If I Were Starting Over as a Pharmacy Benefits Buyer, This Is What I’d Do
When I started out in the pharmaceutical industry nearly 20 years ago, I didn’t know what I didn’t know. Like many HR leaders, CFOs, and benefit consultants stepping into the space today, I assumed the PBM industry ran on the same principles as every other vendor relationship: transparent pricing, aligned incentives, clear accountability. It doesn’t. If I were starting over today as a pharmacy benefits buyer, here’s exactly what I’d focus on:
1. Don’t confuse “discounts” with savings The biggest mistake I made early on was letting rebate guarantees and AWP discounts sway my decisions. They sounded impressive. But I learned quickly that these figures can be gamed. They’re built to distract. The real cost is the total cost of care, after everything, including spread pricing, clawbacks, and DIR fees, are brought forward. That’s the only number that matters.
2. Push for audit rights and actually use them Most contracts offer audit language that sounds good but is practically useless. If I were starting fresh, I’d make sure the contract grants real audit access to claims-level detail, pricing logic, and rebate reconciliation. More importantly, I’d use that right annually. Trust isn’t a strategy.
3. Ask how the PBM gets paid and why I used to avoid this question. Now it’s the first one I ask. If your PBM’s revenue grows when your drug spend increases, the relationship is misaligned by default. I’d look for a flat-fee model where they earn more when I spend less and outcomes improve.

4. Treat formulary control as a power lever This one took me a while to grasp. Most employers give up formulary control without realizing it’s their most valuable lever. If I were new to the space, I’d demand visibility into formulary decisions and keep clinical integrity front and center.
5. Make sure my broker or consultant knows more about pharmacy benefits than sales If the person advising me on multi-million-dollar drug spend can’t explain lesser of logic, generic substitute rate, earnings after cash disbursements (EACD), or channel conflict, I’m out. I’d only work with brokers or consultants who’ve invested in technical knowledge. A telltale sign they’re more focused on sales than strategy is when they obsess over member disruption but ignore program efficiency. I’d also have them sign a disclosure agreement to eliminate financial conflicts of interest from the start.
6. Learn the language PBMs speak fluent obfuscation. If I were starting today, I’d invest time up front to learn the key terms, definitions, and games. That knowledge builds leverage. And leverage is what gives you control.
I’ve made just about every mistake there is. But what helped me course-correct, and what helps our clients today, is a commitment to clarity. No jargon. No smoke. Just alignment.
If you’re stepping into pharmacy benefits for the first time, don’t try to master everything at once. Start with understanding how your PBM gets paid, where you do or don’t have control, and who’s looking out for your members.
That’s where the real savings begin.
You don’t need to figure it all out alone. The CPBS program is a great place to start.
The Pharmacy Benefits Mastery Program™ is a self-paced training built for HR, finance, and benefits professionals who want to take control of pharmacy benefit decisions. It covers contracts, pricing models, clinical strategy, and fiduciary oversight in plain English. Organizations can also sponsor team members to build internal PBM expertise without relying on outside consultants.
Beyond technical knowledge, the Pharmacy Benefits Mastery Program helps professionals strengthen their personal brand as strategic thinkers who don’t just manage benefits, they lead them. It’s not just a certificate. It’s a signal that you’re ahead of the curve.