The Rise of the Modular PBM Model

John Zevzavadjian
President of Enterprise Solutions

As the healthcare industry navigates rising costs and evolving regulatory demands, the traditional pharmacy benefit management (PBM) model is receiving increased attention. In the current environment, employers, health systems, third party administrators (TPAs), and health plans are under growing pressure to manage pharmacy spend while maintaining transparency and a positive member experience.

This balance can be difficult to achieve in today’s landscape, where the three dominant PBMs, controlling nearly 80% of the market, offer bundled arrangements that package services like claims adjudication, retail networks, and specialty pharmacy into a single contract.
While convenient, these models often limit cost visibility, complicate third-party integration, and reduce the flexibility organizations need to align benefits with their goals. The result: missed opportunities, performance gaps, and ultimately, a diminished consumer experience.

In response, a growing number of payers are shifting toward modular PBM models. These unbundled approaches allow organizations to select and customize services based on their unique financial targets and member needs. But with that flexibility comes the need for clear strategy, seamless integration, experience, and modern technology.That’s where RxSense comes in.

The problem with the “one-size-fits-all” model

Legacy PBM models offer a bundled approach, giving clients the convenience of managing a single contract and vendor. While this may seem efficient, these models obscure how money is being used. Without full transparency, employers, health systems, TPAs, and health plans struggle to identify operational inefficiencies that drive up costs and hinder performance. This lack of clarity not only impacts financial outcomes but also compromises the member experience.

“Transparency is important because we all want to understand where every dollar is being spent through the supply chain,” said John Zevzavadjian, President of Enterprise Solutions at RxSense. “Ultimately, it’s the consumer and plan who benefits from the lowest net cost, but if there are any inefficiencies, like spread pricing or markups, it’s the consumer and the payer who end up footing the bill.”

Additionally, many legacy models still rely on outdated mainframe systems that lack the connectivity needed to support today’s pharmacy ecosystem. What once worked as a “one-size-fits-all” solution now can fall short in a market that demands flexibility, real-time insight, and seamless integration. Today’s pharmacy benefit challenges require more than the status quo—and the right technology to unbundle services is the key.

Modular PBM: Built around control and customization

In contrast to the “one-size-fits-all” model, a modular PBM approach empowers payers to create benefit structures and financial structures that align with their unique goals whether that’s lowering specialty drug costs, tailoring the member experience, or simplifying vendor relationships.

“You have the control to manage plan designs to meet your client commitments, financial goals, and health outcomes,” says Zevzavadjian. “It’s about designing the plan around your strategy and not being forced into someone else’s model.”

At its core, the modular model unbundles the tightly integrated services of traditional PBMs. Instead of being locked into a predefined package, organizations can selectively contract for services like claims adjudication, data analytics, network access, or formulary management based on what works best for them.

“The modular approach disaggregates all the value pools that can cause visibility friction with clients,” explains Zevzavadjian. “If you only need adjudication and analytics, you pay a transparent fee for those services – no spread pricing, no hidden markups. Everything is 100% passed through to our clients.”

This fee-based, pass-through model brings complete transparency into contracts and cost of goods, eliminating uncertainty around how dollars flow. Whether organizations choose to manage some services in-house or outsource entirely, the modular approach gives them the power to configure, scale, and modify their pharmacy benefit on their terms.

RxSense is built for the modern modular model

Implementing a modular PBM strategy requires more than simply unbundling services, it demands a platform that can seamlessly connect every component of the pharmacy benefit experience, along with an experienced team that partners with you every step of the way. That’s where RxSense excels.

RxSense was built to support modular PBM models, offering a fully integrated, end-to-end platform that combines claims adjudication, plan design, eligibility, and near real-time analytics,all on a single, modern code base. This unified architecture means no bolt-on systems, no delays, and no fragmented data.

“The beauty of modern technology is building from the ground up with flexibility in mind,” says Zevzavadjian. “From onboarding to adjudication to analytics, everything at RxSense runs through the same infrastructure so clients have near real-time visibility into performance, cost, and outcomes.”

Unlike legacy systems that rely on outdated mainframes and batch data, RxSense uses API-based connections and cloud-native infrastructure to ensure fast, secure, and accurate data transfer across vendors and services. This modern foundation supports seamless integration of prior authorization, specialty networks, and clinical programs, enabling smooth interoperability with full control and transparency. RxSense also provides a dedicated, cross-functional team of developers, product experts, and industry veterans who partner with clients to define, implement, and continuously refine a modular strategy tailored to their evolving needs.

While some PBMs may offer their own platforms, they may not always have the depth of experience or specialized expertise needed to support private-label solutions or integrate with other systems. RxSense was built with this kind of flexibility, combining robust technology with practical know-how to deliver custom solutions and seamless third-party integrations.

“Modular doesn’t mean you have to do it all at once,” Zevzavadjian notes. “RxSense can provide the full stack to get you started and then scale back as clients choose to take on more themselves. It’s about flexibility, not just in technology but in partnership.”

A smarter future for pharmacy benefits

As healthcare costs rise and transparency becomes non-negotiable, payers can no longer afford to settle for outdated, one-size-fits-all pharmacy benefit models. The shift toward modular PBM isn’t just a trend, it’s a strategic imperative for organizations seeking greater control, customization, and cost efficiency.

With RxSense, employers, health systems, TPAs, and health plans gain more than a technology platform, they gain a flexible and transparent partner built for today’s demands and tomorrow’s growth. Whether starting small or overhauling an entire benefit structure, RxSense enables organizations to move at their pace, on their terms, with full visibility every step of the way.

To learn more about how RxSense can help unbundle your pharmacy benefits, visit www.rxsense.com.