SHARx, a procurement management solution for high-cost prescription drugs, warns that accelerating pharmacy benefit manager (PBM) reforms may shift where revenue is captured without actually lowering employer drug costs. The company urges employers to look beyond rebate pass-through promises and verify whether total pharmacy expenses are declining.

Paul Pruitt, Chief Growth Officer and Co-Founder of SHARx, stated that changing one PBM revenue stream does not automatically translate into lower costs for employers. He emphasized that the financial model can adjust, requiring plan sponsors to demand transparency across the entire arrangement to determine if reforms are producing real savings.

Regulatory Scrutiny and Vertical Integration

Federal scrutiny highlights the complexity of PBM economics. The Federal Trade Commission (FTC) has documented extensive vertical integration among the largest PBMs and their affiliated insurers and pharmacies. An FTC staff report found that the three largest PBMs' affiliated pharmacies generated more than $7.3 billion in dispensing revenue above estimated acquisition costs on specialty generic drugs studied from 2017 through 2022.

The U.S. Department of Labor's 2026 PBM disclosure proposal seeks to give employers and plan fiduciaries greater visibility into compensation received by PBMs and their affiliates. Pruitt noted that employers cannot determine if an arrangement delivers promised savings without seeing its full economics.

Revenue Shifts in Specialty Drugs

PBM reform has traditionally focused on rebates, spread pricing, and contract disclosures. However, revenue may also flow through specialty pharmacies, group purchasing organizations (GPOs), rebate aggregators, mail order pharmacies, and other affiliated entities.

The FTC reported that pharmacies affiliated with the three largest PBMs received 68% of specialty-drug dispensing revenue in 2023, up from 54% in 2016. The commission also found that major PBMs generally reimbursed affiliated pharmacies at higher rates than unaffiliated pharmacies for the specialty generic drugs examined.

In July 2026, the FTC announced a settlement with CVS Health's Caremark Rx and affiliated rebate aggregator Zinc Health Services. The settlement included measures intended to increase transparency and alter certain PBM compensation practices. Pruitt cautioned that such regulatory action should be treated as the beginning of the analysis, not proof that total pharmacy economics have been fixed.

What the Numbers Show

The divergence between regulatory focus on rebates and the actual flow of revenue is stark. While reforms target traditional PBM fees, the FTC data reveals that affiliated pharmacies captured $7.3 billion in excess dispensing revenue between 2017 and 2022. Furthermore, the share of specialty-drug dispensing revenue held by affiliated pharmacies rose from 54% to 68% over seven years. This suggests that even if rebate margins are compressed, the vertically integrated structure allows revenue to migrate to dispensing entities, potentially neutralizing cost savings for employers unless total spend is monitored.

Contract vs Economic Transparency

A PBM contract can disclose administrative charges, rebate guarantees, and discount terms while offering limited insight into revenue generated elsewhere within a vertically integrated organization. The Department of Labor's proposed rule would require PBMs to disclose certain payments received from drug manufacturers, pharmacies, and other sources, allowing plan fiduciaries to audit those disclosures.

Pruitt encourages employers to request a complete ownership and revenue-flow picture by asking:

• Which affiliated entities participate in the pharmacy benefit?
• What are the ownership relationships among PBMs, pharmacies, GPOs, rebate aggregators, and service providers?
• What manufacturer rebates, service fees, and other compensation are connected to the account?
• What compensation is tied to dispensing, formulary placement or utilization?
• What subcontractor relationships and payments are connected to the plan?
• Do independent audit rights cover affiliates and subcontractors?

Total Pharmacy Spend and Access

For Pruitt, the most meaningful test of rebate reform is what happens to an employer's total net pharmacy spend and employees' ability to obtain their medications. This requires looking beyond rebates to specialty-drug costs, fees, manufacturer payments, access barriers, and member disruption.

Pruitt suggested that employers should consider whether every high-cost prescription needs to flow through the traditional system. "If employers can leave the traditional PBM model and get a simpler, lower-cost result, then the value of that model deserves closer scrutiny," he said.