Is Your Pharmacy Benefit Earning Its Keep?

Drug spend is the fastest-moving line in your plan. Do you know how it’s managed?

Prescription drug costs are projected to rise 11.5% in 2027, according to the Segal Health Plan Cost Trend Survey. That’s faster than overall health costs, which are already heading for their biggest jump in more than two decades.

Employers are responding by looking harder at who manages that spend. Gallagher’s 2026 benchmarks found organizations are scrutinizing vendor relationships more closely, with pharmacy benefit managers at the top of the list. And 58% of employers are cutting underperforming vendors ahead of 2027.

Why start with the PBM

Your pharmacy benefit manager determines which drugs are covered, what you pay for them, and how rebates and discounts are handled. For many employers, it’s also the least understood relationship in the entire benefits program. The contract gets signed, the renewal rolls over, and the details rarely get a second look.

In a year when nearly half of employers cite high-cost therapies like GLP-1s as a top cost challenge, that’s a lot of spend running on autopilot.

What accountability looks like

A strong pharmacy partnership should hold up to a few straightforward questions:

How does the pricing work? You should be able to see how drug costs, fees, and any spread are calculated.
Where do rebates go? Learn how much is returned to the plan and how it’s reported.
What’s guaranteed? Performance guarantees should be specific, measurable, and reviewed annually.
Can you audit it? Clear audit rights indicate a partner confident in its numbers.
How are specialty drugs managed? Ask what clinical programs are in place and what results they’ve produced.

None of this assumes anything is wrong. It’s the same diligence you’d apply to any vendor handling a growing share of your budget.