Published on 2025-08-19 by Ryan Ross
What is a PBM?
A Pharmacy Benefit Manager is a third-party administrator responsible for processing and paying prescription drug claims, creating formularies, and negotiating discounts with manufacturers and pharmacies…
The Rebate Game: Misaligned Incentives
The Magic Question
Industry insider Jim Lodge suggests brokers ask every PBM one simple question: “Do you take any revenue tied to drug prices?”…
Lack of Transparency: Why Data Matters
Most employer plans overpay for prescriptions because they don’t know what they’re paying for…
Brokers Making a Difference: Case Study
John Kuhlmann shared a case where a 600-life group switched from a large consulting firm…
A New Model: Cost Plus, Angle Health & Broker-Led Reform
Cost Plus Drugs
Mark Cuban’s startup, Cost Plus Drugs, publishes prices for over 1,000 medications…
Angle Health
Caleb Parker of Angle Health describes his company as a “full-stack health plan manufacturer”…
Key Takeaways for Brokers
- Ask the Magic Question
- Demand Claims Transparency
- Break the Specialty Tier
- Incorporate Cost Plus Drugs
- Educate Employees
Frequently Asked Questions (FAQ)
- What is a PBM?
- A Pharmacy Benefit Manager administers prescription drug programs for health plans…
- How do PBMs make money?
- Many take a percentage of rebates, impose hidden fees, charge manufacturers and pharmacies, and retain spreads…
- Can PBMs withhold data from employers?
- No. Under CAA 2021, plans with 100+ participants must receive full claims data…
- What is the magic question to ask a PBM?
- “Do you take any revenue tied to drug price?”
- How can brokers introduce transparency into pharmacy benefits?
- Use transparent PBMs, incorporate Cost Plus Drugs, and work with carriers like Angle Health…
The Call to Action: Be a Transparency Advocate
Employers are overwhelmed. HR leaders and CFOs often don’t even know what questions to ask…