PEO
Three-quarters of employers are dumping or planning to dump their pharmacy benefits advisors
By Insurance Wire Staff, . Insurance Wire.
Employer dissatisfaction with pharmacy benefit managers, the companies that negotiate drug prices and manage prescription coverage on behalf of employers, has reached a breaking point. Three in four US employers have either replaced their pharmacy benefits advisor in the past year or intend to do so in the next twelve months, according to a survey cited by Insurance Business Magazine. The underlying data comes from an RxBenefits report also covered by Employee Benefit News.
Both outlets agree on the headline number.
What is driving the exits
The rebate model is at the center of it. Pharmacy benefit managers have traditionally collected rebates from drug manufacturers and passed some portion back to employers as checks, a system that has long drawn criticism for obscuring the true cost of drugs. As those rebate checks shrink, employers are feeling the cash flow effect directly and asking harder questions about what they are actually paying.
GLP-1 medications, the class of drugs used for weight loss and diabetes management that includes brands like Ozempic and Wegovy, have become a flashpoint.
What employers are now asking
Employee Benefit News frames the RxBenefits report as a guide for HR leaders on what questions to put to their pharmacy benefit managers, covering drug costs, GLP-1 coverage and clinical review processes. The forward-looking element: major pharmacy benefit managers are rolling out new pricing models ahead of 2028, which means employers who do not engage now may find themselves locked into arrangements built around structures they did not fully evaluate.
What to watch
The churn rate itself is the signal worth tracking. A market where three in four buyers are actively reconsidering their vendor relationships is not a market in minor adjustment. It suggests that the traditional pharmacy benefit manager model, built on rebate opacity and long contract cycles, is losing employer confidence faster than the industry has acknowledged publicly.
For brokers and HR leaders managing renewals, the practical question is whether the current arrangement can answer basic questions about net drug costs and how GLP-1 spending is being managed. If it cannot, the survey data suggests most employers are already looking for alternatives.
Sources
1. Why employers are reconsidering their pharmacy benefit managers, benefitnews.com
2. Pharmacy benefits advisor churn hits three in four employers, survey finds, insurancebusinessmag.com
Insurance Wire provides news and information, not insurance, legal, or financial advice. Consult a qualified professional about your specific needs.