Pharmacy benefit consulting for employers

A pharmacy benefit consultant works on behalf of the employer to help evaluate, design, and manage the prescription drug benefit program. This includes reviewing and negotiating PBM contracts, designing formularies, managing specialty drug costs, supporting regulatory compliance, and using data analytics to identify cost-saving opportunities. Unlike a general benefits advisor, a pharmacy benefit consultant provides specialized expertise focused specifically on the pharmacy component of the health plan.

A Pharmacy Benefit Manager (PBM) is a third-party administrator that manages prescription drug benefits on behalf of health plans, employers, and insurance companies. PBMs negotiate drug prices with manufacturers, manage formularies, process pharmacy claims, and administer rebate programs. Because PBMs influence what drugs are covered, at what cost, and through which pharmacies, the terms of your PBM contract have a direct and significant impact on your benefits spend. PBMs currently manage prescription benefits for approximately 266 million Americans.

Spread pricing occurs when a PBM charges an employer more for a drug than it pays the pharmacy, retaining the difference as undisclosed margin. The FTC found that the three largest PBMs generated $7.3 billion for themselves and affiliated pharmacies through specialty generic markups from 2017 to 2022. Employers can address spread pricing by requiring explicit contractual restrictions and pass-through pricing models that provide full cost visibility.

GLP-1 medications for weight management are one of the fastest-growing cost drivers in employer health plans, accounting for 29% of U.S. drug spending growth in 2024. Employers covering GLP-1s can implement sensible guardrails, including prior authorization, clinical eligibility criteria, lifestyle program participation requirements, and conservative initial fill protocols, to help balance access with long-term plan affordability.

Specialty drugs are used by approximately 2% of health plan members but account for more than 50% of total prescription spending. Employers can work to reduce specialty drug costs through biosimilar adoption programs, site-of-care optimization, utilization management programs including prior authorization and step therapy, and PBM contract terms that align incentives with plan affordability.

The Consolidated Appropriations Act (CAA) requires employers and their PBMs to meet pharmacy-specific transparency standards, including annual RxDC reporting, machine-readable file (MRF) submissions that include pharmacy data, and disclosure of PBM fees, spread pricing, and rebate structures. Employers whose PBM contracts do not reflect current CAA standards may face compliance gaps that should be addressed proactively.

A traditional benefits advisor typically manages pharmacy as part of a broader health plan renewal. The Baldwin Group takes a more specialized approach, providing independent PBM contract analysis, data-driven benchmarking of pricing and rebate terms, clinical guidance on formulary and specialty drug strategy, ongoing regulatory monitoring, and advocacy focused solely on the employer’s interests.