A broker’s guide to breaking the rebate cycle

Prescription drug costs are among the fastest-growing and most unpredictable healthcare expenses employers face. According to recent data, many patients don’t fill their medications as prescribed because of high costs and opaque pricing. Traditional pharmacy benefit manager (PBM) models—built around rebate-driven incentives—are failing to deliver the predictable, value-based pharmacy benefits that employers demand.

In a timely article published in Employee Benefit News, Rae McMahan (SVP, Payor Solutions at Prescryptive) argues that brokers must move beyond rebate-focused strategies and adopt four concrete levers to improve affordability, transparency and access in pharmacy benefits.

1. Tie every dollar in the pharmacy benefit to value—not rebates.
   Brokers should advocate for dynamic, value-based formularies that reflect the actual medication needs of the employee population. This means cutting wasted spend on high-cost, low-use drugs and prioritizing therapies that align with outcomes.
2. Demand full transparency.
   Transparency isn’t optional—it’s foundational. Employers should insist on full disclosure of rebate retention, administrative fees, spread pricing and mark-ups. PBMs that operate with opaque incentives undermine trust and long-term affordability.
3. Empower members at the point of prescription.
   The moment a prescription is written should become a moment of empowerment—not confusion. Modern tools that provide real-time pricing (cash vs. insured), alternative therapies and pharmacy options help drive smarter decisions and better adherence.
4. Leverage clinical review and utilization management.
   Unbiased prior authorization, independent expert review and clinical oversight help ensure that the right therapies are prescribed, avoiding waste and misuse—such as in the case of high-cost GLP-1s, where targeted management reduced claims and utilizers by nearly 30 % for one employer.

Brokers have a unique opportunity to challenge the status-quo PBM model and guide clients toward smarter pharmacy benefit design. Prescryptive’s model helps examine if every dollar spent is aligned with meaningful value and helps employees to have access to the medications they need. When you’re ready to take the next step, reach out!

Explore Rae McMahan’s full article in Employee Benefit News here: A Broker’s Guide to Breaking the Rebate Cycle.