Many employers may not realize that monitoring their pharmacy benefit manager’s (PBM) performance to contract terms on a regular basis can potentially save money on their Rx benefit. Even after your contract is finalized, it’s vital that you continue to monitor your PBM’s performance to catch unexpected fluctuations in what you’re paying from month to month.

Why?  Pharmacy used to be less than 5 % of the total medical spend, but not anymore.  We have clients whose pharmacy spend is approaching 30 % of the total medical spend. Also, “‘Cause things happen.” The pharmacy benefit is constantly changing, there are new drugs, new prices and new uses for existing drugs. New ways to classify and adjudicate claims, new pharmacy network agreements…the list goes on. As a payer, if you don’t monitor what those changes are or how they are impacting you, then you could be spending more money than you should. When monitoring PBM activity, we have saved clients’ money by discovering and correcting changes that occurred without their knowledge.

What Should You Look For?

Some important areas to monitor include:

  1. Whether or not your PBM is adhering to contract guarantees
  2. If Prior Authorizations and Step Therapy programs are working properly
  3. If your claims are in line with industry benchmarks
  4. How your MAC list is performing
  5. If your Specialty claims are paying correctly and based on an up-to-date price list


While PBMs often produce periodic reports, those reports usually don’t tell you what is actually happening or what is really wrong and what is actionable. Many times, PBM reports don’t demonstrate whether they are performing to contract terms. Having an independent pharmacy benefit consulting group with sophisticated technology review these items is essential to achieving the best of your pharmacy benefit.

Other things to look for include whether or not your PBM is performing well clinically- i.e. are they recommending the right drugs on your formulary? In a recent blog, we discussed the drug Duexis and why some drugs such as this are not a benefit to you as the payer or your member.

How Often Should You Monitor?

We, at Crystal Clear Rx (CCRx), recommend monitoring on a regular basis, ideally monthly, but at the very least quarterly. If you wait until the end of the year report, you’ll likely miss major items that could have resulted in significant savings for your organization along the way had it been caught early on. We highly suggest that employers – or multi-employers – identify these items as they happen and make course corrections as needed.

What Can You Do?

As mentioned earlier, having an independent pharmacy benefits consulting group manage the monitoring portion will help greatly. Having a team of experts monitoring your PBM’s activities can give you a very good return on your investment.

Finally, make sure any consultant group does more than simply track your AWP discounts.  AWP discount, although one way of tracking your PBM’s financial performance, is not necessarily the best way to do so.

If you have further questions about monitoring your PBM contract, or anything else regarding your benefit, please reach out to us!