The shift toward transparent PBMs is accelerating, and it’s changing the landscape for every stakeholder; manufacturers, patients, payers, and PBMs themselves. Historically, the world of PBMs have existed behind closed doors, but recently the curtain is being pulled back. This change in visibility can have an impact in all areas of market access. The professionals at VS Health Group leverage their expertise from the four major perspectives in our field.
Manufacturer perspective:
Generally, biopharma is beyond ready to see the negotiating power of the PBMs diminish with a shift toward increased transparency. Most view PBM opacity as a significant driver of distorted market determinants of list price. As PBM models shift to reward outcomes rather than rebates, manufacturers believe that there is opportunity to engage in alternative payment methods that better reflect therapeutic value of their products.
Patient Perspective:
The emergence of Transparent PBMs arrives with much hope for decreased system costs and more efficient administration and delivery of pharmacy benefits. But what will it really mean for patients in terms of cost and access? As for cost, there is the possibility that some of the savings plans see will ultimately get passed along to patients when they fill their prescriptions. As for access, it is not clear how this shift will translate to payer management behavior that makes it difficult for healthcare providers to successfully prescribe and patients to successfully fill prescriptions without delays and excessive administrative burden.
Payer perspective:
Particularly since the market consolidation of PBMs into three mega entities, payers have long been seeking more transparency in pharmacy benefit management. The top PBMs, which are vertically aligned with payers, consolidate their pharmacy benefit offering with a variety of other services. Having all of these services bundled together contributes to the lack of transparency in the model, since it created the ability to shift value using those levers with limited visibility to their customers. In contrast, the transparent PBM model is focused on pricing and discounts. Instead of consolidating services, they complement their PBM offering with other entities that provide those services. This allows employer group customers line of sight into pricing for each of these components.
PBM Perspective:
Logarithmic growth in U.S. drug spend placed significant demands on the pharmacy benefit manager (PBM) business model since the first PBMs began electronically processing pharmacy claims more than 35 years ago. Today, however, the market has largely matured and consolidated into three dominant, vertically integrated entities. As a result, PBM clients are demanding programs and services that are fully aligned with their best interests—and with the health and financial well-being of their employees and members. Greater transparency in pharmacy benefit management represents an important step in that direction. Emerging transparent PBMs are building their business models from the ground up with alignment, clarity, and fiduciary responsibility at the core. By offering pass-through pricing, clear administrative fee structures, auditable rebate arrangements, and elimination of spread pricing, these organizations aim to realign incentives, reduce conflicts of interest, and restore trust in the pharmacy benefits ecosystem.
As the conversation around transparent PBMs develops, VS Health group continues to leverage their partners’ valuable experience to analyze how this will impact the market access landscape.