Every week, I hear well-meaning brokers, consultants, and HR leaders repeat things they have been told about pharmacy benefits that simply aren’t true or misleading. The problem is not ignorance; it is misinformation. PBMs and others in the supply chain often frame partial truths as facts to protect their margins and maintain control. Employers are the ones paying for it.

Let’s look at four examples that show how misinformation spreads and why it costs plan sponsors billions.

The 340B Misconception

A broker recently asked me, “We’ve heard that by the time the plan sponsor pays for a 340B drug, the hospital and dispensing pharmacy have inflated the price so much that the savings are gone. Is that true?”

It is not. Look at the data from our 340B portal. Across dozens of high-cost specialty drugs, the 340B price including shipping still comes in well below the ingredient cost in retail channels. For example, drugs like Creon and Genotropin show plan-level savings of $1,900 to $5,800 per claim under 340B pricing. Even for the highest-cost biologics like Skyrizi, savings exceed $7,000 per claim.

So where does this “no savings” narrative come from? It is a deflection. Drugmakers, hospitals, and PBMs all have financial interests in keeping plan sponsors away from 340B opportunities. The fewer questions employers ask, the easier it is for intermediaries to capture those margins.

The Contract Deflection

Another broker posted on LinkedIn a PBM said to him, “Why does our contract matter if we’re guaranteeing your spend?”

That is classic misdirection. PBMs use “guarantees” to distract from contract language that controls how much money they keep. Spend guarantees sound like protection, but they do not change the underlying math. The contract defines what is included or excluded from that spend. Rebates, administrative fees, clinical programs, and manufacturer revenue all hide behind those clauses.

A guarantee means nothing if it is built on a bad foundation. A fiduciary PBM contract, by contrast, gives employers visibility into every revenue stream and audit right. That is the only way to ensure your “guarantee” is based on real savings, not financial engineering.

The NADAC Oversimplification

A consultant pharmacist posted on LinkedIn, “Generic drug costs dropped 17 percent on average over the last five years, but PBM contract prices went up…This is why NADAC is compelling for contracting.”

It sounds logical but it is misleading. NADAC represents the average acquisition cost to the pharmacy, not the total cost to dispense a prescription. When you add professional dispensing fees of ten to twenty-five dollars per prescription, the NADAC model starts to fall apart as a savior for drug pricing.

Using NADAC in isolation ignores the economics of the transaction. Employers that buy into this argument often find themselves paying more overall once the fees, spreads, and administrative costs are added in. Transparency without context is not transparency; it is marketing.

The MTM Misunderstanding

On the popular Healthcare Benefits Hackers Google Group, a consultant responded to this post: “Some pass-throughs offer value-based formularies (rather than rebate-driven formularies), which reduces spend by favoring lower-cost drugs when several drugs have equivalent clinical value in a given therapeutic category.”

The consultant replied, “Our generic procurement process significantly minimizes the need for MTM programs within a therapeutic class because the pricing delta between drugs in the same therapeutic class is minimal.” That response conflates drug pricing with drug use, and that is where the logic falls apart.

MTM is not about price; it is about appropriateness and outcomes. Medication Therapy Management targets misuse, duplication, and non-adherence, not just the unit cost of drugs. Even if the pricing spread within a class is narrow, inappropriate utilization such as wrong dose, duplicate therapy, or unnecessary combinations drives waste. A low-cost drug used incorrectly is still a waste of plan dollars and harms patient outcomes.

Generic procurement does not address polypharmacy, adherence, or contraindications. Buying generics efficiently is good practice but does nothing to prevent a diabetic patient from taking five overlapping medications from three prescribers. MTM catches these scenarios before they cause harm or hospitalization. Procurement does not.

Therapeutic classes are not monolithic. Even when drugs are in the same class, differences in pharmacokinetics, patient comorbidities, and side effect profiles can make one option far more cost-effective in practice. MTM accounts for clinical effectiveness in real patients, not theoretical cost equivalence.

Minimal price delta does not mean minimal risk. Many expensive claims stem from misuse of “cheap” drugs that lead to hospitalizations or new prescriptions for side effects. MTM prevents these downstream costs, which procurement cannot touch.

Value-based formularies and MTM are complementary, not substitutes. A value-based formulary optimizes which drugs are available. MTM ensures they are used correctly. One sets the table, the other keeps the meal balanced. Suggesting one replaces the other ignores how comprehensive cost control actually works.

In short, claiming “we don’t need MTM because our pricing is good” is like saying “we don’t need seatbelts because our cars have good brakes.” It misses the point and leaves the plan, and its members, exposed.

Taking Back Control

HR and benefits leaders cannot rely on assumptions or industry hearsay. The only way to protect plan assets is through education. When you understand the mechanics of PBM contracts, plan design, clinical programs, and pricing models, you stop chasing marketing claims and start demanding accountability.

Informed leaders pay less, get better outcomes, and get a seat on the board of directors. Uninformed ones overspend, accept conflicts of interest, and wonder why they get passed over for promotions.

A recent CPBS student said it best:

“From a consultant’s perspective, none of my clients or prospective clients have any clue what BER, GER, and similar terms even mean. That makes the way this exam is structured completely disconnected from the reality of what consultants actually do.”

That gap in understanding is exactly why misinformation thrives and why education remains the most powerful antidote.

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