- In this episode, Andréa Caballero of Catalyst for Payment Reform speaks with Joe Summers, Vice President of New Business Development at Health Delegates, about pharmacy benefit manager (PBM) reform, the evolving policy landscape, and how employers can navigate transparency, rebates, and rising drug costs.
Key Insights
PBM Reform: Progress with Caveats
Momentum around PBM reform is real and encouraging, with transparency and rebate pass-through requirements gaining attention in policy circles. However, the true test will be in the implementation of these requirements. Employers should feel optimistic—but remain cautious as specifics take shape.
Transparency Isn’t Always What It Seems
While new rules aim to increase visibility into drug spending, definitions matter. For example, “100% rebate pass-through” may be undermined if rebates are reclassified as fees. Similarly, “standard” vs. “enhanced” reporting raises questions about how much insight employers will actually receive—and at what cost.
As regulations target rebate practices, some PBMs may reduce rebate amounts while increasing administrative or service fees. This shift can obscure true costs, making it difficult for employers to determine whether they are genuinely saving money without detailed and ongoing analysis.
Breaking Apart the PBM Model
Health Delegates promotes a “carve-out” approach—separating formulary management, clinical oversight, and rebate management from claims processing and pharmacy networks. This structure allows employers to see the full breakdown of costs, rather than relying on bundled pricing from a single vendor. Health Delegates integrates seamlessly with existing PBMs and vendors.
Flexibility Over Pre-Set Formularies
Unlike traditional PBMs, Health Delegates does not rely on rigid, pre-set formularies. Instead, it enables customized drug coverage decisions based on clinical value and total cost impact—not just rebate potential—giving employers greater control over outcomes.
Actionable Data for Better Decisions
Detailed reporting and scenario analysis allow employers to evaluate trade-offs—such as lower rebates versus lower overall costs. This empowers more informed, strategic decision-making rather than reliance on opaque pricing structures.
What Employers Should Watch Next
- As reforms move from legislation to implementation, employers should closely monitor how terms like “rebates,” “fees,” and “transparency” are defined.
- Contract language, reporting access, and cost allocation will ultimately determine whether reforms deliver real financial value.
- Vertical integration in the PBM space has obscured transparency and insight into efficiency and pricing, employers should question the status quo and consider moving toward more flexible models that promote choice and clinical value.