SmithRx Milestones and Momentum 2024: See how we're making a real difference in pharmacy benefits – for employers, members, and their families.

See the full report

SmithRx Milestones and Momentum 2024: See how we're making a real difference in pharmacy benefits – for employers, members, and their families.

See the full report

SmithRx Milestones and Momentum 2024: See how we're making a real difference in pharmacy benefits – for employers, members, and their families.

See the full report

What is a PBM?

Understanding Pharmacy Benefit Managers: From Legacy Models to Modern Solutions

Learn About SmithRx

Watch Video

What is a PBM?

Understanding Pharmacy Benefit Managers: From Legacy Models to Modern Solutions

Learn About SmithRx

Watch Video

What is a PBM?

Understanding Pharmacy Benefit Managers: From Legacy Models to Modern Solutions

Learn About SmithRx

Watch Video

Overview

Pharmacy Benefit Managers: The Bridge Between Costs and Care

Pharmacy Benefit Managers (PBMs) help employers, health plans, and members manage the cost and access to prescription medications.

Drug Manufacturers

Create and supply prescription medications to treat health conditions.

Plan Sponsors

Insurance providers that manage healthcare coverage, including prescription costs and access.

Pharmacies

Dispense prescription medications to patients through retail, mail-order, or specialty services.

PROMISE VS REALITY

What PBMs Were Meant to Do—And What’s Changed

PBMs were created to lower drug costs and streamline prescription management. However, some legacy PBMs have shifted focus to profits over patients, introducing hidden fees, opaque pricing, and limited drug choices, leaving employers and members with rising costs and reduced access.

PROMISE VS REALITY

What PBMs Were Meant to Do—And What’s Changed

PROMISE VS REALITY

What PBMs Were Meant to Do—And What’s Changed

How Legacy PBMs Exploit the System

Spread Pricing

Legacy PBMs charge health plans more for a drug than they reimburse pharmacies, keeping the difference as revenue. This "spread" varies based on the drug, pharmacy, and contract terms.

Rebate Take

Legacy PBMs retain a portion of manufacturer rebates instead of passing them to plan sponsors. This practice incentivizes PBMs to favor drugs with higher rebates, undermining cost savings.

Vertical Integration

Legacy PBMs expand control by acquiring insurers, pharmacies, or manufacturers. This leads to higher drug prices, limited consumer choices, and reduced pricing transparency.

Graphic adapted from Drug Channels' Mapping the Vertical Integration of Insurers, PBMs, Specialty Pharmacies, and Providers

How Legacy PBMs Exploit the System

Spread Pricing

Legacy PBMs charge health plans more for a drug than they reimburse pharmacies, keeping the difference as revenue. This "spread" varies based on the drug, pharmacy, and contract terms.

Rebate Take

Legacy PBMs retain a portion of manufacturer rebates instead of passing them to plan sponsors. This practice incentivizes PBMs to favor drugs with higher rebates, undermining cost savings.

Vertical Integration

Legacy PBMs expand control by acquiring insurers, pharmacies, or manufacturers. This leads to higher drug prices, limited consumer choices, and reduced pricing transparency.

Graphic adapted from Drug Channels' Mapping the Vertical Integration of Insurers, PBMs, Specialty Pharmacies, and Providers

How Legacy PBMs Exploit the System

Spread Pricing

Legacy PBMs charge health plans more for a drug than they reimburse pharmacies, keeping the difference as revenue. This "spread" varies based on the drug, pharmacy, and contract terms.

Rebate Take

Legacy PBMs retain a portion of manufacturer rebates instead of passing them to plan sponsors. This practice incentivizes PBMs to favor drugs with higher rebates, undermining cost savings.

Vertical Integration

Legacy PBMs expand control by acquiring insurers, pharmacies, or manufacturers. This leads to higher drug prices, limited consumer choices, and reduced pricing transparency.

Graphic adapted from Drug Channels' Mapping the Vertical Integration of Insurers, PBMs, Specialty Pharmacies, and Providers

Why Legacy PBMs Fall Short

Hidden Costs

Employers rarely see where their money goes.

Complex Pricing

Layers of fees make costs unpredictable.

Limited Access

Patients face restricted drug options and pharmacy networks.

The Impact

How This Affects Employers and Members

69%

Of patients report being required to use a PBM-preferred pharmacy. PBM steering practices restrict pharmacy choices, limiting access to preferred providers

FTC Report, 2023

15-25%

Of employers’ annual prescription drug spending is driven up by unmanaged PBM plans due to hidden fees and inefficiencies. These opaque charges add significant costs and complicate budgeting.

USI, 2022

1 in 4

Patients state their PBM mandates the use of higher-cost medications, even when cheaper, equally effective alternatives are available, increasing out-of-pocket expenses.

KFF Health Tracking Poll, 2023

The Modern PBM

Built on Values You Can Trust

At SmithRx, our approach to pharmacy benefits is guided by three core principles. With these values being at the heart of everything we do, we’re reimagining pharmacy benefits to ensure everyone benefits from a system built on trust and clarity.

Transparent

Healthcare pricing should be clear. At SmithRx, we believe in full visibility, showing you every cost, every time. No surprises, no confusion—just straightforward, honest pricing.

Transparent

Healthcare pricing should be clear. At SmithRx, we believe in full visibility, showing you every cost, every time. No surprises, no confusion—just straightforward, honest pricing.

Transparent

Healthcare pricing should be clear. At SmithRx, we believe in full visibility, showing you every cost, every time. No surprises, no confusion—just straightforward, honest pricing.

Pass-through

All savings go directly to you. With no hidden fees or exceptions, our model ensures every discount is passed on transparently, so you always know where your dollars go.

Pass-through

All savings go directly to you. With no hidden fees or exceptions, our model ensures every discount is passed on transparently, so you always know where your dollars go.

Pass-through

All savings go directly to you. With no hidden fees or exceptions, our model ensures every discount is passed on transparently, so you always know where your dollars go.

Client-aligned

We focus on delivering the lowest net prices. By offering options like generics and biosimilars, we give you the flexibility to choose cost-effective solutions without compromising care.

Client-aligned

We focus on delivering the lowest net prices. By offering options like generics and biosimilars, we give you the flexibility to choose cost-effective solutions without compromising care.

Client-aligned

We focus on delivering the lowest net prices. By offering options like generics and biosimilars, we give you the flexibility to choose cost-effective solutions without compromising care.

Elevate Your Expertise with Radical Transparency

Learn About SmithRx

SmithRx is on a mission to reduce the complexity and costs of pharmacy benefits with radical transparency and cutting-edge technology.

Sales and Business

844-454-0123

sales@smithrx.com

Pharmacy and Provider Line

844-512-3030

info@smithrx.com

Member Help

844-454-5201

help@smithrx.com

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