Free Resource for Employers

Your PBM May Be Earning Revenue Your Team Has Never Seen

Two self-insured employers sent their PBM one email. The answers exposed $135,000 and $545,000 a year in revenue the plan never saw. Get the same 12 questions and see what your PBM says.

  • The exact 12 questions to email your PBM (copy, paste, send)
  • What two real PBMs answered, and what it cost each plan
  • The 5 contract terms that signal you're overpaying
Send Me the 12 Questions

Work email only. No cost, no obligation, no broker change required.

Written by Eric Papp. As presented at SHRM’s 2026 national conference.

$680K
Found per year by two employers who sent one email
500 to 5,000
Employee groups this is built for
$0
Cost to send the 12 questions to your PBM
8 of 8
Carve-Outs Delivering 30-40% Savings
Problem

Three PBMs Control 80% of Claims. Their Contracts Share the Same Three Terms.

We audited the contracts behind both case studies. Different PBMs, different employer sizes, same three terms: the PBM keeps the manufacturer rebates, spread pricing is allowed, and there is a financial penalty for leaving early. None of it is illegal. The question for a plan fiduciary is simply: who does this benefit?

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CVS Caremark

Largest PBM by prescription volume

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Express Scripts

Part of Cigna — second largest PBM

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Optum Rx

UnitedHealth Group subsidiary

  • Employers evaluate pharmacy performance through discounts and rebates — not true net cost
  • Misaligned incentives can cause "savings" on paper to mask rising overall pharmacy spend
  • Complex reporting structures obscure what employers are actually paying
  • Without full transparency, employers can't benchmark or challenge their PBM arrangement
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~80%

of all U.S. prescription claims are controlled by just three PBMs — leaving most employers with limited negotiating leverage and little visibility into true costs.

Pharmacy Costs Are Becoming One of the Biggest Drivers of Healthcare Spend

For many employers, pharmacy is no longer a side issue inside the health plan. It is becoming one of the fastest-growing and least transparent areas of cost.

Rising specialty drug utilization, rebate-driven pricing, and opaque PBM contract structures are creating more volatility and making it harder for employers to understand what they are truly paying.

For self-insured employers especially, that means pharmacy may be one of the largest unmanaged expenses in the plan.

  • Specialty Drug Utilization Rising

    Specialty drugs now make up a disproportionate share of pharmacy spend for many employers.

  • Rebate-Driven Pricing

    Rebate arrangements can incentivize PBMs to favor higher-cost drugs over clinically equivalent, lower-cost alternatives.

  • Opaque Contract Structures

    Many PBM contracts are written in ways that make it genuinely difficult for employers to audit true performance.

Healthcare Cost Growth Drivers

Specialty Pharmacy+18% YoY
Medical/Surgical+8% YoY
Retail Pharmacy+6% YoY
Inpatient Hospital+5% YoY
Outpatient Services+4% YoY

Pharmacy costs are now frequently the fastest-growing line item in self-insured health plans.

Why Employers Overpay

Why So Many Employers May Be Overpaying for Pharmacy

Many traditional PBM arrangements include contract terms and pricing structures that make it difficult to identify true savings. If you are only being shown discounts and rebates, you may not be seeing the full financial picture.

Misaligned Incentives

PBM compensation structures can reward volume and rebate capture rather than lowering your organization's net drug cost.

Complex, Hard-to-Audit Contracts

PBM contracts are often structured in ways that obscure the relationship between reported savings and actual spend changes.

Reporting Focused on Discounts

When reporting centers on discounts and rebates rather than total cost trend, it becomes difficult to assess whether the plan is truly performing.

Spread Pricing Practices

In some arrangements, PBMs charge employers more than they reimburse pharmacies — capturing the difference as undisclosed revenue.

Specialty Drug Exposure

Without active specialty management strategies, employers may face significant and unexpected cost increases driven by a small number of high-cost prescriptions.

Formulary Design Gaps

Formularies that aren't actively managed may allow higher-cost branded drugs to be dispensed when clinically equivalent generics are available.

Solution

What Transparent Pharmacy Carve-Outs Can Change

High-performing employers are taking a closer look at pharmacy and asking whether a more transparent model can deliver better alignment, greater control, and lower net cost.

A transparent pharmacy carve-out can help employers move away from opaque pricing structures and toward a model where incentives are aligned around reducing actual spend, not just producing favorable-looking reports.

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  • Full Cost Transparency

    See exactly what you're paying — ingredient cost, dispensing fees, and any margins — with no hidden spread pricing.

  • Aligned Incentives

    Work with a PBM model where success is measured by actual cost reduction — not rebate volume or network spread.

  • Greater Employer Control

    Own your own formulary and clinical programs — making decisions based on your population's needs, not the PBM's book of business.

  • Lower Net Cost

    The goal of a transparent carve-out is measurable, sustainable reduction in what you actually spend on pharmacy — not just better-looking reports.

What They Get

What You Will Get Inside the Pharmacy Savings Blueprint

This free resource is designed to help CFOs, HR leaders, and decision-makers better evaluate whether their current PBM arrangement is serving the organization well.

Includes:

  • Legacy PBM vs. Modern PBM comparison — a clear breakdown of how older and newer models differ in structure, transparency, and outcomes
  • Top 12 questions to ask your PBM — designed to surface whether your current arrangement has alignment or transparency gaps
  • Case studies from employers who shifted to a more transparent model and what outcomes they achieved

You will learn:

  • How to identify whether your PBM contract may contain terms that limit your visibility into true costs
  • What questions to ask in your next PBM review or RFP process
  • How transparent pharmacy carve-outs work and what employers typically experience after making the shift
  • Whether your organization's size and structure make it a good candidate for this kind of change
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Who This Is For

  • CFOs looking for greater control over healthcare costs
  • HR leaders responsible for benefits strategy
  • Self-insured employers seeking transparency and savings
  • Employers with growing pharmacy spend or limited contract visibility
This is best suited for employers who want a more strategic view of pharmacy, not just a renewal spreadsheet.
Download the Free Blueprint
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About Eric
Who Is Behind This

Pharmacy Benefits Unbundled is an educational resource from Eric Papp, a Tampa-based employee benefits consultant who works with self-insured employers with 500 to 5,000 employees.

His work centers on a question most plans have never asked out loud: what does the pharmacy benefit actually cost once you separate it from the medical plan? Eric is the author of Leadership by Choice (Wiley) and Manage Promises, Not People, and spoke on pharmacy carve-outs at SHRM’s 2026 national conference.

Our Goal Is Simple

"We work for you, not the carriers."

What You Can Expect:

  • Independent & Unbiased

    We are not affiliated with any PBM or carrier, which means our recommendations are based entirely on what is best for your organization.

  • Deep Pharmacy Expertise

    Our team has experience evaluating PBM contracts, carve-out structures, and specialty drug management strategies across a wide range of employer sizes and industries.

  • Practical, Actionable Guidance

    We focus on clear analysis and concrete steps — not abstract frameworks or long consulting engagements that delay real decisions.

  • No Broker Change Required

    The 12 questions and the Executive Pharmacy Review work alongside your current broker and carrier. Nothing has to change for you to see what your PBM contract actually costs.

Get the 12 Questions
GET THE 12 QUESTIONS

Send Your PBM One Email. See What Comes Back.

The copy-and-paste email that surfaced $135K and $545K in hidden PBM revenue. Forward it to your PBM tomorrow morning. No commitment in asking.

By submitting, you agree to receive information about pharmacy savings. No spam ever.

Written by Eric Papp, employee benefits consultant, Tampa, FL. As presented at SHRM’s 2026 national conference.

Frequently Asked Questions

Our renewal is January 1. Is there still time?
Yes, but the window is short. Most PBM contracts auto-renew unless you give 60 to 90 days' written notice, which for a January 1 renewal means acting this fall. Miss it and the contract locks in for another two to three years. Sending the 12 questions takes ten minutes and tells you whether you need to act at all.
Will a pharmacy carve-out disrupt employees?
In a typical transition, about 95% of members see no change at all: same pharmacy, same medication, same routine. Many pay less. The real work focuses on the roughly 3% of members who drive 70% of plan spend, and even there it is about finding a lower-cost path to the same drug, not restricting access. Escalations go to your consultant, not your HR team.
Is this a sales pitch?
No. The Blueprint is intended to help you better understand how pharmacy spend works and what questions to ask. There is no sales pressure and no obligation.
Do I need to make a change to my medical plan to benefit from this?
No. In most cases your medical stays the same. A pharmacy carve-out is a separate arrangement that focuses specifically on prescription drug benefits, independent of your medical carrier.
Who is behind this page?
Eric Papp, an employee benefits consultant in Tampa who specializes in pharmacy carve-outs for self-insured employers and spoke on the topic at SHRM’s 2026 national conference. The firm he works with is named in the footer. Nothing on this page is for sale; the 12 questions are yours to send whether or not we ever talk.
What happens after I send the questions to my PBM?
You will get answers, partial answers, or silence, and each one tells you something. If the answers raise concerns, or the PBM will not answer, you can request an Executive Pharmacy Review. It is also free and does not require changing brokers.

Get in Touch

Have a question or need more information? We're here to help and will get back to you as soon as possible.