Is PBM Transparency a Good Thing?

Implications: This article discusses transparency in the context of retail pharmacies; however, PBMs are most profitable in the mail order distribution channel.

Transparent PBM deals have more guarantees than implied by this article.

Analysis: This article discusses transparency in a retail pharmacy context; however, PBM profits are driven primarily from the mail order distribution channel. This is important because PBMs typically won't offer transparency for mail order scripts; especially not for generic scripts.

The article is incorrect when it implies that retail transparent PBM deals do not offer guarantees for discounts, dispensing fees, and rebates. Transparent deals do have guarantees, though they generally are more conservative than for traditional PBM deals. AWP discount guarantees are about 1/2% lower than for traditional deals.

I don't agree with the demography/geographic argument that for younger and/or more rural employer groups, traditional deals may be better. I don't agree because the PBMs will incorporate the demography and geography into the deal itself. The PBM uses a census in its pricing process; if the group is located in an area where its retail pharmacy contracts are not as good as in urban areas then the guarantees in the deal will be lower.