The Shift in Pharmacy Benefits Management: Opportunities for Employers and Brokers

The landscape of pharmacy benefits management (PBM) is undergoing a seismic shift, with the Big Three—Optum, CVS Caremark, and Express Scripts—losing significant market share among employers. According to the 2026 Pulse of the Purchaser survey, the Big Three's dominance has dwindled from 63.4% in 2025 to 54.3% in 2026. Alarmingly, over half of the employers still utilizing these PBMs are contemplating a switch in the next one to three years. This trend signals not just a warning but also an emerging opportunity for both employers seeking better value and brokers looking to guide them through this transition.

Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, emphasizes the critical nature of these findings. With over 90 million Americans represented and an annual healthcare spend exceeding $850 billion, Gremminger highlights that a significant number of employers are feeling the pinch of rising healthcare costs. These costs are not just a financial burden; they are actively hurting competitiveness in a market where every dollar counts. The question arises: will brokers step up to lead this conversation, or will they be sidelined as employers seek alternative solutions?

Market Dynamics: A Shift Toward Independence

The exodus from the Big Three PBMs is not a distant trend; it is currently unfolding. Gremminger notes that independent PBMs have reported consistent year-over-year growth, primarily driven by smaller employers. As these independent entities successfully scale and demonstrate their ability to manage large claims volumes, larger employers are also beginning to take notice.

For example, if a small independent PBM successfully captures a contract with a company of approximately 3,000 employees, that business usually comes at the expense of one of the Big Three. The trend is becoming increasingly evident, with larger organizations now observing the shifts in the market and contemplating their options. Some employers have even begun to exclude the Big Three from their request for proposal (RFP) processes altogether, requiring at least one independent PBM to be included in the final considerations.

The Role of Brokers in the Changing Landscape

Brokers have a critical role to play in this evolving market. However, Gremminger warns that many brokers have not yet adapted to the changing landscape. A staggering 23.4% of employers currently utilizing a Big Three PBM admit they do not fully understand the terms of their contracts. This lack of transparency presents a significant opportunity for brokers willing to educate their clients and guide them toward better options.

Nevertheless, brokers face a structural challenge: the Big Three continue to offer commissions and volume-based overrides that independent PBMs cannot match. Gremminger points out the conflict of interest that arises when brokers are incentivized to place clients with PBMs that yield the highest commissions. He illustrates this with a common scenario where brokers recommend a vendor based on financial gain rather than the best interest of their clients.

The Legal Landscape and Broker Responsibilities

Legally, brokers are required to disclose all forms of compensation in accordance with the Employee Retirement Income Security Act (ERISA) and the Consolidated Appropriations Act (CAA) of 2021. Non-compliance can lead to severe repercussions. The Department of Labor mandates that brokers must provide full transparency regarding direct and indirect compensation related to PBM contracts. Failure to do so can constitute a prohibited transaction, putting both brokers and employers at risk.

Analyzing Costs: Key Strategies for Employers

For employers navigating this complex landscape, data-driven decision-making is paramount. The Pulse of the Purchaser survey found that employers who have full claim-level access employ an average of 11.9 high-value purchasing strategies, compared to just 7.9 for those with limited access. This disparity underscores the value of data in optimizing healthcare spending.

• High-Cost Claims Breakdown: Identifying the small percentage of covered lives responsible for a significant portion of total plan costs—typically 40% to 50%—enables employers to address the most impactful cost drivers effectively.
• Provider Network Cost Analysis: Understanding price variations among hospitals in similar geographic areas can lead to substantial savings. For instance, a provider like New York Presbyterian may charge two to three times more than its competitors.
• Cross-Carrier Pricing Models: By modeling actual claims against potential costs under different carrier contracts, employers can gain insights into their spending and explore alternative options.

Employer Perspectives: The Demand for Change

The survey indicates that 83% of employers perceive rising healthcare costs as a trade-off against wages, and 93% anticipate passing costs onto employees if trends continue. This reality creates a pressing need for brokers to deliver substantive guidance and innovative solutions. Employers are actively seeking partners who can help them navigate these challenges and identify opportunities for cost savings.

In this climate, brokers who differentiate themselves will be those who provide independent analyses and demonstrate a commitment to their clients' best interests. Gremminger notes that brokers who engage with independent data partners are better positioned to offer unbiased recommendations. Notable partnerships, such as the National Alliance's collaboration with Peterson Health Analytics, showcase how brokers can leverage data-driven insights to enhance decision-making.

Key Takeaways

• Market share of the Big Three PBMs is declining, with employers seeking alternatives.
• Brokers must adapt to the changing landscape and provide transparent guidance.
• Employers benefit from data-driven analyses to identify cost-saving opportunities.
• Legal compliance regarding broker compensation is crucial to avoid penalties.
• Independent PBMs are gaining traction as viable options for employers.

Frequently Asked Questions

What are pharmacy benefits managers (PBMs), and why are they important?

Pharmacy benefits managers (PBMs) act as intermediaries between pharmacies, health insurers, and employers to manage prescription drug benefits. They negotiate prices, manage formularies, and process claims on behalf of health plans. Their role is crucial because they influence the cost of medications, which can significantly impact overall healthcare expenses for employers and their employees.

Why are employers moving away from the Big Three PBMs?

Employers are increasingly dissatisfied with the rising healthcare costs associated with the Big Three PBMs. As independent PBMs have demonstrated their ability to provide competitive pricing and better service, employers are seeking alternatives that offer more transparency and cost-saving opportunities. The trend reflects a broader desire for better value in healthcare spending.

How can brokers add value in the current PBM landscape?

Brokers can add value by providing employers with independent analyses of their PBM contracts, helping them understand the nuances of pricing, and identifying high-cost claims. By leveraging data-driven insights and emphasizing transparency in broker compensation, brokers can position themselves as trusted advisors in a market seeking innovation and efficiency.

What should employers look for in a PBM or broker?

Employers should prioritize transparency, data-driven decision-making, and a commitment to their interests when selecting a PBM or broker. They should seek partners who provide comprehensive analyses of claims data, offer competitive pricing, and demonstrate a clear understanding of the evolving healthcare landscape. Engaging with brokers who collaborate with independent data partners can also enhance the quality of recommendations.