Good Employers Keep Choosing the Wrong PBM Because They Start With the Wrong Metrics

Employers still rely too heavily on discounts and rebates to shortlist Pharmacy Benefit Managers (PBMs), according to US-Rx Care, even though those metrics have not controlled pharmacy trend over decades of time and may prevent a full fiduciary comparison before the real evaluation begins.

TAMARAC, Fla., July 20, 2026 /PRNewswire/ -- Employers have spent decades chasing bigger discounts and richer rebates in PBM bids. Yet pharmacy costs keep rising. According to US-Rx Care, many employers are still starting with the wrong question. The current PBM buying process often rewards spreadsheet optics over actual cost control, pushing employers to compare rebate guarantees and discount promises before they ever ask whether a PBM can lower net cost, reduce pharmacy spend, or operate without conflicts of interest.

"Employers are missing the bigger picture," said Renzo Luzzatti, CEO of US-Rx Care. "If you focus on discounts and rebates, the wrong PBM can end up looking like the winner on paper." That matters more now because employer oversight of PBM relationships is becoming harder to approach simply as a routine administrative exercise.

The U.S. Department of Labor estimates that PBMs provide prescription drug benefits to roughly 90 million Americans through employer-sponsored self-insured health plans. Many employers believe they have ran a competitive PBM search in the past, when the process may have been tilted from the start.

The Problem with the Wrong Evaluation Criteria
According to Luzzatti, employers and consultants have been conditioned to use discounts and rebates as the main shortlisting criteria in PBM request-for-proposal (RFP) processes. As a result, PBMs have learned to optimize for those two metrics. The problem is that neither have proven to be a true cost-savings strategy on its own. Although attractive in a bid, it doesn't control which drugs are being used or whether those therapies are clinically appropriate.

"Discounts matter, but once you strip away the industry's pricing optics, most PBMs are offering numbers in the same range," Luzzatti said. "An 80% discount means little if the plan is buying the wrong drug or the price is inflated." Traditional PBM formularies and prior authorization rules can deepen that problem driving utilization toward options that generate more revenue for the PBM instead of the lowest net cost for the plan and its members.

A playbook published by The National Alliance of Healthcare Purchaser Coalitions also warns that PBM selection processes can be distorted by referral fees, compensation arrangements, and unclear contract terms, while Purchaser Business Group on Health has published purchasing standards aimed at helping plan sponsors move beyond opaque economics and misaligned incentives.

Why Good Employers Still Buy the Wrong Vendor
US-Rx Care says that employers often do not know the right questions when evaluating their current PBM or considering moving to another PBM. In the company's view, the first question in any RFP should be whether every bidder will accept plan fiduciary responsibility as defined under the Employee Retirement Income Security Act (ERISA).

Luzzatti reminds that employers can be misled by PBM language that sounds protective but falls short in practice. He pointed to "claims fiduciary" and "appeals fiduciary" clauses as examples of terms that may sound substantial but do not create the same obligation as true plan fiduciary status. "Claims and appeals language may mean the PBM adjudicates claims correctly or runs an appeals process. It does not mean the PBM is legally bound to act in the best interests of the plan and its participants, conflict of interest free," said Luzzatti.

Under ERISA, a true plan fiduciary standard means no conflicts of interest, acting solely in the best interests of the plan and members, and full visibility into all financial and utilization data.

The Questions Employers Should Ask Now
US-Rx Care says the next generation of PBM evaluations should test for alignment, not just pricing optics. Among the most important questions employers should ask:

• Will the PBM accept plan fiduciary responsibility as defined under ERISA?
• Does the PBM make more money when the plan spends more money?
• Does the PBM own retail, mail, or specialty pharmacies that the plan is incentivized or required to use?
• Are clinical decisions and formulary management separated from dispensing and revenue incentives?

Employers should also scrutinize common contract language that explicitly states the PBM is not a fiduciary and is not obligated to act in a fiduciary manner. These clauses are a major red flag because they put the employer on notice that the PBM is preserving the right to operate with conflicts of interest. "If that language is in the contract, employers should not be surprised when costs go up and access to data is restricted," he said.

The Market is Moving Toward Lowest Net Cost
Employers shouldn't abandon pricing discipline. They need to stop assuming quoted discounts will translate into lower total costs. A stronger evaluation focuses on what drives pharmacy spend: clinical oversight, lowest-cost sourcing, transparent contract terms, open data access, and a business model that does not profit from the medications themselves.

"The consultants and employers that can get beyond discounts and rebates and evaluate all the other levers that actually lower cost are the ones who get this right," Luzzatti said. "That is where the market is headed." For employers, US-Rx Care says the question is no longer simply whether the PBM market is changing. It is whether their own buying process is changing with it.

About US-Rx Care
US-Rx Care is revolutionizing America's pharmacy benefits system by replacing opaque, profit-driven PBMs with a transparent, fiduciary model that puts employers and members first. Founded in 2007, the company combines clinical rigor, ethical contracting, and data-driven oversight to cut drug costs by up to 50% or more while also improving health outcomes. Operating under a legally binding ERISA fiduciary standard, US-Rx Care eliminates conflicts of interest, passes through 100% of manufacturer rebates and pharmacy discounts, and delivers measurable savings without compromising care. Privately owned and free from outside financial influence, US-Rx Care is setting the new standard for pharmacy benefit management—restoring trust, accountability, and real control for employers, benefits consultants, and health plans nationwide. 

Website: www.us-rxcare.com

References:

• National Alliance of Healthcare Purchaser Coalitions. (2023). A playbook for employers: Addressing pharmacy benefit management misalignment. ncbch.net/files/PBM%20Playbook--NationalAlliance-NCBCH_2023_A.pdf
• Purchaser Business Group on Health. (2023, October). Changing the game: Groundbreaking PBM purchasing standards for large employers. pbgh.org/wp-content/uploads/2023/10/Changing-the-Game_PBM-Purchasing-Standards.pdf
• U.S. Department of Labor. (2026, January 29). U.S. Department of Labor proposes historic pharmacy benefit manager fee disclosure rule. dol.gov/newsroom/releases/ebsa/ebsa20260129
• U.S. Department of Labor. (n.d.). Fact sheet: Proposed pharmacy benefit manager fee disclosure rule. dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/proposed-pharmacy-benefit-manager-fee-disclosure-rule

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SOURCE US-Rx