What Do Employers Want in a PBM? | PBMI 2025

Instead of just settling for one of the “big 3,” an increasing number of employers are beginning to shop around for pharmacy benefit managers (PBMs). Panelists at a session on the “employer mindset” at the 2025 Pharmacy Benefit Management Institute (PBMI) Annual National Conference said employers want transparency, partnership and out-of-the-box thinking from PBMs.

Karen van Caulil, Ph.D.

“It is a balancing act, for sure,” said Karen van Caulil, Ph.D., president and CEO of the Florida Alliance for Healthcare Value, a purchasers’ coalition, noting the importance of affordability for the health plan and access for the plan members.

“They're looking for a true partner in the PBM space,” added van Caulil, “and some of the relationships are adversarial, and that's what they're getting rid of, and that’s why they are going out for RFPs [request for proposals].”

Rosa Novo, the executive benefits director of the Miami-Dade County Public Schools, said she is in the midst of negotiating a new PBM contract after working with one of the big 3 PBMs for many years. She emphasized the importance of a “true partnership… we want someone who will be at the table with us. We want someone who's willing to have those difficult conversations.” She also expressed frustration with PBMs that tout transparency but, in her view, don’t really provide it. “They just plaster the name transparent on it, and then they want to charge me to give me the data that is not even the data that I need. That, to me, is an insult. I've said, ‘You know what? You're wasting my time.”

Shawn Gremminger, M.P.P.

Shawn Gremminger, M.P.P., CEO and president of the National Alliance of Healthcare Purchaser Coalitions and a member of Managed Healthcare Executive's editorial advisory board, moderated the session. Gremminger previewed some PBM-related findings from the alliance’s “Pulse of the Purchaser” survey that are scheduled to be released next week. Although the market share of the big three — CVS Caremark, Optum Rx and Express Scripts — has declined only slightly, Gremminger said the survey showed a doubling of the share of the smaller PBMs, many of whom position themselves as having more transparent pricing practices than the big 3. Gremminger said the survey also showed that only about half of the employers that contracted with the big 3 felt that they had the information they needed to be prudent fiduciaries of pharmacy benefits. Fiduciary responsibility has become an important issue for employers with respect to pharmacy benefits because of some lawsuits against employers alleging that they have failed to live up to the responsibility.

Van Caulil, whose group includes approximately 80 Florida-based employers, said her members are working with their PBMs to promote generics and biosimilars to keep costs down. They also want high-value drugs that help keep people out of the hospital covered, she said. Where rebates are going is a favorite question, she told the PBMI audience. Van Caulil also said that employers are hiring advisers “to really look at the contracts they have now [to] make sure they’re really being enforced in the way they need to” and to craft RFPs for new contracts. One sore point with employers is the inadequacy of audits, according to van Claulil. PBMs will select 400 claims out of many thousands of claims during a year, said van Claulil, “and there’s no way you can pull those 400 and really make any determination as to whether things are going the way you want them to.” As a result, employers have started hiring vendors that monitor all the claims, flagging duplications and other problems.

Van Caulil also discussed the PBM transparency law that Florida enacted two years ago. The transparency, network adequacy and patient protection provisions have had positive effects, she said, but she also mentioned some problems. The law requires employers to attest that the PBM that they are working with is adhering to the Florida law, but employers sometimes lack the data to comfortably do so, she said. The law also has provisions for sweeping reviews of all pharmacy benefit claims data. Van Claulil said PBMs are passing on the cost of the review to employers. “It’s a lot of money because, as I said, it's a massive amount of data that is taking a long time to sift through,” she said, adding that “there doesn't seem to be like an upper limit, so there's no best guess on what it's going to cost. But there's also a lack of transparency to know whether the PBM is charging you the right amount. Is it your portion of this or not?”

Rosa Novo

The Miami-Dade school district is the third largest in the country, Gremminger said, and Novo said she is in charge of benefits for 44,000 employees and 9,200 retirees, with $97 million of the $497 million spent on benefits used to cover pharmacy benefits, “so definitely a focus on pharmacy is needed.” Novo said the school district received $22 million in rebates last year, but she sounded a note of caution about the allure of rebates. “$22 million sounds great, but really, where were the missed opportunities of saving dollars and redirecting care to the appropriate medicine and to the appropriate site of care?” she said.

Novo listed innovation, flexibility and transparency as some of the attributes she is looking for in a PBM as the school district is considering a new PBM contract. She also mentioned the importance of leaving open the possibility of direct contracting and that for the first time, the school district is considering carving out its pharmacy benefits management.