PBM Models
Transparent vs Traditional PBM Models

Understand the two dominant PBM models and how each impacts your plan's bottom line.

TRANSPARENT

Pass-Through Model

  • ✓PBM passes exact pharmacy cost to plan
  • ✓100% of manufacturer rebates returned
  • ✓Full audit rights with unlimited access
  • ✓No spread pricing on any claims
  • ✓Revenue from flat admin fee only
Examples: Capital Rx, SmithRx, Navitus, AffirmedRx
TRADITIONAL

Spread Pricing Model

  • ✗PBM charges plan more than pharmacy cost
  • ✗Retains portion of manufacturer rebates
  • ✗Limited audit rights with restrictions
  • ✗Spread pricing on brand and generic claims
  • ✗Revenue from fees + spread + rebate retention
Examples: Express Scripts, CVS Caremark, OptumRx

Side-by-Side: Same Drug, Different Models

Metric Transparent PBM Traditional PBM Difference
Ozempic (semaglutide) - 30-day supply
Plan pays pharmacy$804$804Same
PBM charges plan$804$1,029+$225
Rebates returned to plan100%~60%-40%
Admin fee per claim$3.50$0Fee vs. hidden margin
Audit accessFullLimited—
Net plan cost per Rx$807.50$1,029-$221.50
Atorvastatin (generic statin) - 30-day supply
NADAC (pharmacy pays)$0.03$0.03Same
PBM charges plan$0.90$8.50+$7.60
PBM spread captured$0$7.60844% markup
Net plan cost per Rx$4.40$8.50-$4.10

Annual Plan Impact: 1,000 Employees

For a mid-size employer spending $5M annually on pharmacy benefits:

Spread Capture
$750K
15% of brand spend
Rebate Retention
$400K
40% of rebates kept by PBM
Potential Savings
$1.15M
By switching to transparent

Sources: Drug Channels Institute 2025, FTC Interim Staff Reports, CMS NADAC. Drug examples use representative pricing; actual costs vary by plan.