Six Pillars of a High-Performing Pharmacy Benefit Plan Design

Non-fiduciary PBMs negotiate with drugmakers and pharmacies to benefit themselves. They use the purchasing power of plan sponsors who lack full insight into pharmacy economics. What used to be a cost-efficiency business is now, in many cases, about promoting the most profitable products, not the most clinically appropriate ones. If you’re a smart buyer of PBM services, you want more control over your pharmacy benefit plan, not less. Here are six pillars of a high-performing pharmacy benefit plan design to help you build a plan that works in your favor.
1. Internal Expertise
Internal expertise means a buyer or consultant has the knowledge to independently evaluate PBM contracts, pricing, and performance without relying on the PBM for direction. It includes deep knowledge of formularies, rebate structures, MAC pricing, and plan design strategies, for instance. Before partnering with a PBM or consultant, it’s worth asking a few key questions as a team:
- Do we have the pharmacy benefits expertise we need in-house?
- If not, would targeted education or outside support add value?
- Are the consultants we’re relying on certified in pharmacy benefit management?
As a Benefits Director, you don’t need to be a pharmacist, but you do need a strong understanding of how pharmacy benefits impact your plan’s performance. Relying too heavily on a PBM or consultant without the right checks can expose your organization to unnecessary risk. That’s where Certified Pharmacy Benefits Specialists (CPBS) come in. Having credentialed support on your side gives you the clarity and leverage to keep your plan aligned with your goals, not someone else’s bottom line.
2. Access
The formulary is your plan’s rulebook for drug access. It informs which medications are covered, at what cost to members, and under what conditions, guiding both prescribers and patients toward clinically appropriate and cost-effective choices.
You should review formulary design regularly, especially for high-cost drug classes like GLP-1s used for weight loss. These drugs now exceed $1,000 per member per month. While effective, ICER has stated their prices are not justified by the long-term benefit in obesity treatment alone.
PBMs may promote these drugs heavily due to large rebates. That’s not fiduciary. Make decisions based on outcomes and cost-effectiveness, not marketing hype or rebate flow. When managed by a fiduciary PBM, the formulary is designed to serve the plan sponsor’s best interest, not the PBM’s bottom line.
3. Medication Adherence
Medication adherence refers to the extent to which a patient takes their medications as prescribed by their healthcare provider. This includes the correct dose, timing, frequency, and duration of use. Non-adherence drives over $290 billion in avoidable healthcare costs each year. Even the best-designed plan fails if members don’t take their medications.
Use Proportion of Days Covered (PDC) to track adherence. A PDC of 80 percent or higher signals a member is staying on therapy. Monitor this at the plan level and intervene where necessary. Otherwise, avoidable ER visits and hospitalizations will drive up your total spend.
4. Cost Containment
Cost containment in pharmacy benefits management refers to a range of strategies, policies, and practices used to manage and reduce the total spend on prescription drugs without compromising the quality of care or patient outcomes. It’s a foundational goal for any fiduciary PBM and a critical metric for evaluating pharmacy benefit performance. Common cost controls in pharmacy benefits management include:
- Mandatory generics
- Therapeutic substitution
- Quantity limits and step therapy
- Specialty pharmacy carve-outs
But controls without measurement are worthless. Use Total Cost of Care (TCOC) to see if lower pharmacy spend is driving higher medical costs. And track Per Member Per Month (PMPM) pharmacy trend to keep your budget on track. These are your two gold-standard benchmarks. If your PBM isn’t talking about them, ask why.
5. Member Cost Share
Cost-sharing strategies like copays and coinsurance are standard, but some tactics do more harm than good. Copay accumulator programs block manufacturer copay assistance from applying to members’ deductibles. That means patients pay more out of pocket, often unexpectedly.
PBMs pocket the assistance and bill your plan anyway. Members struggle to afford meds, adherence drops, and total costs go up. These programs benefit PBMs, not your plan or your people.
6. Outcomes and Safety
Your plan should limit or exclude drugs that provide little to no health benefit. This includes:
- Hair growth and weight loss products
- ED drugs
- Growth hormones
- Over-the-counter meds
- Opioids
The opioid crisis is a case study in misaligned incentives. From 2016 to 2017, Purdue Pharma paid $400 million in rebates and fees to the big three PBMs. Internal documents showed Purdue understood rebates were the key to staying on formulary. And it worked. Self-funded employers paid for it, both financially and in lost lives. Be explicit about what your plan won’t cover. Do not let your PBM make those decisions in a vacuum.
Final Word: Own Your Education
The best protection against misaligned incentives is knowledge. When you understand how pharmacy benefits really work, you’re in a stronger position to lead, question, and negotiate.
Too often, plan sponsors hand over control to PBMs or advisers without fully understanding the mechanics behind pricing, rebates, and utilization. That gap is where unnecessary costs and missed opportunities live.
Invest in your own education and that of your team. Learn the language. Get certified. Ask sharper questions. When you understand the system, you don’t just manage a benefit, you lead it. Transparency, accountability, and aligned incentives all start with being informed.