Pharmacy has become one of the most significant and least understood drivers of healthcare spend. That combination is creating a persistent problem: most organizations lack clear visibility into what they are paying for, why costs are increasing, and whether their pharmacy strategy is delivering the results they were promised.
That disconnect was the focus of CBIZ Employee Benefits’ recent webinar, The Rx Bill of Goods That Was Never Delivered. The discussion explored this issue in depth, highlighting why outcomes continue to fall short of expectations and what needs to change across the pharmacy landscape.
As moderator and Benefits Consultant Chris Estephan put it, “Most employers don’t have a pharmacy problem. They have a visibility problem.”
The Gap Between Proposal and Performance
At the center of the problem is a fundamental gap between expectations and execution. Employers often enter pharmacy arrangements based on strong proposals and projected savings. However, these projections are built on assumptions that can quickly evolve as utilization shifts, drug indications expand, and pricing dynamics change.
Senior Pharmacy Consultant Kyle Knoke highlighted this gap directly. “Savings projections are models, and those assumptions can break.”
What ultimately governs the relationship is the contract itself, and in many cases, those contracts allow for modifications over time that can materially impact performance. As a result, employers may find themselves locked into arrangements that no longer reflect the original promise. The savings they expected may not materialize, and cost drivers may look very different than originally anticipated.
The Rebate Illusion
Rebates are a clear example of how perceptions can diverge from reality. While they are often highlighted as a measure of program success, rebates alone do not tell the full story.
“Simply saying rebates are passed through is not transparency,” noted Michael Zucarelli, National Director of the CBIZ Managed Pharmacy Practice.
High rebate totals frequently correlate with increased use of higher-cost, brand-name medications. Focusing too heavily on rebate levels can obscure the bigger picture.
Lokesh Nigam, Business Unit President, reinforced the risk of relying on that model. “[Stick to the] status quo, and you will lose.”
Chasing rebates alone does not produce sustainable results. Employers that prioritize the lowest net cost and improved clinical outcomes are better positioned to manage long-term spend.
GLP-1s Are Reshaping Costs
Few trends illustrate the volatility in pharmacy better than the rise of GLP-1 medications. These drugs have gone from a relatively small component of pharmacy spend to a major driver in a short period of time. For employers, this creates new strategic questions about how to balance cost management, employee demand, and long-term outcomes.
Our panelists emphasized that covering GLP-1s is unlikely to produce a traditional ROI in the near term. Instead, employers are faced with a strategic choice. Do they design their plan to prioritize cost control and financial return? Or do they position coverage as part of a broader talent attraction and retention strategy?
There is no universal answer, but the decision cannot be passive. Employers need to define their objective and align plan design accordingly.
Why Timing and Strategy Matter
One of the most consistent themes across the discussion was timing. Many employers approach pharmacy strategy reactively, focusing primarily on renewal cycles. By the time they engage, their options are already limited.
Increasingly, organizations that are seeing better outcomes are taking a more active approach. That includes ongoing performance monitoring, contract auditing, and, when appropriate, testing the market.
Zucarelli emphasized the importance of this posture. Employers that take a more aggressive and informed approach create leverage.
Moving Forward With Clarity and Control
Employers cannot effectively manage what they cannot see. Without a clear understanding of pricing, utilization, and contract structure, the gap between expectation and reality will continue to widen.
For organizations preparing for upcoming renewals, the most important step is gaining a complete and accurate understanding of their current pharmacy picture. That clarity is where stronger outcomes take shape.
Ready to discuss your pharmacy strategy? Connect with a benefits consultant to get started.
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