Why HR leaders can’t wait any longer to rethink their PBM

In the last few years, states have introduced dozens of PBM reform bills, many requiring greater transparency, clearer pass-through of discounts and stronger auditing rights. The Federal Trade Commission’s growing scrutiny of PBMs underscores how opaque the system has become, and recent legal actions taken by employees against their employer plans highlight a new reality: employers are expected to act with fiduciary care when overseeing health benefits.

For employers spending $10 million annually on pharmacy benefits, even a conservative 15% to 20% overspend means roughly $2 million in waste. That translates to about $165,000 per month. No organization would tolerate that level of inefficiency in any other supplier relationship.

Still, I hear the same five concerns repeatedly from HR teams exploring a new PBM. These concerns are valid, but they’re also solvable.

“We don’t feel the urgency.”

Pharmacy benefits don’t feel urgent until a renewal deadline is approaching, and some decision makers are waiting for federal legislation to set clear parameters. But waiting shortens your research runway and can force a default to the comfortable choice rather than the best choice.

A better approach is to begin evaluating PBMs long before your renewal cycle. Take this time to audit partial claims data or review public actuarial filings to gauge if your plan is paying above-market rates. The earlier you review, the more leverage you retain to negotiate or change vendors. With state-level reforms accelerating, employers now need more time to ensure their plan designs meet new standards across state lines.

“The savings sound too good to be true.”

In an industry known for making it difficult for employers to know their true pharmacy cost, skepticism is no surprise. This is particularly true as fees are tucked into the many layers of legacy insurance and PBM conglomerate vertical integration.

While financial transparency and savings are critical, evaluating PBMs should go beyond discounts.Employers should prioritize partners who demonstrate improved health outcomes at a lower cost.

Measures such as higher medication adherence rates, better chronic disease management and enhanced member support all lead to lower total cost of care. Ask potential PBMs to provide data on these metrics and to share case studies or references from clients who have seen tangible improvements in employee health and wellbeing after switching.

This approach helps avoid the trap of chasing discounts that don’t translate into better care and instead focuses on the long-term health of your workforce.

“If something goes wrong, it’s on me.”

This concern is understandable. HR leaders have lived through enrollment disruptions, overwhelmed call centers and employees frustrated by changes in providers and excluded medications. Those memories stick. At the same time, Kaiser Family Foundation research shows growing frustration among Americans about rising drug costs and limited visibility into the prior authorization maze.

Independent satisfaction surveys can help allay the fear of change. Check the Net Promoter Score of the PBMs under consideration. Independent, next-generation PBMs generally deliver significantly greater satisfaction, including how transitions are managed, than their legacy counterparts.

In addition to reviewing satisfaction scores, HR leaders should consider speaking directly with peers at organizations that have recently transitioned to a new PBM.Hearing firsthand about their experiences – what worked, what challenges arose and how health outcomes improved - can provide invaluable perspective and confidence.

Successful transitions require planning and dedicated support teams. Require a written step-by-step plan from the new PBM, including:

• A mirroring phase to limit disruption
• High-risk patient management plans
• Member satisfaction measurement

This shifts responsibility from HR to the PBM — where it belongs.

“I’m not the final decision-maker.”

Many HR teams express interest in switching PBMs but lack the authority to make the final decision; however, given the growing fiduciary and financial implications, pharmacy benefits are one of the few areas where HR, finance and executive leadership must align.

C-Suite decision makers typically want to see:

• Total pharmacy spend net of rebates and administrative fees
• Per-member-per-month trends
• Member disruption rates
• Implementation risk and guarantees
• ROI and contractual guarantees

When these numbers are presented clearly, the conversation changes. Instead of HR making an argument alone, leadership sees the material financial and health care impact. A transparent PBM model with real clarity is much easier to champion internally.

“The switch feels too big and too fast.”

The decision to switch PBMs often feels overwhelming, but in reality, moving pharmacy benefits can be a relatively easy transition – especially when your PBM partner offers robust solutions for formulary continuity and improved network access.Modern PBMs are equipped to mirror existing formularies, minimize member disruption and provide expanded pharmacy networks that make access to medications smoother for employees.

Employers can take incremental steps, starting with a thorough review of specialty drugs, GLP-1 therapies or women’s health medications to uncover immediate opportunities for savings and improved care. With the right PBM support, the transition process is streamlined, and members experience continuity in their medication journey.

Rather than viewing the switch as a single, risky leap, HR leaders can approach it as a series of manageable steps, guided by data and supported by a partner committed to both financial transparency and better member health outcomes.

The overlooked reality: Minimal member service

One of the most overlooked realities in pharmacy benefits is that PBMs are often the only health care service where members receive little more than a “white bag” at the pharmacy—without meaningful support or guidance from the health care system. Despite the significant fees paid to PBMs, members rarely experience true service or care coordination when filling prescriptions.

This raises an important question for HR leaders: Why continue to pay PBM fees when the member experience is so limited? Employers should demand more than transactional fulfillment; they should expect PBMs to deliver real value through improved member support, medication adherence and health outcomes. The era of accepting minimal service for maximum spend must end. Instead, organizations should prioritize PBMs that offer comprehensive member services, proactive outreach and measurable improvements in employee health and wellbeing.

The bottom line

The pharmacy system is changing. Regulations are tightening. Fiduciary expectations are rising. Members (your employees) are demanding clearer, more supportive benefits.

Switching PBMs will never feel like the perfect project at the perfect time. But in today’s environment, not evaluating your options is the greater risk.

With the right data, the right protections and the right partner, switching PBMs becomes not just feasible, but mission-critical for the health of your workforce and the health of your bottom line.

Susan Thomas is Chief Commercial Officer of LucyRx, an independent, next-generation pharmacy benefit manager redefining prescription care. Susan holds both a Bachelor of Science in Nursing and an MBA from the University of Virginia, giving her a unique blend of front-line experience and business insight.