What employers can do

Pharmacy transparency isn't about becoming an expert in drug pricing or PBM operations. It's about responsible stewardship of the plan and the people it serves. Here are some practical steps employers can take.

Carve out pharmacy from medical benefits: Separating pharmacy from medical benefits creates clearer lines of accountability and visibility into spend. While it introduces additional administrative considerations and requires careful employee communication, a pharmacy carve-out gives employers greater control over pricing structures and performance evaluation, making it easier to align the benefit with governance goals. Employers should also recognize that many carriers own both PBMs and group purchasing organizations, which can complicate efforts to fully separate incentives.
Demand deeper contract transparency: Or better yet, establish contract terms that PBMs must adhere to, rather than defaulting to theirs. The focus should be on how prescriptions are priced and what their true net cost is, not simply whether rebates exist. A PBM may describe an arrangement as "transparent," but that does not necessarily mean it is designed to lower net cost. Beyond reviewing headline terms, employers need to understand not just who is being paid and how much, but how pricing mechanics affect participants at the point of sale. Asking direct questions about rebates, administrative and other fees, pricing methodology and audit rights is not adversarial; it is often the only way for employers to determine whether the benefit is working as intended.
Secure access to claims-level data: Claims-level visibility, particularly before or shortly after adjudication, allows employers to identify pricing anomalies, coding issues and misalignments between benefit design and real-world outcomes, including differences experienced by participants who are in versus out of the deductible phase. This visibility matters because billing errors are not rare; a 2024 JAMA Health Forum study found that one in five Americans received a problematic medical bill. Independent claims reviews can help surface and address these issues without placing undue burden on HR teams.
Evaluate alternative pharmacy pricing models: Net-price, cost-plus, and even cash-based models reduce reliance on rebate-driven economics by tying pricing more directly to acquisition cost plus a defined administrative fee. While not appropriate for every employer, these alternatives can improve predictability and reduce incentive misalignment for plans seeking greater clarity and control over pharmacy spend.
Support participants with targeted advocacy and savings tools: Member advocacy services, cash-price comparison requirements and digital savings tools can help employees navigate pharmacy benefits more effectively—particularly those managing chronic or high-cost conditions. Success depends on trust, transparency and clear communication around data use, but when implemented well, these tools improve both affordability and engagement.

Raising the bar on industry responsibility

Pharmacy benefit transparency is no longer an abstract policy debate. As costs rise and scrutiny increases, HR leaders are being asked to engage more directly with how pharmacy benefits actually function. That does not mean becoming experts in drug pricing. It means understanding enough to ask better questions, make more informed decisions and clearly explain why the plan is structured the way it is—and whether it is working in the best interest of participants. Across both parts of this series, the message is simple: Transparency for transparency's sake is not the goal. Fiduciaries need to know, understand and be able to manage how their plan operates. That is what enables employers to manage pharmacy benefits with greater clarity, intention and care for the people they serve.

Instant Insights /

How HR leaders can turn pharmacy transparency into real leverage

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