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How to Find the Right PBM: Your Guide to Making an Informed Decision

Choosing a pharmacy benefit manager shouldn't feel like solving a puzzle with missing pieces. Yet for many employers and health plans, the PBM selection process remains frustratingly complex. The right questions separate legitimate partners from those with hidden agendas.

Every industry has its own buzzwords. In the PBM industry, that buzzword is "transparency." You hear it everywhere. But what does transparency actually mean?


Why "Transparency" Means Nothing


According to Webster's Dictionary, transparent means "free from pretense or deceit, easily detected or readily understood, characterized by visibility or accessibility of information, especially concerning business practices."

Many PBMs today market themselves as "transparent." But transparency, on its own, is not a business model, it’s a communication style. It might mean you can see your claims data, get a line-item invoice, or review your rebate

arrangements. But none of that guarantees that the PBM is acting in your best interest.


Let’s look at the term "fiduciary" instead.


A fiduciary is contractually bound to act in your best interest at all times. Not just when it’s convenient, not just when it’s profitable. It’s a higher standard of accountability that governs every decision and contract. Fiduciaries are required to disclose conflicts of interest and avoid self-dealing. They don’t just share information, they’re responsible for making decisions that protect you, not pad their bottom line.


In contrast, a transparent PBM can still profit from spread pricing, retain rebates, or structure contracts that favor their own profitability as long as they tell you about it. They’re being transparent. But they’re not necessarily being fair.

This isn’t a revolutionary concept. No one is breaking the code here. It’s just doing what’s right when nobody’s looking.


And yet companies that operate as fiduciaries are often labeled as “disruptors.” Not because they’ve invented something new, but because they’ve chosen to do the right thing in a system built to reward opacity and self-interest.


The One Question That Matters Most


Will your PBM contractually commit to be a fiduciary?


This is the most important question you can ask. A Fiduciary PBM is contractually bound to act in your best interests, not their own.

Five Questions Every Buyer Must Ask


1. Who Gets the Rebates?

Your PBM should commit to 100% rebate pass-through. It's not hard. It's not their money. They didn't do anything for it. Those rebates should go back to who they belong to: the employer and the employee.

2. Do You Have Conflicts of Interest?

You can't own a pharmacy and manage pharmacy benefits. That's a direct conflict of interest. Your PBM shouldn't compete with the healthcare providers you work with.

3. Can I See My Own Data?

Your data belongs to you. You should see complete, understandable information. Some employers get data that's impossible to understand, and that's done intentionally. If your current PBM provides confusing reports, ask yourself why.

4. How Do You Price Generic Drugs?

Never accept a PBM that prices generics as brand medications. This basic practice inflates your costs unnecessarily.

5. Who Controls the Formulary?

Ask this question: Are you using an open formulary? At DisclosedRx, the client dictates the formulary. We don't dictate it. It's a custom formulary based on the client's needs. If you allow the PBM to direct the formulary, it could cause you problems.


What Full Disclosure Really Means


Full Disclosure isn't just about being open. It's about contractual accountability. When a PBM operates with Full Disclosure, you get:


  • Complete visibility into every revenue source

  • All rebate arrangements disclosed

  • Actual drug costs with no markup

  • Complete access to your data

  • Control over formulary decisions


All the data we have, we give to our clients every month. Usually they tell us, "When we need it, we'll ask for it because it's too much data." But we provide it because it's the right thing to do.


Making Your Decision


Finding the right PBM comes down to asking the right questions and demanding contractual commitments, not just promises.


Don't settle for "transparency" when you can have Full Disclosure.

The right PBM will:


  • Contractually commit to acting in your best interest

  • Provide complete financial disclosure

  • Give you control over critical decisions

  • Use simple, straightforward revenue structures

  • Provide data that empowers rather than confuses


This isn't about finding the cheapest option. It's about finding a partner whose interests align completely with yours through contractual obligation.


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