.
Their incentives are tied to how much they make, not how much you save. These vertically integrated giants profit off the very spend you’re trying to reduce. And they’re getting more creative every year:
- Inflated List Prices: Manufacturers increase prices to fund rebate deals.
- Rebate Games: PBMs prioritize drugs that pay them more, not what’s best for your plan or your people.
- Formulary Manipulation: Generics and lower-cost options get excluded—on purpose.
- Restricted Networks: You’re boxed into pharmacy options that benefit them, not you.
Client Example: $35,000/Month on Just Three Drugs
One of our clients—a national fitness equipment manufacturer—came to us after years of rising pharmacy costs under a carrier-owned PBM.
What we found was shocking: $35,000 per month was being spent on just three specialty medications. No fraud, no overuse—just unchecked pricing and zero oversight from the PBM.
We implemented a specialty sourcing strategy that bypassed the carrier’s inflated contracts and instead sourced those same prescriptions transparently, through a vetted high-performance program.
Result?
That $35,000/month dropped by 60%—without compromising access or quality.
This is what happens when you stop letting your PBM manage their margins and start managing your spend.
Mid-Year Is Your Window to Fix This
If you’re reading this mid-year, you’re in luck.
This is your chance to act before renewal season locks in another 12 months of overspending.
Download our Free Mid-Year Health Plan Review Checklist to:
- Spot red flags in your pharmacy and medical plan structure
- Ask smarter questions of your current PBM or broker
- Identify where you’re bleeding money—and how to stop it
📥 [Download the checklist here] or book a mid-year strategy call and let us walk you through it.
How Employers Can Regain Control Over Pharmacy Spend
Step 1: Get the Right Data (or Fight for It)
You can’t manage what you can’t see.
The first step isn’t just reviewing your drug formulary—it’s getting access to your actual Rx claims data.
If you can’t get your data, that’s the first red flag. You need to fix that, fast. It’s the most powerful tool you’ll have.
Benchmark it:
If your Rx spend is over $100 PMPM (per member, per month), you have a problem.
The national average (after rebates) is $78.76 PMPM.
Another key metric: Prescription drug spend as a percentage of total claims expenditures.
While specific benchmarks can vary, it’s important to monitor this ratio closely. If your plan’s prescription drug spending constitutes a significantly higher percentage compared to industry averages, it’s a strong signal your pharmacy spend is out of control.
Step 2: Reprice Your Current Spend
If you do have data, get a PBM repricing analysis done by an independent source. This shows what your exact claims would cost under a transparent, pass-through PBM.
No games. No spread pricing. No mystery margins.
❗ Don’t have enough data to reprice? Use our PBM Vendor Evaluation Checklist—part of our Benefit Cost Containment Blueprint. It’ll show you what to ask and what red flags to look for before your next renewal.
Step 3: Disinter-mediate the Supply Chain
This is where most employers stop. But the savings really start when you cut out unnecessary middlemen and move to independent, transparent partners who aren’t profiting from every script filled.
That means:
- Ditching carrier-owned PBMs
- Installing a specialty sourcing program for high-cost drugs
- Auditing your rebate and formulary alignment regularly
- Working with PBMs who provide full pass-through pricing + data access
This is not about “shopping the market.”
It’s about changing how the game is played.
Ready to Take Control?
If your company spends $500,000 or more annually on health insurance, it’s time for a pharmacy strategy that actually works.
📞 Book a 30-minute discovery call and we’ll walk you through the exact checklist we use to:
- Spot red flags in your PBM contract
- Reduce specialty Rx costs by 40% or more
- Eliminate spread pricing and hidden markups
- Get access to real-time data you can act on
It’s part of our Benefit Cost Containment Blueprint—designed for CFOs and HR leaders ready to stop playing defense.
Let’s fix the structure—together.
Want to see the 9 steps that smart companies are using to slash health costs?
Watch the video overview and don’t forget to download our free Mid-Year Health Plan Review Checklist to get started.
Ready to take back control of your health plan? Book a call with us today to learn how our Benefit Cost Containment Blueprint can help you uncover hidden savings and put you back in the driver’s seat.
