The growing demand for PBM insourcing
For decades, the three largest PBMs have dominated the market, controlling 70% of pharmacy benefits nationwide. Yet, dissatisfaction with their services has reached a decade-long high. A 2023 survey by Pharmaceutical Strategies Group revealed that organizations are increasingly frustrated with a lack of flexibility, limited transparency and misaligned incentives.
Organizations—including health systems, health plans, large employers, and grocers—seek a tailored pharmacy benefit solution that offers greater control, flexibility and transparency. Rather than relying on legacy PBMs with misaligned incentives and varying strategies, they are turning to insourcing their pharmacy benefits as a strategic alternative.
“The primary reason for the shift away from the big three PBMs to new alternatives is the increasing dissatisfaction with existing solutions,” says Ramzi Yacoub, Pharm.D., chief pharmacy officer at RxSense. “Most large PBMs force clients to fit this mold that makes economic sense for them, without regard for whether the mold fits the clients’ needs.”
Unlocking the benefits of insourcing PBM services
Insourcing isn’t just achievable; it offers significant advantages. Companies that manage their pharmacy benefits internally gain complete control over the pharmacy ecosystem, from customizing formularies to implementing internal clinical programs.
“For a long time, the assumption was that you needed massive volume to get competitive pricing and rebates,” Yacoub explains. “But the real drivers of savings are operational efficiency, formulary management and a well-structured member journey—not just price and volume. These aspects are often overlooked because traditional models often focus so heavily on price and volume.”
In contrast, partnering to start your own PBM offers control and cost transparency that can lead to significant savings.
“When you’re negotiating contracts, you can immediately see the cost transparency and savings that come from having more control,” Yacoub says. “With tighter management over your formulary and cost management strategies, you can make the best decisions for your business and your members.”
RxSense: Powering the shift to PBM insourcing
Yacoub recommends that organizations looking to bring their PBMs in-house focus on their core strengths while partnering with an experienced provider like RxSense to manage other responsibilities—especially during the early stages of insourcing. This approach ensures a smooth transition and sets the foundation for long-term success.
“Our model is built on delivering scalable, highly efficient technology that simplifies the process of administering your own PBM benefits,” he explains. “As our partnerships evolve, we support clients in taking on more ownership at their own pace, helping them to differentiate and shape their strategic vision.”
While insourcing used to be difficult, resource intensive and expensive, RxSense has simplified the process. The enterprise platform, RxIQ Enterprise, provides an innovative, scalable platform that enables organizations to manage their own pharmacy benefits seamlessly. RxSense also uses AI and machine learning to streamline client onboarding, reducing implementation times without sacrificing quality. From contract negotiation to claims processing, RxIQ Enterprise empowers companies with the tools, data and control needed to operate their own PBMs effectively.
A premier midwestern hospital’s path to greater savings and independence
Facing rising pharmacy costs, a premier Midwestern hospital sought a smarter solution for managing its pharmacy benefits. As expenses increased within its employee plan, the hospital turned to RxSense to gain greater control, transparency and flexibility over its PBM. With a well-established pharmacy department and a commitment to financial sustainability, the hospital focused on strategies to reduce costs while maintaining high-quality care for employees.
By partnering with RxIQ Enterprise, the hospital has taken complete control of its pharmacy benefits, securing direct access to critical data, optimizing formulary management and uncovering strategic cost-saving opportunities. This shift has not only enhanced financial efficiency but also reinforced its commitment to high-quality patient care. With greater transparency and flexibility, the hospital achieved an impressive 10% savings within the first year.
Your path to PBM independence starts here
Organizations considering PBM insourcing need the right partner for success. RxSense delivers the technology, expertise and strategic support to make the transition in-house seamless and effective. Beyond implementation, RxSense remains a trusted partner, providing ongoing guidance and tailored support to ensure each client manages their pharmacy benefits in alignment with their strategic objectives—whether they require comprehensive assistance or a more hands-off approach.
“This is an exciting time as many organizations are bringing their PBMs in-house,” Yacoub says. “It’s crucial for organizations to realize that this option is available, and the key is finding a partner who will support you throughout the journey.”
Ready to take control of your pharmacy benefits? Contact RxSense to learn more.
