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Explore drug pricing ↓ Compare 18 PBMs
Drug Price BenchmarkingLive data
$800B+
Annual PBM-managed drug spend
270M
Americans covered by Big 3
80%
Market share, three companies
12–22%
AWP-to-NADAC pricing spread
Drug Pricing
Benchmark pricing across 123+ medications

Compare list prices (AWP) against actual acquisition costs (NADAC). The spread reveals where intermediary margins exist.

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What is NADAC? The National Average Drug Acquisition Cost — the CMS benchmark for what pharmacies actually pay. The gap between AWP and NADAC represents potential intermediary capture.
PBM Directory
18 PBMs, compared on what matters

Pass-through pricing, rebate transparency, and audit rights. Filter by model type.

PBMSharePass-Through100% RebatesAudit RightsSpreadOwned Rx

Sources: Drug Channels Institute 2025, FTC Interim Staff Reports, company disclosures, SEC filings.

Contract Analysis
Scan contracts. Model savings.

Paste PBM contract text for automated risk analysis, and model cost variance between PBM models.

Contract analyzer

Upload a contract file or paste text below. We scan for spread pricing, rebate retention, audit restrictions, and other problematic terms. Nothing is stored or transmitted.

Drop contract file here
or click to browse
Supports .txt, .pdf, .doc, .docx, .rtf

* For informational purposes only. Not legal, financial, or professional advice. Always consult qualified counsel before making contract decisions.

Cost variance modeler

Estimate savings from switching PBM models based on your plan size and drug spend.

$147,250
Estimated annual variance · $147 per covered life
Spread: $136,000Rebate: $11,250
New Tool
Formulary coverage checker

See which PBMs cover a drug, tier placement, prior auth, and estimated copays.

Understanding formulary tiers

PBMs organize drugs into tiers that set your out-of-pocket cost. Tier placement isn't always clinical — rebate deals influence which drugs get preferred status.

Tier 1 — Preferred Generic · $0–15
Tier 2 — Preferred Brand · $25–50
Tier 3 — Non-Preferred · $50–100+
NC — Not Covered · Full cost
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A drug on Tier 1 at one PBM may be Tier 3 at another — hundreds of dollars per month difference for the same medication.
Procurement
Ask the right questions

Categorized procurement questions with relevance context. Downloadable.

Who This Serves
🏢

Employers

Benchmark PBM pricing. Evaluate contract terms.

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Health Plans

Compare PBM models. Model cost variance.

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Benefits Advisors

Data-driven insights and RFP templates.

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Pharmacies

Understand pricing practices and reimbursement.

Insights
Latest articles

Expert analysis on PBM pricing, drug costs, and pharmacy benefit management.

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Common Questions
Frequently asked questions
A Pharmacy Benefit Manager (PBM) is a company that manages prescription drug benefits for health insurers, employers, and government programs. They negotiate drug prices with manufacturers, create formularies (approved drug lists), process claims, and run mail-order pharmacies.
Spread pricing is when a PBM charges a health plan more for a drug than it pays the pharmacy, keeping the difference as profit. For example, a PBM might charge your employer $15 per prescription while paying the pharmacy $8, pocketing the $7 spread on every claim.
NADAC (National Average Drug Acquisition Cost) is a CMS benchmark showing what pharmacies actually pay to buy drugs from wholesalers. RxPBM.ai lets you compare your plan's drug costs against NADAC to see if your PBM is charging a fair price or keeping large spreads.
Drug manufacturers pay rebates to PBMs in exchange for favorable formulary placement (preferred status on the approved drug list). These rebates can be 30-50% of a drug's list price. The key question for employers is how much of that rebate the PBM passes through to the plan versus retains.
Compare your plan's per-unit drug costs against NADAC benchmarks, ask for pass-through pricing guarantees, request a rebate audit, review administrative fees, check for hidden specialty drug markups, and consider hiring an independent pharmacy benefits consultant to review your contract.
CVS Caremark, Express Scripts (Cigna), and OptumRx (UnitedHealth) control roughly 80% of the US prescription drug market. This concentration gives them enormous negotiating power over drug manufacturers and pharmacies. Critics argue it reduces competition, enables opaque pricing practices, and ultimately increases costs for patients and employers.
In pass-through pricing, the PBM passes all manufacturer discounts and rebates directly to the plan, earning revenue only through transparent administrative fees. In traditional pricing, the PBM keeps spreads and a portion of rebates. Pass-through models are more transparent but may have higher upfront admin fees.
AWP (Average Wholesale Price) is a benchmark used in PBM contracts to set drug pricing. It was famously called 'Ain't What's Paid' because it bears little relation to what pharmacies actually pay. AWP is typically 15-20% above WAC (Wholesale Acquisition Cost) and far above NADAC, which reflects actual pharmacy acquisition costs.
MAC (Maximum Allowable Cost) is the maximum amount a PBM will pay a pharmacy for a generic drug. PBMs set their own MAC lists, which can vary significantly. Pharmacies are often reimbursed below their actual cost on MAC-priced drugs, forcing them to absorb losses or refuse to fill prescriptions.
A specialty drug carve-out separates high-cost specialty medications from the main PBM contract, often managed by a dedicated specialty pharmacy. This allows employers to negotiate specialty pricing independently, potentially saving 10-25%. Specialty drugs represent only 1-2% of prescriptions but 50%+ of total drug spending.
A formulary exclusion means a drug is not covered at all by the plan. PBMs exclude drugs to steer patients toward preferred alternatives (often those with higher rebates). If your drug is excluded, you must use the preferred alternative, pay full price, or request an exception through your doctor.
A health insurer provides overall health coverage (medical, surgical, hospital). A PBM specifically manages the prescription drug benefit within that coverage. However, the Big Three PBMs are all owned by health insurers (CVS/Aetna, Cigna/Express Scripts, UnitedHealth/OptumRx), blurring the distinction and raising vertical integration concerns.
When a PBM owns mail-order and specialty pharmacies, it can steer patients to its own pharmacies through plan design (lower copays for mail-order), mandatory mail-order requirements, or narrow pharmacy networks. This vertical integration means the PBM profits from the same transactions it is hired to manage on behalf of employers.
A strong PBM RFP should require pass-through pricing guarantees, full rebate disclosure, NADAC-based generic pricing, transparent administrative fees, specialty drug carve-out options, network adequacy guarantees, clinical program performance metrics, and the right to audit. Use specific drug-level pricing scenarios to compare bidders fairly.
Clawback is when a PBM collects more from the patient (copay) than the total cost of the drug, then claws back the difference from the pharmacy. For example, if a generic costs $4 but the copay is $10, the pharmacy collects $10, keeps $4, and remits $6 to the PBM. Patients overpay without knowing it.
DIR (Direct and Indirect Remuneration) fees are retroactive charges PBMs impose on pharmacies after prescriptions are filled, often months later. They reduce pharmacy profit margins unpredictably and have been blamed for pharmacy closures. Recent CMS rules aim to shift these fees to the point of sale to increase transparency.
PBMs influence opioid prescribing through formulary design, prior authorization requirements, and quantity limits. They have been both criticized for initially covering opioids too freely and praised for later implementing safeguards. PBMs now commonly require prior authorization for high-dose opioids and monitor for concurrent benzodiazepine use.
Transparent PBMs (like Capital Rx, SmithRx, and Rightway) guarantee pass-through pricing, provide full visibility into drug costs and rebates, earn revenue only through flat admin fees, and publish their pricing methodology. Traditional PBMs' revenue depends on keeping pricing opaque. Transparent models are gaining employer adoption but still represent a small market share.
Recent and pending legislation includes FTC investigations into PBM practices, state PBM licensing and transparency laws, the Inflation Reduction Act's Medicare drug price negotiation, proposed federal bills requiring rebate pass-through, and efforts to decouple PBMs from pharmacy ownership. Over 40 states have enacted some form of PBM regulation.
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