What Employers Often Miss When Evaluating Pharmacy Benefit Manager Performance

The healthcare system in America is convoluted and often expensive, which causes no small amount of stress for patients, providers, and pharmacies alike. For employers that provide health insurance and drug coverage for their workers especially, finding a solution that is both cost effective and ideally straightforward is often difficult. These healthcare purchasers turn to Pharmacy Benefit Managers (PBMs) and find great success, but there are a number of misconceptions and pitfalls employers can fall into when evaluating PBM performance.

The key central question for most employers is whether the contract terms and incentives of a PBM model are right for their health plan—a question complicated by the increased scrutiny around the standard practices of most pharmacy benefit managers. While PBMs save patients and the healthcare system around $1000 per person annually, modern transparency requirements and shifting needs require that employers make clear-eyed decisions. That requires understanding how rebates actually work, the details of utilization management, and the data around real clinical outcomes.

The Role Of PBMs

Employers turn to pharmacy benefit managers primarily to balance cost, access, and member experience, in large part because of how PBMs function. These third-party companies manage prescription drug plan benefits for insurers and employers—in short, they’re middle men in the prescription drug supply chain that help control drug spending and manage benefits. PBMs negotiate rebates and discounts with drug manufacturers, manage drug formularies, assemble retail pharmacy networks, process and adjudicate pharmacy claims, design drug benefits, and conduct utilization management. All of these tasks heavily influence medication cost, access, and utilization.

Functionally, PBMs often maintain extensive networks of pharmacies to ensure members have seamless access to prescriptions, from brick-and-mortar locations, to mail order, to specialty pharmacies. Members pay a copay (and coinsurance, if applicable) at the pharmacy counter, and the PBM reimburses the pharmacy for the remainder of the drug’s cost. After that, PBMs are paid by health plans for the prescription—a practice that has drawn some criticism when the manager charged plans for more than they reimburse to pharmacies, which is a strategy called spread pricing.

The benefit of PBMs to employers is primarily reduced costs and higher levels of safety. PBMs and employers work together to build a pharmacy plan in alignment with the employers’ needs, which includes everything from deductibles and copays to employee education and utilization reviews. The formularies created by PBMs—the comprehensive and curated lists of medicines covered by an insurance plan—streamline prescription management to provide a range of options that are cost effective, functional, and safe. Employers and health plans also play a key role in determining what drugs are or are not covered.

Key Evaluative Metrics And Misconceptions

Unfortunately, many—but not all—pharmacy benefit managers famously struggle with transparency due to black box drug pricing, unclear compensation structures, and lacking data access, which makes proper evaluation through audits important for employers. Misconceptions abound; rebates are often not passed in whole directly to clients, for example, and are instead reduced after PBMs retain some portion as a source of revenue.. Even the idea that PBMs save employers and patients money at a baseline is a misconception; as always, it all depends on the plan and model at hand. Fortunately, employers looking to evaluate the performance of their chosen PBM partner have a number of metrics they can choose from, but not all of them are created equal.

Several key metrics worth using in PBM evaluations are based on the rate of drug dispensation and efficacy. The Specialty Dispensing Rate, or the percentage of all dispensed prescriptions that are specialty drugs, can help employers track how much their PBM is dispensing high-cost drugs that require special handling. Generic Effective Rate is the average percent discount for generic drugs—which make up 90% of dispensed drugs—and thus is an incredibly important metric for tracking PBM performance. Paired with the Generic Dispense Rate, or the number of generic fills divided by the total number of prescriptions, these two metrics are key for evaluating the efficacy of any PBM. According to TransparentRx, for every 1% increase in GDR, a plan can expect a 5% reduction in gross drug spend.

Other metrics offer other avenues for evaluation. Proportion Days Covered represents the percentage of days within a set period in which a patient can access their prescription, and it helps PBMs and employers track medication adherence. Total Cost of Care and Per Member Per Month metrics represent the costs as a whole, either in terms of prescription drug spending (both direct and indirect costs) or on a fundamental level. As a group, these data points give employers a solid, data-driven foundation for evaluating their formulary managers of choice.

High Satisfaction and Novel Alternatives

Despite the complexity and the concerns with pharmacy benefit managers as an industry, employers often report high levels of satisfaction. A large Healthsperien survey published in 2026 in collaboration with the Pharmaceutical Care Management Association (PCMA) revealed that American employers who provide drug coverage for their workers via a PBM report high satisfaction with the PBM’s performance. The survey included 1035 small and large employers, and focused on employer satisfaction with PBM services, contracting structures, and financial performance; employer experiences with rebates and drug benefit cost management; and employer priorities when selecting and contracting with PBMs; among others. The results are striking.

• 95% of employers reported confidence in their organization’s ability to make decisions regarding prescription drug benefits.
• 98% of employers said access to a wide network of pharmacies is important when selecting a PBM.
• 95% of employers reported satisfaction with the data, reporting, and analytics tools provided by their PBM.
• 94% of employers reported satisfaction with the accessibility of the pharmacy networks provided by their PBM.
• 89% of employers that received rebates reported using them to lower employees’ out-of-pocket costs.

It’s also worth noting that not all pharmacy benefit managers are prone to the complexity and transparency concerns described prior. For example, AffirmedRx is a PBM that’s structured as a Public Benefit Corporation, and thus is able to enshrine a patient-centric and transparent approach in the very structure of their company. As a result, the rebates that critics of the PBM industry have identified as unfair profit centers, the savings that traditional PBMs might retain in whole or in part, can be passed directly through to the health plans AffirmedRx manages, complete with full claim-level data transparency. It goes without saying that, as a result, spread pricing simply and intentionally doesn’t happen.

“AffirmedRx’s patient-centric model is less an innovation than it is a re-focusing of what truly matters—the health of the plan members and their experience in achieving and sustaining healthy lives,” says an AffirmedRx representative