TransparentRx

A pharmacy savings strategy can look good on paper and still fail in the claims data.

One of the easiest places to see it is non-formulary spend. The benchmark is called the Formulary Compliance Rate:

Non-formulary drug spend ÷ total net drug spend × 100

If paid non-formulary spend is running above 3%, that should trigger a deeper review of exception approvals, therapeutic classes, reason codes, and whether the P&T committee’s work is being bypassed.

This is not about denying care. Good formulary management still allows fair, clinically appropriate exceptions.

But “access” should not become a shield for poor oversight, rebate-driven decisions, or special handling that undermines the plan’s clinical and financial intent.

A fiduciary standard of care requires employers to know whether the formulary is actually being followed, whether exceptions are documented, and whether coverage decisions are being made in the plan’s best interest.

Why Your Healthcare Savings Strategy is Failing (Hint: Check Your Formulary) TransparentRx If members are routinely filling non-formulary drugs, this is a clear signal why your healthcare savings strategy is failing.

PBM decisions are easier when HR starts with the right question.

Not, “How big is the discount?”
Not, “How strong is the guarantee?”
Not, “How polished is the proposal?”

The better question is:

Can we prove this arrangement puts the employer’s interests first?

That one question changes the review process. It shifts attention from surface-level pricing to contract terms, revenue streams, claims data, audit rights, and conflicts of interest.

For self-funded employers, pharmacy benefits are not just a purchasing decision. They are a fiduciary decision. A clear decision tree helps HR separate what sounds good from what actually protects the plan.

HR Decision Tree: When Pharmacy Savings May Create Member Disruption TransparentRx Self-funded employers face a difficult tradeoff in pharmacy benefit management. A HR Decision Tree helps in the decision-making process.

Clinical rigor is one of the most important, and often overlooked, parts of pharmacy benefit management. For benefit directors, CFOs, brokers, and consultants, the goal is not just to lower pharmacy costs. The goal is to make sure every clinical and financial decision can be explained, documented, and defended.

That starts with a few basic questions:

→ Is the formulary built by a conflict-free P&T committee?
→ Are prior authorization and step therapy rules clinically appropriate?
→ Are exceptions reviewed consistently?
→ Is non-formulary spend being monitored?
→ Are high-cost drugs being evaluated based on net cost, safety, efficacy, and patient impact?

A clinically rigorous pharmacy benefit does not restrict care. It creates a fair process for determining which drugs should be covered, when exceptions are appropriate, and how the plan can protect both member access and plan assets.

This matters because pharmacy benefit decisions should not be driven by rebates, spread pricing, or hidden financial incentives. They should be driven by evidence, transparency, and a fiduciary standard of care.

When clinical rigor is built into the pharmacy benefit, plan sponsors are in a better position to reduce waste, improve oversight, and support better outcomes for members. That is the standard more self-funded employers should expect.

The Essential Elements of Clinical Rigor in Pharmacy Benefits TransparentRx The essential elements of clinical rigor in pharmacy benefits means a pharmacy claim can look clean and still be wrong.

Transparency in pharmacy benefits sounds good, but it means very little if it is not backed by contract authority.

In this post, I asked ChatGPT to score our PBA services agreement for employer control and transparency. The lesson was not the score. The lesson was what changed when fiduciary language, audit rights, rebate ownership, and plan sponsor authority were weakened.

Self-funded employers should ask one practical question:

Does your PBM agreement give you enforceable control, or are you relying on vendor promises?

Read the audit clause. Review rebate ownership. Confirm who controls the formulary, specialty arrangements, network strategy, data access, and plan economics.

That is where fiduciary oversight starts.

I Asked ChatGPT to Score Our PBA Services Agreement and Was Surprised by What I Learned TransparentRx I recently asked ChatGPT to score our pharmacy benefit administrator (PBA) services agreement based on control and transparency.

https://transparentrx.com/six-non-negotiables-every-pharmacy-benefits-purchaser-should-demand

Six Non-Negotiables Every Pharmacy Benefits Purchaser Should Demand TransparentRx The wrong internal assumptions can cost a plan millions. Here are six non-negotiables every pharmacy benefits purchaser should demand.

Buying pharmacy benefits is no longer just a procurement decision. It is a fiduciary responsibility.

In my latest blog, I cover five non-negotiables every PBM purchaser should demand:

• Knowledgeable staff
• Vendor contract access
• Claim data access
• Medical benefit drug claim oversight
• A true fiduciary PBM contract
• Adequate independent resources

For brokers, consultants, CFOs, and HR leaders, the goal is simple: make sure pharmacy benefit decisions are informed, verifiable, and aligned with the best interests of the plan and its members.

Six Non-Negotiables Every Pharmacy Benefits Purchaser Should Demand TransparentRx The wrong internal assumptions can cost a plan millions. Here are six non-negotiables every pharmacy benefits purchaser should demand.

Most PBMs talk about savings. Few can prove no money is being left on the table.

In this blog, I break down 7 practical ways to tell whether your PBM is truly controlling drug spend, managing utilization, and operating with the level of transparency plan sponsors deserve.

If your PBM cannot show its work, that should concern you.

7 Ways to Tell If Your PBM Is Leaving Money on the Table TransparentRx The old PBM sales pitch is no longer enough. Here are 7 ways to tell if your PBM is leaving money on the table.

Most employers have no idea they’re paying for the same drug through two different playbooks.

→ Under the medical benefit: opaque pricing, weak controls, and markups buried in the claim.
→ Under the pharmacy benefit: better visibility, but only if the PBM contract is built to protect the plan.

So no, moving a drug to the pharmacy benefit is not automatically a win. Sometimes it cuts waste. Sometimes it just moves the profiteer.

That is the part too many brokers and benefit leaders miss. The real job is not shifting claims. It is enforcing a fiduciary standard of care on every dollar spent.

What Happens After Deciding to Move Medical Benefit Drugs to the Pharmacy Benefit? TransparentRx Moving medical benefit drugs to the pharmacy benefit is part of a total cost of care strategy, the focus shifts from idea to ex*****on.

Ticketmaster’s fee backlash offers a useful lesson for employers, brokers, and Benefit Directors: people want clarity, not surprises.

The same standard should apply to pharmacy benefits. When pricing is transparent and contract terms are easy to understand, plan sponsors can make better decisions, manage costs more effectively, and build greater trust with employees.

This is a good opportunity for brokers and Benefit Directors to lead the conversation around transparent pricing, better oversight, and a fiduciary standard of care in pharmacy benefits.

Better visibility leads to better decisions.

What Ticketmaster’s Fee Backlash Can Teach Employers About PBMs TransparentRx Employers do not lose sleep over concert ticket fees. Ticketmaster’s fee backlash can teach employers about PBMs.

Caterpillar’s experience offers an encouraging example for commercial sector employers. When plan sponsors take a more active role in overseeing the pharmacy benefit, they create opportunities to improve transparency, reduce waste, and make better use of plan dollars. It is a strong reminder that meaningful savings often begin with thoughtful oversight and a fiduciary standard of care.

The PBM Playbook Caterpillar Rejected 20 Years Ago Is Still Costing Employers Millions TransparentRx The PBM playbook caterpillar rejected 20 years ago is costing employers who are still being told that pharmacy benefits are too complex.