Pharmacy benefit management wasn't invented to be complicated.
The original premise was simple: as employer-sponsored health insurance expanded in the mid-twentieth century, someone needed to manage the logistics of prescription drug coverage. Process the claims. Negotiate with pharmacies. Help employers offer a benefit their workforce could actually use. The pharmacy benefit manager was, at its inception, an administrative function built around a straightforward mission: make medications accessible and affordable.
That was the job. For a while, the industry did it.
How the industry strayed
Rebates entered the picture as a reasonable concept, and they remain one. Drug manufacturers, eager for formulary placement, offer rebates to PBMs in exchange for preferential positioning. When those rebates flow back to the plan sponsor, and when formulary decisions are grounded in clinical and financial merit, the mechanism works as intended.
The problem is what happened at scale.
Three large entities, today known as the “Big 3”, consolidated market share to the point where they now collectively process roughly 80% of all U.S. prescription claims in a market worth nearly $600 billion annually, managing pharmacy benefits for approximately 270 million Americans. At that concentration, something shifted. Rebates stopped being a vehicle for delivering value to clients and became a revenue stream for the PBM itself. Formulary decisions began reflecting not which drugs produced the best outcomes, but which manufacturers offered the largest rebates. The actual cost of a drug, what it costs, where the money goes, who profits, became nearly impossible for employers to trace.
What the FTC Found
In January 2025, the Federal Trade Commission completed a multi-year investigation into PBM pricing practices. The findings were not ambiguous.
The Big Three PBMs generated more than $7.3 billion in revenue above the actual acquisition cost of specialty generic drugs at their affiliated pharmacies between 2017 and 2022. One drug used to treat pulmonary hypertension was marked up more than 7,700%. A multiple sclerosis medication that costs $177 to acquire was billed at nearly $4,000 for a 30-day supply. The Big Three also collected an additional $1.4 billion through spread pricing, billing plan sponsors more than they reimbursed pharmacies for the same drugs. The report passed on a unanimous commission vote.
This is not a bug in the system. For those who benefit from the opacity, it is the feature.
The GLP-1 test case
Nothing has raised the stakes more visibly in recent years than GLP-1 medications.
The clinical evidence for drugs like Wegovy® and Zepbound® is strong, not just for weight loss, but for meaningful reductions in cardiovascular risk, improvement in metabolic markers, and downstream effects on a range of costly chronic conditions. More than 40% of privately insured adults, over 57 million people, are clinically eligible based on diagnoses of diabetes, obesity, or being overweight with additional risk factors.
For most employers, the list prices are a real challenge. Navigating GLP-1 coverage thoughtfully requires clinical rigor. Prior authorization plays an important role in that process: ensuring the right patients get the right medications, that lower-cost alternatives are considered where appropriate, and that clinical criteria are applied consistently. When used well, prior authorization is a tool for sound stewardship.
The question employers should be asking is whether those coverage decisions, prior authorization criteria, formulary tier placement, utilization management, are being made on the basis of clinical evidence and total cost of care, or on the basis of what's most financially advantageous to the intermediary managing the benefit.
The cost of misaligned care
The downstream consequences of a system optimized for the wrong outcomes are real and largely underacknowledged.
An estimated 50% of Americans do not take their chronic long-term medications as prescribed. Poor adherence contributes to more than $500 billion in avoidable health care costs annually, roughly 125,000 preventable deaths and up to 25% of all hospitalizations in the United States each year. The connection between cost and adherence is direct: prescription abandonment rates fall below 5% when a drug carries no out-of-pocket cost to the patient. When that cost exceeds $500, the abandonment rate climbs to 60%. In 2024 alone, approximately 96 million new prescriptions were abandoned at the pharmacy counter.
A benefit partner truly aligned with employer and patient outcomes treats medication affordability as a financial priority, not a clinical nicety, and invests in clinical intervention early, before manageable conditions become costly crises.
What transparency actually requires
True transparency in pharmacy benefit management means pass-through pricing: the actual cost of the drug passed to the plan sponsor without markup or hidden margin. It means rebates flowing back to the client, not retainedas PBM revenue. It means a clear accounting of all fees. It means formulary decisions made on clinical and financial merit, not driven by which manufacturer offers the largest rebate.
That kind of transparency isn't just a feature. It's a fundamentally different business model, one that requires the PBM's financial success to be tied to the health and cost outcomes of its clients, not to the complexity and volume of the contracts it manages.
A different answer already exists
We built True Rx Health Strategists on a premise that the interests of the PBM, the employer, and the patient don't have to conflict. We are a pharmacist-led organization built on transparent pricing, clinical decision-making, and real accountability to outcomes. We pass rebates back to our clients. We make formulary decisions based on clinical evidence and net cost, not rebate volume. We call ourselves Health Strategists because we are clinically trained partners who act in the best interest of clients and patients with every decision.
That orientation shapes what we build. We moved quickly to be first to market, offering direct to employer pricing for GLP-1 medications through our collaboration with Waltz Health. When the evidence for early clinical intervention pointed toward a better model, we built Healthier You, a $5 per member per month bundle combining pharmacist-led weight management, diabetes management, and pharmacogenomics medication matching. And in an industry built on complexity, we hold ourselves to a different standard for every interaction, because creating memorable experiences for clients and patients is what raising the bar for care actually looks like.
The PBM industry was designed to serve patients. It still can.
