Should I Replace My Pharmacy Benefit Manager (PBM)?

January 2026
Managing pharmacy benefits is one of the most complex and expensive parts of running a healthcare plan. Pharmacy Benefit Managers (PBMs) are supposed to control drug costs, manage pharmacy claims, and negotiate rebates with manufacturers. But as costs continue to climb and transparency remains elusive, many plan sponsors are asking a key question: Should we replace our PBM?

Here’s how to think about that decision.

Why Employers Start Questioning Their PBM

Many employers are frustrated by the lack of transparency in their PBM contracts. They are often left in the dark about how much the PBM actually pays for drugs, what portion of rebates is kept, and how spread pricing works. If you cannot follow the money, it’s hard to know if your plan is truly being managed in your best interest.

Rising pharmacy spend is another major trigger. If your drug costs are increasing without clear explanation, it could be tied to a restrictive formulary, poor utilization controls, or low rebate pass-through.

There’s also the clinical side to consider. PBMs that focus more on financial deals than patient outcomes may neglect clinical oversight. This can lead to unnecessary drug use, low adherence, and poor overall value.

Lastly, operational issues can build up. Complaints about slow prior authorizations, mail-order delays, or poor communication are often early signs that something is off.

How to Know It’s Time to Reevaluate

You don’t have to guess. There are common signs that point to deeper problems.

You may need to reexamine your PBM if you do not have full rebate transparency or audit rights, if your contract has not been tested in the market in over three years, or if your PBM bundles services like claims processing, mail order, and specialty pharmacy under a single entity that you cannot separate. When control is concentrated in this way, it becomes harder to assess value, quality, or accountability.

What You Can Do Instead of Switching Immediately

You don’t have to make a full change right away. In fact, there are good reasons to start with a market check or RFP. This lets you compare your current pricing and contract terms with other options. Sometimes the pressure of a competitive bid is enough to push your existing PBM to improve.

You can also explore alternative PBMs that operate under pass-through or cost-plus models. These groups pass all rebates back to the plan sponsor, charge fixed admin fees, and make drug costs easier to understand.

Another step is to bring in an independent pharmacy consultant. A neutral advisor can help you analyze claims, benchmark performance, design a custom RFP, and guide contract negotiations. These are complex contracts with long-term financial impacts, so outside expertise can be a smart investment.

What to Watch Out for When Switching PBMs

While switching PBMs can lead to savings and better performance, it is not risk-free. Plan members may experience disruption due to changes in formularies or network pharmacies. Your HR and benefits teams will face a heavier workload during implementation. And there may be short-term transition costs, especially if contracts overlap or require early termination.

That’s why it’s critical to treat this as a strategic decision, not a rushed reaction to frustration.

Is It Time to Replace Your PBM?

Here’s the bottom line. You should seriously consider replacing your PBM if you do not understand how your money is being spent, if your vendor relationship is no longer working, or if your contract is outdated and no longer fits your goals.

But replacement is not the only answer. Some PBMs will adapt if you push for better pricing, clinical customization, and clearer contract terms. In many cases, renegotiating with leverage can be just as effective as switching.

The goal is not just to replace a PBM. The goal is to take control of your pharmacy benefit strategy.

If you’re ready to take that first step, reach out to us here (Contact Crystal Clear Rx).